Samples of construction contracts should include such vital details as compensation and list of duties.

Construction contracts also go by the following names:

  • Construction Agreements
  • Construction Contracts
  • Construction Management Agreements
  • Service Agreements for Construction
  • Construction Services Contracts
  • Contracts for Construction
  • Construction Contractor Agreements
  • Contractor Agreements

A construction agreement is a document between a property owner and contractor that specifies certain duties that the contractor needs to perform. Such project details could include:

  • Renovations
  • Alternations
  • Maintenance

The document details also include the amount to be paid to the right contracts, the rights of all parties, and the date the construction project needs to be completed.

Contract Steps

A document should include the following definitions:

  • Owner: Person who hires the contractor to complete the construction project on the property in question
  • General Contractor: The person responsible for oversight of the project
  • License Number: A general contract’s state-issued license, proving that they are licensed to be a contractor

Further, a contract should include the worksite and address of the project. You must also include a job description of the work and the project goals. You may also submit any specifications or plans with the agreement as well. Such specifications can include:

  • Blueprints
  • Drawings
  • Exhibits

In addition, contract prices and payments are vital, and you should state the overall price that will go to the work, including when payments will be issued.

You should also note any labor and materials for the project, and which party will supply what items. Further, include starting and finishing dates. This means that the contract must start the project on a certain date and end by a specified time. Before a project begins, each party should work out what type of licenses and permits will be required as the project starts. On the contractor’s end, he or she must hire subcontractors to help complete the project.

You should include provisions regarding potential changes that may take place during the project. Lastly, warranties are a vital part of the process because it guarantees that the work completed is free of defects.

Additional Provisions

You may also include such elements as the following:

  • Indemnification: The contractor accepts responsibility for any damages or loss throughout the project
  • Resolution Disputes: Such a clause is reserved for mediation and arbitration in the event of any conflict. Such a clause is useful in preventing legal proceedings.
  • Termination: When either party can lawfully terminate the agreement

One of the most important clauses you can add pertains to insurance, especially if you plan a large project. A contract may force contractors and owners to obtain insurance as a safeguard against defects or damages. When it comes to liquidated damages, it is the amount each day a contract should pay to the owner if a project surpasses the deadline.

In regards to damages, the contract can include a provision known as force majeure. Such a clause mandates that parties will not take issue liability due to unforeseen circumstances (i.e., earthquakes, hurricanes, material shortages, etc.)

You may also detail how a worksite should be managed or maintained, including:

  • Material storage
  • Worker supervision
  • The dumping of waste

Contract Benefits

Construction agreements benefit all parties involved. For instance, you may wish to build your dream house and hire a contractor to complete your vision. With that, you may come across problems in the form of higher-than-anticipated costs and delays. This is why you should get all details of an agreement in writing until the project is fully completed.

Moreover, the agreement gives all parties the chance put into writing their goals and any details they wish to stress to the other party. Most importantly, you should detail the compensation forms to prevent miscommunication.

Compensation Models

You have various ways in which you can establish compensation models:

  • Lump Sum: Also called a fixed price agreement. This compensation form is most common for construction projects. All parties agree to a fixed price, depending on a contractor’s appraisal costs, and final designs.
  • Cost or Cost-Plus: The owner reimburses a contractor for any costs incurred during the project, such as labor and materials. In addition, an owner also pays a percentage for profit margins.
  • Unit Price: The unit price involving parties establishing a price on each unit or item (i.e., cubic yard linear foot, per hour, etc.).

To find out more information on samples of construction contracts, submit your legal inquiry to our UpCounsel marketplace. UpCounsel has some of the best lawyers in the nation that will help all parties get into a legally-sound contract that will help everyone achieve their goals and get the compensation they deserve. In addition, our attorneys will be by your side in case any conflict arises, and they will help you draft a solid arbitration agreement to prevent court proceedings.