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Construction Builder Agreement

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CONSTRUCTION BUILDER AGREEMENT

This Construction Builder Agreement ("Agreement") is made and entered into as of the date set forth in the signature block below by and between Owner Name: , Owner Address: , and Builder Name: , Builder Address: .

RECITALS

WHEREAS, Owner is the owner of certain real property located at: (the "Property");

WHEREAS, Builder is duly licensed and experienced in the construction of residential and/or commercial improvements and represents that Builder has the skill, staff, equipment, and ability to perform the construction described in this Agreement;

WHEREAS, Owner desires to engage Builder, and Builder desires to accept such engagement, to perform the work described in this Agreement in accordance with the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the parties agree as follows:

1. SCOPE OF WORK

1.1 Builder shall furnish all labor, materials, equipment, tools and supervision necessary to complete the construction described in the Project Documents and specifications (the "Work") at the Property. The specific Work shall be detailed as follows:

2. CONTRACT PRICE AND PAYMENT

2.1 Contract Price. Owner shall pay Builder the total contract price of $ (the "Contract Price"), subject to adjustments for approved changes as provided in this Agreement.

2.2 Retainage. Owner may retain percent of each progress payment until final completion and acceptance, except as otherwise agreed in writing.

3. TIME FOR COMPLETION

3.1 Commencement and Substantial Completion. Builder shall commence Work on or before and shall achieve Substantial Completion by , subject to adjustments for excusable delays.

3.2 Liquidated Damages. If Builder fails to achieve Substantial Completion by the agreed date, Builder shall be liable for liquidated damages in the amount of $ per calendar day, unless delay is excused under this Agreement.

4. CHANGES AND CHANGE ORDERS

4.1 All changes to the Work shall be made only by written change order signed by Owner and Builder. A change order shall specify adjustments to the Contract Price, time for completion, and any other affected provisions. No oral instruction shall be binding.

5. PERMITS, INSPECTIONS AND LAWS

5.1 Builder shall obtain and pay for all construction permits and inspections required by applicable law unless otherwise set forth in the Project Documents. Builder shall perform the Work in compliance with all applicable codes, laws and regulations.

6. WARRANTIES

6.1 Builder warrants to Owner that the Work will be free from defects in workmanship and materials for a period of from the date of Final Completion. This warranty excludes defects caused by ordinary wear and tear, Owner's misuse, or alterations by others.

7. INSURANCE AND INDEMNITY

7.1 Builder shall maintain at its expense commercial general liability insurance, workers' compensation, and automobile liability insurance with limits sufficient to cover claims arising out of the Work. Builder shall provide certificates of insurance upon Owner's request.

Commercial General Liability    Workers' Compensation    Automobile Liability

7.2 Indemnity. To the fullest extent permitted by law, Builder shall indemnify, defend and hold harmless Owner, Owner's agents and representatives from and against any claims, damages, losses and expenses (including reasonable attorneys' fees) arising out of or resulting from the performance of the Work, to the extent caused by the negligent acts or omissions, or willful misconduct, of Builder or its subcontractors.

8. SITE CONDITIONS AND ACCESS

8.1 Owner shall provide Builder with access to the Property and shall disclose to Builder known subsurface or latent conditions. If unknown or differing site conditions are encountered, the parties shall promptly negotiate equitable adjustments to the Contract Price and schedule.

9. DEFAULT AND TERMINATION

9.1 If either party materially breaches this Agreement and fails to cure the breach within after written notice, the non-breaching party may terminate this Agreement and pursue available remedies. Termination shall not relieve the breaching party of liability for damages.

10. DISPUTE RESOLUTION

10.1 The parties shall attempt in good faith to resolve disputes arising under this Agreement by negotiation. If the dispute cannot be resolved within thirty (30) days, the parties agree to submit the dispute to binding arbitration under the rules of an established arbitration association agreed by the parties; arbitration shall be conducted by a single neutral arbitrator and the arbitrator's award shall be final and binding.

11. NOTICES

11.1 All notices required or permitted under this Agreement shall be in writing and delivered by hand, nationally recognized overnight courier, or certified mail, return receipt requested, to the addresses set forth below or to such other address as a party may designate by written notice.

12. MISCELLANEOUS PROVISIONS

12.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of , without regard to its conflict of law principles.

12.2 Entire Agreement. This Agreement, together with all Project Documents and written change orders, constitutes the entire agreement between the parties and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written.

12.3 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable in whole or in part, such provision shall be ineffective to the extent of such illegality or unenforceability without affecting the remaining provisions hereof.

