Oregon Cost Plus or Fixed Fee 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. LIST OF DOCUMENTS TO BE INCORPORATED INTO THIS CONTRACT:

1. Oregon Construction Contractors Board Recommended Contract Addendum to Satisfy Contract Terms Requirement- OAR 812-012-0110

2. Consumer Protection Notice

3. Notice of Right to a Lien

4. Information Notice to Owner About Construction Liens

5. Maintenance Information and Schedule

6. Notice of Procedure

7. Notice of Compliance with the Homebuyer Protection Act (HPA)

The above-mentioned documents are hereby incorporated in and made part of this Contract.

2. SCOPE OF WORK: Contractor, who is licensed by the Oregon Construction Contractors Board, 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.

3. 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.

4. 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.

5. 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.

6. 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.

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

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

14. 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 Oregon.

15. 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.

16. 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.

17. WARRANTY: Contractor's warranty shall be limited to defects in materials and 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 are not warranted by Contractor. Contractor hereby assigns to Owner all warranties on materials as provided by the manufacturer of such materials.

NOTICES TO OWNER:

CCB Recommended Contract Addendum to Satisfy Contract Terms Requirement

OAR 812-012-0110

1. List of Required Construction Contractor Board (CCB) Consumer Notices

Oregon law requires construction contractors to give homeowners certain notices before and during a construction project. The following is a list of the forms. It is important to read and understand these forms.

a. Consumer Protection Notice.

b. Information Notice to Owner About Construction Liens

c. Notice of Procedure

2. Explanation of Property Owner’s Rights

a. Consumers have the right to receive the products and services agreed to in the contract.

b. Consumers have the right to resolve disputes through means outlined in the contract.

c. Consumers have the right to file a complaint with the CCB. Any arbitration or mediation clauses in the contract may prevent the CCB from processing.

3. Arbitration/Mediation Clause

a. An “arbitration or mediation clause” is a written portion of a contract designed to settle how the parties will solve disputes that may arise during, or after the construction project. Arbitration clauses are very important. They may limit a consumer’s ability to have their dispute resolved by the Oregon court system or the Oregon Construction Contractors Board.

b. The following box should be checked by the contractor:

This contract contains an arbitration or mediation clause.

This contract DOES NOT contain an arbitration or mediation clause.

c. The Oregon Construction Contractors Board urges consumers to read and understand the entire contract – including any arbitration clause before signing a construction contract. Consumers are not obligated to accept contract terms proposed by the contractor, including arbitration provisions. These may be negotiated to the satisfaction of both parties.

4. Offer of Written Warranty (New Residential Structure Only)

Purchaser acknowledges the contractor has offered warranty against defects in materials and workmanship to the purchaser. Buyer has accepted or rejected the offer of warranty. (see appendix in contract.)

Consumer Protection Notice

Actions to help make your project successful

(ORS 701.330 (1))

Oregon law requires contractors to provide the homeowner with this notice at the time of written contract, for work on a residential structure. This notice explains licensing, bond and insurance requirements, and steps that consumers can take to help protect their interests.

START OUT YOUR PROJECT RIGHT

1. Make sure your contractor is properly licensed before you sign a contract.

• A license requires the contractor to maintain a surety bond and liability insurance.

• If your contractor is not licensed - the CCB bond and dispute resolution services will not be available to you.

2. What you should know about bids, contracts, and change orders.

3. Additional contract information you should know.

4. If you should have a problem with your contractor - You can file a complaint with the CCB against a licensed contractor within one year of the substantial completion of work on your project.

NOTICE OF RIGHT TO A LIEN.

WARNING: READ THIS NOTICE. PROTECT YOURSELF FROM PAYING ANY CONTRACTOR OR SUPPLIER TWICE FOR THE SAME SERVICE.

To: Date of mailing:

Owner

This is to inform you that has begun to provide ordered by for improvements to property you own. The property is located at .

NAME:

ADDRESS:

TELEPHONE:

IMPORTANT INFORMATION FOR YOUR PROTECTION

Under Oregon's laws, those who work on your property or provide labor, equipment, services or materials and are not paid have a right to enforce their claim for payment against your property.

