California Commercial Form

COMMERCIAL CONSTRUCTION CONTRACT

THIS CONSTRUCTION CONTRACT (“Contract”), effective as of the date of the last party to sign below, is between , having an address at ("Contractor") and , having an address at ("Owner").

For valuable consideration the parties hereby agree as follows:

1. SCOPE OF WORK: Contractor shall provide all labor and materials, and perform all work necessary for the completion of the residence, structure, or improvements as described in the drawings and specifications signed by both Owner and Contractor (“Project”) and more particularly described as

Such drawings and specifications are hereby made a part of this Contract. Drawings and specifications shall contain a scale drawing showing the shape, size, and dimensions of the construction and equipment together with a description of the work to be done, materials to be used, and the equipment to be used or installed.

2. WORK SITE: The Project shall be constructed on the property of Owner located at and more particularly described as (hereafter "the Work Site").

3. TIME OF COMPLETION: Contractor shall commence the work to be performed under this Contract on or before and shall substantially complete the work on or before .

4. PERMITS: Contractor shall apply for and obtain such permits and regulatory approvals as may be required by the local municipal/county government, the cost thereof shall be included as part of the Project price.

5. SOIL CONDITIONS: Contractor shall have no responsibility for the condition of the soils at the Work Site. Any excavation, filling or other work required by the Owner other than the usual and customary excavation and grading shall be agreed to in a Change Order for an amount in addition to the Contract Price. Contractor shall not be responsible for any damages suffered by Owner as a result of the soil conditions at the Work Site.

6. SURVEY AND TITLE: If the Project is near the Owner’s property boundary, Owner will point out property lines to the Contractor. If the Owner or Contractor has any doubt about the location of the property lines, Owner shall provide Contractor with boundary stakes through a licensed surveyor. In addition, Owner shall provide Contractor documentation that Owner has title to the Work Site and shall provide Contractor copies of any covenants, conditions, or restrictions that affect the Work Site.

7. CHANGES TO SCOPE OF WORK: Owner may make changes to the scope of the work, including changes to the drawings and specifications, from time to time during the construction of the Project. However, any such change or modification shall only be made by written "Change Order" signed by both parties. Such Change Orders shall become part of this Contract. Owner agrees to pay any increase in the cost of the Project as a result of a Change Order.

8. CONTRACT PRICE:

{COST PLUS}

Owner agrees to pay Contractor the actual cost to Contractor of materials plus the sum of $ for performing the services set forth in the scope of the work. Contractor shall be paid as follows:

OR

{FIXED FEE}

Owner agrees to pay Contractor the sum of $ for performing the services set forth in the scope of the work. Contractor shall be paid as follows:

Contractor shall furnish Owner appropriate releases or waivers of lien for all work performed or materials provided at the time the next periodic payment shall be due.

9. PROGRESS PAYMENTS:

A. Owner shall make progress payments on account of the contract price to Contractor, on the basis of applications for payment submitted to by Contractor as the work progresses, and on the ’s certificate for the same, in accordance with .

B. Progress payments may be withheld if:

1. Work is found defective and not remedied;

2. Contractor does not make prompt and proper payments to subcontractors;

3. Contractor does not make prompt and proper payments for labor, materials, or equipment furnished to Contractor;

4. A subcontractor is damaged by an act for which Contractor is responsible;

5. Claims or liens are filed with regard to the project; or

6. In the opinion of , Contractor's work is not progressing satisfactorily.

10. FINAL PAYMENT:

A. Owner shall make final payment to Contractor within thirty (30) days after the work is completed, if the contract is at that time fully performed; however, final payment shall not be made or deemed due until Contractor has delivered to Owner a complete release of all liens arising out of the contract, or receipts in full covering all labor, materials, and equipment for which a lien could be filed, or in the alternative a bond satisfactory to Owner indemnifying him or her against any and all such liens.

