Can this agreement be signed electronically?

Yes. Electronic signatures satisfy the ESIGN Act (15 U.S.C. ch. 96) and UETA in most jurisdictions when intent, consent, attribution, and reproducible records are present; include a consent disclosure for consumer-facing transactions.

Do I need a notarization or witnesses?

Not usually for private construction options, but certain related instruments (deeds, some powers of attorney) require notarization or witnesses under state law; check the local requirements before relying on a notarized attachment.

Is remote online notarization (RON) acceptable?

RON is permitted in most states but rules vary; verify identity-proofing, audio-video recording, and retention requirements per the applicable state notary commission before using RON.

How do I update or amend an exercised option?

Amend by written change order signed by authorized parties; record the amendment, update schedules, and ensure payment terms and lien waivers reflect the change.

How should I store executed agreements?

Retain signed copies in the project repository with backups. Use encrypted storage (TLS in transit, AES-256 at rest) and retain audit logs for evidentiary purposes.

How can an option be revoked or canceled?

Revocation depends on the agreement terms; include explicit withdrawal or revocation language. If absent, follow contract law principles and provide written notice per the agreement's notice provisions.

Electronic Signature
Templates
Real estate
Construction Options Agreement

Construction Options Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

CONSTRUCTION OPTIONS AGREEMENT

Parties

This Construction Options Agreement ("Agreement") is made and entered into as of by and between:

Owner / Optionor Optionee / Developer

Property

Property Address Parcel / APN Number Legal Description

Grant of Option; Consideration

Owner hereby grants to Optionee an exclusive option to undertake construction of the improvements described in this Agreement and to acquire an interest in the Property as set forth herein. The option shall be exercisable in accordance with the terms below in exchange for the option consideration of payable to Owner upon execution of this Agreement. The option consideration is non-refundable except as expressly set forth in this Agreement.

Option Term; Exercise

Term Commencement Date: Term Expiration Date:

To exercise the option, Optionee must deliver written notice of exercise signed by Optionee and pay any additional sums required under this Agreement to Owner at the addresses set forth in the Notices section. Exercise shall be effective upon Owner's receipt of such notice and funds.

Purchase / Construction Financial Terms

Exercise / Purchase Price (if applicable) Earnest Deposit upon Exercise Financing Contingency

☐ Optionee's obligation to proceed is conditioned upon Optionee obtaining financing acceptable to Optionee by . If Optionee fails to secure financing, Optionee shall provide written notice to Owner and may terminate the Agreement as provided herein.

Construction Scope; Plans and Specifications

Optionee shall construct the improvements in substantial conformance with the plans and specifications attached hereto or incorporated by reference. Owner shall have reasonable opportunity to review and approve material deviations, which approval shall not be unreasonably withheld.

Description of Improvements / Scope of Work

Permits, Approvals and Obligations

Optionee shall obtain and pay for all permits, approvals, inspections and licenses necessary for the construction and completion of the improvements, unless otherwise expressly agreed in writing. Owner shall cooperate reasonably in obtaining any Owner-required consents but shall not be responsible for Optionee's failure to obtain permits.

Construction Schedule; Possession

Construction Commencement Date: Anticipated Completion Date:

Time is of the essence for the construction schedule. Delays caused by force majeure, Owner-caused delays, or permitting delays shall extend the schedule by a reasonable period.

Payments; Draws; Change Orders

Payment terms, draw schedule, retention and change order procedures shall be as set forth in the attached payment exhibits or as otherwise agreed in writing. Optionee shall provide itemized requests for payment with lien waivers as a condition to disbursement.

Payment / Draw Schedule (summary)

Insurance, Bonds and Liens

Optionee shall maintain commercial general liability, builder's risk and workers' compensation insurance in amounts customary for projects of this type. Optionee shall furnish certificates of insurance and performance and payment bonds if required by Owner. Optionee shall promptly discharge or bond off any mechanic's or materialmen's liens arising from Optionee's performance.

Inspections, Warranties and Acceptance

Owner shall have the right to inspect work in progress and final work prior to final payment. Optionee warrants that all work shall be performed in a good and workmanlike manner and shall be free from defects for a period of one year from substantial completion, unless a longer warranty is specified in the plans.

Default; Remedies

If either party materially defaults under this Agreement, the non-defaulting party shall provide written notice specifying the default and a thirty (30) day opportunity to cure, except for payment defaults which shall have a ten (10) day cure period. Remedies include specific performance, termination, retention of option consideration as liquidated damages where permitted, and recovery of reasonable attorneys' fees and costs incurred in enforcing this Agreement.

