What should be included in a contractor contract?

Short answer

Get it in writing before work starts. The contract should identify the licensed contractor, define the scope and materials, state the total price and a milestone payment schedule, assign permit responsibility, set start and completion dates, and cover change orders, lien releases, warranty, insurance and how the agreement can be terminated.

Full explanation

A contract turns an estimate into an enforceable agreement. It should include:

Parties and credentials — the contractor''s legal entity name, address, licence number and insurance; your name and the property address.

Scope and specifications — the work in detail, with the estimate or plans attached and incorporated by reference. Materials by brand, grade and model where it matters.

Price and payment schedule — the total contract price, whether it is fixed or cost-plus, and payments tied to defined milestones with a final payment held until completion and inspection.

Permits and approvals — who applies, who pays, and confirmation that work will meet applicable codes.

Schedule — start date, substantial completion date, and how delays (weather, materials, owner-caused) are handled.

Change orders — a requirement that any change to scope or price is written and signed by both parties before the work is done. This single clause prevents most cost disputes.

Lien protection — a requirement that the contractor provide releases or waivers of lien from subcontractors and suppliers with each payment. Unpaid subcontractors can place a lien on your property even after you have paid the contractor.

Warranty — the labour warranty period and pass-through of manufacturer warranties.

Insurance — coverage the contractor must maintain for the duration of the project.

Termination and dispute resolution — how either party can end the agreement, and how disputes will be handled.

Signatures and date, with a copy provided to you.

Some states require specific written disclosures in home improvement contracts and grant cancellation rights in defined situations. Check your state''s consumer-protection agency for the disclosures that apply where you live.

State-specific rules

Florida contract points to watch:
- Construction liens. Florida''s construction lien law lets subcontractors and suppliers who are not paid record a lien against your property. Require lien releases with each payment and pay attention to any Notice to Owner you receive. The Florida Bar publishes a consumer pamphlet on building and remodeling that explains liens and payments.
- Deposits. If your contractor takes an initial payment of more than 10 percent of the contract price, §489.126, Florida Statutes, requires permit applications within 30 days and work to start within 90 days after permits are issued, absent just cause or a written agreement otherwise.
- Licensing. Chapter 489 governs who may contract for construction work in Florida and restricts unlicensed contracting.

Common mistake to avoid

Never allow work to begin on a verbal agreement or on an estimate alone, and never accept a verbal change order. Every change to scope or price should be written and signed before the work happens.

Sources & References

Consumer Pamphlet: Building or Remodeling a Home in Florida — The Florida Bar official source
§489.126, Florida Statutes — Moneys received by contractors — Florida Legislature — Online Sunshine official source
§489.113, Florida Statutes — Qualifications for practice; restrictions — Florida Legislature — Online Sunshine official source
How To Avoid a Home Improvement Scam — Federal Trade Commission official source

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