How to read a contractor's contract before you sign

A home improvement contract is the record of what you and the contractor agreed to. A thorough one says who will do the work, what materials they'll use, where and when the work happens, and what it costs. Read it carefully before you sign, and don't sign until you understand it and agree to its terms.

Who and what

The contract should list the contractor's name, address, phone number and license number. It should describe the type of work, such as demolition, installation, finishing and removal, and name the materials by maker and brand. A line that names the cabinets' maker and brand, with the design drawings attached, is easier to check against the finished job than "install kitchen cabinets." It should also list any subcontractors. Any promise made in conversation belongs in the contract too.

When and how much

Look for an estimated start date and completion date. The price should cover the scope of work and the cost of labor and materials, and the contract should set out the payment schedule. Don't pay the full amount up front.

Permits, cleanup and warranty

The contract should say who will pull the building permits. A contractor who asks you to get the permits yourself is showing a common warning sign of a scam. Get the warranty in writing, with what it covers, such as the labor, the products and the materials, what it doesn't cover, and for how long.

Signatures

The contract carries the name and contact details of both you and the contractor. Both of you sign and date it before the work begins, and each of you keeps a signed copy. On a large job, it can also set milestone dates for each stage, along with deadlines for the permits, the materials and the inspections.

Changes during the job

The contract should say how changes are handled, through written change orders. Keep each one with your other project paperwork.

An annotated example

What to do next

Read the whole contract, and check that every blank space is filled in before you sign. Don't let anyone pressure you into signing. Keep a signed copy with the bids and the change orders.