The Statement of Work (SoW) is an attachment to some sort of “main” agreement which usually deals with a project of some kind. This could be for software development, or something more tangible, like construction – either way these all typically have multiple milestones and detailed step by step plans for completion. The SoW is where all of the details concerning the scope of the project, the cost, the payment schedule, the special standards and regulations which apply, assumptions, responsibilities and duties of each party, and other such information are set out. 

This manner of drafting an agreement has many advantages.

For one, if you’ve ever worked on some type of major project you’ll know that things rarely – if ever – go exactly according to plan. Let’s stick with the construction context for an illustrative example. Suppose you are renovating your basement, and it is discovered that your foundation is rotting and must be fixed for renovations to proceed. If all of the details about the scope and cost of the work were included in the main agreement, amending it might become very complicated. However, because you had compartmentalized all those details into an SoW and left the “bigger picture” items in the agreement, it is much faster and easier to amend without changing the fundamental things the parties already agreed to.

When entering into your next construction agreement, keep this in mind, and if you notice these details spilling into the main agreement, try to shift them into an SoW. A lawyer who is experienced with construction contracts can be helpful, as they will have several key insights on how to best draft your agreement, and minimize risks to you.

Browse Clausehound’s learning library for construction agreements, and click through the tags on each clause to learn more!


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