How to Review a Contractor's Contract Before Signing
A contractor's contract is your most important protection during a bathroom remodel. Before you sign, you need to understand every clause, verify the payment schedule protects you, and ensure there are clear procedures for changes, warranties, and disputes. This guide walks you through exactly what to look for.
Quick Summary
Time needed
1-3 hours
Difficulty
Moderate (requires attention to detail)
Cost
Free ($200-500 if using attorney)
Why Contract Review Is Non-Negotiable
The contract you sign determines everything about your bathroom remodel experience. It dictates what you'll pay, when you'll pay it, what happens when things go wrong, and your legal recourse if the contractor disappears or does substandard work. A poorly written contract or one skewed heavily in the contractor's favor can cost you thousands of dollars and months of frustration.
Don't rush this step. Even if you love your contractor and trust them completely, the contract exists precisely for situations when trust breaks down. Here's what a proper contract review protects you from:
- Payment disputes: Clear milestones prevent paying for work not yet completed.
- Scope creep surprises: Written change order procedures stop unexpected bills.
- Mechanic's liens: Lien waiver requirements protect your home's title.
- Abandoned projects: Termination clauses let you exit and hire someone else.
- Substandard work: Warranty terms ensure defects get fixed at no cost to you.
- Timeline disasters: Completion dates with consequences keep projects on track.
What You Need for Contract Review
Before sitting down to review the contract, gather these items so you can cross-reference information and document your questions:
Documents
- The contractor's proposed contract
- Your original project quote/estimate
- Design plans and material selections
- Contractor's license and insurance certificates
Tools
- Highlighter and colored pens
- Notepad for questions
- Calculator for payment verification
- Access to state licensing board website
Step-by-Step: Reviewing Your Contractor Contract
1. Verify Contractor Credentials and Business Information
The contract should clearly identify the contractor with their full legal business name, not just a DBA or first name. This is critical if you ever need to take legal action or file a complaint with licensing boards.
Must Be Included
2. Scrutinize the Scope of Work
The scope of work is the heart of your contract. It should describe in precise detail exactly what work will be performed and what materials will be used. Vague language like "quality fixtures" or "standard tile" is unacceptable.
Good Scope Language
- • "Kohler K-3979-0 Highline toilet in white"
- • "48 sq ft Carrara marble 12x24 tile, herringbone pattern"
- • "Delta Trinsic faucet, model 559LF-MPU, matte black"
- • "Schluter DITRA waterproofing membrane"
Red Flag Language
- • "Standard bathroom fixtures"
- • "Quality tile for floor and walls"
- • "Modern faucet in selected finish"
- • "Appropriate waterproofing methods"
Your scope of work should cover all of these areas for a bathroom remodel:
3. Analyze the Payment Schedule
The payment schedule is where many homeowners get burned. A contractor asking for 50% upfront is a massive red flag. Ethical, established contractors can float initial material costs and don't need large deposits. Here's what a fair payment schedule looks like:
Recommended Payment Structure for a $25,000 Bathroom Remodel
Secures your spot on the schedule
Work has visibly begun
Plumbing and electrical approved
Major visible work complete
Punch list complete, you're satisfied
4. Understand the Change Order Process
Change orders are one of the most contentious areas in contracting. During any remodel, you might discover unexpected issues or decide to upgrade materials. The contract must clearly define how changes are handled:
- Written requirement: All change orders must be in writing before work begins. Verbal agreements are not binding.
- Price transparency: Change order pricing should show materials, labor hours, and markup clearly. Avoid "cost plus" language without caps.
- Timeline impact: Change orders should include any schedule adjustments, signed by both parties.
- Approval requirement: You must sign to approve before any change order work begins. Never accept "we'll figure it out later."
5. Examine Warranty Terms
Your contract should include two types of warranties: the contractor's workmanship warranty and pass-through manufacturer warranties for materials and fixtures.
Workmanship Warranty
- Minimum 1 year (2 years preferred)
- Covers installation defects
- Response time for claims (48-72 hours)
- Waterproofing: 5-10 years
Product Warranties
- Toilet: typically 1-5 years
- Faucets: lifetime to 5 years
- Tile: typically 5-10 years
- Vanity: 1-3 years
The contract should state that the contractor will provide you with all manufacturer warranty documentation at project completion, and that their workmanship warranty covers labor to repair any defects during the warranty period.
6. Require Lien Waiver Provisions
This is one of the most overlooked but critical contract elements. A mechanic's lien allows anyone who provided labor or materials for your project to place a claim against your property if they're not paid—even if you paid your general contractor in full.
Real-World Scenario
You pay your general contractor $25,000 for your bathroom remodel. The GC doesn't pay the tile supplier ($3,000) or plumber ($4,000). Those unpaid suppliers can place liens on your home totaling $7,000, and you may have to pay again—or they can force a sale of your home to collect. Lien waivers prevent this.
