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Construction Services Contract

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CONSTRUCTION SERVICES CONTRACT

This Construction Services Contract (the "Contract") is made and entered into as of Effective Date: by and between Contractor Name: , an entity type Corporation LLC Individual, with principal place of business at ; and Client Name: , with mailing address at .

RECITALS

WHEREAS, Client desires to engage Contractor to perform construction work at the project location described below in accordance with the terms and conditions set forth in this Contract; and

WHEREAS, Contractor represents that it is duly licensed, experienced, and qualified to perform the construction services described herein and will provide labor, materials, equipment, supervision, and all incidentals necessary for performance of the Work; and

WHEREAS, the parties wish to set forth their respective rights and obligations in writing.

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

1. SCOPE OF WORK

1.1 Contractor shall furnish all labor, materials, equipment, tools, supervision and services (collectively, the "Work") necessary to complete the construction described as:

1.2 The Work shall conform to the specifications, drawings, and other contract documents prepared by or for the Client and delivered to Contractor prior to commencement. In the event of any discrepancy between drawings and specifications, Contractor shall promptly notify Client for resolution and shall not proceed with disputed items until authorized in writing.

2. CONTRACT PRICE AND PAYMENT

2.1 Contract Sum. In consideration for the complete performance of the Work, Client shall pay Contractor the Contract Sum of $ (the "Contract Sum"), subject to additions and deductions for Change Orders as provided in this Contract.

2.2 Payment Schedule. Payments shall be made in accordance with the following schedule: Initial deposit of of Contract Sum upon execution; progress payments based on completed work as described in monthly invoices; and final payment upon completion and acceptance. Retainage of may be withheld as permitted by applicable law.

2.3 Invoices and Payment. Contractor shall submit itemized invoices substantiating work performed and materials furnished. Client shall make payment within days of receipt of a proper invoice, subject to good faith review and allowable deductions for defective work. Late payments shall bear interest at unless otherwise prohibited by law.

3. CHANGES AND CHANGE ORDERS

3.1 Any alteration or deviation from the Scope of Work involving extra cost or credit shall be performed only upon a written Change Order signed by authorized representatives of both parties. Change Orders shall specify adjustments to the Contract Sum and/or the Contract Time.

3.2 If the parties cannot agree on the price or time extension for a requested change, Contractor may proceed only with a written directive from Client agreeing to the proposed method of payment and time adjustment.

4. SCHEDULE; TIME FOR COMPLETION

4.1 Contractor shall commence Work on or before Start Date: and shall achieve Substantial Completion by Completion Date: . Time is of the essence.

4.2 If Contractor fails to achieve Substantial Completion by the Completion Date, Contractor shall be liable for liquidated damages in the amount of $ per day, which the parties agree is a reasonable estimate of anticipated damages.

5. SUBCONTRACTORS; ASSIGNMENT OF CONTRACT

5.1 Contractor may engage subcontractors to perform portions of the Work; however, Contractor shall remain fully responsible for the performance of all subcontracted Work and compliance with this Contract.

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

6. WARRANTIES

6.1 Contractor warrants that materials and equipment furnished will be new (unless otherwise specified) and that the Work will be free from defects in workmanship for a period of from the date of Final Completion. Manufacturer warranties, if any, shall also apply.

6.2 This warranty does not cover damage or defect caused by abuse, neglect, ordinary wear and tear, or modifications by persons other than Contractor or its authorized representatives.

7. INSURANCE AND INDEMNITY

7.1 Contractor shall, at its own expense, maintain during the term of the Work commercial general liability insurance, automobile liability insurance, and workers’ compensation coverage as required by law and sufficient to protect Client from claims arising out of Contractor's operations. Contractor shall provide evidence of such insurance upon request.

7.2 To the fullest extent permitted by law, Contractor shall indemnify, defend and hold harmless Client, its officers, agents and employees from and against all claims, damages, losses and expenses, including attorney's fees, arising out of or resulting from performance of the Work, provided such claim is caused in whole or in part by any negligent act or omission of Contractor, a subcontractor, or anyone directly or indirectly employed by them.

Insurance Carrier Name: Policy Number:

8. COMPLIANCE WITH LAWS; PERMITS; SAFETY

8.1 Contractor shall obtain and pay for all permits, licenses, inspections and approvals required by public authorities for the proper execution and completion of the Work, unless otherwise agreed in writing.

8.2 Contractor shall perform the Work in a safe and workmanlike manner in compliance with all applicable laws, codes, ordinances and regulations and shall be responsible for jobsite safety.

9. TERMINATION

9.1 Either party may terminate this Contract for cause if the other party materially breaches any obligation hereunder and fails to cure such breach within days after receipt of written notice specifying the breach.

9.2 Client may terminate this Contract for convenience upon written notice to Contractor. In the event of termination for convenience, Contractor shall be paid for Work performed to the date of termination and reasonable demobilization costs, less amounts necessary to cover Client’s costs to complete the Work.

10. DISPUTE RESOLUTION

10.1 The parties shall first attempt to resolve any dispute arising out of or relating to this Contract through good faith negotiations. If unresolved within thirty (30) days, the parties agree to submit the dispute to non-binding mediation administered by a mutually selected mediator.

