Free Construction Contract Template

A simple construction contract conveys the terms of your project and offers protection. Follow these steps to include the general conditions and tailor them to your project.

Step 1 – Provide Parties’ Information

Begin your construction services contract by including the parties’ details. Provide both parties’ names and indicate whether each is a business or an individual. This identification clarifies each party’s legal obligations, which can differ in construction work.

The contractor should also include their license number. The owner can verify it using state-specific resources (such as Florida’s contractor lookup). By verifying a contractor’s status, a property owner can ensure that the contractor:

• Has updated credentials
• Is capable of performing the work
• Is eligible for insurance coverage

Step 2 – Give a Description of the Work

Describe the work the contractor will perform so their expectations are clear. You can also list the site location and start and end dates to ensure the contractor can commit to the project.

Consider attaching work plans, specs, and other documents to clarify the expected work. The contractor can refer to these documents for detailed guidance if they get stuck on a project.

Maintain a good working relationship by outlining the process for work changes. Explain the role of a construction change order. With this precaution, the contractor won’t have to start new work without getting paid for it.

Step 3 – List the Pricing & Payment Terms

List the contract price and payment terms to establish the rate from the project’s onset. Include the retainage, which is the percentage (usually 5-10%) withheld from the contractor’s payment until they complete the project. Outline whether the property owner will pay upon milestones or project completion.

What Are Pricing Structures in a Construction Contract?

A construction contract may price services differently. Here are some of the pricing structures in a construction job agreement:

• Lump-sum (Fixed-price). The contractor agrees to complete the project for a set price.
• Cost-plus (Cost-reimbursement). The contractor is reimbursed for project costs, plus a profit percentage.
• Time and materials. The property owner pays for the actual time spent and materials used, plus a markup.
• Unit pricing. The contractor receives payment for the units of work they complete at set prices.

The contractor can prepare a construction invoice to request payment once they complete the outlined work.

Step 4 – Include Completion & Inspection Terms

Specify what adequate completion of the project looks like so that both parties know when the work is finished. These guidelines establish quality standards and ensure the property owner is happy with the final product. You may also condition the contractor’s final payment on substantial completion of the work.

You can also specify liquidated damages. These are amounts payable to the property owner if the contractor delays the project or breaches the contract by failing to finish the work in a quality manner.

Step 5 – Discuss Material & Labor Provisions

Clarify who will provide the materials and labor for the construction project. In most cases, the contractor will provide the labor. The materials division may differ. They can be split or provided by one party.

For example, consider a property owner who hires a contractor to build a backyard deck. The homeowner might provide the wood they already bought. However, they might need the contractor to bring the remaining supplies. When you outline who will provide what, the contractor will have everything they need to finish the project to the property owner’s satisfaction.

Step 6 – Decide Responsibility for Licenses & Permits

Consider the project’s scope and determine what licenses and permits are necessary. Use your construction contract to record which party must obtain these documents. By addressing these details, you can avoid work delays and ensure compliance with relevant laws.

Step 7 – Clarify Supervision Duties

The contractor often assumes responsibility for supervision. Specify if they’re allowed to have a subcontractor assist with the work supervision. When you assign these duties upfront, you can ensure that someone oversees the work to the agreed standards.

Step 8 – State Whether There’s a Warranty

A warranty can be a great safety net if there’s an issue with the work performed or materials used. It ensures that the contractor stands behind their work, providing peace of mind to the property owner. In your construction contract, be sure to define these details for your warranty:

• The duration
• What it covers
• Any conditions that can void it

Step 9 – Include Insurance Obligations

Insurance provisions protect both parties in case of unforeseen events. The contractor reduces their financial risk by ensuring they are covered for liability claims. At the same time, the property owner is protected from liability for:

• Damages
• Workplace injuries
• Accidents caused by the contractor

The contract should specify minimum coverage amounts and require the contractor to show proof of insurance before work begins.

Step 10 – Describe Termination Procedures

Sometimes, either party may decide it’s best not to proceed with the rest of the construction work agreement. Use your construction contract to outline when and how the agreement may be canceled. Non-payment by the property owner and unsatisfactory work may be valid reasons. For any issues with work quality, state whether the contractor will have the opportunity to correct the work before the contract is terminated.

Specify that the terminating party must provide written notice. Be sure to outline the financial and legal consequences of ending the contract early.

Step 11 – Record Confidentiality Clauses

Sometimes, a contractor might need access to security information or proprietary details to get the job done. Confidentiality clauses protect sensitive information that the contractor shares with the property owner.

