Property Owner Frequently Asked Questions

What does Contract Smart do?

Contract Smart provides unique online tools to help contractors provide a higher level of service and professionalism to their clients.  Specifically, our Bid and Contract Management System is designed to reduce Contractor disputes and their associated risks by providing a balanced contract that clearly outlines each step of the work to be completed, along with payment due at that time within the contract's Scope of Work. Our innovative system enables the Property Owner to only pay for work completed, and allows the Owner and Contractor to quickly updated their contract if changes occur during the course of the project.  Finally, the contract is designed to resolve disputes quickly through an accelerated, non-litigious conflict resolution process.


Are Contract Smart Members licensed and insured?

In order to use Contract Smart’s products, each Member Contractor must agree to follow a Code of Ethics.  Among other things, the Code of Ethics states that each Member Contractor agrees to carry at least $1,000,000 in General Liability Coverage, along with all required licensing for the jurisdiction in the which the contractor operates.  Contract Smart recommends that each Owner request documentation from the Contractor to prove that both insurance and licensing are appropriate and current prior to executing any contract.


What is the relationship between Contract Smart and its Member Contractors?

Contract Smart Members are not employees or independent contractors of Contract Smart.  They are Contractors that use Contract Smart’s products and agree to follow Contract Smart’s Code of Ethics.


How does Contract Smart help protect me from lawsuits?

Numerous features of the Bid and Contract Management System have been designed to minimize number of disputes between Owners and Contractors.  Despite the efforts, Contract Smart realizes that some disputes may still arise on occasion.  As such, Contract Smart's Contract features a binding arbitration stipulation within its Conflict Resolution Clause, designed to resolve most conflicts within 14 days of notice from one party to another. 


What happens if my plans or materials change after my project starts?

Since changes to a project can occur for a variety of reasons, Contract Smart's Bid and Contract Management System allows your Contractor to quickly modify your contract to reflect the requested change order(s).  Once the modifications to the contract are complete to reflect the change order(s), your Contractor can e-mail, fax, or hand deliver a copy of the changes for your review.  If you are satisfied with the changes, simply sign the new document with your Contractor and your contract is updated.  However, all prior versions will be stored in the event that you or your Contractor need them for later reference.


What if the Contractor I want to use for my project isn’t currently a Contract Smart member?

In the event that you'd like to work with a Contractor that isn't a Contract Smart member, you can direct them to www.contractsmart.com, where they can learn more about our products and services, including the Bid and Contract Management System.  In many cases, we offer a free trial that will enable your Contractor to utilize our full product and service offerings throughout the course of your project.


How can I check on a Contractor’s track record?

You may request references from a prospective Contractor, which many reputable Contractors maintain and should readily provide to you.  Note that even if a Contractor provides references, it is a good idea to not only contact one or more of those references, but to check other sources of information regarding their historical performance and reputation.  There are a number of sources of information to review a Contractor's history.  Two popular services are the Better Business Bureau (www.bbb.org - Free) and Angie's List (www.angieslist.com - Note: subscription required).     


What is a lien waiver?  What is it used for?

A lien waiver is an important document that helps protect a Property Owner from potential legal claims and title problems. 

In order to provide recourse to Contractors in the event of non-payment by a Property Owner or General Contractor they are working for, the law generally allows Contractors to place a lien (known as a Mechanic's Lien) on the Owner's property.  Thus, a lien waiver is a document that the Property Owner provides to the Contractor when payment is provided for completed work.  When the Contractor executes a lien waiver, he or she is acknowledging payment for work completed and is waiving his or her rights to place a lien on the property in conjunction with the paid work. 

Lien waivers can be full or partial in nature.  A full lien waiver generally applies to all work completed on the Property, while a partial lien waiver applies to only certain work completed.  When a partial lien waiver is executed, the Contractor is waiving his or her right to file a lien in conjunction with certain work completed and paid for, while the Contractor retains his or her rights to place a lien on the property for future work if he or she is not compensated for that work. 


What about Subcontractors?

If you are completing a project that involves a General Contractor, it is possible that the General Contractor may hire one or more Subcontractors to complete portions of the work.  Under these circumstances, the General Contractor can use Contract Smart's Bid and Contract Management System to create a contract with the Subcontractor(s).  This contract is designed to ensure that the Subcontractor performs the assigned work in conjunction with the schedule provided in the Scope of Work contained in your contract with your General Contractor.  The Subcontractor contract also provides certain rights, remedies and protections to the General Contractor in the event that the Subcontractor fails to perform the work assigned by the General Contractor.


