Construction Contract Agreement Template
Undertaking a contraction project, big or small, can be a complex undertaking with many moving parts. That’s why we’ve worked with legal experts and proofreaders to develop a standard construction contract to use as you grow your business.
Free Construction Contracts Template
Undertaking a contraction project, big or small, can be a complex undertaking with many moving parts. That’s why we’ve worked with legal experts and proofreaders to develop a standard construction contract to use as you grow your business.
What’s in this template?
- • Scope of work
- • Payment and fees
- • Responsibilities of constructor
Click below to get access to our free construction contract template
What is a construction contract?
Building projects by their very nature are involved with many different skills required to fulfill a job. Everything from the multiple-level high-rise apartment complex to a tiny house on residential land requires rigorous planning and labor to complete the project.
A constructor, also known as the builder, is responsible for the execution of a construction project. They charge client fees in exchange for bringing property to life.
A construction contract is a written agreement between a contractor and a client that sets out the scope of work, the price, the schedule and the terms for a building project. General contractors use it for new home builds, renovations and commercial jobs.
DISCLAIMER: We are not lawyers or a law firm and we do not provide legal, business or tax advice. We recommend you consult a lawyer or other appropriate professional before using any templates or agreements from this website.
Download our Construction
Contract Forms
As a constructor, you make your living from your ability to coordinate and execute on building projects, not from necessarily doing administrative tasks for your business.
That’s why we’ve drawn up a simple construction contract template for you to use for each new job, which saves you precious time and confusion.
Click below to grab a copy of our construction agreement form
Why are contracts important in construction?
Building projects can quickly get confusing if they’re not managed properly.
- • Clients may change their minds multiple times throughout the job.
- • Subcontractors face unpredictable situations such as poor weather or damaged materials.
- • Budgets get blown as jobs take longer than expected.
- • Payments get missed for whatever reason.
- • Or sometimes, disputes arise between clients and constructors due to a clash of approaches.
While a construction agreement is not the answer to all the potential issues in a build, it’s a vital document to create boundaries and accountability for all parties involved.
If disputes arise, the construction contract agreement will be the reference document when conducting legal proceedings.
What Are the Four Types of Construction Contracts?
The four main types of construction contracts are lump-sum, cost-plus, time-and-materials and unit price contracts. Each one splits the cost risk differently between you and your client:
- Lump-sum (fixed price): one total price for the whole project
- Cost-plus: the client pays the actual costs plus an agreed fee or percentage
- Time and materials: an hourly labor rate plus the cost of materials
- Unit price: a set price per unit of work, such as per square foot
Our template is set up as a lump-sum contract. You can adapt the Payment And Fees section for any of the other three.
What Are the 5 Essential Elements of a Construction Contract?
The five essential elements of a construction contract are the scope of work, the price and payment schedule, the timeline, the change order process and the terms for termination and disputes. Our template covers each one in its own section.
You can write your own construction contract, and it’s binding once both parties agree to clear terms and sign it. For large projects, have a lawyer check it against your state’s licensing and lien notice rules.
Best practices when using a construction contract
Having a compliant and thoughtful construction agreement template in place puts you in a much better position. However, we’ve identified some best practices to get even more out of your document.
What is the work to be completed by the constructor or contractor?
As a constructor, you must be clear on the scope of your client building project. You’ll need to rely on a combination of your experience, and the building plans to specify your responsibilities accurately.
We understand that it may not be feasible to list all of your duties in a simple contract document, so we encourage you to focus on outlining the key milestones of a construction.
The other consideration is tailoring your services to your clients’ needs. Below are some questions you can ask clients to identify any potential issues about the project.
- • Who do we ask to make decisions?
- • Have you worked with builders before? If so, what didn't you like about the service?
- • What are you looking for in a builder?
- • Do you have sustainability goals for this project?
- • What's your budget?
Use any combination of these questions, together with the building plans, to provide an accurate project scope.
What is the process for amendments?
No matter how much planning you do upfront, sometimes you can’t prevent the need to change tack. Weather, budgets, bad contractors are a few of many variables of construction work.
One of the more controllable factors of a building job is managing your client’s expectations. Clients can change their minds and want to add, subtract, or completely change courses.
Constant project changes cost you time, money, and can be quite the point of frustration. To mitigate this risk, establish ground rules for how parties deal with amendments.
For instance, if a client requests a change outside the scope of your original contract, add a clause in your agreement where all parties must sign off on changes in writing. Parties can assess any changes in budget, subcontractors, materials, or any other facets that may influence this amendment.
No work can proceed until parties are in agreement with the changes.
Having a reliable revision process protects the constructor from doing unnecessary work and holds the client accountable for their requests.
What are your payment terms?
Your fees are understandably at the forefront of your client’s minds, as it will significantly influence their budget and ability to complete the project.
Depending on whether projects are commercial or residential or the access to capital of your client, we suggest you provide a couple of options for payment terms.
If the client can confidently pay your fees, you could charge a deposit and the balance at the time of completion.
Alternatively, you could arrange progress payments where you’re paid every certain amount of days, weeks, or months.
Work with your client and the scope of the project to land on a payment structure everyone is happy with.
Download our Construction Contract
As a constructor, you make your living from your ability to coordinate and execute on building projects, not from necessarily doing administrative tasks for your business.
That’s why we’ve drawn up a simple construction contract template for you to use for each new job, which saves you precious time and confusion.
Click below to grab a copy of our construction agreement form
Frequently Asked Questions
FAQ about our Construction Agreements
Construction jobs are often costly and require skilled tradespeople who can handle dangerous equipment. Building jobs can also get out of hand without project management and substantiated documentation each step of the way.
So while there’s no legal requirement to have a construction agreement, it’s highly recommended that you put one in place to protect yourself if anything goes pear-shaped.
