How should payments be structured in a construction contract in Nevada?

In a construction contract in Nevada, payments should be clearly defined, which includes outlining the terms for both progress payments and final payments. This clarity is essential to ensure that both the contractor and the client have a mutual understanding of when payments will be made and under what conditions.

Structured payments protect both parties by providing a framework for financial transactions throughout the project. For instance, progress payments might be scheduled based on the completion of certain milestones, allowing the contractor to receive compensation as they complete various phases of work. Final payments are typically made upon the project’s completion, ensuring that all contractual obligations have been met and that the owner is satisfied with the work provided.

Having a clear payment structure helps to prevent disputes that can arise from misunderstandings or a lack of communication regarding financial obligations. It establishes accountability and ensures that both parties adhere to agreed-upon timelines and conditions, ultimately leading to a smoother project execution.

In contrast to this approach, leaving payments undefined can create confusion and potential conflicts. Similarly, assuming payments are not necessary in a verbal agreement undermines the importance of having a documented contract for such transactions, leaving both parties vulnerable. Allowing payments at the contractor’s discretion could lead to unpredictable cash flow issues for the owner and could jeopardize the project