“A verbal contract isn’t worth the paper it’s written on.” While historians disagree on who came up with this timeless quote, its accuracy isn’t questioned. That’s why when you hire someone to work on your home, you need a written contract.
A contract can be a simple one-page document or a “contract package” of many pages, depending on the size and complexity of your project. But there are common elements that should be included in any contract.
1. Parties to the contract. Who the contractor is, including their name, full address, phone number, email, business license where required, and business/GST number. Who you are, including your name, address (plus project address if different), and contact details.
2. Scope of work. This lays out what will be done and includes a description of the project; a list of materials and products to be used, including brand, name/number, colour, and dimensions; the contractor’s responsibilities spelled out in detail; and the homeowner’s responsibilities. Complex projects require longer descriptions, and details can be added as attachments that are part of the contract.
3. Project schedule. For simple projects, a start and completion date. For larger projects, a detailed timeline that lays out significant project milestones — for example, completion of the foundation work, framing, and required inspections.
4. Price. The contract should set out the full cost and the payment schedule. The price should reflect everything needed for the project, including labour, materials, subtrades, and fees for permits and waste disposal. The payment schedule on small projects may be an initial modest down payment and a final payment. Larger projects may require one or more progress payments, tied to completion of specific project milestones.
5. Contractor’s insurance and workers’ compensation. The contract should include a Certificate of Insurance showing the contractor is covered if they cause damage to your home or to neighbouring properties, or injury to you or third parties. Most contractors are required to have Workers’ Compensation coverage — this should be also noted in the contract with a Letter of Clearance attached.
6. Warranty. A contract should spell out the warranty provided, specifying what’s covered for how long and noting limitations or exclusions.
7. Other contract elements. A contract can contain many other clauses that deal with items like building permits, zoning variances, change orders, and dispute resolution. If relevant to your project, make sure they’re spelled out in detail. Always remember — when in doubt, don’t leave it out; get it in writing in your contract.
This overview is for illustrative purposes only and does not constitute legal advice. Find more information at www.getitinwriting.ca.