So while there’s no legal requirement to have a construction agreement, it’s highly recommended that you put one in place to protect yourself if anything goes pear-shaped.
Building projects are dynamic, and we recognize that terms and conditions may need to be adjusted depending on your client’s needs. We’ve made our template available in a Word file type so you can make changes as required.
It’s important to note that if you tend to make significant changes to our template, it’s worth consulting with a lawyer or conveyancer to ensure you’re not leaving yourself exposed.
It’s important to note that if you tend to make significant changes to our template, it’s worth consulting with a lawyer or conveyancer to ensure you’re not leaving yourself exposed.
Like any agreement, a construction contract may be canceled in the following situations:
- Any party breaches the terms and conditions.
- Any part gives written notice to another party based on the agreed notice period.
- When the project has been completed.
document preview
Construction Contract Agreement
Construction Contract Agreement
Parties
– This Construction Contract Agreement (hereinafter referred to as the “Agreement”) is entered into on ______________ (the “Effective Date”), by and between __________________________, with an address of ______________ (hereinafter referred to as the “Constructor”) and ______________ with an address of ______________ (hereinafter referred to as the “Client”) (collectively referred to as the “Parties”).
Construction Property
– The Property that is to be constructed is located at the following address:
________________________________________________________________________________________________________________________
Scope Of Work
The Constructor agrees to perform the construction described below:
- ____________________________________________________
- ____________________________________________________
- ____________________________________________________
- ____________________________________________________
- ____________________________________________________
- ____________________________________________________
- ____________________________________________________
- ____________________________________________________
- ____________________________________________________
- ____________________________________________________
– In addition to the aforementioned, the Constructor agrees to abide by and perform all the work that is shown on the construction plan available on the property’s site.
Term
– This Agreement shall be effective on the date of the signing this Agreement (hereinafter referred to as the “Effective Date”) and will end when the construction services are completed.
– The term of this Agreement may be extended upon the provision of written consent from both Parties.
– The Parties agree that the Construction will begin on ______________ and will end on or before ______________.
Payment And Fees
– The Parties agree that the total cost of the services will be ______________ where ______________ will be paid at the signing of this Agreement and ______________ will be paid at completion.
– The Parties agree that the Constructor will provide an invoice to the Client every ______________ days/months for the Services he/she completes.
– The Parties agree that the means of payment will be via
________________________________________________________________________________________________________________________
Permits And Licenses
– The Parties agree that it is the duty of the Constructor to obtain all permits and licenses needed to commence in the construction of the site and provide his/her services.
– The Parties further agree that the ______________ will be responsible to pay the fees for the governmental inspections, if need be.
Usage Of Materials And Labor
– The Parties agree that it is the Constructor’s responsibility to provide as well as pay for any labor and/or equipment needed to complete the construction as per the Agreement.
– The Parties further agree that the materials used for the construction are to be brand new.
Additional Responsibilities Of The Constructor
The Constructor agrees to the following:
- 1. To supervise, manage and complete all the construction services as per this Agreement.
- 2. To keep record of the documents in a safe place accessible only to the Constructor and the Client.
- 3. To take all necessary precautions for all safety in general.
- 4. To bear responsibility for any acts of negligence and emergencies and accidents.
- 5. To provide a guarantee to the Client that the work commenced will be in accordance with the documents of this Agreement.
- 6. To maintain the property, keep it clean, and to safely dispose of hazardous materials and waste.
- 7. To train personnel on handling hazardous materials and to be responsible for any illness, damage, or loss of personnel.
Insurance
– The Parties agree that it is the Constructor’s responsibility to purchase an insurance policy for the construction.
– The Parties further agree that it is the Client’s responsibility to maintain an insurance that covers replacement costs in the event of fire, theft, act of nature and/or casualty(s).
Termination
This Agreement may be terminated in case the following occurs:
- Immediately in case one of the Parties breaches this Agreement or one of the conditions set forth in this Agreement and does not amend them within a period of ______________.
- This Agreement will automatically be terminated when both Parties complete their obligations.
Indemnification
– The Constructor agrees to hold harmless as well as indemnify its personnel, employees and others against all liabilities, expenses, claims or other.
– The Constructor further agrees to be held responsible for providing a defense against the aforementioned liability, claims and/or demands, if any.
Governing Law
– This Agreement shall be governed by and construed in accordance with the laws of ______________.
Amendments
– The Parties agree that any amendments made to this Agreement must be in writing where they must be signed by both Parties to this Agreement.
As such, any amendments made by the Parties will be applied to this Agreement.
Assignment
– The Parties hereby agree not to assign any of the responsibilities in this Agreement to a third party unless consented to by both Parties in writing.
Alternative Dispute Resolution
– Any dispute or difference whatsoever arising out of or in connection with this Agreement shall be submitted to ______________ (Arbitration/mediation/negotiation) (Circle one) in accordance with, and subject to the laws of ______________
Entire Agreement
– This Agreement contains the entire agreement and understanding among the Parties hereto with respect to the subject matter hereof, and supersedes all prior agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.
Severability
– In an event where any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, then the remaining provisions will remain to be enforced in accordance with the Parties’ intention
Signature And Date
– The Parties hereby agree to the terms and conditions set forth in this Agreement and such is demonstrated throughout by their signatures below:
Constructor
Name: ______________________
Signature: ___________________
Date: _______________________
Client
Name: ______________________
Signature: ___________________
Date: _______________________
Download our Construction
Contract Form
As a constructor, you make your living from your ability to coordinate and execute on building projects, not from necessarily doing administrative tasks for your business.
That’s why we’ve drawn up a simple construction contract template for you to use for each new job, which saves you precious time and confusion.
Click below to grab a copy of our construction agreement form