Concrete Terms — May 2013

Construction and Real Estate

May 01, 2013
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Protect the owner with a right-to-audit clause included in every contract.
 
Most cost-plus construction contracts include a clause giving the owner the right to audit the contractor’s records to determine compliance with the contract terms and ensure the owner was billed correctly for the work completed. Stipulated-sum or fixed-price contracts normally do not give the owner the right to examine the contractor’s records or specify that the contractor should keep the project records for at least three years.
 
All construction contracts—cost-plus, stipulated-sum, and fixed-price—should contain language to give the owner the option of examining a contractor’s records to verify compliance with the contract terms.
 
Keep reading to learn why a right-to-audit clause should be a part of every construction contract.

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