Some projects may need this clause more than others. For example, a renovation project for a high-tech manufacturing plant may demand it. Alternatively, a residential project, such as a home renovation, may not.

Step 12 – Outline Dispute Resolution Methods

A well-drafted construction contract should include a clause for dispute resolution. Depending on the issue, it may specify that mediation, arbitration, and litigation are available to the parties.

For example, suppose a contractor believes they need more payment for unexpected work. If the property owner disputes the charge, the parties can refer to the dispute resolution clauses in their contract. This way, they can work toward a fair and timely resolution.

View the example below to see what a construction contract looks like. Then, write your own using Legal Templates’s guided form to include your custom terms. Download the final form in PDF or Word format to keep in your records.

This is a document preview. Your customized version will be created after you answer a few quick questions.

State of __________

CONSTRUCTION CONTRACT AGREEMENT

This Construction Contract Agreement (this “Agreement”) is made as of the ___ day of ___________,

20___ by and between __________, a(n) ☐ Individual ☐ Business Entity located at __________,

__________, __________ __________, (“Owner”) and __________, a(n) ☐ Individual ☐ Business

Entity located at __________, __________, __________ __________ with contractor's license number

__________ ("Contractor"). Owner and Contractor may each be referred to in this Agreement individually

as a “Party” and collectively as the “Parties.”

The Parties agree as follows:

1. Description of Work. Contractor shall perform the following described work at __________,

__________, __________ __________ (the "Property"), in accordance with Owner’s contract plans and

specifications, this Agreement and any Change Order, as defined herein, (collectively, the "Contract

Documents"): __________________________________________

_____________________________________________________ [Description of work] (the "Work").

Industry terminology used in any Contract Documents which are not defined shall be interpreted as

having the same meaning as that recognized in the construction industry in the area where the Property

is located.

2. Contract Price and Payments. Owner agrees to pay Contractor the total amount of $________ (the

“Contract Price”). Payment of this amount is subject to additions or deductions in accordance with any

mutually agreed to changes and/or modifications in the Work. Payment will be made by (Check one)

☐ cash ☐ personal check ☐ cashier’s check ☐ money order ☐ credit card or debit card ☐ wire

transfer ☐ other: __________, according to the following schedule:

Deposit (Check one)

☐ A deposit is NOT required.

☐ $__________ deposit, due upon the execution of this Agreement.

Installments (Check one)

☐ There will be NO installment payments.

☐ Installment will be paid at set intervals. $________ due ☐ every week ☐ every month ☐ other:

__________ from the completion of the Work.

☐ Installments will be paid upon the completion of the following milestones:

• $________ due upon __________ [Milestone]

• $________ due upon __________ [Milestone]

• $________ due upon __________ [Milestone]

Balance Due

$________ balance due upon completion of the Work.

3. Certificate of Completion. Work under this Agreement shall begin on ___________, 20___, (☐ and

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hall be completed by ___________, 20___). Upon completion of the Work, Contractor shall notify Owner

that the Work is ready for final inspection and acceptance and Owner shall make the final payment within

____

______ days after final inspection.

4. Materials and Labor. Contractor shall provide and pay for all labor and equipment, including tools,

construction equipment, machinery, transportation and all other facilities and services, and all materials

necessary for the completion of the Work. All materials shall be good quality and new, unless t

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ontract Documents require or permit otherwise. Contractor may substitute materials only with the prio

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ritten approval of Owner. (Check all that apply)

☐ T

he following materials will not be included in the Contract Price and are the sole responsibility of

Owner and will not be covered under warranty by Contractor: _______________________________.

☐ I

n addition, the Contract Price shall include the following fixtures: __________________________.

5. Licenses and Permits. (Check one) ☐ Contractor ☐ Owner shall obtain all licenses and permits

necessary for proper completion of the Work. (Check one) ☐ Contractor ☐ Owner is responsible for t

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cost of any necessary permits or licenses.

6. Laws and Regulations. Contractor shall perform the Work in a workmanlike manner and in

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ompliance with all applicable federal, state, and local laws, regulations and ordinances, trade standards,

ethical guidelines and any safety requirements of Owner (the “Applicable Laws”). Contractor shall

promptly notify Owner upon discovery of any variance between the Applicable Laws and the Construction

Documents.

7. Supervision of Construction. Contractor shall be solely responsible for and shall supervise and direct

all construction under this Agreement. Contractor shall provide competent and suitable personnel t

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per

form the Work and shall at all times maintain good discipline and order at the Property. Contractor will

at all times take all reasonable precautions for the safety of its employees and the public at the Property.

