flexiblefullpage - default
Currently Reading

NAHB Advice to Home Builders: Evaluate Your Contracts

Advertisement
billboard - default
Business Management Best Practices

NAHB Advice to Home Builders: Evaluate Your Contracts


March 20, 2020
Builder reading contract
By smolaw11

As the coronavirus disrupts supply chains and some cities suspend construction, the National Association of Home Builders recommends evaluating business contracts for clauses that account for delays caused by unforeseen circumstances. Clauses may allow for builders to have more time to complete a project, or it may allow the client to terminate the contract. In order to determine the best path forward in the event of a significant delay, builders must review their specific contract to see what steps they must take, such as notifying the client of the delay, and if the coronavirus fits under the kinds of events covered by the contract. The country may be in unprecedented times, but keeping tabs on contracts can help builders avoid an even messier situation. 

Home builders should expect delays caused by supply chain disruption, workforce unavailability, and even permitting due to shelter-in-place recommendations to stem the spread of COVID-19 caused by a novel coronavirus. Companies should carefully review their contracts now for certain provisions that allow for such delays.

One of the principal roles of a commercial contract is to allocate risk between the parties. A force majeure provision allocates risk and provides notice to the parties of events that may suspend or excuse performance under the contract if specified events occur that are beyond the party’s control.

A force majeure provision allows a contracting party to mitigate its risk of breach due to events or circumstances it did not cause and could not have anticipated. In addition to allowing a builder additional time to complete the project, it might also allow for termination of the contract if performance is prevented beyond a specified period.

Read More

 

Related Stories

Business Management

Industry Strategies for Weathering a Market Correction

Home builders, BPMs, and real estate investors are adjusting their business strategies to overcome a market slowdown. Here's what they're doing differently... 

Business Management

How These Female Business Leaders Foster Trust in the Workplace

Four female panelists discussed strategies to create a healthy and inclusive workplace at Fortune's Most Powerful Women Summit last week 

Business Management

Is an Employee Stock Ownership Plan Right for Your Construction Business?

Employees who are invested in the company's success may one day make the best leaders. That's where employee stock ownership plans (ESOP) come in

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category



Advertisement
native2 - default
Advertisement
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.