B. Owner, by making payment, waives all claims except those arising out of the following

1. Faulty work appearing after substantial completion has been granted;

2. Work that does not comply with the contract documents;

3. Outstanding claims of lien; or

4. Failure of Contractor to comply with any special guarantees required by the contract documents.

C. Contractor, by accepting final payment, waives all claims except those that Contractor has previously made in writing, and which remain unsettled at the time of acceptance.

11. LATE PAYMENT/DEFAULT: A failure to make payment for a period in excess of thirty (30) days from the due date shall be deemed a material breach of this Contract. If payment is not made when due, Contractor may suspend work on the job until such time as all payments due have been made without breach of the Contract pending payment or resolution of any dispute. Owner agrees to pay a late penalty of 2% per month of all payments that are more than thirty (30) days late.

12. CONTRACTS DOCUMENTS:

A. The contract documents on which the agreement between Owner, , and Contractor is based, that contain the plans and specifications in accordance with which the work is to be done, and that provide for the method of payment of the contract price are as follows:

1. This agreement, with supplementary agreements and conditions attached to this agreement;

2. The plans and specifications, with addenda attached to such plans and specifications, issued before execution of this agreement, and any amendments made after the effective date of this agreement;

3. Written interpretations of the contract documents and directives to be made from time to time by the ; and

4. Work change orders issued, or to be issued.

B. The contract documents together form the contract for the work described in this agreement. The parties intend that the documents include provisions for all labor, materials, equipment, supplies, and other items necessary for the execution and completion of the work, and all terms and conditions of payment. The documents also include all work and procedures not expressly indicated in such documents necessary for proper execution of the above-described project.

C. The contract documents are to be separately executed in triplicate by Owner and Contractor. Contractor, by executing the documents, represents that Contractor has inspected and is familiar with the work site and the local conditions under which the work is to be performed. If by inadvertence any of the contract documents are not signed, shall identify them.

13. DESIGNATION OF :

The for above-described project is , having an office at .

14. DUTIES AND AUTHORITY OF :

The duties and authority of the are as follows:

A. General Administration of Contract. The primary function of the is to provide the general administration of the contract. In performing these duties the is Owner's representative during the entire period of construction.

B. Inspections, Opinions, and Progress Reports. He/she shall keep familiar with the progress and quality of the work by making periodic visits to the work site. He/she will make general determinations as to whether the work is proceeding in accordance with the contract. He/she will keep the Owner informed of such progress, and will use his/her best efforts to protect the Owner from defects and deficiencies in the work. He/she will not be responsible for the means of construction, or for the sequences, methods, and procedures used in such construction, or for Contractor's failure to perform the work in accordance with the contract documents.

C. Access to Work Site for Inspections. He/she shall be given free access to the work at all times during its preparation and progress. However, he/she is not required to make exhaustive or continuous on-site inspections to perform his/her duties of checking and reporting on work progress.

D. Interpretation of Contract Documents -- Decisions on Disputes. He/she will be the initial interpreter of the contract document requirements, and make primary decisions on claims and disputes between Contractor and Owner. All of his/her decisions are subject to arbitration as provided in this agreement.

E. Rejection and Stoppage of Work. He/she shall have authority to reject work that in his /her opinion does not conform to the contract documents, and in this connection to stop the work or a portion of such work, when necessary.

F. Payment Certificates. He/she will determine the amounts owing to Contractor as the work progresses, based on Contractor's applications and his/her inspections and observations, and will issue certificates for progress payments and final payment in accordance with the terms of the contract documents.

15. RESPONSIBILITIES OF OWNER:

A. Owner shall:

· give all instructions to Contractor through ;

· shall furnish all necessary surveys for the work, and

· shall secure and pay for easements for permanent structures or permanent changes in existing structures or facilities on the work site, or which are necessary for its proper completion.

B. Owner reserves the right to let other contracts in connection with the project. Contractor shall cooperate with all other contractors to the effect that their work shall not be impeded by his/her construction, and shall give such other contractors access to the work site necessary to perform their contracts.

