If you’re about to buy or already have a house to renovate, it’s urgent to start figuring out how you’ll be able to protect yourself with a contractor’s agreement. The danger is that you could be tricked and have to shell out a lot of money, but worse things might happen.
Let’s get to the point, how does the procurement contract protect me?
1.Duration of the works
In the procurement contract you must write down when the works will begin and by what date they will be finished. Then ask the company how many weeks or months it needs to do all the works and set a specific day for handing over the keys. This date is essential should there be any delays in delivery.
Work out with the contractor a daily sum for each day of delay from the date of works completion.Know that the penalty starts at a minimum of €50 per day, but set the appropriate figure and raise it if necessary. However, the contract protects not only you but also the contractor. Usually the penalty is never more than 20 percent of the maximum amount agreed upon.
When the procurement contract is signed an advance payment is always given, usually 30%. We recommend you put a description for the additional 3-4 payment steps. Proceed by logic of temporal execution of works and specify which works you have to pay for. It sometimes happens that the company manages capital disastrously and no longer has the money to proceed. Strictly stick to the specified steps without shelling out any more money. You can always get rid of the company, terminate the contract and hire a new company.
4.Final balance of the works
One last piece of advice. Establish that the 20% related to the balance of the works will be disbursed within 30 days of the works completion. Never ever pay the balance on the day of delivery. So take at least a month to verify that the works have been done properly. That 20% is valuable to you, for example you can determine whether to deduct the entire maximum penalty.
Our law firm specialises in drafting procurement contracts and ready to assist you.