May 21, 2026

Five questions to ask before you sign a construction contract

Construction contracts get reviewed by lawyers for legal risk. Fair enough — indemnities, insurance, liens and limitation periods deserve professional eyes. But some of the most expensive terms in a construction contract aren’t legal problems at all. They’re commercial ones, they hide in plain sight, and they’re routinely signed unread because they look like boilerplate.

Before you sign anything — CCDC standard form or bespoke — get plain-English answers to these five questions. We review construction contracts as part of our owner’s representation work, and these five account for most of the money we’ve seen owners lose or save.

1. What exactly am I buying?

Not the drawings — the gaps between them. Every set of documents has silences, conflicts and errors, and every contract has a mechanism for what happens when they surface. The question is: who pays for the difference between what was drawn and what a working building requires?

On a stipulated-sum contract against complete, coordinated documents: mostly the contractor. On anything signed against incomplete documents — which is most fast-tracked work — mostly you, priced as changes at the least competitive moment possible. Neither answer is wrong; they’re different deals at different prices. What’s dangerous is not knowing which deal you’re in. If the documents aren’t finished, say so in the contract structure (a CM model, defined allowances, a properly sized contingency) instead of pretending a fixed price is fixed.

2. How do changes get priced?

Changes are where projects bleed, so the change article deserves more attention than any other commercial clause. Specifics to nail down before signing:

• Agreed labour rates and markups — schedule them in the contract, including the markup a general contractor may add on subcontractor changes. Watch for markup stacking through subcontract tiers.
• A pricing deadline — changes priced within a set number of days, so claims can’t accumulate into a year-end ambush.
• A time-and-material fallback with daily records — for genuinely unpriceable work, T&M with signed daily tickets, not reconstructed invoices.
• Your right to proceed while price is disputed — so a pricing argument can’t hold the schedule hostage.

A contract that’s vague here isn’t neutral. Vagueness always prices in one direction, and it isn’t yours. The upstream fix is fewer changes in the first place — see where change orders actually come from.

3. What does the schedule actually promise?

A date in a contract means little without definitions and teeth. Check four things. What counts as substantial performance — the legal threshold matters, but so does the practical one: can you occupy, operate, generate revenue? What relief does the contractor get — weather, permits, your own slow decisions — and what notice must they give to claim it? Is there liquidated damages language, and is the daily number real or decorative? And symmetrically: what do delays you cause cost, because owner-caused delay is the contractor’s favourite claim, and slow decisions are its favourite species.

A schedule with no consequences attached is a hope. Contracts run on consequences.

4. When does money move, and against what?

Payment mechanics look procedural and decide everything about your leverage:

• Progress claims paid against verified work in place, certified by someone competent — not against invoices.
• Backup defined: quantities, percent complete by trade, updated schedule with every claim. No backup, no certification.
• Holdback is statutory in every province — but deficiency holdbacks, partial releases and final payment mechanics are negotiated. The end of the job is your last leverage; don’t give it away in article three.
• Front-loading checked: an early schedule of values weighted heavily toward mobilization is an interest-free loan from you to the contractor. Level it before the first claim, because you can’t after.

5. What happens when we disagree?

Not if — when. Every project generates disagreements; the contract decides whether they cost thousands or millions. Look for a step process: project-level negotiation with a deadline, then executives, then mediation, then arbitration or litigation as the last resort — with the work continuing throughout. Fast, cheap, early resolution keeps small problems small. A contract silent on this question means every disagreement starts at expensive.

The meta-question: “that’s standard”

When you raise any of this, someone will say “that’s standard.” It’s worth translating: standard means someone else’s default. CCDC forms are a genuinely good starting point — but every project modifies them through supplementary conditions, and the supplementary conditions are where the deal actually lives. Standard for whom is always the right follow-up.

None of this requires a legal education. It requires asking, in writing, before signing — and having someone on your side who has administered these clauses on live projects and knows which ones get used. That’s a core part of what we do for owners before a contract ever reaches the lawyers.

Frequently asked questions

Should I use a CCDC contract or a custom one?

CCDC forms are well-understood, court-tested and a fair baseline — most Canadian projects should start there. The real review target is the supplementary conditions, where standard risk allocations get quietly rewritten.

When should contract terms be settled?

Before tender, ideally — bidders should price the actual terms, including the change rates and schedule provisions. Negotiating terms after selecting a contractor means negotiating without competition.

Do these questions apply to small projects?

All five, scaled down. A $2M fit-out with vague change pricing bleeds by the same mechanism as a $200M tower — the digits are smaller, the percentage usually isn’t.

Signing something soon? Send it to us first — a contract review takes days and pays for itself the first time a clause gets used.