Arizona Construction Contract

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").

Owner hereby authorizes Contractor to commence and complete the usual and customary excavation and grading on the Work Site as may be required in the judgment of the Contractor to complete the Project. Unless called for in the drawings or specifications, no landscaping, finish grading, filling or excavation is to be performed at the Work Site by the Contractor.

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 .

Contractor shall not be liable for any delay due to circumstances beyond its control including strikes, casualty, acts of God, illness, injury, or general unavailability of materials.

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. INSURANCE: Contractor shall maintain general liability, workers compensation and builder's risk insurance.

7. 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.

8. 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. In the event the cost of a Change Order is not known at the time a Change Order is executed, the Contractor shall estimate the cost thereof and Owner shall pay the actual cost whether or not it is in excess of the estimated cost.

9. 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.

DEPOSIT AND PROGRESS PAYMENTS (optional)

Owner will make an advance deposit in the amount of $ , to be paid by (date). The amount of will be paid as a progress payment when (stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract).

10. LATE PAYMENT/DEFAULT: A failure to make payment for a period in excess of ten (10) 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 charge of 1% of all payments that are more than ten (10) days late plus interest at the rate of 1% per month.

11. 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.

12. 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.

13. 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 only 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 Arizona.

14. 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.

15. PERFORMANCE:

(a) Contractor may, at its discretion, engage licensed subcontractors to perform work pursuant 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.

16. 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:

Notice to Buyer

Within two years from the earlier of the close of escrow or actual occupancy for new home or other new building construction or on completion of the specific project, you have a right to file a complaint with the registrar of contractors at http://www.azroc.gov, (602) 542-1525 1-877-MY AZROC (1-877-692-9762 (outside Maricopa County) for the commission of an act in violation of Arizona Revised Statutes section 32-1154, subsection A, below.

32-1154. Grounds for suspension or revocation of license; continuing jurisdiction; civil penalty; recovery fund award; summary suspension

A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

2. Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.

3. Violation of any rule adopted by the registrar.

4. Failure to comply with the statutes or rules governing social security, workers' compensation or unemployment insurance.

5. Failure to pay income taxes, withholding taxes or any tax imposed by title 42, chapter 5, articles 1 and 4 and incurred in the operation of the licensed business.

6. Misrepresentation of a material fact by the applicant in obtaining a license.

7. The doing of a fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

8. Conviction of a felony.

9. Failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.

10. Aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one's license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.

11. Failure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee's operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

12. Failure of a contractor to comply with any safety or labor laws or codes of the federal government, state or political subdivisions of the state.

13. Failure in any material respect to comply with this chapter.

14. Knowingly entering into a contract with a contractor for work to be performed for which a license is required with a person not duly licensed in the required classification.

15. Acting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth upon the license.

16. False, misleading or deceptive advertising whereby any member of the public may be misled and injured.

17. Knowingly contracting beyond the scope of the license or licenses of the licensee.

18. Contracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.

19. Failure to notify the registrar in writing within a period of fifteen days of any disassociation of the person who qualified for the license. Such licensee shall have sixty days from the date of such disassociation to qualify through another person.

20. Subsequent discovery of facts which if known at the time of issuance of a license or the renewal of a license would have been grounds to deny the issuance or renewal of a license.

21. Having a person named on the license who is named on any other license in this state or in another state which is under suspension or revocation unless the prior revocation was based solely on a violation of this paragraph.

22. Continuing a new single family residential construction project with actual knowledge that a pretreatment wood-destroying pests or organisms application was either:
(a) Not performed at the required location.
(b) Performed in a manner inconsistent with label requirements, state law or rules.

23. Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held.

24. Prohibit, threaten to prohibit, retaliate, threaten to retaliate or otherwise intimidate any contractor or materialman from serving a preliminary notice pursuant to section 33-992.01.

