Contract for Construction of a Commercial Building
Agreement made on the _________________________________ (date), between
___________________________________________ (Name of Owner) of ______________
___________________________________________________________________________
(street address, city, county, state, zip code) , referred to herein as Owner, and
_______________________________ (Name of Contractor), a corporation organized and
existing under the laws of the state of ___________________, with its principal office
located at __________________________________________________________________ ____________ (street address, city, county, state, zip code) , referred to herein as Contractor.
For and in consideration of the mutual covenants contained in this agreement, and
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
I. Description of Work Contractor is duly licensed in the state of ________________________ (name of
state) and shall perform the following described work, in accordance with the contract plans
and specifications (the contract documents), at ____________________________________
___________________________________________________________________________
(street address, city, county, state, zip code) :
(Description of Work to be Done)
____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
II. Contract Price A. Owner agrees to pay Contractor, for the work described, the total price of
$_______________.
B. Payment of this amount is subject to additions or deductions in accordance
with the provisions of this contract and of the other documents to which this contract
is subject.
III. Progress Payments A.Owner shall make progress payments on account of the contract price to
Contractor , on the basis of applications for payment submitted to (e.g.,
architect/engineer) ______________________________ by Contractor as the work
progresses, and on the (e.g., architect/engineer) ___________________________’s
certificate for the same, in accordance with (describe the contract document that
establishes the basis for a progress payment) _______________________________
__________________________________________________________________________________________________________________________________________
_____________________________________________________________________ ____________________________________________________________________.
B.Progress payments may be withheld if: 1.Work is found defective and not remedied;
2. Contractor does not make prompt and proper payments to
subcontractors; 3. Contractor does not make prompt and proper payments for
labor, materials, or equipment furnished to Contractor;
4. A subcontractor is damaged by an act for which Contractor is
responsible;5. Claims or liens are filed with regard to the project; or
6. In the opinion of (e.g., architect/engineer) _____________________,
Contractor's work is not progressing satisfactorily.
IV. Final Payment A.Owner shall make final payment to Contractor within ______ (number) days
after the work is completed, if the contract is at that time fully performed; however,
final payment shall not be made or deemed due until Contractor has delivered to
Owner a complete release of all liens arising out of the contract, or receipts in full
covering all labor, materials, and equipment for which a lien could be filed, or in the
alternative a bond satisfactory to Owner indemnifying him or her against any and all
such liens.
B. Owner, by making payment, waives all claims except those arising out of the
following
1. Faulty work appearing after substantial completion has been
granted;2. Work that does not comply with the contract documents;
3. Outstanding claims of lien; or
4. Failure of Contractor to comply with any special guarantees
required by the contract documents.
C. Contractor, by accepting final payment, waives all claims except those that
Contractor has previously made in writing, and which remain unsettled at the time of
acceptance.
V. Starting and Completion Dates Construction under this contract shall begin on (e.g., date of commencement of
construction) __________________________, and be completed by (e.g., date of
completion) ____________________________.
VII. Contracts Documents A. The contract documents on which the agreement between Owner, (e.g.,
architect/engineer) ___________________________, and Contractor is based, that
contain the plans and specifications in accordance with which the work is to be done,
and that provide for the method of payment of the contract price are as follows:
1.This agreement, with supplementary agreements and conditions
attached to this agreement; 2. The plans and specifications, with addenda attached to such
plans and specifications, issued before execution of this agreement,
and any amendments made after the effective date of this agreement; 3. Written interpretations of the contract documents and directives to be
made from time to time by the (e.g., architect/engineer)
____________________________; and4. Work change orders issued, or to be issued.
B. The contract documents together form the contract for the work described in
this agreement. The parties intend that the documents include provisions for all labor,
materials, equipment, supplies, and other items necessary for the execution and
completion of the work, and all terms and conditions of payment. The documents also
include all work and procedures not expressly indicated in such documents necessary
for proper execution of the above-described project. C. The contract documents are to be separately executed in triplicate by Owner
and Contractor. Contractor, by executing the documents, represents that Contractor
has inspected and is familiar with the work site and the local conditions under which
the work is to be performed. If by inadvertence any of the contract documents are not
signed, (e.g., architect/engineer) ______________________________ shall identify
them.
VII. Designation of (e.g., Architect/Engineer) ______________________________
The (e.g., architect/engineer) _____________________________ for above-
described project is ______________________________________ (name), having an office
at _________________________________________________________________________ ______________________________________ (street address, city, county, state, zip code).
VIII. Duties and Authority of (e.g., Architect/Engineer)
___________________________
The duties and authority of the (e.g., architect/engineer)
_______________________________________ are as follows:
A. General Administration of Contract.
The primary function of the (e.g., architect/engineer)
________________________________ is to provide the
general administration of the contract. In performing these duties the (e.g.,
architect/engineer) ____________________________________ is Owner's
representative during the entire period of construction.