Indemnity; Environmental

Each party shall indemnify and hold harmless the other from claims, losses, or liabilities arising out of its negligent acts or omissions. Optionee shall comply with all environmental laws during construction and shall be responsible for remediation of contamination caused by Optionee's operations.

Disclosures

The parties acknowledge the following known conditions affecting the Property:

Lead-based paint: ☐ Yes ☐ No

Known mold or water intrusion: ☐ Yes ☐ No

Prior structural damage or repairs: ☐ Yes ☐ No

If Yes, describe details

Notices

All notices shall be in writing and shall be delivered by hand, overnight courier, or certified mail to the addresses below. Notice is effective upon receipt.

Owner Notice Address Optionee Notice Address

Governing Law; Entire Agreement

This Agreement shall be governed by and construed in accordance with the laws of the state in which the Property is located. This Agreement, together with any exhibits and attachments, constitutes the entire agreement between the parties with respect to the subject matter and supersedes all prior negotiations and agreements.

Miscellaneous Provisions

Any amendments to this Agreement must be in writing and signed by both parties. If any provision is held unenforceable, the remaining provisions shall remain in full force and effect. Time is of the essence where expressly stated.

Execution

The parties have executed this Agreement as of the date first written above.

Owner / Optionor:

By:

Date:

Optionee / Developer:

By:

Date:

What a Construction Options Agreement Covers

A Construction Options Agreement is a contractual addendum that defines optional work scopes, upgrade packages, or alternate performance choices offered during a construction project. It sets the option descriptions, fixed or formula-based pricing, exercise deadlines, and any conditions for conversion into change orders or separate work contracts. Typical parties include property owners, developers, general contractors, subcontractors, and lenders. When executed properly it reduces ambiguity over scope and cost, and it can be signed electronically consistent with federal and state e-signature laws such as the ESIGN Act (15 U.S.C. ch. 96).

Why a Clear Options Agreement Matters for Projects

A well-drafted Construction Options Agreement clarifies optional work, locks pricing or pricing methods, sets exercise windows, and reduces later disputes. It supports scheduling certainty and protects stakeholder expectations while remaining enforceable in electronic form under ESIGN and state UETA/ESRA frameworks when signature intent and consent are established.

Who Typically Prepares and Signs This Agreement

The agreement is used by parties who must document optional scopes, prices, or upgrade choices during bidding, contracting, or pre-construction phases.

Owner / Developer — selects optional upgrades, authorizes budgets, and tracks exercise deadlines for project budgeting and lender approvals.
General Contractor — lists optional line items, sets pricing methods, and coordinates subcontractor scope and scheduling if options are exercised.
Lender / Title Agent / Attorney — reviews option impacts on financing, security interests, and closing conditions before recording or funding.

Each signer should have authority to bind their organization; lenders or title agents may require additional notices or attachments before closing.

Core Elements to Include in a Professional Agreement

Include these sections to make an options agreement enforceable, transparent, and operational during construction and closeout.

Option Description

Clear, itemized descriptions of each optional work package with reference to drawings or specifications and any product selections or allowances that define the scope.

Pricing Terms

Fixed sums or formula-based pricing with allowances, unit rates, escalation clauses, and whether prices include overhead, profit, and taxes.

Exercise Window

Specific dates and notice method for exercising options, including time-of-day cutoffs, acceptable responders, and how late exercises affect schedule.

Conversion Procedure

Process to convert an exercised option into a change order or separate contract, required approvals, and drawing revision responsibilities.

Payment and Lien Waivers

Payment schedule, retainage rules, and lien waiver requirements to protect owners and downstream contractors when options are paid.

Dispute and Remedies

Governing law, dispute resolution method (mediation/arbitration), and remedies for missed exercises or defective option work.

Quick Steps to Complete the Agreement

Follow this sequence to prepare, review, and execute a Construction Options Agreement efficiently.

01

Gather Parties: Confirm legal names and signatory authority for each involved organization.
02

Define Options: Itemize optional scopes, reference drawings, and include precise specifications.
03

Set Prices: Enter fixed prices or clear pricing formulas and any contingencies.
04

Execute: Have authorized signers sign and date; distribute fully executed copies to stakeholders.

How to Configure an Online Options Workflow

Set up a consistent electronic workflow so option choices route for review, acceptance, and recordkeeping without manual handoffs.