WAYS TO PROTECT YOURSELF ARE:

— RECOGNIZE that this notice of right to a lien may result in a lien against your property unless all those supplying a notice of right to a lien have been paid.

— LEARN more about the lien laws and the meaning of this notice by contacting the Construction Contractors Board, an attorney or the firm sending this notice.

— ASK for a statement of the labor, equipment, services or materials provided to your property from each party that sends you a notice of right to a lien.

— WHEN PAYING your contractor for materials, equipment, labor or services, you may make checks payable jointly to the contractor and the firm furnishing materials, equipment, labor or services for which you have received a notice of right to a lien.

— OR use one of the methods suggested by the "Information Notice to Owners."

— GET EVIDENCE that all firms from whom you have received a notice of right to a lien have been paid or have waived the right to claim a lien against your property.

— CONSULT an attorney, a professional escrow company or your mortgage lender.

Information Notice To Owner About Construction Liens

This is not a lien. Your contractor is required by law to provide this notice to inform you about construction lien laws.

Steps That Consumers Can Take to Protect Themselves

• Contact the Construction Contractors Board (CCB) and confirm that your contractor is licensed.

• Review the Consumer Protection Notice (ORS 701.330(1)).

• Consider using the services of an escrow agent to protect your interests.

• Contact a title company about obtaining a title policy that will protect you from construction lien claims.

• Ask the contractor to get lien waivers or lien releases from every subcontractor, materials provider, equipment provider, and anyone else the contractor is responsible for paying.

• Have a written contract with your contractor.

• If you receive a Notice of Right to Lien, ask for a statement of the reasonable value of the materials, labor, equipment, or services.

• When you pay your contractor, write checks made jointly payable to the contractor, subcontractors, materials, equipment, or services providers.

• Should you have a dispute with your contractor, you may be able to file a complaint with the CCB.

• Consult an attorney.

Job Site Address:

Moisture Intrusion & Water Damage Information For Home Owners

Effective July 1, 2008, contractors that build new homes must provide special information to homebuyers about moisture intrusion and water damage, and provide a home maintenance schedule in accordance with ORS 701.335.

RECOMMENDED MAINTENANCE SCHEDULE FOR HOMEOWNERS

Notice of Procedure Regarding Residential Construction Arbitrations and Lawsuits

Oregon law contains important requirements that homeowners must follow before starting an arbitration or court action against any contractor, subcontractor, or supplier for construction defects.

Before you start an arbitration or court action, you must do the following:

1. Deliver a written notice of any conditions that you believe are defective to the contractor, subcontractor, or supplier that you believe is responsible for the alleged defect.

2. Allow the contractor, subcontractor, supplier, or its agent, to visually inspect the possible defects and also allow reasonable testing.

3. Provide the opportunity to make an offer to repair or pay for the defects.

You should contact an attorney for information on the procedures and deadlines required under Oregon law.

Notice of Compliance with the Homebuyer Protection Act (HPA)

In compliance with Oregon law, the below mentioned Seller has selected to comply with the requirements of ORS 87.007.

1. ADDRESS or DESCRIPTION OF PROPERTY

2. DATE OF PURCHASE (CHOOSE ONE)

A. ORS 87.007 does not apply to the sale of the above described Property.

B. ORS 87.007 applies to the sale of the above described Property. Seller complied by checking one of the following:

Title Insurance as provided for in ORS 87.007(2)(a).

Retained in Escrow not less than 25 percent of the sale price as provided for in ORS 87.007(2)(b).

Bond or Letter of Credit as provided for in ORS 87.007(2)(c).

Written Waivers received from every person claiming a lien as provided for in ORS 87.007(2)(d).

Completed Sale After the Deadline for perfecting liens as provided for in ORS 87.007(2)(e).

3. SELLER INFORMATION

4. BUYER INFORMATION

Additional Instructions

The seller and the buyer must sign and date the form on or before the closing date of the sale. Both parties should retain a copy of the form. Compliance with the HPA is the sole responsibility of the seller.