Construction contracts often include a provision awarding damages to the buyer at "X" amount of dollars per day for each day the builder is late in completing the work. The parties to the contract agree on this amount in advance because they know the buyer will incur added costs, or will lose profits, because of the delay. If the amount fixed for the damages is unreasonably high, the court will consider it a Penalty and will not enforce it.
Step-by-step explanation:
"Construction Contract" can be defined as a combination of various individual documents which focuses on the different aspect of the project, or it can also be a multi-page document which contains various sections that offers details on different aspects of the agreement.
A construction contract includes
- Name of contractor and contact information.
- Name of homeowner and contact information.
- It describes property in legal terms.
- The various list of attachments of the contract.
- The cost involved
- Description of the work and its completion date.
- Right to stop the project.