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After nailing down the scope of the work and the price during the design and bidding phase, the contractor writes a contract that formalizes exactly what he promises for his price.
If a contractor rushes you in any way or exerts pressure on you to read and sign the contract as soon as it’s presented, or if he proposes working with no contract at all, you should consider working with someone else. Most contractors will be happy to take on this extra work for a fee, and it’s usually a bargain for the homeowner, since workers, tools, and materials are already on site. In this section, the contractor should make you aware of known problems, such as a cracked sidewalk that will be repaired as part of the agreed-upon price. There are code-required minimums for many materials—such as framing lumber, sheathing, and electrical components.
The contract should also specify the brand names, model numbers and colors of appliances, lighting and bath fixtures, along with the name and grade of building materials, like roofing and finish lumber. If some items are not specified at the time the contract is written, the contract should list the specific spending allowances. Before deciding to go to the mat over an ironclad finish date, remember that you can give the contractor an incentive to finish the job and move on by withholding final payment until the project is completed.
Also, remember that a completion date can force the contractor to cut corners to finish on time.
A contract should specify application or building techniques, especially if they vary from standard practice. How money changes hands should be carefully stipulated in the contract, with an outline of payment methods.
For most jobs, the first payment is due upon signing the contract, but some states limit this amount. The contract should require the contractor to present proof of insurance for general liability insurance and workers’ compensation (if the contractor has employees) before the job starts.
Finally, it should be clear who’s responsible for damage to your walks, driveway and yard. Most contractors can’t provide a flawless job, and you can always find mistakes in their work.

The National Association of Home Builders has published such a guide, written specifically for homeowners and remodelers. Sign up for Danny's Monthly Newsletter and stay up to date on tips and tricks for the home. Nearly anyone involved with remodeling—professional contractors and homeowners alike—can recount a story or two about good projects that turned sour because the homeowner and contractor worked under different assumptions. No matter the size of the job, the contractor should give you a day or two (preferably a week) to look over the contract, have an attorney review it, ask questions and make changes if necessary. Each part of the job should be explained, including framing, electrical, plumbing, sheathing, siding, roofing, and all finish work. But be sure to specify your choices when you want material that’s beyond what codes call for or is a higher grade than is commonly used. For example, you may want to set aside $3,000 of the budget for appliances or $200 for a light fixture in the powder room. He’ll have outstanding bills he wants to cover with this final payment, which may be as much as a third of the total.
For example, if you want old shingles carted to the curb by wheelbarrow instead of having a Dumpster placed on your lawn, make that clear. Say you decide once the job is in progress that you want a pocket door instead of a swinging door or an extra window in the kitchen.
To protect you it should also include a clause that makes the contract void if financing is unobtainable. For example, in California first payments are limited to 10% of the job total or $1,000, whichever is less.
Make clear that the final payment will be issued only after all inspections and change orders are done and the final punchlist has been completed. The contract should also require the contractor to verify insurance and workers’ comp for his subcontractors.
Some contractors assume it goes to the curb, but your town might not pick up there or charge you extra to do so.

Questions over who fixes these problems can easily escalate into hard-to-resolve disputes if you can’t find an objective guide that indicates the job has been done within acceptable limits. Residential Construction Performance Guidelines establishes the minimum quality that’s acceptable on a wide range of jobs. In addition to posting comments on articles and videos, you can also send your comments and questions to us on our contact page or at (800) 946-4420. With the exception of emergencies, when the scope of the work is clearly defined and you’re in a hurry, insist on a contract for any work done on your home. These misunderstandings would never have happened if a contract had been drawn up before the job got under way. Both you and your contractor should agree to everything in the contract before it is signed.
Make your contractor aware of the quality level you expect; always ask whether your allowances are sufficient. A contractor will rarely agree to an end date, especially if there’s a financial penalty. Though some contractors ask for more up front if custom products have to be ordered, 10% is typical. You can expect a target end date, and a good contractor will come as close as possible to it. A contract should specify up front the change-order labor rate and the markup, and how they are billed.

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