Basic Building and Construction Contract between Owner and Contractor
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 .
I. Description of Work
Contractor , a corporation duly licensed as a Contractor in the state of _____________
(name of state) , shall perform the following described work, in accordance with the Contract
plans and specifications (the Contract Documents ), at the following address:
____________________________________________________________________________
(Location of job, including street address)
____________________________________________________________________________
____________________________________________________________________________
(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.
C. Progress payment on the total Contract price is to be made in installments as
follows:
1. Installment of $____________ on or before __________________ (date) .
2. Installment of $____________ on or before __________________ (date) .
3. Installment of $____________ on or before __________________ (date) .
4. Final Payment of $____________ on or before _______________ (date) .
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)
___________________ by Contractor as the work progresses, and on the (e.g.,
architect’s) __________________ certificate for the same, in accordance with (give
reference to paragraph number and/or section of Contract document establishing
basis for progress payments) ____________________________________________
______________________________________________________________________
______________________________________________________________________ .
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 him or her;
4. Another contractor is damaged by an act for which Contractor is
responsible;
5. Claims or liens are filed on the job; or
6. In the opinion of (e.g., architect) ____________________ , 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, and subject to
the condition that final payment shall not be 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:
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 he
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 ________________ (date) , and be
completed by ___________________ (date) .
VI. Contract Documents
A. The Contract Documents on which the Agreement between Owner , (e.g.
architect or 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 or engineer) __________
___________________ ; and
4. 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 he 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 or engineer) ________________________________ shall identify them.
VII. Designation of (Architect or Engineer) __________________; Duties and Authority
A. The (e.g. architect or engineer) __________________________ for above-
described project is __________________ (name) having an office at ______________
____________________________________________________ (street address, city,
county, state, zip code) .
B. The duties and authority of the (e.g. architect or engineer) ________________
a re as follows:
1. General Administration of Contract.
The primary function of the (e.g. architect or engineer) _____________
is to provide the general administration of the Contract . In performing
these duties he is Owner's representative during the entire period of
construction.
2. Inspections, Opinions, and Progress Reports.
(E.g. Architect or Engineer) ________________________ shall keep
familiar with the progress and quality of the work by making periodic visits
to the work site. He will make general determinations as to whether the
work is proceeding in accordance with the Contract . He or she will keep
the Owner informed of such progress, and will use his best efforts to
protect the Owner from defects and deficiencies in the work. He 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 .
3. Access to Work Site for Inspections.
(E.g. Architect or Engineer) _______________________ shall be given
free access to the work at all times during its preparation and progress.
However, he is not required to make exhaustive or continuous on-site
inspections to perform his duties of checking and reporting on work
progress.
4. Interpretation of Contract Documents
Decisions on Disputes . (E.g. Architect or Engineer) ______________
will be the initial interpreter of the Contract Document requirements, and
make primary decisions on claims and disputes between Contractor and
Owner . All of (e.g. Architect or Engineer) ______________’s decisions
are subject to arbitration as provided in this Agreement.
5. Rejection and Stoppage of Work.
(E.g. Architect or Engineer) __________________ shall have authority
to reject work that in his opinion does not conform to the Contract
Documents , and in this connection to stop the work or a portion of such
work, when necessary.
6. Payment Certificates.
(E.g. Architect or Engineer) _________________ will determine the
amounts owing to Contractor as the work progresses, based on
Contractor's applications and his inspections and observations, and will
issue certificates for progress payments and final payment in accordance
with the terms of the Contract Documents .
VIII. Responsibilities of Owner
A. Owner shall give all instructions to Contractor through (e.g. architect or
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 Contract s in connection with the project.
Contractor shall cooperate with all other Contractors to the effect that their work shall not be
impeded by construction, and shall give such other Contractors access to the work site
necessary to perform their Contract s.
IX. 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 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 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 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 shall notify (e.g. architect or
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 employees on the project, for those of his subcontractors and their
employees, and for those of all other persons doing work under a Contract with him..
G. Warranty of Fitness of Equipment and Materials.
Contractor represents and warrants to Owner and to (e.g. architect or
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 or engineer) ______________’s
direction all samples and shop drawings for his consideration and approval as to
conformance with the specifications of the Contract Documents and his 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 or her work or that of his or her subcontractors.
Contractor further agrees to remove all such waste material and rubbish on termination
of the project, together with all his tools, equipment, machinery, and surplus materials.
Contractor agrees, on terminating his 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 or 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 or engineer) ________________ , or that of his 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 and 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.
X. 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 or engineer) _______________ , for
such reasonable time as he may determine, when in his 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.
XI. Subcontractors
A. Contractor agrees to furnish (e.g. architect or engineer) _______________ ,
prior to the execution of this Agreement, with a list of names of sub contractors to whom
he proposes to award the principal portions of the work to be subcontracted by him.
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 or engineer) _________________ or Owner reasonably objects, nor shall
Contractor be required to hire a subcontractor to whose employment he 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.
XII. 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.
XIII. Insurance
A. Contractor's Liability Insurance .
Contractor agrees to keep in force at his own expense during the entire period
of construction on the project such liability insurance as will protect him 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 own liability insurance during the
construction on this project, and reserves the right to purchase such additional insurance
as in his opinion is necessary to protect him 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 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 Paragraph C . of this
section. Contractor agrees to obtain waivers of such claims by all subcontractors.
XIV. 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 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 .
XV. 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 or 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.
XVI. Termination
A. Contractor's Termination.
Contractor may, on ( number) days written notice to Owner and (e.g. architect
or 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 or 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 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 .
XVII. 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.
XVIII. Governing Law
This Agreement shall be governed by, construed, and enforced in accordance with the
laws of the State of ______________.
XIX. 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.
XX. Attorney’s Fees
In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party
in the action shall pay to the successful party, in addition to all the sums that either party may be
called on to pay, a reasonable sum for the successful party's attorney fees.
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.
In this contract, any reference to a party includes that party's heirs, executors,
administrators, successors and assigns, singular includes plural and masculine includes
feminine.
WITNESS our signatures as of the day and date first above stated.
________________________ _________________________
(P rinted name) (P rinted name)
________________________ _________________________
(Signature of Contractor) (Signature of Owner)