What to Watch for in Interior Design Contracts

TL;DR

Must-check items when drafting accommodation interior contracts

Attorney Song Ji-eun's Series on Hospitality Law

07. What to Watch for in Interior Design Contracts

Hospitality Legal Q&A Part 4

Writer: Attorney Song Ji-eun

Editor: ONDA Manager Lee Chae-eun

"I hired a contractor to remodel the property — wanted to give guests better facilities. But after construction wrapped, what got delivered looked nothing like what we discussed. Found defects, too. How do I hold the contractor accountable? And how do I prevent this from happening next time?"

Renovating a property is practically inevitable — whether you're launching a new accommodation or already running one. Issues like the one above come up more often than they should. Lately, with raw material costs climbing, budget overruns and late-discovered defects have become even more common. That's why nailing the interior design contract from the start matters more than anything.

So what should you focus on when signing an interior contract?

1. Lock Down Start and Completion Dates

First: define clear start and completion dates. Your property can't operate until construction is done, so delays directly translate to lost revenue. To protect yourself, include a liquidated damages clause — a daily penalty if the contractor misses the completion deadline.

2. Split Payments — and Keep Retention High

Never pay the full contract amount upfront. Interior contracts typically break payments into deposit, progress payment, and final payment. Keep at least 50% as the final payment. Contractors will push for bigger upfront deposits or progress payments, but retention is your leverage. Final payment releases only after you've confirmed quality work — which means contractors have real incentive to finish properly. The higher the retention, the better your outcome.

3. Review Every Attachment — Especially the Drawings

Don't gloss over the contract attachments — drawings, labor breakdowns, specs. Some clients skip written contracts entirely or treat drawings as afterthoughts. Big mistake. If the contractor deviates from the drawings, that's your evidence. Review every detail upfront.

4. Extend the Defect Warranty Period

Defects show up after move-in. To cover yourself, set a defect warranty period — and make it as long as possible. Most contractors offer one year of free warranty repair. Push for longer. Also consider requiring the contractor to purchase performance bonds and defect liability insurance. This protects you if the contractor disappears or refuses to fix issues.

Today's Q&A covered what to watch for in interior design contracts. The most common disputes? Work that doesn't match the contract, and surprise bills for "extra" work. For the first issue, your drawings are your remedy — they give you grounds for a damages claim. That's why careful upfront review matters so much.

If the contractor invoices you for extras, scrutinize every line item. Best practice: write into the original contract that no additional fees will apply. If you request changes mid-project that legitimately add cost, agree on the price before the work starts — not after.

Interior contracts involve large sums and complex terms. Read carefully. If you need help, bring in a professional to review the contract or provide counsel before you sign.