Contract Formation and Contract Performance
Offer, acceptance, and everything that changes in between
A contract requires offer, acceptance, consideration, capacity, and a lawful purpose; the contract documents define the deal. Know who has authority to bind each party - field personnel usually do not.
Performance turns on scheduling and documentation. Distinguish substantial from complete performance. Delays are excusable (weather, owner acts, unforeseen conditions) or non-excusable; compensable delay also carries cost. "No damages for delay" clauses are enforceable but narrowly construed, and a constructive change or active interference can defeat them. Differing site conditions come in two types: Type I, where the conditions differ materially from those indicated in the contract documents, and Type II, where conditions differ from those ordinarily encountered. Liquidated damages must be a reasonable forecast of loss, not a penalty.
Payment follows the schedule of values, with retention - capped at 5 percent on public works and set by contract on private work, where prompt payment statutes still apply. Understand pay-when-paid versus pay-if-paid language. Termination is for cause (with cure notice) or for convenience, and each triggers different remedies.
Trap: oral change directives. If the owner's representative orders extra work, confirm it in writing that day - many contracts make written authorization a condition of payment.
Rule of thumb: written notice within the contract's time limit preserves the claim; silence usually waives it.