Contracts after a Disaster

Publication Number 490-321, August 1996

General

Hold on to your money until it has been completely earned by the person you have hired to do a job. Even under critical emergency conditions, complete, good-quality repairs must be done or damage and deterioration will appear at a future date. Strengthen the patches and wait patiently until you can be sure of a good job. Then, start with a clear, complete contract.

Contracts are the best way to handle matters. A contract is a promise or set of promises for which the law gives a remedy in case of breach, or the law in some way recognizes their performance as a duty.

Three Elements of a Contract:

1. An agreement (or an offer and acceptance) to do specific things in a specific manner. State clearly, simply, and completely all that is to be done. If a beginning and finishing date are involved, state them in the body of the contract. A good item to include in a contract for home rebuilding is that materials and procedures used will be those provided for in minimum standards of the current CABO Code (Council of American Building Officials). Some of these minimum standards are discussed in later articles.
2. Between Competent Parties Parties involved must be at least 18 years of age and mentally competent (not insane, retarded, or suffering mental problems of aging).
3. For a Consideration Something of value changes hands, usually money.

Signatures of parties making the agreement and the date are essential. If money or other considerations change hands before the entire contract is completed, signed receipts should also change hands.

Look for the words, "Bonded, Licensed, Insured," on the business cards or stationery of a contractor you hire. The bond protects you from being sued for wages by laborers the contractor does not pay. The license means the contractor has passed state, county, or city tests or qualification standards. The insurance protects you if the contractor'w later turns out to have been substandard or if the materials used to do the work were substandard.

Check with your Better Business Bureau or Chamber of Commerce to see if the contractor is, indeed, bonded, licensed and insured.

Withhold Full Payment Until:

• All building supplies used have been paid for. Require receipts for all paid bills for all materials used.
• All subcontractors and employees of the general contractor have been paid. Require a written, signed statement to this effect from the contractor.
• Everything has been completed on the job to the full satisfaction of the contract.

Based on information developed by Clemson Cooperative Extension following Hurricane Hugo. Revised for Virginia audiences by Virginia Cooperative Extension.