Clause library

CONSTRUCTION AGREEMENT

Date: October 22, 2026

Contractor: [Contractor Name]

Client: [Client Name]

Project: [Project Description]

Address: [Project Address]

SCOPE OF WORK

[Contractor Name] shall furnish all labor, materials, equipment, and supervision necessary to complete the following Work at [Project Address] (the "Project"):

[Project Description]

The Work shall be performed in accordance with this Agreement and any drawings, specifications, or exhibits attached hereto and incorporated by reference. Any work not expressly included is excluded from the Contract Sum.

CONTRACT PRICE

Lump Sum. Client shall pay [Contractor Name] the total sum of [Contract Amount] (the "Contract Sum") for complete performance of the Work, subject only to adjustments by written Change Order.

The Contract Sum is based upon the scope of Work described herein and in any attached exhibits. No additional compensation shall be due for work within the scope unless authorized by Change Order.

PROJECT SCHEDULE

Commencement. Work shall commence on or about [Start Date], subject to receipt of required permits and Client's deposit.

Substantial Completion. [Contractor Name] shall achieve Substantial Completion of the Work on or before [Completion Date], subject to equitable adjustment for delays caused by Client, Change Orders, unforeseen conditions, or Force Majeure events.

Schedule Updates. [Contractor Name] shall provide reasonable schedule updates upon Client's written request. Time extensions shall be documented by written Change Order.

TIME IS OF THE ESSENCE

Time is of the essence with respect to the Substantial Completion date specified in this Agreement. Both parties acknowledge that timely performance is a material term. However, Client acknowledges that schedule compliance requires timely Client approvals, access, payments, and decisions, and that Client-caused delays shall extend the Substantial Completion date by a corresponding amount.

FORCE MAJEURE

Neither party shall be in default or liable for delay or failure to perform caused by events beyond its reasonable control, including but not limited to: acts of God, fire, flood, earthquake, epidemic, pandemic, war, terrorism, riot, civil disturbance, labor disputes not involving Contractor's own employees, government-ordered work stoppages, permitting delays outside Contractor's control, or material shortages not caused by Contractor's failure to order timely. The Contract Time shall be extended equitably for such events; any adjustment to the Contract Sum requires a written Change Order.

PAYMENT TERMS

Deposit. Client shall pay [Contractor Name] a deposit of 30% of the Contract Sum upon execution of this Agreement to secure scheduling and material procurement. The deposit is applied to the final payment.

Progress Payments. [Contractor Name] shall submit progress payment applications with supporting documentation. Approved amounts are due within 30 days of Client's receipt of each application.

Final Payment. The remaining contract balance is due upon Substantial Completion and Client's acceptance of the Work, subject to any agreed punch list holdback (not to exceed 150% of the cost to complete outstanding items).

Disputed Amounts. Client shall pay undisputed portions of each application when due and may withhold only amounts specifically related to disputed Work, with written notice stating the basis for withholding.

LATE PAYMENT

Interest. Balances not paid when due shall accrue interest at 1.5% per month (or the maximum rate permitted by law, whichever is less) from the due date until paid in full.

Suspension for Non-Payment. If Client fails to pay any undisputed amount within seven (7) days after [Contractor Name]'s written notice of non-payment, [Contractor Name] may, without prejudice to other remedies, suspend performance of all or any portion of the Work until payment is received. The Contract Sum and Contract Time shall be equitably adjusted for any such suspension.

CHANGE ORDERS

Authorization Required. No alteration, deviation, addition to, or omission from the Work shall be valid or binding unless documented in a written Change Order signed by both parties before the affected Work begins. Verbal instructions, field sketches, text messages, emails, and handwritten notes are not authorized Change Orders.

Pricing. Change Order pricing shall include labor, materials, equipment, supervision, overhead, profit, and applicable taxes. Time extensions shall be stated in the Change Order when the schedule is impacted.

Pricing Disputes. If the parties cannot agree on pricing, Client may direct [Contractor Name] to proceed with the work on a time-and-materials basis, with compensation to be determined in accordance with the Dispute Resolution section.

EMERGENCY WORK

In an emergency imminently threatening life, safety, or property, [Contractor Name] may proceed with necessary corrective work without a signed Change Order after giving Client notice as soon as practicable under the circumstances. A Change Order reflecting the actual cost plus overhead and profit shall be executed promptly thereafter. [Contractor Name] shall make reasonable efforts to minimize costs incurred in emergency situations.