16. RESPONSIBILITIES OF CONTRACTOR:

Contractor's duties and rights in connection with the above-described project are as follows:

A. Responsibility for and Supervision of Construction. Contractor shall be solely responsible for all construction under this contract, including the techniques, sequences, procedures, and means, and for coordination of all work. Contractor shall supervise and direct the work to the best of his/her ability, and give it all attention necessary for such proper supervision and direction.

B. Discipline and Employment. Contractor shall maintain at all times strict discipline among his/her employees, and Contractor agrees not to employ for work on the project any person unfit or without sufficient skill to perform the job for which he or she was employed.

C. Furnishing of Labor, Materials, etc. Contractor shall provide and pay for all labor, materials, and equipment, including tools, construction equipment, and machinery, utilities, including water, transportation, and all other facilities and services necessary for the proper completion of work on the project in accordance with the contract documents.

D. Payment of Taxes and Procurement of Licenses and Permits. Contractor shall pay all taxes required by law in connection with work on the project in accordance with this agreement including sales, use, and similar taxes, and shall secure all licenses and permits necessary for proper completion of the work, paying the fees for such licenses and permits.

E. Compliance with Construction Laws and Regulations. Contractor shall comply with all laws and ordinances, and the rules, regulations, or orders of all public authorities relating to the performance of the work under and pursuant to this agreement. If any of the contract documents are at variance with any such laws, ordinances, rules, regulations, or orders, he or she shall notify promptly on discovery of such variance.

F. Responsibility for Negligence of Employees and Subcontractors. Contractor assumes full responsibility for acts, negligence, or omissions of all his/her employees on the project, for those of his/her subcontractors and their employees, and for those of all other persons doing work under a contract with him or her.

G. Warranty of Fitness of Equipment and Materials. Contractor represents and warrants to Owner and to that all equipment and materials used in the work, and made a part of the structures on such work, or placed permanently in connection with such work, will be new unless otherwise specified in the contract documents, of good quality, free of defects, and in conformity with the contract documents.

H. Furnishing of Samples and Shop Drawings. Contractor agrees to furnish at ’s direction all samples and shop drawings for his or her consideration and approval as to conformance with the specifications of the contract documents and his or her concepts of design called for in such specifications.

I. Clean-up. Contractor agrees to keep the work premises and adjoining ways free of waste material and rubbish caused by his/her work or that of his/her subcontractors. Contractor further agrees to remove all such waste material and rubbish on termination of the project, together with all his/her tools, equipment, machinery, and surplus materials. Contractor agrees, on terminating his/her work at the site, to conduct general clean-up operations, including the cleaning of all glass surfaces, paved streets and walks, steps, and interior floors and walls.

17. RIGHT TO CURE: Contractor shall have the right to cure a defect before Owner may file any action in court against Contractor.

18. DESTRUCTION AND DAMAGE: If the Project is destroyed or damaged for any reason, except where such destruction or damage was caused by the sole negligence of the Contractor or its subcontractors, Owner shall pay Contractor for any additional work done by Contractor in rebuilding or restoring the Project to its condition prior to such destruction or damage. If the estimated cost of replacing work already accomplished by Contractor exceeds 20 percent of the Contract price, either the Contractor or Owner may terminate this Contract. Upon termination by either party, Contractor shall be excused from further performance under this Contract and Owner shall pay Contractor a percentage of the Contract price in proportion to the amount of work accomplished prior to the destruction or damage.

19. ASSIGNMENT: Neither party may assign this Contract, or payments due under the Contract, without the other party’s written consent. Any such assignment shall be void and of no effect.

20. INTERPRETATION:

A. Interpretation of Documents. The Contract, drawings, and specifications are intended to supplement one another. In the event of a conflict, the specifications shall control the drawings, and the Contract shall control both. If work is displayed on the drawings but not called for in the specifications, or if the work is called for in the specifications but not displayed on the drawings, Contractor shall be required to perform the work as though it were called for and displayed in both documents.

