What to Put in a Renovation Contract in Ontario to Avoid a Dispute Later

Most renovation disputes we see in Ontario share the same root cause: the contract never actually addressed the thing that later went wrong. A vague scope, no clear payment schedule, no plan for changes mid-project — and suddenly two reasonable people disagree about what was actually promised.

A well-drafted renovation contract cannot prevent every disagreement, but it can turn most disputes into a five-minute conversation ("look, it's right here in section 4") instead of a months-long standoff. Here is what a solid contract should cover.

The Core Terms Every Renovation Contract Needs

1. A Detailed Scope of Work

Vague descriptions ("renovate the kitchen") are the single biggest source of disputes. A strong scope of work specifies:

• Exactly which rooms, systems, or areas are included
• What is explicitly excluded (this matters as much as what's included)
• The specific materials, finishes, brands, or grades being used — not just "standard" or "builder-grade"
• Who is responsible for permits, inspections, and design/architectural drawings

2. A Clear Price and Payment Schedule

• The total contract price, and whether it is fixed or subject to change
• A payment schedule tied to project milestones (e.g., signing, rough-in complete, drywall complete, final completion) rather than arbitrary dates
• What counts as a "deposit" versus a "progress payment," and whether any portion is refundable
• How the statutory holdback under the Construction Act applies to your project, since payers on a project are generally required to hold back a percentage of what is owed until the lien period expires

3. A Defined Timeline

• Expected start and completion dates
• What happens to the timeline if delays occur that are outside the contractor's control (weather, permit delays, supply issues)
• Whether there is any consequence for delays that are within the contractor's control

4. A Change Order Process

This is where many contracts fall silent — and where many disputes begin. Your contract should specify:

• That any change to scope, materials, or price must be documented in writing and signed by both parties before the change is made
• How the cost of a change order will be calculated
• What happens if a change is requested verbally on-site (ideally: it doesn't count until it's in writing)

For more on how change order disputes actually play out, see our companion article on who pays for extra work added mid-project.

Terms That Protect You If the Relationship Breaks Down

Termination Rights

Spell out what happens if either side wants — or needs — to end the contract early: notice requirements, what is owed for work completed to that point, and what happens to any deposit.

Warranty on Completed Work

Ontario's Construction Act separately imposes certain statutory protections, but your contract can also specify what warranty period applies to workmanship and how warranty claims are handled.

Dispute Resolution

Consider whether you want the contract to require mediation or arbitration before either side can go to court. This can be faster and more private than litigation, but it also means giving up the option of an ordinary court action unless you carve out exceptions.

Insurance and Licensing Confirmation

Require the contractor to confirm they carry appropriate liability insurance and, where applicable, hold any required licence — and consider asking for proof rather than taking their word for it. Hiring an unlicensed or uninsured contractor can leave you exposed if something goes wrong on site.

A Pre-Signing Checklist

• [ ] Scope of work is specific enough that a stranger reading it could describe the finished project
• [ ] Total price and payment schedule are tied to milestones, not just dates
• [ ] Change order process requires written sign-off before work proceeds
• [ ] Start and completion dates are stated, with a plan for delays
• [ ] Termination and refund terms are addressed for both sides
• [ ] Contractor has confirmed insurance (and licensing, if applicable) in writing
• [ ] You have kept a signed copy of the final contract, not just an early draft
• [ ] Any verbal promises made during negotiation are actually reflected in the written contract

Why "We'll Just Figure It Out" Is a Bad Plan

It is tempting, especially with a contractor you trust or a friend-of-a-friend referral, to skip the detailed paperwork. The problem is that disputes tend to surface precisely when trust has already broken down — after a missed deadline, a cost overrun, or unexpected work quality. At that point, having agreed terms in writing is often the only thing that resolves the disagreement without a lawsuit.

Frequently asked questions