OPTIONAL ADDENDUM

To be used for residential repair or replacement of damage resulting directly from a catastrophic storm in a specific area that is designated by an insurer, a licensed contractor who enters into a contract for the repair or replacement of a residential roof or other repair or replacement within the scope of Chapter 32 of the Arizona Revised Statutes with a purchaser who resides in the residence or who intends to reside in the residence after the completion of the contract shall include at least the following provision

Notice to Homeowner

You may cancel this contract at any time within seventy-two hours after you have been notified that your insurer has denied your claim to pay for the goods and services to be provided under this contract.

You may cancel this contract at any time, for any reason, within four business days after signing this contract.

If you cancel, any property traded in, any payments made by you under the contract or sale and any negotiable instrument executed by you will be returned within ten business days following receipt by the seller of your cancellation notice and any security interest arising out of the transaction will be cancelled.

If you cancel, you must make available to the seller at your residence in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may, if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller's expense and risk.

If you do make the goods available to the seller and the seller does not pick them up within twenty days of the date of your notice of cancellation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller, or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligations under the contract.

A copy of a repair estimate has been provided that includes the following disclosures:

(a) A precise description and location of all damage claimed on the repair estimate.

(b) For roofing repair or replacement, a detailed description of the work to be done including the square footage of the repair area or the replacement area.

(c) If the damaged areas are not included in the repair estimate, a specification of those areas and any reason for their exclusion from the repair estimate.

(d) Whether or not the property was inspected before the preparation of the estimate and the nature of that inspection, specifically whether the roof was physically accessed.

(e) That the contractor has made no assurances that the claimed loss will be covered by an insurance policy.

(f) That the policyholder is responsible for payment for any work performed if the insurer should deny payment or coverage for any part of the loss.

Notice of Cancellation

To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram, to , at not later than midnight of (date).

I hereby cancel this transaction.

Notes for a licensed individual or contractor who prepares a repair estimate for post-storm repair or replacement services for residential repair or replacement of damage resulting directly from a catastrophic storm in a specific area that is designated by an insurer:

A licensed contractor who enters into a contract for the repair or replacement of a residential roof or other repair or replacement within the scope of Chapter 32 of the Arizona Revised Statutes with a purchaser who resides in the residence or who intends to reside in the residence after the completion of the contract must disclose the following information to the insured owner:

A precise description and location of all damage claimed or included on the repair estimate.

Documentation to support the damage claimed on the estimate, including photographs, digital images or another medium.

A detailed description and itemization of any emergency repairs already completed by the contractor.

If damaged areas are not included in the repair estimate, a specification of those areas and any reason for their exclusion from the repair estimate.

A provision stating whether or not the property was inspected before the preparation of the estimate, if the contract is a contract for repair or replacement of a roof, and whether the roof was physically accessed.

The contractor has made no assurances that the claimed loss will be covered by an insurance policy.

If an insured owner submits a claim with the insurer for residential repair or replacement according to these provisions, the contractor may not begin work on the repair or replacement until the insurer approves or denies the claim except if the work is necessary to prevent further loss.

A person who is not licensed pursuant to this chapter and who is not exempt from licensure pursuant to this chapter may not bring a private cause of action to recover monies from a homeowner for any residential repair or replacement that the person does that's covered by ARS Section 31-1158.02.

Within ten days after a contract has been canceled according to this provision, the contractor must tender to the insured owner any payments made by the insured owner and any note or other evidence of indebtedness except that if the contractor has performed any emergency services, the contractor is entitled to receive reasonable compensation for the services if the insured owner has received a detailed description and itemization of the charges for those services.

The down payment section on the execution of a contract entered into pursuant to this section shall not require more than fifty per cent of the total contract.

Any changes, additions or deletions to the work order specified in the original contract shall be included in a written change order that is signed by the homeowner.

A contractor shall immediately notify and disclose in writing to the residential owner of a property or casualty insurance policy any cancellation of the contractor's workers' compensation coverage.

A contractor's failure to comply with this section is grounds for license suspension or revocation pursuant to section 32-1154.