CLIENT RESPONSIBILITIES

[Client Name] shall:

1. Provide timely access to the project site during normal working hours (7:00 a.m. to 5:00 p.m., Monday through Friday) and secure storage for materials when requested.
2. Maintain utilities in active service (electric, water, gas) unless otherwise agreed in writing.
3. Designate an authorized representative with authority to approve changes, accept work, and issue payments.
4. Obtain all financing, approvals, and consents required for the Client's obligations under this Agreement.
5. Remove or protect personal property, furnishings, artwork, and valuables not included in the Work.
6. Pay invoices in accordance with the Payment section; failure to pay undisputed amounts may suspend Work after seven (7) days' written notice.
7. Provide accurate site information and disclose known hazardous materials, structural defects, or encumbrances.
8. Coordinate other contractors or Client's own forces working at the site to avoid conflicts with [Contractor Name]'s Work.

CONTRACTOR RESPONSIBILITIES

[Contractor Name] shall:

1. Perform the Work in a good and workmanlike manner, consistent with industry standards and applicable building codes.
2. Provide qualified supervision, labor, materials, equipment, and tools necessary to complete the Work.
3. Maintain the jobsite in a safe, orderly condition and comply with OSHA regulations and all applicable local safety requirements.
4. Protect existing improvements and adjacent property from damage caused by the Work; promptly repair damage caused by [Contractor Name]'s negligence at no cost to Client.
5. Remove construction debris and leave work areas broom-clean at the end of each workday and upon completion of the Work.
6. Obtain all permits and inspections required for the Work unless expressly assigned to Client in writing.
7. Provide progress schedules, submittals, and documentation reasonably required for payment applications and Client's records.
8. Notify Client promptly in writing of any condition that may delay completion or affect the Contract Sum.

UNFORESEEN AND HIDDEN CONDITIONS

Differing Site Conditions. If conditions at the site differ materially from those indicated in the Contract Documents, or if unknown physical conditions of an unusual nature are encountered that differ materially from those ordinarily found in comparable work, [Contractor Name] shall promptly notify Client in writing before proceeding. The Contract Sum and Contract Time shall be equitably adjusted by written Change Order.

Pre-Existing Conditions. [Contractor Name] is not responsible for defects, damage, or failures in existing structures, systems, or materials not installed by [Contractor Name], except to the extent [Contractor Name] expressly agreed in writing to investigate, remediate, or warrant such conditions.

Mold, Lead, Asbestos. If [Contractor Name] encounters or suspects the presence of mold, lead paint, asbestos, or other hazardous materials, [Contractor Name] shall immediately notify Client in writing and shall not disturb the materials. Remediation by a licensed abatement contractor shall be at Client's cost and shall constitute grounds for a Change Order.

MATERIALS AND CLEANUP

Materials. All materials furnished by [Contractor Name] shall be new unless otherwise expressly specified. Client may approve in writing the use of equivalent substitute materials. Client-supplied materials must be delivered to the site in acceptable condition before installation; [Contractor Name] shall not be responsible for defects in Client-supplied materials or equipment.

Cleanup. [Contractor Name] shall keep the work area reasonably clean and safe during construction and shall remove all construction debris and surplus materials upon completion, excluding items expressly designated for Client disposal.

Title to Materials. Title to materials incorporated into the Work passes to Client upon payment for those materials. [Contractor Name] shall not encumber materials with liens arising from disputes unrelated to this Project.

INSURANCE AND INDEMNIFICATION

Contractor Insurance. [Contractor Name] shall maintain, at its own expense, the following insurance during performance of the Work:

• Commercial General Liability: $2,000,000 general aggregate / $1,000,000 per occurrence
• Workers' Compensation: Statutory limits as required by [State] law
• Employer's Liability: $500,000 per occurrence
• Commercial Auto Liability: $1,000,000 combined single limit
• Builder's Risk / Installation Floater as applicable to the Work

Certificates of insurance naming [Client Name] as Additional Insured on CGL and Auto policies shall be provided before commencing Work and upon renewal. Workers' Compensation certificates shall name [Contractor Name] as the insured.

Subcontractors. [Contractor Name] shall require all subcontractors to carry comparable insurance coverage and shall obtain certificates before subcontractors begin Work.

Indemnification. Each party shall indemnify, defend, and hold harmless the other party and its officers, directors, employees, and agents from third-party claims, losses, and expenses (including reasonable attorneys' fees) arising from the indemnifying party's negligent acts, omissions, or willful misconduct in connection with the Work. This mutual indemnity does not require either party to indemnify the other for that party's own sole negligence or willful misconduct.