B. Entire Agreement. This Contract constitutes the entire agreement of the parties. No other agreements, oral or written, pertaining to the work to be performed under this Contract exists between the parties. This Contract may only be modified by a written agreement signed by both parties.

C. Governing Law. This Contract shall be interpreted and governed in accordance with the laws of the State of California.

21. ATTORNEYS’ FEES AND COSTS: If any party to this Contract brings a cause of action against the other party arising from or relating to this Contract, the prevailing party in such proceeding shall be entitled to recover reasonable attorney fees and court costs.

22. PERFORMANCE:

A. Contractor may, at its discretion, engage licensed subcontractors to perform work pursuant to this Contract provided Contractor shall remain fully responsible for the proper completion of the Project.

B. All work shall be completed in a workman-like manner and in compliance with all building codes and applicable laws. To the extent required by law, all work shall be performed by individuals duly licensed and authorized by law to perform said work.

C. Contractor agrees to remove all debris and leave the premises in broom clean condition.

23. TIME OF ESSENCE; EXTENSION OF TIME

A. All times stated in this agreement or in the contract documents are of the essence.

B. The times stated in this agreement or in the contract documents may be extended by a change order from for such reasonable time as he/she may determine, when in his/her opinion Contractor is delayed in work progress by changes ordered, labor disputes, fire, prolonged transportation delays, injuries, or other causes beyond Contractor's control or which justify the delay.

24. SUBCONTRACTORS

A. Contractor agrees to furnish , prior to the execution of this agreement, with a list of names of subcontractors to whom he/she proposes to award the principal portions of the work to be subcontracted by him/her.

B. A subcontractor, for the purposes of this agreement, shall be a person with whom Contractor has a direct contract for work at the project site.

C. Contractor agrees not to employ a subcontractor to whose employment reasonably objects, nor shall Contractor be required to hire a subcontractor to whose employment he/she reasonably objects.

D. All contracts between Contractor and subcontractors shall conform to the provisions of the contract documents, and shall incorporate in them the relevant provisions of this agreement.

25. MANDATORY ARBITRATION OF DISPUTES.

Any Claim arising out of or related to the Contract, except Claims of an aesthetic nature and except those waived, shall, after decision by the Architect or 30 days after submission of the Claim to the Architect, be subject to arbitration.

Prior to arbitration, the parties shall try to resolve disputes by mediation. Claims not resolved by mediation shall be decided by arbitration which, unless the parties mutually agree otherwise, shall be in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect. The demand for arbitration shall be filed in writing with the other party to the Contract and with the American Arbitration Association, and a copy shall be filed with the Architect.

A demand for arbitration shall be made within the following time limits: , as applicable, and in other cases within a reasonable time after the Claim has arisen, and in no event shall it be made after the date when institution of legal or equitable proceedings based on such Claim would be barred by the applicable statute of limitations

Limitation on Consolidation or Joinder. No arbitration arising out of or relating to the Contract shall include, by consolidation or joinder or in any other manner, the Architect, the Architect's employees or consultants, except by written consent containing specific reference to the Agreement and signed by the Architect, Owner, Contractor, and any other person or entity sought to be joined. No arbitration shall include, by consolidation or joinder or in any other manner, parties other than the Owner, Contractor, a separate contractor, and other persons substantially involved in a common question of fact or law whose presence is required if complete relief is to be accorded in arbitration. No person or entity other than the Owner, Contractor or a separate contractor shall be included as an original third party or additional third party to an arbitration if their interest or responsibility is insubstantial. Consent to arbitration involving an additional person or entity shall not constitute consent to arbitration of a Claim not described therein or with a person or entity not named or described therein. The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly consented to by parties to the Agreement shall be specifically enforceable under applicable law in any court having jurisdiction thereof.

Claims and Timely Assertion of Claims. The party filing a notice of demand for arbitration must assert in the demand all Claims then known to that party on which arbitration is permitted to be demanded.

Judgment on Final Award. The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.

NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE BUSINESS AND PROFESSIONS CODE OR OTHER APPLICABLE LAWS. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION:

26. INSURANCE

A. Contractor's Liability Insurance. Contractor agrees to keep in force at his/her own expense during the entire period of construction on the project such liability insurance as will protect him/her from claims, under workers' compensation and other employee benefit laws, for bodily injury and death, and for property damage, that may arise out of work under this agreement, whether directly or indirectly by Contractor, or directly or indirectly by a subcontractor. The minimum liability limits of such insurance shall not be less than the limits specified in the contract documents or by law for that type of damage claim. Such insurance shall include contractual liability insurance applicable to Contractor's obligations under this agreement. Proof of such insurance shall be filed by Contractor with Owner within a reasonable time after execution of this agreement.

B. Owner's Liability Insurance. Owner agrees to maintain in force his/her own liability insurance during the construction on this project, and reserves the right to purchase such additional insurance as in his /her opinion is necessary to protect him/her against claims arising out of the Contractor's operation, without diminishing Contractor's obligation to carry the insurance specified in this agreement on Contractor's part to be carried.

C. Property Damage Insurance on Work Site. Owner agrees to maintain at his/her expense during construction of the project property damage insurance on the work at the site to its full insurable value, including interests of Owner, Contractor, and subcontractors, against fire, vandalism, and other perils ordinarily included in extended coverage. Losses under such insurance will be adjusted with and made payable to Owner as trustee for the parties insured as their interests appear. Owner shall file a copy of all such policies with Contractor within a reasonable time after construction begins under and pursuant to this agreement.

D. Waiver of Work Site Property Damage Claims to Extent of Insurance Coverage. Owner and Contractor waive all claims against each other for fire damage or damages from other perils covered by insurance provided in Subparagraph C. of this Section. Contractor agrees to obtain waivers of such claims by all subcontractors.

27. CORRECTING WORK

When it appears to Contractor during the course of construction that any work does not conform to the provisions of the contract documents, Contractor shall make necessary corrections so that such work will so conform, and in addition will correct any defects caused by faulty materials, equipment, or quality of performance in work supervised by him or her or by a subcontractor, appearing within from the date of issuance of a certificate of substantial completion, or within such longer period as may be prescribed by law or as may be provided for by applicable special guaranties in the contract documents.

28. WORK CHANGES

A. Owner reserves the right to order work changes in the nature of additions, deletions, or modifications, without invalidating this agreement, and agrees to make corresponding adjustments in the contract price and time for completion.

B. All changes will be authorized by a written change order signed by Owner or by as Owner's agent. The change order will include conforming changes in the agreement contract and completion time.

C. Work shall be changed, and the contract price and completion time shall be modified only as set out in the written change order.

D. Any adjustment in the contract price resulting in a credit or a charge to Owner shall be determined by mutual agreement of the parties, or by arbitration, before starting the work involved in the change.

29. TERMINATION

A. Contractor's Termination. Contractor may, on days written notice to Owner and , terminate this agreement before the completion date specified in this agreement when for a period of days after a progress payment is due, through no fault of Contractor, fails to issue a certificate of payment for the same, or Owner fails to make the payment.

B. Owner's Termination. Owner may, on days notice to Contractor, terminate this agreement before the completion date specified in this agreement, and without prejudice to any other remedy he or she may have, when Contractor defaults in performance of any provision in this agreement, or fails to carry out the construction in accordance with the provisions of the contract documents.

C. On any such default by Contractor, Owner may elect not to terminate this agreement, and in such event he or she may make good the deficiency of which the default consists, and deduct the costs from the progress payment then or to become due to Contractor.

30. NO WAIVER

The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

31. WARRANTY: Contractor's warranty shall be limited to defects in workmanship within the scope of work performed by Contractor and which arise and become known within one (1) year from the date hereof. All said defects arising after one (1) year and defects in material are not warranted by Contractor. Contractor hereby assigns to Owner all warranties on materials as provided by the manufacturer of such materials.

AGREED: