What to Know Before Signing a Construction Contract in BC

Whether you are building a new home or taking on a large renovation, a construction contract sets the foundation for how the project will move forward. These agreements outline each party’s responsibilities, timelines, and costs; however, without careful review, they can also leave room for disputes. At Linley Welwood, our lawyers understand the importance of a well-drafted contract when it comes to construction projects in British Columbia. That is why we have put together some information highlighting what you should know before signing a construction contract in BC.

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Key Elements to Review Before Signing a Contract

Construction contracts can vary widely depending on the scope of work, but there are key elements you should always review before signing to protect your interests and to help prevent costly misunderstandings later on.

Understand the Scope of Work

A clearly defined scope of work is critical. The contract should outline exactly what will be done, how, and by when. This includes material specifications, design details, and whether any work is being subcontracted. Ambiguous language or missing details can lead to construction disputes over what was actually agreed upon.

Know the Payment Structure

Your contract should clearly state how and when payments will be made, including deposits, progress draws, and holdbacks. Under BC’s Builders Lien Act, a 10% holdback is typically required until the project is substantially complete to protect against unpaid subcontractors or suppliers.

Confirm Licensing and Insurance

In BC, contractors must be licensed through BC Housing for residential construction and must carry appropriate insurance and WorkSafeBC coverage. Confirming these details can protect you from liability if something goes wrong on the job site. You can check contractor licenses on the BC Housing Registry.

Clarify Change Orders and Delays

Unexpected changes are common in construction, but your contract should include a process for handling them. Be sure that any changes to scope, cost, or schedule must be documented and approved in writing. Also, confirm how delays will be managed and whether penalties or extensions apply.

Dispute Resolution and Termination Clauses

Your contract should include clear terms for resolving disputes, whether through negotiation, mediation, or legal action. It should also outline under what conditions the contract can be terminated and what compensation may be involved.

At Linley Welwood, our lawyers are here to help you review and understand construction contracts so you can make informed decisions. Get in touch with us to learn more about our legal services and how we can help protect your interests before signing a construction agreement.