Contractor agrees to assume full responsibility for the acts, negligence, and/or omissions of its employees

and any subcontractors and their employees.

8. Record Documents. Contractor shall maintain in a safe place at the Property one record copy of all

drawings, specifications, addenda, written amendments, and the like in good order and annotated t

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how all changes made during construction, which will be delivered to Owner upon completion of t

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rk. Owner shall have the right to inspect and review such documents upon notice to Contractor.

9. Utilities. (Check one) ☐ Contractor ☐ Owner shall pay for all permanent electric, water, phone,

cable, sewer and gas service as needed to perform the Work. (Check one) ☐ Contractor ☐ Owner shal

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pay for the installation, connection and removal of all temporary utilities on the Property during the

per

formance of the Work. All temporary utilities shall conform and adhere to the Applicable Laws.

10. Hazardous Materials. Except as otherwise provided in the Contract Documents, Contractor shall be

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esponsible for all Hazardous Materials brought to the Property by Contractor. Hazardous Materials shall

include radioactive materials, asbestos, polychlorinated biphenyls, petroleum products, crude oil,

flammable materials, chemicals or solvents known to cause cancer or reproductive toxicity, pollutants,

contaminants and toxic substances which are restricted, prohibited or regulated by any agency of

government in its manufacture, use, maintenance, storage, ownership or handling. If Contractor discovers

any Hazardous Materials on the Property, Contractor shall immediately notify Owner and may cease

working until the material or substance has been rendered harmless. Owner shall defend, indemnify and

hold harmless Contractor, any subcontractors, and their respective agents and employees from and

against all claims, damages, losses and expenses, including attorney’s fees, arising out of or resulting

from contact with the Hazardous Substance in performance of the Work resulting in bodily injury, illness

or death, or injury or property damage, provided such claim, damage, loss or expense is not the result of

any negligent act or omission by the party seeking such indemnity.

11. Warranty. Contractor warrants that the Work shall be in accordance with the Contract Documents,

applicable law and trade standards and free from material structural defects, improper workmanship or

defective materials. Contractor shall replace, correct or repair any Work not in accordance with the

Contract Documents, applicable law and trade standards or any defects caused by faulty materials,

equipment or workmanship for a period of __________ year(s) from the date of completion of the Work.

Nothing in this Section 11 shall be construed to place a time limit with respect to any other obligation

Contractor may have under this Agreement.

12. Condition of the Property. Contractor agrees to keep the Property and adjoining driveways free and

clear of waste material and rubbish. Contractor shall confine the storage of materials and equipment and

the operations of employees to the Property, and shall not unreasonably encumber the Property with

materials or equipment. Contractor shall be fully responsible for any damage to the Property or areas

contiguous thereto resulting from the performance of the Work. At the completion of the Work, Contractor

shall remove all waste materials, rubbish and debris from and about the Property as well as all tools,

appliances, construction equipment and machinery, and surplus materials, and shall leave the Property

clean and ready for occupancy by Owner.

13. Inspection. Owner shall have a right to inspect the Work at any time and request that Contractor

promptly correct any Work that is defective or does not conform to the Contract Documents. If required,

the Work shall be inspected and certified by the appropriate state or local agency or health officer at each

necessary stage.

14. Right to Stop Work. If Contractor fails to correct any defective Work or repeatedly fails to perform the

Work in accordance with the Contract Documents, Owner shall have the right to order Contractor to stop

performing the Work, or any portion thereof, until the cause for such order is eliminated.

15. Subcontracts. Contractor shall furnish to Owner a list of names of subcontractors proposed to

perform principal portions of the Work. Contractor shall not employ any subcontractor to whom Owner

reasonably objects. A subcontractor, for the purposes of this Agreement, shall be a person with whom

Contractor has a direct contract for work at the Property. All contracts between Contractor and

subcontractor shall be in accordance with the terms of this Agreement and the Contract Documents.

16. Work Changes. Owner reserves the right to order changes to the Work in the nature of additions,

deletions or modifications, without invalidating this Agreement, and agrees to make correspondi

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ustments in the Contract Price and time of termination if applicable. All changes will be authorized in

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ritten “Change Order” signed by Owner and Contractor, which shall be incorporated by referenc

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ein.

17. Other Contractors. Owner reserves the right to enter into other contracts in connection with the

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rk. Contractor shall cooperate with all other contractors so that their work shall not be impeded,

and

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hall give them access to the Property as necessary to perform their contracts.