Is Contract Smart a referral service?

No. Contract Smart provides its members with access to its Bid and Contract Management System, a dynamic online service that enables Contractors to easily create bids and contracts for Owners and Subcontractors.  The Bid and Contract Management System also allows members to manage their online bids and contracts within a private, secure account.  Contract Smart Members are listed on the website for the benefit of Owners seeking Member Contractors, but Members are not charged for the listing or for any resulting contact from an Owner. 


How is a Contract Smart Contract different from a form Contract I can purchase online?  And why should I consider using a Contract Smart Contract instead of the Contract my Contractor provides?

While having a written contract is an important step toward establishing and maintaining a professional image and important legal protections, traditional contracts do have shortcomings.  Many are boiler-plate documents that do not address specific aspects of the work to be performed.  Often, these static documents become outdated with changes in the law or changes in the project.  Further, some Owners are hesitant to sign them because they understand that they are typically slanted in the Contractors favor.  In fact, many of these contracts stipulate that any disputes be resolved through costly and time-consuming litigation within the Contractor's selected jurisdiction.  Finally, these contracts do little to help the Contractor better manage his or her workload, which, in turn, does little to help the Owner receive timely service and performance.

On the other hand, The Bid and Contract Management System provides a balanced contract that provides important legal protections to the Owner and the Contractor.  The probability of disputes during the job is lowered by the detailed Scope of Work that is prepared in conjunction with the contract, as well as by subcontractor agreements stipulating terms and conditions of work.  Disagreements with Owners are also reduced when the Bid and Contract Management System's project management tools are used to keep projects on time and under budget.  And, in the unlikely event of a dispute, the Contract Smart Contract contains an arbitration clause designed to resolve disagreements within two weeks - a much quicker and less costly solution than most court proceedings. 


Who writes contracts for Contract Smart?

Contract Smart engages highly experienced attorneys within each state it operates to draft its contracts.  By dealing with local attorneys, Contract Smart is better able to that ensure the quality, timeliness, and appropriateness of the contracts it offers to its Member Contractors and their customers.


What is the Bid and Contract Management System and how does it work?

The Bid and Contract Management System is an online program that allows Contractors to provide Property Owners with a professional, detailed bids and contracts for proposed or planned improvements to property.  The program's flexibility enables Contractors and Property Owners to update contracts for changes that arise during the job, and to manage their entire workload with customizable reports to improve their performance and communication with Owners. 

Additionally, the Bid and Contract Management System enables you to pay only for work completed once the contractor completes certain tasks where a Payment Milestone has been designated.  Finally, in the event a dispute arises on your project, the contract within the Bid and Contract Management System provides a Conflict Resolution clause that is designed to protect you from costly and time consuming legal proceedings.


What is a Payment Milestone?  Why is it important? 

A Payment Milestone indicates that monies are due upon the fulfillment or completion of a specific task within the scope of the work to be completed.  Payment milestones are important because they help to ensure that the Property Owner is paying for work that is completed.  As such, payment milestones are designed to provide more control to the Owner than a situation where the Owner simply writes checks at the Contractor's request, without those checks necessarily being tied to the completion of work or a task.


I don’t live in Colorado.  Can I use a Contract Smart contract with my Contractor?

Contract Smart has retained experienced attorneys in the field of Construction Law for the State of Colorado to draft its Contracts and Agreements.  Since these Contracts and Agreements are written and updated with changes to Colorado Law, they are not recommended for use outside the State of Colorado.  Since Contract Smart plans to expand beyond Colorado soon, please check the Contract Smart website periodically for updates regarding our expansion.


Does Contract Smart provide legal advice?

No. Contract Smart provides an online portal to individuals who choose to prepare their own legal documents for the purpose of managing contract-based improvements to their real property or to the real property of others. Contract Smart is not a law firm, and the employees of Contract Smart are not acting as an attorney for its Member Contractors, their Clients or any other user of Contract Smart’s Products and Services. Please read our Terms and Conditions for additional details.  


How can I determine if a Contractor is a valid Contract Smart Member?

Contract Smart Member Contractors are listed in our Member Directory for your convenience.  If you suspect a contractor is fraudulently using Contract Smart products, please contact us immediately.  You may be eligible for a reward.