- 1 - COMMERCIAL CONSTRUCTION CONTRACT THIS COMMERCIAL 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. SCOPE OF WORK: Contractor 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. 2.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.
3. 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.
4. 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.5. 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.6.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.
- 2 - 7.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.8.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.9.PROGRESS AND FINAL PAYMENTS:A.Owner shall make progress and final payments on account of the contract price to
Contractor on the basis of progress and final payment requests submitted to Owner by Contractor
according to the following monthly billing cycle:
_______________________________________________________________________________ _____________________________________________________________________________________________________________________________________________________________. Within seven (7) days after Contractor receives a periodic or final payment from an owner or a
state agency, Contractor agrees to pay the subcontractor, if any, the full amount due the
subcontractor in accordance with the subcontract for work performed or materials provided in
accordance with that subcontract. Within seven (7) days after a subcontractor receives a periodic
or final payment from Contractor, the subcontractor shall pay another subcontractor, if any, the
full amount due the subcontractor under the subcontract for work performed or materials provided
in accordance with that subcontract. B.Contractor’s request for payment will be considered approved by Owner 21 days after
Owner or the person designated in the contract by Owner to receive the payment request, receives
such request, unless, prior to that time, Owner provides Contractor with a written statement
- 3 - containing specific items in the request for payment that the Owner disapproves. Owner may
disapprove the request for payment or a portion of the request based upon a claim of:1.Unsatisfactory job progress;2.Failure to remedy defective construction work or materials;3.Disputed work or materials;4.Failure to comply with material provisions of the construction contract or
accompanying documents, including but not limited to payroll certifications, lien
releases, warranties, material certifications, and test data;5.Failure of a contractor to make timely payment for claims, including but not limited to
claims for labor, equipment, materials, subcontracts, taxes, fees, professional services,
rent, and royalties;6.Damage to the owner; or7.The existence of reasonable evidence that the construction contract cannot be
completed for the unpaid balance of the contract sum.Owner may withhold from a payment only an amount that is sufficient to pay the direct expenses
that Owner may reasonably expect will be necessary to correct any claim based on the items set
out above. Owner will furnish a written statement to Contractor specifying a condition listed
above for which approval of the request for payment or a portion of the request for payment is
being withheld. If Owner approves all or a portion of Contractor’s request for payment, Owner
shall pay Contractor the approved amount within seven (7) days after Contractor’s request for
payment is approved.Prior to submitting a monthly or final pay application to Owner, Contractor may disapprove a
subcontractor’s request for payment or a portion of the request based upon a written claim of any
of the above listed conditions. C. 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.D. Owner, by making final 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.E. 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.10.LATE PAYMENT/DEFAULT: A failure to make payment for a period in excess of 30 days
from the due date shall be deemed a material breach of this Contract. If payment is not made when
- 4 - due, Contractor may suspend work on the job until such time as all payments due have been made,
and the contractor may terminate the construction contract if the payment obligations are not
satisfied within 30 days of suspension according to Section 28 of this agreement without breach of
the Contract pending payment or resolution of any dispute. Contractor shall provide written notice
to Owner at least seven (7) calendar days before Contractor’s intended suspension of performance
or contract termination. Owner agrees to pay Contractor interest, beginning on the day following
the date when the payment is due, of 1 ½ % a month or a pro rata fraction of that amount on the
unpaid balance. If Contractor receives interest from Owner for a delayed payment by Owner,
Contractor shall ensure that any interest accrued on a delayed payment is distributed by Contractor
to subcontractors on a pro rata basis. If a periodic or final payment required by a subcontract to be paid by Contractor to a subcontractor
is delayed for more than 30 days plus three (3) working days from the date the payment is required
by the subcontract to be made, Contractor shall pay to the subcontractor interest beginning on the
day following the date when the payment is due, at the rate of 1 ½ % a month or a pro rata fraction
of that amount on the unpaid balance. If a subcontractor receives interest from the contractor for a
delayed payment by Contractor, the subcontractor shall ensure that any interest accrued on the
delayed payment is distributed by the subcontractor to other subcontractors, if any, on a pro rata
basis.If Owner fails to make timely payments of amounts approved for a subcontractor’s work and/or
Contractor fails to pay subcontractor for the approved work, or if Owner declines to approve
portions of Contractor’s payment request for a subcontractor’s work and the reasons for Owner’s
refusal to approve are not the fault of or directly related to the subcontractor’s work, a
subcontractor may suspend work on the job until such time as all payments due have been made,
and the subcontractor may terminate the construction contract if the payment obligations are not
satisfied within 30 days of suspension without breach of the Contract pending payment or
resolution of any dispute. A subcontractor shall provide written notice to Contractor and Owner at
least seven (7) calendar days before the subcontractor’s intended suspension of performance or
contract termination. Interest is not required to be paid unless Owner, Contractor, or subcontractor, as appropriate, has
been notified of these requirements at the time the request for payment is made. Acceptance of
progress payments or final payment releases any claim for interest on the payment.11.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
- 5 - time to time by the ________________________ (e.g., architect/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 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.12. DESIGNATION OF ________________________ (eg. Architect/Engineer):The ________________________ (e.g., architect/engineer) for above-described project is
________________________ (name), having an office at ________________________ (street
address, city, county, state, zip code).13.DUTIES AND AUTHORITY OF ________________________ (eg. 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
- 6 - 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.14.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.15.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 and 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
- 7 - 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.16. RIGHT TO CURE: Contractor shall have the right to cure a defect before Owner may file any
action in court against Contractor.17. 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.18. ASSIGNMENT: Neither party may assign this Contract, or payments due under the Contract,
- 8 - without the other party’s written consent. Any such assignment shall be void and of no effect.19.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 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 Montana.20. 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.21.PERFORMANCE:A.Contractor may, at its discretion, engage licensed subcontractors to perform work pursuant
to 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.22.TIME OF ESSENCE; EXTENSION OF TIMEA. 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.23. SUBCONTRACTORSA. 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.
- 9 - 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.24. MANDATORY ARBITRATIONAny 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. 25.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
- 10 - perils covered by insurance provided in Subparagraph C. of this Section. Contractor agrees to
obtain waivers of such claims by all subcontractors.26. CORRECTING WORKWhen 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.27.WORK CHANGESA. 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.28.TERMINATIONA. Contractor's Termination. Contractor may, on seven (7) 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 30 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, and after Contractor has suspended
work on the job under Section 10 of this agreement. 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
- 11 - 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.29.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. 30. WARRANTY: Contractor's warranty shall be limited to defects in 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 and defects in material are not warranted by
Contractor. Contractor hereby assigns to Owner all warranties on materials as provided by the
manufacturer of such materials.AGREED:CONTRACTOR:Signature Print Name & Title Date License Number Name and Address of License HolderOWNER:Signature Print Name Date
