Should the construction contract you are about to enter contain an indemnification provision? What about “no-damage-for-delay” or differing site condition clauses? Or how about a waiver of consequential damages? The inclusion and scope of these types of provisions (and countless others) in any particular construction contract are things you should discuss with your attorney. Whether they are necessary or should be agreed to may vary depending on the type of project and the parties involved. There are, however, certain minimum elements that must be in every Arizona construction contract.
Pursuant to A.R.S. § 32-1158(B), any construction contract in an amount exceeding $1,000.00 entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:
- The name of the contractor and the contractor’s business address and license number;
- The name and mailing address of the owner and the job site address or legal description;
- The date the parties entered into the contract;
- The estimated date of completion of all work to be performed under the contract;
- A description of the work to be performed under the contract;
- The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including applicable taxes;
- The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner;
- The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract; and
- In ten point bold type, that the property owner has the right to file a written complaint with the registrar of contractors for an alleged violation of A.R.S. 32-1154(A), the registrar’s telephone number and website address, and that complaints must be made within the applicable time period as set forth in A.R.S. 32-1155(A).
It is important to note that, while these elements are required by A.R.S. 32-1158, they do “not constitute prerequisites to the formation or enforcement of a contract.” A.R.S. 32-1158(D) makes it clear that failure to include any of these elements “shall not constitute a defense by either party to an action for compensation, damages, breach, enforcement or other cause of action based on the contract.”