Typical Contractor Mumbo Jumbo – How Understanding the Terms Can Help You

If you’ve never dealt with a contractor before, or don’t do so on a regular basis, you might have trouble understanding what they’re talking about from time to time.

If you don’t speak the language, this can lead to confusion and problems down the road. So if there’s anything in the contract, or even while the actual work is being completed, that you don’t completely understand, take time to sit down with your contractor and figure things out.

This is going to save you a lot of headaches, and possibly money, down the road. There’s no such thing as a stupid question when your livelihood is on the line, so ask away and don’t stop until you’re satisfied with the answer.

Here are a few of the most common terms a contractor might utter or write in a contract that could lead to confusion on the part of the client (you)…


When a contractor talks about allowances, this generally refers to the amount of money that the client needs to set aside for things they’ve already determined will need to be done but haven’ yet been explored.

For example, you may have decided you want hardwood flooring in your new office. But you haven’t yet decided the exact type, so this allowance will need to be set aside for when the decision is finally made.

The actual flooring could be more or less than this allowance, so it’s not normally set in stone in the contract.


This is short for specifications and is a common word contractors use in their day-to-day business.

For you as the client, when you hear a contractor talking about specs, it’s generally going to refer to lists of materials and products, as well as the actual work that’s required to finish a project.

This list of specs should be included in the contractor’s estimate, as well as in the contract that will be signed by both the client and the contractor prior to beginning work.

Change Orders

These take place after the work on a project begins and the client decides that changes need to be made to work that was originally agreed to in a contract.

Change orders usually involve an increase in spending, so be wary of this before committing to them. But if there’s something you don’t like along the way and want to make a change, you and your contractor should sit down and commit to a change order.

Bonded and Bonding

You always want to work with a contractor who is bonded to ensure a good degree of financial protection in case something goes wrong during the course of the building project.

A contractor bond provides the client with protection in case the job isn’t completed properly or if the contractor fails to pay his suppliers and/or subcontractors.

A bond will also cover any damage that occurs to the client’s property, which is another level of protection for the client.

When deciding on a contractor for your construction job, you should always ask for proof that he and his company are sufficiently bonded.

Punch Lists

If you hear your contractor talking about a “punch list,” this is really just his name for a checklist he’s created for the items that need to be completed on your construction job.

These are things that you and the contractor have agreed to ahead of time and includes the major details of the job and how and when they are to be completed.

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