SOP Templates > Home Builder > Bidding & Estimating > Contract Review and Execution Checklist

Contract Review and Execution Checklist for Home Builder

This checklist is designed to guide home builders specializing in custom homes through the process of reviewing and executing contracts. It ensures that all critical elements such as scope documents, allowances, drawings, inclusions and exclusions, terms and conditions, insurance requirements, schedule expectations, and legal considerations are thoroughly examined. This process is crucial for mitigating risks, ensuring clarity, and establishing a solid foundation for project execution. The checklist also includes steps for coordinating revisions, confirming client understanding, collecting signatures, and properly storing the executed contract.

Review final scope documents

Step 1: Gather all scope documents

Collect all relevant scope documents from the project file. Ensure that you have the latest versions of each document, as these will form the basis of the contract.

Step 2: Verify completeness and accuracy

Carefully read through each document to ensure that all project elements are included and accurately described. Check for any discrepancies or missing information that could lead to misunderstandings later.

Step 3: Consult with project team

Discuss the scope documents with the project team, including project managers and estimators, to confirm that all parties have a shared understanding of the project's scope.

Review allowances and budgets

Step 1: Identify all allowances

List all allowances specified in the contract. These are typically for items where the exact cost is not yet determined, such as fixtures or finishes.

Step 2: Compare with estimates

Compare the allowances with the initial estimates provided during the bidding process. Ensure that they align and are sufficient to cover the expected costs.

Step 3: Discuss with financial team

Meet with the financial team to review the allowances and budgets. Ensure that they agree with the proposed figures and that there are no financial red flags.

Examine drawings and specifications

Step 1: Collect all relevant drawings

Obtain the latest set of architectural and engineering drawings. Ensure that these are the final versions approved by all stakeholders.

Step 2: Check for consistency

Review the drawings alongside the specifications to ensure consistency. Look for any discrepancies between the two that could lead to construction errors.

Step 3: Consult with design team

Discuss the drawings and specifications with the design team to confirm that they accurately represent the project's requirements and that any changes have been incorporated.

Verify inclusions and exclusions

Step 1: List all inclusions

Identify and list all items and services included in the contract. Ensure that these are clearly defined and agreed upon by all parties.

Step 2: List all exclusions

Similarly, identify and list all items and services that are excluded from the contract. This helps in setting clear boundaries for the project's scope.

Step 3: Confirm with client

Discuss the inclusions and exclusions with the client to ensure they understand and agree with the defined scope. Make any necessary adjustments based on their feedback.

Review terms and conditions

Step 1: Read through terms and conditions

Carefully read through the terms and conditions. Pay special attention to clauses related to payment terms, dispute resolution, and termination.

Step 2: Consult with legal advisor

Discuss the terms and conditions with a legal advisor to ensure that they are fair and do not expose the company to unnecessary risks.

Step 3: Clarify any ambiguities

Identify any ambiguous terms or clauses and seek clarification from the client or their legal representative. Ensure that all parties have a clear understanding of their obligations.

Confirm insurance requirements

Step 1: Identify required insurance types

List all types of insurance required by the contract, such as general liability, workers' compensation, and builder's risk insurance.

Step 2: Verify coverage amounts

Ensure that the coverage amounts specified in the contract meet or exceed industry standards and are sufficient to cover potential risks.

Step 3: Consult with insurance provider

Discuss the insurance requirements with the company's insurance provider to confirm that the current policies meet the contract's requirements.

Establish schedule expectations

Step 1: Review project timeline

Examine the project timeline included in the contract. Ensure that it is realistic and accounts for all phases of construction.

Step 2: Identify critical milestones

Identify key milestones and deadlines within the project timeline. Ensure that these are clearly defined and achievable.

Step 3: Discuss with project manager

Meet with the project manager to review the timeline and milestones. Make any necessary adjustments based on their input and expertise.

Address legal considerations

Step 1: Identify legal requirements

List all legal requirements that must be addressed in the contract, such as permits, licenses, and regulatory compliance.

Step 2: Consult with legal advisor

Discuss the legal considerations with a legal advisor to ensure that all requirements are met and that the contract is legally sound.

Step 3: Make necessary revisions

Make any necessary revisions to the contract based on the legal advisor's feedback. Ensure that all parties agree to the changes.

Coordinate revisions with client

Step 1: Identify necessary revisions

List any revisions that need to be made to the contract based on the review process. Ensure that these changes are clearly documented.

Step 2: Communicate with client

Discuss the proposed revisions with the client. Ensure that they understand the changes and agree to them.

Step 3: Document client approval

Obtain written approval from the client for the proposed revisions. Ensure that this documentation is stored with the contract file.

Confirm client understanding

Step 1: Schedule a review meeting

Arrange a meeting with the client to review the contract. Ensure that all relevant parties are present.

Step 2: Walk through contract

Go through the contract with the client, explaining each section and addressing any questions they may have.

Step 3: Address client concerns

Listen to any concerns the client may have and provide clear explanations or make necessary adjustments to the contract.

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