Nothing can be unreasonable or unbalanced, excessively favoring one party over another. If it is, a judge will toss the contract clause or the contract in its entirety should you ever end up in litigation. There's normally an expected date of completion. After that date, there's usually a grace period before any performance penalties come into play. The length of grace depends on the scale of the project (replacing a toilet seat versus remodeling an entire bathroom), the work conditions (site access, indoor/outdoor, high-rise co-op versus single family residence, etc), and if it's new construction or remodeling. New construction can be straightforward once excavation is complete and the foundation is in. Remodeling can be a can of worms whenever a wall or floor is opened up. After the grace period you can add a penalty. I recommend something small, roughly 5% or so. Then after another length of time, the penalty can be increased to a total of 10%, then later to 15%, etc. Realize that when you start getting into penalties and holding parties' feet to the fire, you need to stay on top of any change orders, or changes to the initial scale and design of the project. A contractor will hold you to anything you do that causes delay to the project, and rightfully so. If he's waiting for a faucet that you ordered off the internet to be delivered, that's your delay. If you ordered the wrong material, or an insufficient amount, or a certain shower valve without its accompanying trim kit, etc. If you change the design, it's a change order. If someone catches the flu...you get the flu and prevent them from creating dust in your house for a few days...or a sub gets the flu and can't work for a few days...common sense should prevail, but in the end the legal document is what can rule the roost. If penalty clauses are in effect, then performance bonuses can be asked for by the contractor. I built a house several years ago for a married couple, both lawyers. While they were acquaintances, they were a bit difficult. Were they not friends, I wouldn't have built for them. They modified the contract and insisted on several scaled penalties in case of late completion. I in turn added a few scaled bonuses for early completion bonuses. I told my crew that any late penalties we incurred would come from my pocket, but that they would affect year-end profit sharing. I told them that any early completion bonuses would be divided up amoungst themselves and go right into their pockets. While we didn't work any faster, and no shortcuts were taken, the guys did put in extra hours here and there, and they collected. Big. I'm not a big fan of bonuses or penalties, only because I prefer a friendly and harmonious "us" relationship on site versus what could otherwise be a "me" versus "you" relationship. You can still have a harmonious relationship with a clause-filled contract, but it can create stress should the time line be threatened. Where the situation can be flipped around is in city living, in a co-op or high-rise. We have rigid work restrictions in cases like that, and penalties are almost the norm.

Thanks everyone. We were supposed to sign the contract with the GC this past Sunday. I asked him to send over the contract in advance (we DO, in fact, read the contracts we sign...they loved us when we bought our house!) He sent it over to us on Sunday morning. We had plans and didn't get home until shortly before we were supposed to meet. He called before he came over and I asked if he was going to bring along the rest of the contract (i.e. exhibits) when he came over. And he said "That's all there is. You talked with the cabinet maker and the price is based on what you talked about." (Ginny - you already know some of this story, so skip this if you're reading it! haha) We've already had some areas where he's said something and then something else winds up happening. In our initial talk, I told him we wanted frameless, full-overlay cabinets. His initial quote didn't have either. And, it turns out that the Amish cabinet maker doesn't do frameless, period. So, we got through that and decided we could minimize the frame portion and still be okay. Next, we talked to the GC and asked about a cash discount. Which he said he offered and that it was "x" % of the total. So, we factored that in when deciding who we were going with. Turns out that he now says that our kitchen is too high in price to offer the discount. WHAT??? In my own business, if someone is buying more, it gives me more of an opportunity to offer a discount. Also, while we were meeting on Sunday, we asked about him painting the walls after the cabinets were in place because the room will reflect light differently once all the cabinets and lighting is in. He agreed that he could do that. He now emailed and said that he doesn't feel comfortable doing that. Ginny - when we visited with the cabinet-maker, it wasn't really supposed to be our final plan but instead to get a fairly accurate quote. I had what I've drawn up and was still perfecting (it's posted on the forum here)...not to mention that I'm certain my dimensions aren't exactly perfect. As to the Amish, there's a sticky area there for them in regard to powered tools, etc. Each sect is governed by similar but different rules. Most of them will talk on cell phones, but they won't have them in their home. They will ride in vehicles, but don't drive them. But, the religious leaders from each community set the rules and those within the community abide by them and don't question them. The GC said that we will get a detailed drawing when we get closer to the date that the cabinet maker will start. But, in the meantime, we need to give $1,000 with a very rough detail of what is and isn't included. My worries are that things will be forgotten or disputed. And I admit, there are a ton of details in our kitchen...I can't keep them straight myself sometimes! Honestly, I don't know what we're going to do. We're back in touch with our "runner up" and I'm still trying to work on a friendly letter to the guy that we thought was going to do our kitchen, but may not be now. Ah, my head is hurting and we haven't even started yet!

Lauraxx -- in this pair, it seems you are the one uncomfortable with not having a contract. As others have suggested, then (not meaning to sound nasty): you do it. Just print up your understanding of the work you've agreed to and ask the contractor to sign it. If he balks at that, seems uncomfortable or refuses, seems insulted or whatever -- well then you've got a situation to evaluate. If he has so many happy customers around with nary a contract in sight, perhaps he'll feel insulted. But you aren't asking for anything untoward. In the end he'll sort of have to make his peace with your "terms" and sign it (or negotiate misunderstandings first). If he won't, that's a pretty illustrative situation to find yourself in. What would it be like if he wouldn't respond to your needs in the event of a problem? As a test-case, this non-problem should be telling. Stick to your guns: if this situation makes you uncomfortable you have every right (with ample precedent) to want to alter it. Not for an instant does this imply you suspect there will be problems, that you harbor concerns about the GC, etc. It means you feel uncomfortable; it is your right to feel comfortable, and your GC likely is the very first to want to agree with that!

theoretically - I've always had to foot the bill to replace all the stuff my GCs subs had damaged To paraphrase from Rudyard Kipling's Kim: A GC is greatest blessing if of best sorts. Otherwise no earthly use. Our kitchen GC was fine about fixing anything that was his or his subs mistake at no expense to us except for at the very very end we disagreed about whether installation was done correctly. We hired someone else to correct it since he didn't accept that it was a problem. It was a small expense in the total scope of the remodel and we were willing to just pay it, but when he learned we were bringing someone else, he fired us (cancelled our contract). The remaining small payment that would have been due him covered fixing the hood installation and a bit of paint touch up that was all that was left so that was fine with us. The GC that did our family room and flooring was great - he had done a few small jobs for us before and we've always been happy with his subs. Only once have we had one of his subs cause damage: the guy pulling Cat 6 wiring broke through the drywall where the wall meets the ceiling in two spots on the other side of the wall from the outlet. Our GC was more upset at him then we were when we found it and had the sub send someone else out to fix it and check the installation.