Contracting Checklist

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In every contracting situation, from the smallest everyday project to the largest construction project, consider the following issues:

☐           Does the contractor have a valid California contractor’s license for the relevant specialty?

☐           Does the contractor have minimally acceptable levels of general liability insurance, automobile insurance and worker’s compensation insurance?

☐           Has the association been named as an additional insured on all of the contractor’s insurance policies?

☐           Have all the subcontractors submitted proof of their contractor’s licenses and insurance policies?

☐           Have all HOA and insured versus insured exclusion and contractor’s condition endorsements been deleted?

☐           Has the contractor complied with all of the association’s bidding requirements?

☐           Has the contractor supplied references and have the references been checked?

☐           Is there a written contract?

☐           Has the scope of the work to be performed been clearly defined?

☐           Does the association have to pay start-up costs to the contractor? Is the amount of the start-up costs reasonable (less than 10% of the total contract price)?

☐           Are progress payments required at reasonable intervals? Have payment obligations such as “upon delivery” been deleted?

☐           Have the payment provisions been written so that the association only pays for work that has been satisfactory completed?

☐           Is the contractor required to submit mechanics’ lien releases before each payment?

☐           Should the association write joint checks to the contractor and subcontractors if unconditional lien releases are not provided?

☐           Can the association hold retention from each progress payment until the end of the contract?

☐           Is final payment required after all mechanics’ lien rights have been expired?

☐           Are the starting and completion dates clearly specified?

☐           Is there a liquidated damages (predetermined monetary payment) provision in the contract?

☐           Would a performance bonus provision provide incentive to the contractor to finish earlier than required?

☐           Can the association terminate the contract “without cause?” If “cause” is required, is it clear under what condition the contract can be terminated?

☐           Has the contractor clearly indicated the warranties being given? Are there any materials manufacturer’s warranties?

☐           What exclusions are there in the warranties? Are these exclusions reasonable?

☐           Will the contractor be required to supply a performance bond or labor & materials bond?

☐           Is the contractor required to indemnify the association for its negligent acts and omissions?

☐           Have all obligations of the association to indemnify the other party been deleted from the contract?

☐           Have limitation of liability clauses been deleted?

☐           Does the contract require some form of Alternative Dispute Resolution mediation or arbitration) prior to or in lieu of litigation?

☐           Is there an attorneys’ fee provision in the contract?

☐           Has the contract been reviewed by legal counsel?

 

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