A general contractor is an individual or company who is responsible for the day-to-day operations and oversight of a construction site. All contractors facilitate the creation of a construction site through the delivery of price estimation and by supplying the workers with the necessary materials.

As a result of the aforementioned responsibilities, a contractor must communicate with the owner of the site, the design team who constructed the plans for the building and the employees on site. The most fundamental role of the contractor; however is to establish contracts through price evaluations of the project.

Before tangibly starting a construction project, a contractor must visit and assess the construction site. Upon evaluating the piece of property, the contractor will formulate a price, referred to as an estimate. The contractors will then evaluate the cost of all materials, equipment, as well as the cost of labor.

After analyzing the expected cost of the project, the contractor will provide the owner or financer of the project with an approximate price for the construction process. Once the cost has been estimated, the contractor will meet with the owner and draw up contracts with the individual or company. 

The contract, when affirmed, will initiate the building of the project. To become a legally binding agreement; however, the owner of the project must agree to the estimated cost delivered by the contractor. Through this price, the budget and the subsequent materials, design and workers are established. 

A contractor is also responsible for providing the construction companies and the individual workers with all material, including labor, equipment and those services necessary for the construction of the project. In order to accomplish these tasks, the contractor will incorporate specialized subcontractors to perform specialized tasks or portions of the construction process. 

As a result of the contractor’s roles and the inherent importance tied to each function, each individual or company must maintain a valid contractor’s license. The contractor’s license is instituted by state governments and as a result, the requirements necessary for obtaining the license will fluctuate based on local laws. 

The Contractors State License Board is an organization that protects consumers by licensing and regulating the contractor industry of California. 

In the state of California, there are nearly 315,000 licensed contractors who possess certification across 43 different classifications. The California State License Board is responsible for educating consumers in regards to the roles of these individuals, the licensing process and construction law in general. In addition, the Contractors State License Board will also administer examinations required for licensing; investigate any complaints against licensed and unlicensed contractors. 

As a result of these functions, the Contractors State License Board is regarded as the administrative and regulatory authority connected to the contracting business. The Contractors State License Board can issue license, issue citations, suspend or revoke licenses and even seek administrative, civil or criminal sanctions against those businesses or individuals who violate construction law. 

The Contractors State License Board possesses a statewide investigative fraud unit to investigate and ultimately eliminate any unlicensed activity that takes place in the state. As the predominant authority and regulatory agency, the Contractors State License Board acts as the authority and fundamental educational resource of this particular sector. For all individuals looking to start a construction project in the state, the Contractors State License Board contains a step-by-step guide regarding the evaluation process of an effective contractor and the means for hiring one. 

Construction Contracts are considered to be necessary within the scope of construction projects with regard to both the implementation of the description of services, but also the commitment to the allotment of responsibility and liability of the construction project; Construction Contracts allow for the legal protection of both parties entering contracts of these nature.

Involved Parties Named within Construction Contracts

In a majority of cases – ranging from commercial Construction Contracts to residential Construction Contracts – the parties named within contract agreements are defined as the following:

The client is defined as the individual who has procured a construction project, which means that they have set forth provision means – ranging from funding to materials – to the second party in order for the construction project to be implemented with the intention of completion

The contractor – or the entity responsible for the provision and completion of the construction effort – will have received goods, services, or monies whose delivery is contingent on the completion of the construction

The Primary Components of Construction Contracts

Construction Contracts will typically vary with regard to the primary components latent within their text; this variance will most often result from the specification of the Construction Contracts in question – both residential and commercial Construction Contracts are amongst the most common types of Construction Contracts:

Residential Construction Contracts

Residential Construction Contracts will typically include the following 3 components upon their creation and legal validity:

The details of the construction project  – or project scope – is defined as the outline and framework of the construction project requested; oftentimes, the project scope with outline in detail all of the components of the project, including the architectural plans, process, and the expected results

The project schedule will typically outline the timeframe in which the construction project will take place; this section is mandated by start-dates and a completion-dates that  are agreed upon within Construction Contracts

The project funding outlines the monetary compensation existing in conjunction with the construction project, including the method of payment, rate of payment, and the terms of payment; typically, full payment is only furnished upon the completion of a project

Commercial Construction Contracts

Commercial Construction Contracts will typically include the following 5 components due to the fact that their existence within the commercial marketplace requires the adherence to additional legislature:

The terms of service section of Commercial Construction Contracts outlines the project details and the nature of construction that will be undertaken

The legislative section ensures that the construction company will adhere to any or all applicable legislation required by local jurisdictions

Contingency Clauses appearing within Construction Contracts provides for methods of modification and rectification in the event that the expressed terms are not sufficiently met by either party involved

The Default Clause within Commercial Construction Contracts illustrate the process undertaken in the event that either party violates the terms of the contract