12.4 Amendments and Waiver. No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties. The waiver by either party of a breach of any provision shall not operate or be construed as a waiver of any subsequent breach.

12.5 Assignment. Neither party shall assign its rights or delegate its duties under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld.

SIGNATURES

Owner Printed Name:

By:

Date:

Builder Printed Name:

By:

Date:

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What a Construction Builder Agreement Is and why it matters

A Construction Builder Agreement is a written contract that allocates responsibilities, timelines, payment terms, and risk between an owner (or developer) and a builder or general contractor for a defined construction project. It typically includes the scope of work, contract price or method of payment, schedule and milestones, change‑order procedures, insurance and indemnity clauses, warranty and acceptance language, lien and permit responsibilities, and dispute resolution. Clear exhibits—drawings, specifications, schedule of values, and a project timeline—help convert design intent into enforceable obligations and reduce downstream disagreements.

Why a clear Builder Agreement benefits project delivery

A properly drafted Construction Builder Agreement reduces ambiguity, protects parties from mechanic’s liens or gaps in insurance, sets payment and acceptance milestones, and creates an evidentiary record for disputes. It clarifies change‑order authorization, assigns permitting responsibility, and defines remedy paths such as retainage, liquidated damages, or arbitration.

Why a clear Builder Agreement benefits project delivery

Who typically prepares and relies on this agreement

Typical users who prepare or rely on a Construction Builder Agreement include property owners, general contractors, project managers, and specialty subcontractors across commercial and residential projects.

  • Property owners and developers — contract with a builder, set budgets, and enforce payment milestones.
  • General contractors — accept scope, manage subcontractors, and assume on‑site compliance responsibilities.
  • Project managers and construction lenders — monitor schedule, draw requests, and milestone completions.

Each party should confirm authority to sign, review insurance and indemnity language, and attach detailed exhibits before work begins.

Stepwise process to prepare, sign, and implement the agreement

Follow these sequential steps to complete and execute a Construction Builder Agreement accurately and efficiently.

  • 01
    Prepare Documents: Gather plans, specs, schedules, and cost breakdowns.
  • 02
    Negotiate Terms: Agree payment, insurance, indemnity, and dispute clauses.
  • 03
    Sign and Authenticate: Obtain authorized signatures and notarizations if required.
  • 04
    Distribute and Archive: Share executed copies with stakeholders and store securely.

Essential clauses to include in a professional Builder Agreement

A complete agreement addresses commercial, operational, and legal risks so parties can proceed with confidence and predictable remedies for noncompliance.

Scope and Specifications

Define work in measurable terms: include plans, specs, performance standards, allowed substitutions, and a schedule of values so change orders and inspections reference a single authoritative source.

Price and Payments

State contract sum or unit pricing, retainage amounts, progress payment schedule, invoicing requirements, remedies for late payment, and conditions for final payment tied to written acceptance and lien waivers.

Schedule and Milestones

Set start/finish dates, milestone deadlines, notice procedures for delays, excusable delay definitions, and liquidated damages or bonus terms to align incentives and manage time risk.

Change Orders

Describe written authorization for changes, pricing methods for extras or credits, and timing for adjustments to schedule and payment to prevent disputed oral directives.

Insurance and Indemnity

Specify required coverages, limits, additional insured endorsements, waiver of subrogation, and mutual indemnities to allocate third‑party and property risk during construction and warranty periods.

Warranties and Acceptance

Detail contractor warranties, cure periods, final inspection processes, punchlist completion, and conditions for withholding final payment until acceptance criteria are met.

Required data elements to include on the first page

Owner Information: Name, address, contact
Contractor Information: Legal entity, license number
Project Address: Street, city, state, ZIP
Contract Price: Amount and currency
Effective Date: MM/DD/YYYY format
Exhibits Attached: List of referenced exhibits

Common drafting and execution pitfalls to avoid

  • Vague scope descriptions leading to change order disputes and cost overruns when plans or specs are not firmly attached.
  • Missing or inconsistent signature blocks that leave authority unclear and may delay payment or enforcement.
  • Failure to require proof of insurance or bonds, exposing owners to contractor insolvency or third‑party claims.
  • Not defining notice procedures and cure timelines, which can forfeit contractual remedies or accelerate termination.

Consequences of incomplete or incorrect agreements

Mechanic’s Lien Risk: Contractor or subcontractor may file a lien under state law
Payment Disputes: Withholding or delayed funds and interest charges
Permit Violations: Stop‑work orders, fines, or remediation costs
Insurance Gaps: Out‑of‑pocket liability for property or injury claims
Change Order Disputes: Work stoppage or costly litigation
Termination Exposure: Damages for wrongful termination or contract breach

Where to send, file, and distribute the executed agreement

Determine the routing path for signatures and final distribution to ensure permits, lenders, and insurers have current copies.