18. Indemnification. Contractor agrees to defend, indemnify and hold harmless Owner and its agents

and employees, from and against all claims, actions, liabilities, suits, demands, injuries, obligations,

damages, losses, settlements, judgments, fines, penalties, costs and expenses, including reasonabl

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torneys' fees, arising out of any negligent act or omission by Contractor, a subcontractor or any

one

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rectly or indirectly employed by them in the performance of the Work resulting in bodily injury, illness or

death, or for property damage, including loss of use, unless caused by the sole negligence or willful

misconduct of Owner.

19. Contractor’s Insurance. Contractor agrees to maintain at its own expense during the entire period of

construction at the Property:

A. General Liability Insurance. Such general liability insurance as will protect Contractor from claims

for property damage and bodily injury, with limits of liability not less than $__________ for each

occurrence.

(Check all that apply)

☐ B. Workers' Compensation Insurance. Such workers' compensation and employee insurance as

required by law.

☐ C. Automobile Liability Insurance. Such automobile liability insurance with limits of liability not

less than $ __________.

☐ D. Other Insurance. __________.

Contractor shall name Owner as an additional insured (☐ except for the workers' compensation

insurance). Proof of such insurance shall be filed by Contractor with Owner within a reasonable time after

execution of this Agreement.

20. Waiver of Subrogation. Owner and Contractor each waive any and all claims or rights to recovery

against the other Party for any loss or damage to the extent such loss or damage is covered by insurance

or would be covered by any insurance required under this Agreement. Owner and Contractor shall cause

each insurance policy carried by Owner or Contractor relating to the Property to include or allow a full

waiver of any subrogation claims.

21. Time of Essence. All times stated in this Agreement or in the Contract Documents are of the

essence. Contractor agrees that such times are reasonable for performing and completing the Work.

22. Liquidated Damages. (Check one)

☐ Owner is entitled to liquidated damages. In the event the Work is not completed by the date set forth

in Section 3 of this Agreement, plus any extensions thereof as

allowed in this Agreement, Owner shall

suffer damages uncertain in amount and difficult to measure and prove accurately. Owner and Contractor

agree that in lieu of actual damages, and not as a penalty, for delay in the performance of the Work,

Contractor shall pay Owner the sum of $__________ for each calendar day completion of the Work is

delayed. Contractor agrees that the liquidated damages specified herein are reasonable in amount and

are not disproportionate to actual anticipated damages. Owner shall have the right to deduct any

liquidated damages from any amount due or that may become due to Contractor. Liquidated damages

shall be the sole and exclusive remedy for Owner for delay in completion of the work past the agreed

upon date.

☐ Owner is NOT entitled to liquidated damages.

23. Extension of Time. The times stated in this Agreement may be extended for such reasonable time as

Contractor may determine when performance of the Work by Contractor is delayed by a Change Order,

labor disputes, fire, unusual delay in deliveries, abnormal adverse weather conditions, unavoidabl

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asualties, or other causes beyond Contractor’s control or which justify the delay.

24. Early Termination for Breach of Contract.

A. Contractor's Termination. Contractor may, on __________ days’ written notice to Owner,

terminate this Agreement before the completion of the Work when for a period of __________ days

after a progress payment is due, through no fault of Contractor, Owner fails to make the payment. O

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uch 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

thereon, plus loss of a reasonable profit.

B. Owner's Termination. Owner may, on __________ days’ notice to Contractor, terminate this

Agreement before the completion of the Work, and without prejudice to any other remedy Owner may

have when Contractor defaults in the performance of any provision of this Agreement, or fails to carry

out performance of the Work in accordance with the provisions of the Contract Documents.

Excess Payment (Check all that apply)

☐ If the unpaid balance on the Contract Price at the time of the termination exceeds the expense of

finishing the Work, Owner shall pay such excess to Contractor.

☐ If the expense of finishing the Work exceeds the unpaid balance of the Contract Price at the tim

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of

termination, Contractor shall pay the difference to Owner.

25. Disputes. Any dispute arising from this Agreement shall be resolved through: (Check one)

☐ C

ourt litigation. The dispute shall be resolved in the courts of the State of __________.

Attorneys’ Fees

☐ If either Party brings legal action to enforce its rights under this Agreement, the prevailing

party will be entitled to recover from the other Party its expenses (including reasonable attorneys’

fees and costs) incurred in connection with the action and any appeal.

☐ Arbitration. The dispute shall be resolved through binding arbitration conducted in accordance with

the rules of the American Arbitration Association.

☐ Mediation. The dispute shall be resolved through mediation.

☐ Mediation then arbitration. The dispute shall be resolved through mediation. If the dispute cannot

be resolved through mediation, then the dispute will be resolved through binding arbitration

conducted in accordance with the rules of the American Arbitration Association.

27. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be

deemed an original and all of which together, shall constitute one and the same document.

28. Headings. The section headings herein are for reference purposes only and shall not otherwise affect

the meaning, construction or interpretation of any provision of this Agreement.

29. Notices. Any notice or communication given or made to any Party under this Agreement shall be in

writing and delivered by hand, sent by overnight courier service or sent by certified or registered mail,

return receipt requested, to the address stated above or to another address as that Party may

subsequently designate by notice and shall be deemed given on the date of delivery.

30. Assignment. No Party hereto shall have the right to assign its rights or delegate its duties hereunder

without the written consent of the other Party, which consent shall not be unreasonably withheld.

31. Binding Effect. This Agreement shall be binding and enure to the benefit of the Parties and their

respective legal representatives, heirs, administrators, executors, successors and permitted assigns.

32. Governing Law. This Agreement and the rights and obligations of the Parties hereto shall be

governed by and construed in accordance with the laws of the State of __________, without regard to its

conflicts of laws provisions.

33. Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in whole

or in part, the remaining provisions shall not be affected and shall continue to be valid, legal and

enforceable as though the invalid, illegal or unenforceable part had not been included in this Agreement.

34. Entire Agreement. This Agreement contains the entire agreement between the Parties hereto with

respect to the subject matter hereof, and supersedes all prior negotiations, understandings and

agreements.

35. Amendments. This Agreement may not be amended or modified except by a written agreement

signed by the all of the Parties.

36. Waiver. No Party shall be deemed to have waived any provision of this Agreement or the exercise of

any rights held under this Agreement unless such waiver is made expressly and in writing. Waiver by any

Party of a breach or violation of any provision of this Agreement shall not constitute a waiver of any other

subsequent breach or violation.

37. Survival. The obligations of Contractor expressly identified in this Agreement, or those by operation

of

law, shall survive the completion of Work or termination of this Agreement.

38. Industry Language. The language used for terms of this Agreement, unless otherwise defined, shall

be construed according to the customary meaning within the construction industry in the area where t

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roject is located and for the type of Work being performed.

39. Independent Contractor. Contractor acknowledges that it is an independent contractor and is not an

agent

, partner, joint venture nor employee of Owner. Contractor shall have no authority to bind or

otherwise obligate Owner in any manner nor shall Contractor represent to anyone that it has the right t

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do

so. Contractor further agrees that in the event that the Company suffers loss or damage as a result of

a violation of this provision Contractor shall indemnify and hold harmless Owner from any such loss or

damage.

40. Rights of Third Parties. Nothing in this Agreement shall create or give to any third party a claim or

right of action against Contractor or Owner.

41. Confidentiality. (Check one)

☐ A

s a result of Contractor's participation in the Work, Contractor will have access and contribute t

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nformation and materials of a highly sensitive nature, including Confidential Information. Contractor

hereby warrants that Contractor and its employees and agents shall not (without in each instanc

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obtaining the Owner's prior written consent) disclose, make commercial or other use of, or give or sell to

any

person, firm, or corporation, any Confidential Information received directly or indirectly from Owner or

acquired or developed in the course of the performance of this Agreement unless: (1) required to do s

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suant to Applicable Laws (and then only after Contractor has given Owner prompt written notice of t

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egal compulsion and, at Owner's expense, provided by Owner with cooperation in any attempt Owner

may make to gain a protective order acceptable to Owner); or (2) it is rightfully in the possession of

Contractor from a source other than Owner prior to the time of disclosure of the information to Contractor

under this Contract; or (3) it was in the public domain prior to the time of Contractor's receipt; or (4) it

became part of the public domain prior to the time of Contractor's receipt by any means other than

an

aut

horized act or omission on the part of Contractor; or (5) it is supplied to Contractor after the time of

Contractor's receipt by a third party who was not under any obligation to Owner to maintain such

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nformation in confidence; or (6) it was independently developed by Contractor prior to the time of it

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eceipt from Owner. All Confidential Information, regardless of form, shall be the property of Owner an

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hall be returned to Owner upon its request, or in any event, at the completion or earlier termination of

this Agreement.

☐ Contractor will NOT have access and contribute to Confidential Information.

42. Other. __________

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

Owner Signature

Owner Full Name

Owner Representative Signature

Owner Representative Name and Title

Contractor Signature

Contractor Full Name

Contractor Representative Signature

Contractor Representative Name and Title

Certificate of Completion

Contractor Name: __________

Property Address: __________, __________, __________ __________

Contract Date: ___________, 20___

Completion Date: ___________, 20___