B. Inspections, Opinions, and Progress Reports. He/she shall keep familiar with the progress and quality of the work by
making periodic visits to the work site. He/she will make general determinations as to
whether the work is proceeding in accordance with the contract. He/she will keep the
Owner informed of such progress, and will use his/her best efforts to protect the
Owner from defects and deficiencies in the work. He/she will not be responsible for
the means of construction, or for the sequences, methods, and procedures used in such
construction, or for Contractor's failure to perform the work in accordance with the
contract documents.
C. Access to Work Site for Inspections.
He/she shall be given free access to the work at all times during its preparation
and progress. However, he/she is not required to make exhaustive or continuous on-
site inspections to perform his/her duties of checking and reporting on work progress.
D. Interpretation of Contract Documents -- Decisions on Disputes.
He/she will be the initial interpreter of the contract document requirements,
and make primary decisions on claims and disputes between Contractor and Owner.
All of his/her decisions are subject to arbitration as provided in this agreement.
E. Rejection and Stoppage of Work .
He/she shall have authority to reject work that in his /her opinion does not
conform to the contract documents, and in this connection to stop the work or a
portion of such work, when necessary.
F Payment Certificates. He/she will determine the amounts owing to Contractor as the work
progresses, based on Contractor's applications and his/her inspections and
observations, and will issue certificates for progress payments and final payment in
accordance with the terms of the contract documents.
IX. Responsibilities of Owner A.Owner shall:
give all instructions to Contractor through (e.g., architect/engineer)
_________________________________ ;
shall furnish all necessary surveys for the work, and
shall secure and pay for easements for permanent structures or permanent
changes in existing structures or facilities on the work site, or which are
necessary for its proper completion.
B. Owner reserves the right to let other contracts in connection with the project.
Contractor shall cooperate with all other contractors to the effect that their work shall
not be impeded by his/her construction, and shall give such other contractors access
to the work site necessary to perform their contracts.
X. Responsibilities of Contractor Contractor's duties and rights in connection with the above-described project are as
follows: A. Responsibility for and Supervision of Construction.
Contractor shall be solely responsible for all construction under this contract,
including the techniques, sequences, procedures, and means, and for coordination of
all work. Contractor shall supervise and direct the work to the best of his/her ability,
and give it all attention necessary for such proper supervision and direction.
B. Discipline and Employment. Contractor shall maintain at all times strict discipline among his/her
employees, and Contractor agrees not to employ for work on the project any person
unfit or without sufficient skill to perform the job for which he or she was employed.
C. Furnishing of Labor, Materials, etc. Contractor shall provide and pay for all labor, materials, and equipment,
including tools, construction equipment, and machinery, utilities, including water,
transportation, and all other facilities and services necessary for the proper
completion of work on the project in accordance with the contract documents.
D. Payment of Taxes Procurement of Licenses and Permits.
Contractor shall pay all taxes required by law in connection with work
on the project in accordance with this agreement including sales, use, and similar
taxes, and shall secure all licenses and permits necessary for proper completion of the
work, paying the fees for such licenses and permits.
E. Compliance with Construction Laws and Regulations.
Contractor shall comply with all laws and ordinances, and the rules,
regulations, or orders of all public authorities relating to the performance of the work
under and pursuant to this agreement. If any of the contract documents are at variance
with any such laws, ordinances, rules, regulations, or orders, he or she shall notify
(e.g., architect/engineer) _________________________________ promptly on
discovery of such variance.
F. Responsibility for Negligence of Employees and Subcontractors.
Contractor assumes full responsibility for acts, negligence, or
omissions of all his/her employees on the project, for those of his/her
subcontractors and their employees, and for those of all other persons doing
work under a contract with him or her.
G. Warranty of Fitness of Equipment and Materials. Contractor represents and warrants to Owner and to (e.g., architect/engineer
that all equipment and materials used in the work, and made a part of the structures
on such work, or placed permanently in connection with such work, will be new
unless otherwise specified in the contract documents, of good quality, free of defects,
and in conformity with the contract documents. It is agreed between the parties to this
agreement that all equipment and materials not so in conformity will be considered
defective.
H. Furnishing of Samples and Shop Drawings.
Contractor agrees to furnish at (e.g., architect/engineer)
__________________________________’s direction all samples and shop drawings
for his or her consideration and approval as to conformance with the specifications of
the contract documents and his or her concepts of design called for in such
specifications.
I. Clean-up. Contractor agrees to keep the work premises and adjoining ways free of waste
material and rubbish caused by his/her work or that of his/her subcontractors.