10.2 If mediation does not resolve the dispute, the parties agree that any unresolved controversy shall be finally resolved by binding arbitration in accordance with the rules of a neutral arbitration forum, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. The arbitration shall be conducted in .

11. LIMITATION OF LIABILITY

11.1 Except for Contractor’s indemnity obligations and willful misconduct, neither party shall be liable to the other for consequential, incidental, special, punitive or exemplary damages arising from or related to this Contract.

12. NOTICES

Contractor Notice Address

Contractor Contact

Client Notice Address

Client Contact

Notices shall be in writing and shall be deemed duly given when delivered personally, sent by nationally recognized overnight courier, or three (3) business days after deposit in the United States mail, postage prepaid, to the addresses set forth above or to such other address as either party may designate by notice in accordance with this section.

13. AMENDMENTS; WAIVER; COUNTERPARTS

13.1 This Contract may be amended only by a written instrument executed by authorized representatives of both parties. No waiver of any provision shall be effective unless in writing.

13.2 This Contract may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Facsimile or electronic signatures shall be deemed original signatures for all purposes.

14. GOVERNING LAW; SEVERABILITY; ENTIRE AGREEMENT

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

14.2 Severability. If any provision of this Contract is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected thereby.

14.3 Entire Agreement. This Contract, including all incorporated documents and executed Change Orders, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and representations, oral or written.

15. MISCELLANEOUS

15.1 Independent Contractor. Contractor is an independent contractor and shall be solely responsible for payment of all employment taxes and benefits for its employees and for compliance with all applicable laws relating to employment.

15.2 Successors and Assigns. This Contract shall bind and inure to the benefit of the parties and their respective successors and permitted assigns.

SIGNATURES

Contractor

Printed Name:

By:

Date:

Client

Printed Name:

By:

Date:

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What a Construction Services Contract Covers

A Construction Services Contract is a written agreement that defines the legal relationship between a project owner and a contractor for construction, renovation, or repair work. It sets out the scope of work, schedule, payment terms, insurance and bonding requirements, change order procedures, risk allocation, dispute resolution, and termination rights. Well-drafted contracts reduce ambiguity, allocate responsibilities, and provide the basis for performance measurement, claims management, and enforcement if disagreements arise. This contract can be executed on paper or electronically where permitted by law.

Why a Clear Contract Matters for Construction Projects

A precise Construction Services Contract reduces disputes, clarifies payment timing and deliverables, and protects parties through insurance and warranty clauses. It establishes milestones, defines change order procedures, and preserves remedies such as lien rights and bond claims.

Why a Clear Contract Matters for Construction Projects

Who Typically Prepares and Signs This Contract

Parties on construction projects vary by size and sector; several roles routinely prepare, review, or sign these agreements.

  • Project owners and developers managing budgets, approvals, and overall contract compliance across multiple contractors and trade partners.
  • General contractors or prime contractors coordinating subcontractors, schedule, and site safety while accepting primary payment obligations.
  • Subcontractors and specialty trades that need clear scope, payment schedule, lien waiver terms, and insurance requirements to avoid risk.

Contracts may also involve lenders, sureties, design professionals, and legal counsel when drafting, negotiating, or enforcing terms.

Signatory Roles and Typical Responsibilities

General Contractor

Typically signs as the primary performing party and accepts contractual responsibility for means, methods, schedule adherence, subcontractor management, and workplace safety. May also be liable for performance bonds and warranty obligations under the contract.

Project Owner

Signs as the payer and project sponsor with responsibility for approvals, timely payments under the schedule, change-order authorization, and final acceptance testing plus dispute resolution initiation if needed.

Required Core Contract Data Elements

Party Names: Full legal names
Scope: Work description
Price Terms: Contract sum or method
Schedule: Start and completion
Insurance: Limits and carriers
Signatures: Signer name and date

Common Consequences of an Improper Contract

Payment disputes: Delayed payments
Liens: Recorded claim risk
Bond claims: Surety involvement
Schedule delays: Liquidated damages
Insurance gaps: Uncovered liabilities
Termination: Contract cancellation costs

Frequent Errors to Avoid When Preparing the Contract

  • Vague scope descriptions that leave key tasks or exclusions undefined, producing disagreements about whether a work item is included in the contract price.
  • Missing or ambiguous payment milestones and retainage terms, which often trigger late payments, cash-flow problems for subcontractors, and disputed final releases.
  • No clear change order process or approval authority leading to uncompensated extra work, unauthorized scope creep, and contentious claims.
  • Insufficient insurance, omitted performance or payment bond requirements, or failure to require certificates of insurance from subcontractors create material exposure.

Step-by-Step: Completing a Construction Services Contract

Follow a clear sequence when preparing and executing the contract to reduce errors and preserve rights across bidding, construction, and closeout stages.

  • 01
    Draft: Define scope, price, schedule, and special conditions first.
  • 02
    Review: Have counsel and project manager check key clauses.
  • 03
    Sign: Collect signatures and dates from authorized signers.
  • 04
    Distribute: Send executed copies to all stakeholders and file them.

