Fill and Sign the Construction Contract Cost Plus or Fixed Fee Hawaii Form

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 - 1 - 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. Please note that pursuant to Hawaii Revised Statutes Section 507-41, et. seq., parties performing work under this contract, including Contractor, any subcontractor or any material man supplying commodities or labor on the Project, may claim a lien upon the improvement as well as upon the interest of the owner of the improvement in the real property upon which the same is situated, or for the benefit of which the same was constructed, for the price agreed to be paid (if the price does not exceed the value of the labor and materials), or if the price exceeds the value thereof or if no price is agreed upon by the contracting parties, for the fair and reasonable value of all labor and materials covered by their contract, express or implied. 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 - 2 - 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 Hawaii. 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 - 3 - 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. 17. BONDING : Pursuant to Hawaii Revised Statutes Section 444-25.5, a homeowner has the right to demand bonding on the project. A bond would guarantees to the bank and owner that: All suppliers and contractors on the job will be paid to insure no property liens related to the project will be placed; the project will be completed according to plans and specifications of the project (performance bond). Contractor is bonded. By signing below, Owner waives the option to demand bonding on the project. 18 . SUBCONTRACTORS : The approximate percentage of work to be subcontracted and the names and license numbers of all subcontractors, if any; is as follows: Name and Address Work Percentage _____________________________ _______ % _____________________________ _______ % _____________________________ _______ % AGREED: CONTRACTOR: Signature       Print Name & Title       Date       License Number       Name and Address of License Holder OWNER: (CHECKS SHOULD BE MADE OUT TO A CONTRACTOR, NOT TO A SALES REPRESENTATIVE) Signature       Print Name       Date NOTICES TO OWNER DISCLOSURE OF LIEN RIGHTS HOMEOWNERS TAKE NOTICE - 4 - Any person who furnishes labor (prime or subcontractor) or materials (material supplier) for your home improvement or renovation project and is not paid can file a claim (lien) in Circuit Court against your property under Hawaii Revised Statutes ("HRS") chapter 507. This is true even if you have paid the contract price in full to the prime contractor and the contractor fails to pay his subcontractors or material suppliers. In order to obtain a lien against your property, a contractor, subcontractor, or material supplier must go to court and show that goods or services for the project have been supplied but not been paid for. You will be notified to appear and defend against these claims in court. If a lien is obtained, you are entitled to prove in a later court proceeding that you paid your prime contractor in full. The court could then enter judgment in your favor against the prime contractor and direct payment out of the contractor's recovery fund up to the amount allowed by law, if the prime contractor was properly licensed at the time you entered into the contract with the prime contractor. WHAT YOU CAN DO Here is what you can do to help prevent problems: (1) Make certain that the contractor is licensed. Call 587-3295 to verify licensure. (2) On bigger jobs ask the contractor to explain to you about the possibility of providing a PERFORMANCE AND PAYMENT BOND which will guarantee completion of the project and payment of all liens. This Bond is usually provided by surety companies or material supply houses to qualified contractors. It may cost you approximately 5% of the project cost. (3) YOU SHOULD NOT MAKE ANY ORAL AGREEMENTS . Make sure everything is put in writing, including but not limited to the price, what work is to be done, any specific exclusions or restrictions, and the grade and brand of materials to be used, the length of the project, etc. See HRS §444-25.5 and the rules of the Contractors License Board. If you later agree to make any changes in the original specifications, THESE CHANGES SHOULD BE IN WRITING AS WELL. (4) TAKE TIME TO STUDY THE AGREEMENT . Do not let a contractor or salesman hurry you into signing a contract; especially when you feel pressured by emergencies. (5) REMEMBER, A CONTRACT IS A LEGAL, BINDING DOCUMENT . Make certain you understand the contract. If not, spend a few extra dollars to have an attorney explain it to you. (6) OBTAIN A LIEN RELEASE FROM SUBCONTRACTORS . A mechanic's lien could be placed on your home by a subcontractor if the general contractor fails to pay his bills--EVEN THOUGH YOU HAVE PAID FOR THE WORK. The same thing holds true FOR SUPPLIERS OF CONSTRUCTION MATERIALS INCORPORATED INTO YOUR JOB...GET A LIEN RELEASE! Contractors could provide you with a lien release form. This form will essentially state that you have paid or have entered into an agreement to pay the subcontractor or supplier for their work, and that the subcontractor or supplier therefore relinquishes their lien rights. (7) DO NOT APPROVE PLANS OR BLUEPRINTS unless you understand them. (8) PLEASE BE SURE YOUR CHECKS are made out to the CONTRACTOR, NOT TO A SALESMAN. - 5 - (9) Make sure and publish a "NOTICE OF COMPLETION" in the newspaper as soon as the work is done. No lien may be claimed 46 days after the notice requirement (among other things) is completed in accordance with HRS §507-43. (10) Discuss with your contractor the possibility of withholding a portion of payment until the 45-day period for filing liens has expired. The amount withheld should be sufficient to cover all claims which might be filed. You and your contractor must agree on the amount. (11) If you have any questions about lien rights or other contract matters, DO NOT SIGN this or any contract. Review HRS chapter 507 and/or contact an attorney first. I (we) have discussed with the contractor the lien rights of those who will be supplying labor or materials to my (our) project as well as steps I (we) can take to reduce our lien liability. I (we) have read and understand this DISCLOSURE OF LIEN RIGHTS. DATED this _________ day of _____________________________ , 20 _________ . __________________________ ____________________________ CONTRACTOR OWNER __________________________ ____________________________ WITNESS OWNER For new home construction or substantial remodeling: CHAPTER 672E OF THE HAWAII REVISED STATUTES CONTAINS IMPORTANT REQUIREMENTS YOU MUST FOLLOW BEFORE YOU MAY FILE A LAWSUIT OR OTHER ACTION FOR DEFECTIVE CONSTRUCTION AGAINST THE CONTRACTOR WHO DESIGNED, REPAIRED, OR CONSTRUCTED YOUR HOME OR FACILITY. NINETY DAYS BEFORE YOU FILE YOUR LAWSUIT OR OTHER ACTION, YOU MUST SERVE ON THE CONTRACTOR A WRITTEN NOTICE OF ANY CONSTRUCTION CONDITIONS YOU ALLEGE ARE DEFECTIVE. UNDER THE LAW, A CONTRACTOR HAS THE OPPORTUNITY TO MAKE AN OFFER TO REPAIR AND/OR PAY FOR THE DEFECTS. YOU ARE NOT OBLIGATED TO ACCEPT ANY OFFER MADE BY A CONTRACTOR. THERE ARE STRICT DEADLINES AND PROCEDURES UNDER THE LAW, AND FAILURE TO FOLLOW THEM MAY NEGATIVELY AFFECT YOUR ABILITY TO FILE A LAWSUIT OR OTHER ACTION. - 6 - For door-to-door solicitation sales: YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT. NOTICE OF CANCELLATION ____________________ (date of transaction) ____________________ (date) YOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY OR OBLIGATION, WITHIN THREE BUSINESS DAYS FROM THE ABOVE DATE. IF YOU CANCEL, ANY PROPERTY TRADED IN, ANY PAYMENT 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. 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 _____________________________ (Name of seller), AT _____________________________ (Address of seller's place of business) NOT LATER THAN MIDNIGHT OF _____________________________ (Date). I HEREBY CANCEL THIS TRANSACTION. ___________________ (Date) _______________________ (Buyer's signature) - 7 -