The Clauses Every Homeowner Should Have in Their Construction Contract

A home renovation or construction project is a major investment — and for many homeowners, it’s also one of the most stressful experiences imaginable. What begins as an exciting project can quickly turn into a nightmare if expectations aren’t clearly outlined in writing. The truth is, most contractor disputes start with one problem: a vague or incomplete contract.

At Davis Law Group Trial Attorneys, we help homeowners protect their property and finances before issues arise. Whether you’re building from the ground up or remodeling your kitchen, here are the essential clauses your construction agreement should include.

1. Detailed Scope of Work

Every construction contract should begin with a clear description of the work to be performed — not general statements like “kitchen remodel” or “bathroom renovation.”A proper scope of work should specify:

• Materials and brands to be used

• The size, dimensions, or model of key items (tile, fixtures, cabinetry, etc.)

• Who is responsible for permits and inspections

• A start date and estimated completion date

Without this level of detail, it’s difficult to hold a contractor accountable for unfinished or substandard work.

2. Payment Schedule and Retainage

Avoid paying large sums upfront. Instead, your contract should tie payments to milestones — for example, 25% after framing, 25% after electrical rough-in, and so on.

Include a retainage clause, allowing you to withhold 5–10% of the total contract price until the job is completed and passes inspection. This creates an incentive for the contractor to finish the job properly and on time.

3. Change Order Requirements

Changes are common in construction, but they’re also where budgets spiral out of control.Your contract should state that all change orders must be in writing, signed by both parties, and include:

• The new scope of work

• Any cost increase or decrease

• Impact on the project timeline

Without this clause, you risk paying for work you didn’t approve or facing inflated costs after completion.

4. Warranties and Workmanship Guarantees

A strong contract should include both:

• A manufacturer’s warranty for materials (e.g., roofing shingles, appliances), and

• A contractor’s warranty for workmanship (often 12 months after completion)

These provisions hold the contractor responsible for repairs if problems arise shortly after the project ends.

5. Insurance and Licensing Verification

Never assume your contractor is licensed or insured — verify it. Your agreement should require proof of:

• A valid contractor’s license in Georgia

• General liability insurance to cover property damage

• Workers’ compensation insurance for subcontractors or employees

If a worker is injured on your property and the contractor lacks proper coverage, you could be held liable.

6. Dispute Resolution Clause

Even with the best intentions, disagreements can happen. Your contract should outline a process for resolving disputes, such as:

• Mediation before litigation

• Arbitration (if agreed upon)

• Venue and jurisdiction (for Georgia homeowners, specify that disputes will be handled in your home county)

This clause helps control legal costs and ensures any dispute is handled in a predictable forum.

7. Termination and Default

Include a termination clause that allows you to end the contract for cause if the contractor:

• Fails to perform work as promised

• Abandons the job

• Breaches material terms of the contract

Also, require the contractor to provide notice before terminating the agreement from their side, so you have time to cure any alleged default.

8. Lien Waiver and Final Release

Before you make the final payment, your contractor should sign a lien waiver and release confirming that:

• All subcontractors and suppliers have been paid, and

• No mechanic’s liens will be filed against your property

This protects you from unexpected claims long after your project is complete.

A strong construction contract is more than paperwork — it’s your first line of defense against poor workmanship, cost overruns, and unfinished projects.

If your contractor’s agreement doesn’t include these clauses, or if you’re unsure what you’re signing, our attorneys can help review or draft the contract to ensure your rights are protected. Davis Law Group Trial Attorneys helps Georgia homeowners and investors navigate construction contracts, resolve disputes, and hold contractors accountable when things go wrong.

Call 404-446-2932 or schedule a consultation before you sign on the dotted line — protecting yourself on the front end is far cheaper than fighting a dispute later.