Field	Configuration
Auto-fill party data	Use templates or merge fields to populate names and addresses automatically.
Conditional pricing	Apply conditional fields so selecting an option displays its price and updates totals automatically.
Signature fields	Place signature, initial, and date fields in role-based order for sequential signing.
Audit trail	Enable timestamping, IP capture, and event logs for each signer and action.

Where to Send the Completed Agreement

Routing determines who gets final copies and which records are updated; keep a distribution list before execution.

Owners: Provide an executed original or certified electronic copy for contract files and budgeting.
Contractors: General and affected subcontractors receive copies to update schedules and procurement orders.
Lenders / Title: Send to lenders or title agents when options affect financing or closing conditions.
Project Records: Store a final signed copy in the project repository and as part of closeout documentation.

Digital Signing and System Integration Considerations

Choose electronic workflows that preserve intent, enable consent, and create a reliable audit trail for later inspection.

Integrations: Connect to Procore, NetSuite, Salesforce, or Microsoft 365 for single-source records.
File Formats: Use PDF or DOCX for upload; ensure signed PDFs comply with ISO PDF signature specs.
Security: Require TLS in transit and AES-256 at rest for storage and transfer.

Typical Deadlines and Timing Rules to Specify

Define clear calendar-based deadlines so exercise rights, deliveries, and payments are unambiguous for all parties.

Exercise Window:

Specify exact MM/DD/YYYY deadline and required notice method to avoid disputes.

Price Lock Period:

State until when quoted prices remain valid; include escalation formula if applicable.

Delivery Lead Time:

Note any lead times for materials or long-lead items tied to exercised options.

Approval Response Time:

Set how many business days an approver has to accept an exercised option.

Conversion Deadline:

Define when an exercised option must be converted to a change order or separate contract.

Common Preparation Errors to Avoid

Ambiguous scope descriptions that leave material or labor responsibilities undefined and cause disputed interpretations during construction.
Omitting exercise deadlines or using vague timing language, which can nullify the option or trigger unintended obligations.
Failing to tie option prices to specific allowances, unit rates, or escalation rules, creating disputes over final invoicing.
Not documenting who has authority to exercise options on behalf of an organization, risking unauthorized commitments or repudiation.

Consequences of an Incorrect or Missing Agreement

Contract Disputes: Increased litigation risk and delay costs

Cost Overruns: Unknown pricing leads to unbudgeted expenses

Schedule Delays: Late exercises can push back procurement and completion

Loss of Options: Unclear notice methods may forfeit option rights

Lender Issues: Undisclosed options can affect funding or title conditions

Regulatory Risk: Improper signatures or missing disclosures may affect enforceability

Essential Data Elements to Record

Parties: Full legal names

Effective Date: MM/DD/YYYY

Option Schedule: Line-item list

Consideration: Price or formula

Exercise Deadline: Exact date/time

Signatures: Named signers and dates

eSignature Pricing Snapshot for Executing Construction Options

Compare common capability and pricing points when selecting an eSignature provider for option agreements; signNow is listed first per comparison conventions.

	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	Varies	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

FAQs and Troubleshooting for Common Execution Questions

Answers to frequent questions about enforceability, notarization, updates, revocation, and electronic recordkeeping when using Construction Options Agreements.

Need help? Contact support

Can this agreement be signed electronically?
Yes. Electronic signatures satisfy the ESIGN Act (15 U.S.C. ch. 96) and UETA in most jurisdictions when intent, consent, attribution, and reproducible records are present; include a consent disclosure for consumer-facing transactions.
Do I need a notarization or witnesses?
Not usually for private construction options, but certain related instruments (deeds, some powers of attorney) require notarization or witnesses under state law; check the local requirements before relying on a notarized attachment.
Is remote online notarization (RON) acceptable?
RON is permitted in most states but rules vary; verify identity-proofing, audio-video recording, and retention requirements per the applicable state notary commission before using RON.
How do I update or amend an exercised option?
Amend by written change order signed by authorized parties; record the amendment, update schedules, and ensure payment terms and lien waivers reflect the change.
How should I store executed agreements?
Retain signed copies in the project repository with backups. Use encrypted storage (TLS in transit, AES-256 at rest) and retain audit logs for evidentiary purposes.
How can an option be revoked or canceled?
Revocation depends on the agreement terms; include explicit withdrawal or revocation language. If absent, follow contract law principles and provide written notice per the agreement's notice provisions.

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