Your contract should require:
- Conditional lien waivers from the GC and all subcontractors with each progress payment
- Unconditional lien waivers upon final payment from all parties
- A list of all subcontractors who will work on your project
7. Verify Project Timeline and Delay Provisions
Your contract should include specific dates and provisions for what happens when things don't go as planned:
8. Review Termination and Dispute Resolution Clauses
Every contract needs clear exit strategies for both parties. Pay attention to the balance of these clauses—they should be fair to both sides:
Termination Terms to Look For
Termination for cause (contractor breach):
You can terminate if contractor abandons work, fails to perform, or materially breaches the contract. You should only owe for work satisfactorily completed.
Termination for convenience (your choice):
You can terminate for any reason with written notice. You'll owe for work completed plus reasonable demobilization costs (define what's "reasonable").
Contractor termination:
Contractor should only be able to terminate for your failure to pay or make the property accessible, with written notice and cure period.
For disputes, look for these provisions:
- Mediation first: Requires good-faith mediation before litigation
- Jurisdiction: Disputes should be resolved in your state/county, not the contractor's
- Attorney fees: Prevailing party should recover reasonable attorney fees
Pro Tips From Experienced Homeowners
Take your time—never sign the same day you receive the contract
A reputable contractor will give you days or even weeks to review. High-pressure tactics to 'sign today for this price' are red flags.
Get everything in writing, even small changes discussed verbally
After any conversation about the project, send an email confirming what was discussed. If it's not documented, it didn't happen.
Consider paying $200-500 for an attorney to review the contract
For a $20,000+ project, this is excellent insurance. A construction-savvy attorney will spot issues you might miss.
Add an allowance clause for selections not yet finalized
If you haven't chosen your exact fixtures, include allowances (e.g., '$500 allowance for toilet') with language for how overages or underages are handled.
Request the contractor's certificate of insurance naming you as additional insured
This ensures you're protected if there's an accident on your property and gives you direct notification if their policy lapses.
Add a right to audit clause for cost-plus contracts
If any portion is 'cost plus,' you should have the right to request invoices and verify actual costs.
Common Mistakes to Avoid
Paying more than 10% upfront
Why it's a problem: Large deposits are the #1 indicator of contractor fraud. Legitimate contractors don't need your money to buy materials.
What to do instead: Cap your deposit at 10% or $1,000, whichever is less. Walk away from anyone demanding more.
Accepting vague scope of work language
Why it's a problem: Terms like 'quality fixtures' or 'standard materials' give the contractor room to substitute cheaper options.
What to do instead: Require specific brand names, model numbers, colors, and quantities for every item.
Signing without verifying license and insurance
Why it's a problem: A lapsed license may void your consumer protections. Inadequate insurance leaves you liable for injuries.
What to do instead: Call the licensing board and insurance company directly before signing. Don't just look at certificates.
Ignoring the lien waiver provisions
Why it's a problem: Without lien waivers, you can be forced to pay for the same work twice if the GC doesn't pay subcontractors.
What to do instead: Require conditional waivers with each payment and unconditional waivers at completion from all parties.
Agreeing to mandatory binding arbitration
Why it's a problem: Arbitration heavily favors contractors who go through it repeatedly. You lose your right to sue or join class actions.
What to do instead: Negotiate for optional mediation first, with litigation rights preserved if mediation fails.
Your Contract Review Checklist
Use this checklist to ensure you've reviewed every critical element before signing.
Frequently Asked Questions
How much should I pay upfront to a bathroom remodel contractor?
Industry best practice recommends paying no more than 10% upfront or $1,000, whichever is less. Reputable contractors can float initial material costs and should never ask for 50% or more upfront. Large deposits are a major red flag and one of the most common indicators of contractor fraud. Structure remaining payments around completed milestones, with 10-15% held until final completion and your satisfaction.
What should be included in a bathroom remodel contract's scope of work?
A thorough scope of work should include: specific brand names and model numbers for all fixtures (toilet, vanity, faucets, shower fixtures), tile specifications including size, color, pattern, and square footage, detailed descriptions of all demolition work, plumbing modifications with fixture locations, electrical work including outlet placement and lighting, waterproofing methods and materials, paint colors and finishes, and cleanup and debris removal responsibilities.
What is a lien waiver and why do I need one?
A lien waiver is a legal document where a contractor, subcontractor, or supplier gives up their right to place a mechanic's lien on your property for the amount they've been paid. Without lien waivers, you could pay your general contractor in full, but if they fail to pay their tile supplier or plumber, those unpaid parties can place a lien on your home and potentially force a sale to collect their money. Always collect lien waivers with each payment.
How long should a contractor warranty bathroom remodel work?
A reputable contractor should warranty their workmanship for a minimum of one year, with two years being preferable. This covers installation defects and craftsmanship issues. Waterproofing in wet areas like showers should carry a longer warranty of 5-10 years given the serious consequences of failure. Material and fixture warranties are separate and come from manufacturers, typically ranging from 1-10 years depending on the product.
Can I cancel a contractor contract after signing?
Most states have a "cooling off" period of 3 business days during which you can cancel a home improvement contract signed in your home without penalty. After this period, cancellation terms depend on your contract. A fair contract should allow termination for convenience with payment for work completed plus reasonable costs, and termination for cause (contractor breach) with minimal obligation. Avoid contracts that impose severe penalties for homeowner cancellation while giving contractors easy exit options.
Ready for the Next Step?
Once you've thoroughly reviewed and signed your contract, it's time to handle permits before work begins.