7 Proven Things Every Construction Contract Must Do (Rhode Island and Massachusetts Guide)
If your construction contract does not do these seven things, you have a piece of paper and a prayer. A prayer can only get you so far when a homeowner refuses to complete payment. Or when the GC swaps you out three weeks before you hit a major milestone. Most contractor agreements in Rhode Island and Massachusetts fall into one of three buckets. Bucket one. You have a one-page template you have been using since 2015. You pulled it off some national construction website. You are not sure whether it applies to Rhode Island or Massachusetts law. Bucket two. You are old-school and all you need is a handshake. Handshakes rarely hold up when a project goes sideways. They fail to capture your rights under state law. And a handshake does not turn an unpaid invoice into cash in your pocket. Bucket three. You have a real contractor agreement. A properly drafted contractor agreement is the operating system for the project. Built right, it does seven things on every job. Here is what each looks like in practice, and what happens in Rhode Island and Massachusetts when one of them is missing. In Rhode Island and Massachusetts, missing your lien filing window by even one day can cost you the right to collect. Table of Contents Define Scope With Specificity Build in a Written Change Order Procedure Set Payment Milestones Tied to the Work Address Attorneys’ Fees and Late Payment Interest Comply With Rhode Island and Massachusetts Statutes Preserve Your Mechanic’s Lien Rights Capture Retainage and Payment Bond Rights 1. A Strong Construction Contract Defines Scope With Specificity A good scope clause carries enough detail that you can say no to extras without souring the relationship. The answer is not no. The answer is: that request is outside our scope, here is the change order form, here is the new price, sign and we start tomorrow. Vague scope is where money disappears. A contractor signs an agreement that says “install kitchen cabinets per plans” and then spends three days doing carpentry work the homeowner assumed was included. By the final invoice, there is no way to prove what was bid and what was added. In a recent matter, a carpenter lost roughly $6,200 on a $22,000 job because the scope clause did not list any of the assumed exclusions. Our client assumed the homeowner was responsible for paint and stain. His old contract did not say so. The homeowner withheld payment until the carpenter finished the painting at his own cost. We built him a new contractor agreement so this never happens again. 2. Your Contractor Agreement Must Include a Written Change Order Procedure An owner asks for remodeling on the back deck mid-project. You hand them a one-page change order, signed before work starts, with a price and a schedule impact. No more arguing at the final invoice. Verbal okays evaporate. Texts get ambiguous. A signed change order is the only paper that pays. The procedure has to be in the contractor agreement before the change happens. It is not enough for the contract to say “change orders shall be in writing.” That sentence does almost nothing in litigation when the contractor cannot produce the writing. What protects you is a procedure: who initiates the change, what form it takes, what price methodology applies, what schedule impact is captured, and who has to sign before work begins. Recently, we worked with a custom home builder in Rhode Island who went $47,000 over budget on owner-requested upgrades. His contract had a change order clause but no procedure, no signature requirement, and no pricing template. The builder recovered $19,000 in mediation. That is money that would have been in his pocket with a proper procedure in place. 3. Construction Contracts Should Set Payment Milestones Tied to the Work, Not the Calendar Deposit. Rough-in. Drywall. Substantial completion. Final. Each milestone gets paid before the next phase begins. You stop floating the project on your line of credit while the homeowner takes their time writing the next check. A contract with no milestones leaves you exposed. You need cash to flow as you continue work. Recently, we worked with a Massachusetts roofer who found out all too late that he had no progress milestones in his contract. This was after he completed the tear-off and underlayment. He waited almost four weeks for the homeowner to release any further payment. A milestone tied to substantial completion would have triggered automatic payment and saved him thousands in carrying costs. 4. Rhode Island and Massachusetts Contractor Agreements Must Address Fees and Late Payment Interest A real contractor agreement turns an unpaid invoice from a write-off into a collectable debt. Most generic contracts fail to include these provisions. That means even if you win the dispute, you eat the cost of winning it. Without an attorneys’ fees provision, you spend money collecting an invoice. After collections, you are looking at a net far below your original margin. With a properly drafted prevailing party clause, that same collection nets you the price of the original invoice plus your fees. The clause does not eliminate disputes. It changes the math on whether pursuing the dispute is worth your time. If your contract does not specify a payment deadline or an interest rate for late payment, you may be limiting the amount you could recover. With a well-drafted contractor agreement, whatever the contract says is what you get. Referencing the applicable prompt payment framework in your contract preserves your right to invoke its protections and signals to the other side that you understand them. 5. Your Construction Contract Must Comply With Rhode Island and Massachusetts Statutes A template pulled off the internet does not know Rhode Island law. It does not know that Rhode Island requires registered contractors to carry minimum $500,000 combined single limit general liability insurance. It does not know that workers’ compensation is required on top of that if the contractor has employees. It does not
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