Contractor further agrees to remove all such waste material and rubbish on
termination of the project, together with all his/her tools, equipment, machinery, and
surplus materials. Contractor agrees, on terminating his/her work at the site, to
conduct general clean-up operations, including the cleaning of all glass surfaces,
paved streets and walks, steps, and interior floors and walls.
J. Indemnity and Hold Harmless Agreement.
1. Contractor agrees to indemnify and hold harmless Owner and (e.g.,
architect/engineer) ______________________________, and their agents
and employees, from and against any and all claims, damages, losses, and
expenses, including reasonable attorneys' fees in case it shall be necessary to
file an action, arising out of performance of the work in this contract, that is
(a) for bodily injury, illness, or death, or for property damage, including loss
of use, and (b) caused in whole or in part by Contractor's negligent act or
omission, or that of a subcontractor, or that of anyone employed by them or
for whose acts Contractor or subcontractor may be liable.
2. This agreement to indemnify and hold harmless is not applicable to
liability of (e.g., architect/engineer) __________________________ or that
of his or her agents or employees, arising out of preparation or approval of
reports, opinions, surveys, maps, drawings, designs, or specifications, or out
of their giving or failure to give instructions, which giving or failure to give is
the primary cause of the injury or damage.
K. Payment of Royalties & License Fees; Hold Harmless Agreement.
Contractor agrees to pay all royalties and license fees necessary for the work, and to
defend any and all actions and settle all claims for infringement of copyright or patent
rights, and to save owner harmless in connection with any such actions and claims.
L. Safety Precautions and Programs.
Contractor has the duty of providing for and overseeing all safety orders,
precautions, and programs necessary to the reasonable safety of the work. In this
connection, Contractor shall take reasonable precautions for the safety of all
employees and other persons whom the work might affect, all work and materials
incorporated in the project, and all property and improvements on the construction
site and adjacent to the construction site, complying with all applicable laws,
ordinances, rules, regulations, and orders.
XI. Time of Essence; Extension of Time A. All times stated in this agreement or in the contract documents are of the
essence.
B. The times stated in this agreement or in the contract documents may be
extended by a change order from (e.g., architect/engineer) _____________________
for such reasonable time as he/she may determine, when in his/her opinion
Contractor is delayed in work progress by changes ordered, labor disputes, fire,
prolonged transportation delays, injuries, or other causes beyond Contractor's control
or which justify the delay.
XII. Subcontractors A. Contractor agrees to furnish (e.g., architect/engineer)
_______________________________, prior to the execution of this agreement, with
a list of names of subcontractors to whom he/she proposes to award the principal
portions of the work to be subcontracted by him /her.
B. A subcontractor, for the purposes of this agreement, shall be a person with
whom Contractor has a direct contract for work at the project site.
C. Contractor agrees not to employ a subcontractor to whose employment (e.g.,
architect/engineer) _________________________ or Owner reasonably objects, nor
shall Contractor be required to hire a subcontractor to whose employment he/she
reasonably objects.D. All contracts between Contractor and subcontractors shall conform to the
provisions of the contract documents, and shall incorporate in them the relevant
provisions of this agreement.
XIII. Mandatory Arbitration
Any dispute under this Agreement shall be required to be resolved by binding
arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall
select one arbitrator and both arbitrators shall then select a third. The third arbitrator so
selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the
American Arbitration Association then in force and effect.
XIV. InsuranceA. Contractor's Liability Insurance. Contractor agrees to keep in force at his/her own expense during the entire
period of construction on the project such liability insurance as will protect him/her
from claims, under workers' compensation and other employee benefit laws, for
bodily injury and death, and for property damage, that may arise out of work under
this agreement, whether directly or indirectly by Contractor, or directly or indirectly
by a subcontractor. The minimum liability limits of such insurance shall not be less
than the limits specified in the contract documents or by law for that type of damage
claim. Such insurance shall include contractual liability insurance applicable to
Contractor's obligations under this agreement. Proof of such insurance shall be filed
by Contractor with Owner within a reasonable time after execution of this agreement.
B. Owner's Liability Insurance. Owner agrees to maintain in force his/her own liability insurance during the
construction on this project, and reserves the right to purchase such additional
insurance as in his /her opinion is necessary to protect him/her against claims arising
out of the Contractor's operation, without diminishing Contractor's obligation to
carry the insurance specified in this agreement on Contractor's part to be carried.
C. Property Damage Insurance on Work Site. Owner agrees to maintain at his/her expense during construction of the project
property damage insurance on the work at the site to its full insurable value, including
interests of Owner, Contractor, and subcontractors, against fire, vandalism, and other
perils ordinarily included in extended coverage. Losses under such insurance will be
adjusted with and made payable to Owner as trustee for the parties insured as their
interests appear. Owner shall file a copy of all such policies with Contractor within a
reasonable time after construction begins under and pursuant to this agreement.