Where to Send or File the Executed Contract

After execution, route copies to internal and external recipients and retain a central executed record for compliance and claims readiness.

  • Owner: Original or executed copy for project records.
  • Contractor: Contract file for payroll, scheduling, and subcontracts.
  • Surety: Provide if bonds are required by the contract.
  • Recordkeeping: Store electronically and archive backups securely.

Essential Contract Sections to Include

A professional Construction Services Contract organizes obligations, financial terms, risk allocation, and procedures for change and dispute resolution to reduce ambiguity and litigation risk.

Scope of Work

A detailed description of tasks, deliverables, specifications, and any excluded items. Attach drawings, specs, and schedules as enforceable exhibits rather than relying on verbal or informal descriptions.

Price and Payments

Clear contract sum or pricing method, accepted change order pricing, progress payment schedule, retainage percentage, final payment conditions, and procedures for disputed invoices.

Schedule and Milestones

Express start date, critical milestones, substantial completion criteria, liquidated damages for delay if applicable, and procedures for extensions of time.

Insurance and Bonds

Specify minimum insurance types and limits, additional insured requirements, and performance/payment bond obligations when required by the owner or law.

Change Orders

Formal change order process including documentation, pricing, approval authority, and effect on schedule and payment to prevent unauthorized work and disputes.

Dispute Resolution

State the preferred method (mediation, arbitration, litigation), governing law, and venue for resolving claims to streamline conflict resolution and control litigation costs.

Typical Timeframes and Deadlines to Track

Track contractual and statutory deadlines closely to preserve rights such as lien filings, final payment, and warranty claims.

Notice to Proceed:

Issue date that starts the contract schedule and time-to-completion calculations.

Payment Terms:

Commonly Net 30; specify invoice submission and supporting documentation.

Substantial Completion:

Date for owner occupancy and release of certain retainage or obligations.

Final Completion:

Final punchlist completion, warranty start, and closeout documentation due.

Mechanic's Lien Filing:

Deadlines vary by state; preserve notice windows immediately after nonpayment.

eSignature Vendor Pricing and Feature Comparison

Comparison of common eSignature vendors and basic plan attributes. Do NOT include any 'as of [date]' or similar datestamps in this summary.

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 Yes, 7-day trial No No Yes, limited Yes, limited
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Real-World Examples of Contracts Signed Electronically

Organizations in real estate and facilities management often replace paper routing with secure electronic signatures to speed execution and maintain compliance.

Martin Properties

Martin Properties adopted online signing for contractor agreements to eliminate courier delays and improve compliance tracking.

  • Immediate execution and centralized records reduced turnaround time significantly.
  • "I can process and execute all of these documents online with 100% compliance and built-in security. Whether on mobile or working offline, I can get forms back to their necessary parties efficiently."

Optica Ventures

Optica Ventures standardized digital contracts to streamline closing construction vendors and collecting signatures remotely.

  • Resulted in fewer missing signatures and clearer audit trails.
  • "The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers."

Practical Tips for Accurate and Efficient Contracts

Adopt consistent templates, defined review steps, and digital workflows to reduce negotiation time and administrative errors.

Standardize Templates
Use a single vetted template that includes mandatory clauses and exhibits; avoid ad hoc edits that create ambiguous obligations or conflicting provisions.
Document Change Orders
Require written, signed change orders with cost and schedule impacts before starting additional work to prevent disputed extra work claims.
Verify Signer Authority
Confirm the signer has corporate authority or power of attorney; keep evidence of authorization to avoid later challenge of signature validity.
Keep Audit Trails
Retain electronic audit records showing signer identity, timestamps, IP addresses, and consent to electronic processes to support enforceability.

Recommended Digital Workflow Settings for Construction Contracts

Configure eSignature workflows to match your approval, authentication, and archival requirements for construction documents.

Field Configuration
Authentication Email link, SMS code, or stronger methods
Routing Order Sequential signer order to ensure approvals
Required Fields Signatures, dates, license numbers enforced
Archive Settings PDF/A export with audit trail attached

Technical and Integration Considerations

Ensure the signing platform supports required file formats, integrations, and authentication levels your project needs.

  • Supported Formats: PDF, DOCX, HTML, Excel
  • Integrations: Procore, Salesforce, NetSuite, Google Workspace
  • Authentication: Email, SMS, KBA, or SSO options

Key Milestones From Bid to Closeout

Track these sequential milestones to manage performance, payments, and closeout efficiently during the project lifecycle.

01

Bid and Award

Procurement, bid acceptance, and award notification commence contract obligations.

02

Notice to Proceed

Formally starts the project schedule and triggers time-based milestones.

03

Substantial Completion

Owner accepts project for intended use and certain retainage or punchlist processes begin.

04

Final Closeout

Final payment, warranty activation, lien releases, and record archiving complete the contract lifecycle.

Frequently Asked Questions about Construction Services Contracts

Answers to common questions about electronic execution, witnessing, revocation, and enforcement of construction contracts.


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