Define: Construction Management Contract

A construction management contract is a legally binding agreement between a construction manager and a project owner. It outlines the responsibilities, scope of work, and compensation for the construction manager in overseeing and coordinating the construction project.

The key components of a construction management contract typically include the project scope, timeline, budget, payment terms, insurance requirements, dispute resolution mechanisms, and termination clauses.

A construction manager is responsible for overseeing and coordinating the entire construction project, including managing subcontractors, scheduling, and budgeting. In contrast, a general contractor is typically responsible for the physical construction work and may subcontract certain aspects of the project.

Yes, a construction management contract can be modified or amended if both parties agree to the changes. It is important to document any modifications in writing and have them signed by both parties to ensure the changes are legally binding.

The construction management contract should outline the procedures for addressing delays or cost overruns. Typically, the construction manager is responsible for managing the project within the agreed-upon budget and timeline. If delays or cost overruns occur due to factors beyond the construction manager’s control, the contract may provide for additional compensation or extensions of time.

A construction management contract should specify the types and amounts of insurance coverage required, such as general liability insurance, workers’ compensation insurance, and professional liability insurance. This helps protect both parties from potential liabilities and risks associated with the construction project.

Yes, a construction management contract can be terminated before the completion of the project. The contract should specify the conditions under which either party can terminate the agreement, such as non-performance, breach of contract, or mutual agreement. Termination provisions should also outline the rights and obligations of both parties upon termination.

Payment terms in a construction management contract may vary, but they often include a combination of fixed fees, percentage-based fees, or hourly rates for the construction manager’s services. The contract should specify the payment schedule, including any milestones or deliverables that trigger payment.

The ability to assign or transfer a construction management contract may depend on the specific terms outlined in the contract. Generally, contracts can be assigned or transferred if both parties agree to the transfer and the new party assumes all rights and obligations under the contract. However, it is important to review the contract language and consult with legal counsel to ensure compliance with applicable laws and regulations.