The Contract
The owner of a house that requires work and the contractor, Borgerding Construction, Inc., are parties to a contract. According to the agreement, Borgerding Construction Inc. must make improvements to the residence of the named owner by making sure that it provides all labor and materials and successfully completes the work. The contract itself, a sample change order, a mechanics lien warning, and a three-day right to cancel notice are the required documents in this agreement. The agreement also specifies the overall cost, the amount of the down payment, and various payment schedules. It also includes the proposed plan of work by clearly indicating the start and completion date for the project. The contract also outlines the responsibilities of both the home owner and the Borgerding Construction Inc. and gives specific instructions regarding change of orders or any extra work. The contract also states the rights of the owner and includes a section where the two parties sign to confirm that they have agreed to enter into a legally binding agreement.
Indemnification Clause
Damage to Property is a paragraph in the contract that states the responsibility of harm of the owner's property. The clause that guards the parties against liability if losses or expenses are incurred is called the indemnification clause. The indemnification clause releases one party from liability, and it is important to use it with caution as it could limit the ability of the owner to recover any damages and losses incurred (Chen-Wishart 481).
Attorney Fees Clause
Attorney's fees is a paragraph in the contract which provides guidelines on how both parties should refund one another in the event a dispute arises and lead them to court. The losing party is required to pay the other party the full attorney's fees and this decision should be included in the judgment given by the suit. This clause is called the attorney fees clause, and in some cases, it may require the losing party to pay the other party other costs incurred from the court proceedings and even court fees (Chen-Wishart 537). It guides the relationship between both sides after they solve a dispute using the arbitration process.
Severability Clause
The paragraph on validity and damages states that if either one or more of the provisions of the agreement or any application is illegal, invalid or unenforceable, it shall not impact the legality and enforceability of the remaining articles in the contract. It also states that the contractor cannot be liable to the owner for damages that exceed the total cash price of the contract. The stipulations in this paragraph make up the severability clause. It is a provision that ensures that the contract is still enforced even if some of its parts may become invalid (McKendrick 255). If an agreement fails to have this clause, a court may declare the whole contract invalid if one of its provisions is declared unenforceable (McKendrick 257). Therefore, this provision aims at saving the deal. Moreover, in the same paragraph, the contract states that the California law governs this provision. The specification of the governing law also brings in the clause of choice of law. The selection of the law means that the parties agree that the terms will only be interpreted by the laws enacted in a particular state and as such litigation can only take place in a specified jurisdiction (McKendrick 282). However, the rules only apply when they do not conflict with the requirements of the general law.
Works Cited
Chen-Wishart, Mindy. Contract Law. Oxford: Oxford University Press, 2012. Web.
McKendrick, Ewan. Contract Law: Text, Cases, and Materials. Oxford: Oxford University Press, 2014. Web.