D. Waiver of Work Site Property Damage Claims to Extent of Insurance Coverage.
Owner and Contractor waive all claims against each other for fire damage or
damages from other perils covered by insurance provided in Subparagraph C. of
this Section. Contractor agrees to obtain waivers of such claims by all subcontractors.
XV. Correcting Work When it appears to Contractor during the course of construction that any work does
not conform to the provisions of the contract documents, Contractor shall make necessary
corrections so that such work will so conform, and in addition will correct any defects caused
by faulty materials, equipment, or quality of performance in work supervised by him or her
or by a subcontractor, appearing within _____________________ (period of time) from the
date of issuance of a certificate of substantial completion, or within such longer period as
may be prescribed by law or as may be provided for by applicable special guaranties in the
contract documents.
XVI. Work Changes A. Owner reserves the right to order work changes in the nature of additions,
deletions, or modifications, without invalidating this agreement, and agrees to make
corresponding adjustments in the contract price and time for completion.
B. All changes will be authorized by a written change order signed by Owner or
by (e.g., architect/engineer) _______________________________ as Owner's agent.
The change order will include conforming changes in the agreement contract and
completion time. C. Work shall be changed, and the contract price and completion time shall be
modified only as set out in the written change order.D. Any adjustment in the contract price resulting in a credit or a charge to Owner
shall be determined by mutual agreement of the parties, or by arbitration, before
starting the work involved in the change.
XVII. Termination A. Contractor's Termination.
Contractor may, on _____ (number) days written notice to Owner and (e.g.,
architect/engineer) _________________________, terminate this agreement before
the completion date specified in this agreement when for a period of _____ (number)
days after a progress payment is due, through no fault of Contractor, (e.g.,
architect/engineer) _________________________ fails to issue a certificate of
payment for the same, or Owner fails to make the payment. On such termination,
Contractor may recover from Owner payment for all work completed and for any
loss sustained by Contractor for materials, equipment, tools, or machinery to the
extent of actual loss plus loss of a reasonable profit, provided he or she can prove
such loss and damages.
B. Owner's Termination.
Owner may, on ______ (number) days notice to Contractor, terminate this
agreement before the completion date specified in this agreement, and without
prejudice to any other remedy he or she may have, when Contractor defaults in
performance of any provision in this agreement, or fails to carry out the construction
in accordance with the provisions of the contract documents. On such termination,
Owner may take possession of the work site and all materials, equipment, tools and
machinery on the work site, and finish the work in whatever way he or she deems
expedient. If the unpaid balance on the contract price at the time of such termination
exceeds the expense of finishing the work, Owner will pay such excess to Contractor.
If the expense of finishing the work exceeds the unpaid balance at the time of
termination, Contractor agrees to pay the difference to Owner.
C. On any such default by Contractor, Owner may elect not to terminate this
agreement, and in such event he or she may make good the deficiency of which the
default consists, and deduct the costs from the progress payment then or to become
due to Contractor.
XVIII. No Waiver The failure of either party to this Agreement to insist upon the performance of any of
the terms and conditions of this Agreement, or the waiver of any breach of any of the terms
and conditions of this Agreement, shall not be construed as subsequently waiving any such
terms and conditions, but the same shall continue and remain in full force and effect as if no
such forbearance or waiver had occurred.
XIX. Governing Law
This Agreement shall be governed by, construed, and enforced in accordance with the
laws of the State of ______________________.
XX. Notices Any notice provided for or concerning this Agreement shall be in writing and shall be
deemed sufficiently given when sent by certified or registered mail if sent to the respective
address of each party as set forth at the beginning of this Agreement.
XXI. Entire Agreement This Agreement shall constitute the entire agreement between the parties and any
prior understanding or representation of any kind preceding the date of this Agreement shall
not be binding upon either party except to the extent incorporated in this Agreement.
XXII. Modification of Agreement Any modification of this Agreement or additional obligation assumed by either party
in connection with this Agreement shall be binding only if placed in writing and signed by
each party or an authorized representative of each party.
XXIII. Assignment of Rights The rights of each party under this Agreement are personal to that party and may not
be assigned or transferred to any other person, firm, corporation, or other entity without the
prior, express, and written consent of the other party.
XXIV. Counterparts This Agreement may be executed in any number of counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute but one and the same
instrument.
WITNESS our signatures as of the day and date first above stated.
__________________________________
(Name of Contractor)
By: _______________________________ __________________________________
(Printed or typed name) (Printed or typed name)
___________________________________ ___________________________________
(Name and Office in Corporation) (Name of Owner)