  • Owner Signature: Owner executes and dates agreement
  • Contractor Signature: Contractor executes and provides proof of authority
  • Permitting Office: Submit required permit documents as directed
  • Project Team: Distribute executed copy to lender, PM, and insurers

How to configure a digital signing workflow for the agreement

Set up field placement, signer order, authentication, and storage preferences before sending the document for signature.

Field Configuration
Signature Order Owner then contractor
Authentication Email + SMS code recommended
Notifications Enable email reminders and final completed copy
Storage Format Keep PDF/A with audit trail

Technical considerations for eSigning and document handling

Confirm file formats, signer authentication level, and storage controls prior to eSubmission to maintain evidentiary value.

  • File Formats: PDF, DOCX supported
  • Integrations: Connectors for Procore and Google Workspace
  • Authentication: Email, SMS, or advanced methods

Ensure the chosen platform provides an audit trail, tamper‑evident signed PDF, and secure storage (TLS and AES encryption) to preserve legal enforceability and meet compliance needs.

Typical timelines, deadlines, and processing expectations

Establish clear timing for permits, payments, notices, and final acceptance to prevent delays and disputes.

Permit Review:

Often 2–8 weeks depending on jurisdiction

Payment Terms:

Commonly Net 30 after invoice submission

Change Order Response:

Allow 5–10 business days for pricing and approval

Notice of Claim:

Follow contract notice windows to preserve remedies

Final Acceptance:

Tie to written sign‑off and punchlist completion

Key milestones from signing to closeout

Track milestone stages to align payments, inspections, and warranty start dates in a single timeline.

01

Contract Execution

Signatures obtained and exhibits attached before mobilization.

02

Preconstruction

Submittals, permits, and mobilization activities completed.

03

Construction

Milestone completions, inspections, and progress billing occur.

04

Closeout

Final acceptance, lien waivers, warranties, and final payment processed.

How a Builder Agreement differs from a Subcontractor Agreement

Compare core attributes to decide which document to use depending on party relationships and payment responsibility.

Criteria Builder Agreement Subcontractor Agreement
Parties owner & builder builder & subcontractor
Scope whole project specific trade work
Payment Responsibility owner pays builder builder pays subcontractor
Liability primary contractor liability trade‑specific liability

eSignature vendor pricing and features relevant to construction agreements

Compare starting prices and key feature availability for eSignature platforms used to execute Construction Builder Agreements; signNow appears first in the comparison.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7‑day free trial Trial varies Trial varies Trial varies Trial varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Real examples of digital execution in practice

These customer experiences show how digital signing and clear contracts support project workflows in real organizations.

Tim Martin, Martin Properties

I can process and execute all of these documents online with 100% compliance

  • Mobile signing cuts site delays
  • Whether on mobile or offline, signed agreements reach necessary parties faster and maintain an audit trail for lender and owner reviews.

Brian Fitzgibbons, Optica Ventures LLC

The interface is simple and easy‑to‑use for our team

  • Customers find it intuitive
  • Streamlined signing reduced turnaround time and simplified coordination among owner, contractor, and architect while preserving signed records for compliance.

Who usually signs and their authority

Owner / Authorized Signer

Typically a named corporate officer, property manager, or developer with signing authority; must have authority to bind the entity and approve budgets, draws, and change orders on behalf of the owner.

General Contractor / Authorized Signer

Usually an officer or project executive with authority to accept scope, hire subcontractors, and certify payment applications and lien waivers under the terms of the contract.

Practical tips for accurate and efficient completion

Adopt consistent templates, attach exhibits, and confirm signer authority to avoid common execution errors.

Use standardized exhibits
Attach plans, specs, schedule of values, insurance certificates, and a signed change‑order form template so all parties reference the same documents throughout the project lifecycle.
Require evidence of authority
Verify corporate signatory authority or resolution for entities; record the signer’s title and attach a representative’s authorization when signing on behalf of a company.
Link final payment to releases
Require conditional or unconditional lien waivers and final acceptance sign‑offs before releasing retainage to prevent post‑close claims.
Preserve audit trails
Keep time‑stamped, tamper‑evident signed PDFs and related correspondence to support enforcement, lender draws, and post‑project audits.

Frequently asked questions about Construction Builder Agreements

Answers to common execution, enforceability, and recordkeeping questions to help parties avoid delays and preserve rights.


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