7 Red Flags in a Contractor's Contract (And How to Spot Them)

7 Red Flags in a Contractor's Contract

Before you sign a construction contract, watch out for these common traps.

1. No Detailed Scope of Work

A vague scope like "renovate kitchen" gives the contractor room to cut corners. The contract should list every task, material, and finish.

2. Full Payment Upfront

Never pay more than 10-15% as a deposit. A legitimate payment schedule ties payments to milestones (framing complete, drywall done, final inspection).

3. No Warranty Clause

Ontario's Consumer Protection Act requires a minimum 1-year warranty on workmanship. If the contract says "no warranty" — walk away.

4. Missing Insurance Details

The contract should reference the contractor's general liability insurance ($2M minimum) and WSIB coverage. Ask for certificates.

5. No Change Order Process

Without a written change order process, the contractor can charge whatever they want for "extras." The contract should specify that all changes require written approval with pricing before work begins.

6. Unrealistic Timeline

If the timeline seems too good to be true, it probably is. A kitchen renovation takes 6-10 weeks minimum. A basement finish takes 8-14 weeks.

7. No Dispute Resolution Clause

What happens if things go wrong? The contract should specify mediation or arbitration before litigation.

How to Protect Yourself

Use our free contract scanner tool to analyze any contractor agreement in seconds.

• Use our AI Contract Scanner to catch these issues instantly
• Never sign on the spot — take 48 hours to review
• Get at least 3 quotes for comparison
• Verify the contractor's license number with your provincial registry