WARRANTY

Workmanship. [Contractor Name] warrants that the Work shall be free from material defects in workmanship for one (1) year from the date of Substantial Completion.

Remedy. During the warranty period, [Contractor Name] shall repair or replace defective Work at no additional cost to Client, provided [Contractor Name] receives written notice of the defect within the warranty period.

Exclusions. The warranty does not cover:

• Normal wear and tear, misuse, neglect, or damage by Client, tenants, or third parties
• Damage caused by other contractors, acts of God, or events beyond Contractor's control
• Client-supplied materials or equipment not installed by [Contractor Name]
• Alterations or repairs performed by others without [Contractor Name]'s prior written consent
• Settlement or movement of the structure not caused by [Contractor Name]'s Work

Manufacturer Warranties. Manufacturer warranties on materials and equipment installed by [Contractor Name] are assigned to Client to the extent assignable, and [Contractor Name] shall assist Client in pursuing warranty claims.

MECHANIC'S LIEN RIGHTS

Notice. Client acknowledges that [Contractor Name] and its subcontractors, suppliers, and material men may have mechanic's lien, stop notice, or payment bond rights under the laws of [State]. [Contractor Name] shall serve all required preliminary notices within the timeframes required by applicable law.

Lien Waivers. Conditional lien waivers from [Contractor Name] (and major subcontractors as reasonably requested) shall accompany each progress payment application. Unconditional waivers shall be provided within fourteen (14) days of receipt of cleared funds for the corresponding payment.

Payment to Subcontractors. [Contractor Name] shall timely pay subcontractors and suppliers for Work covered by Client payments and shall not divert project funds to unrelated obligations. Upon Client's request, [Contractor Name] shall provide documentation of payments made.

LIMITATION OF LIABILITY — CONSEQUENTIAL DAMAGES

Mutual Waiver. Neither party shall be liable to the other for consequential, incidental, indirect, special, or punitive damages arising out of or related to this Agreement, including but not limited to loss of use, loss of profits, loss of income, or loss of business opportunity, even if advised of the possibility of such damages.

Exceptions. This mutual waiver does not limit: (a) Client's obligation to pay the Contract Sum and Change Orders for Work properly performed; (b) Contractor's obligation to repair or replace defective Work under the Warranty section; or (c) either party's liability for willful misconduct or intentional breach.

Cap on Damages. Each party's total aggregate liability under this Agreement shall not exceed the Contract Sum actually paid to Contractor.

DISPUTE RESOLUTION — NEGOTIATION

Good-Faith Effort. Before initiating formal proceedings, the parties shall attempt to resolve any dispute, claim, or controversy arising out of this Agreement through direct good-faith negotiation between authorized senior representatives. Either party may initiate this process by written notice identifying the dispute.

Timeline. If negotiations do not result in resolution within fifteen (15) calendar days after the written notice (or such longer period as the parties may agree), either party may proceed to the next step of dispute resolution.

Continuation of Work. Unless the Agreement is properly terminated, [Contractor Name] shall continue performance of undisputed Work during dispute resolution, and Client shall continue to pay undisputed amounts when due.

DISPUTE RESOLUTION — MEDIATION

If direct negotiation fails, either party may submit the dispute to non-binding mediation before a mutually agreed neutral mediator. If the parties cannot agree on a mediator within ten (10) days of a written request, either party may petition a court of competent jurisdiction to appoint one.

Mediation costs shall be shared equally. Each party shall bear its own attorneys' fees in connection with mediation. Mediation is a prerequisite to litigation or arbitration, except where a party seeks emergency injunctive relief.

DISPUTE RESOLUTION — LITIGATION

If mediation fails to resolve the dispute, either party may pursue available remedies in the state or federal courts located in [State]. Each party irrevocably consents to the exclusive personal jurisdiction and venue of those courts for purposes of this Agreement.

Attorneys' Fees. The prevailing party in any action to enforce this Agreement, collect amounts due, or seek damages shall be entitled to recover reasonable attorneys' fees, court costs, and litigation expenses, to the extent permitted by applicable law.

TERMINATION FOR CAUSE

Either party may terminate this Agreement if the other party materially breaches any provision and fails to cure such breach within fourteen (14) calendar days after receiving written notice specifically describing the breach. Material breach includes, without limitation: Client's failure to make undisputed payments when due, [Contractor Name]'s persistent failure to perform Work in a workmanlike manner, or either party's insolvency or assignment for the benefit of creditors.

Upon termination for cause by Client, [Contractor Name] shall be paid for Work satisfactorily performed to the date of termination, less any damages directly caused by Contractor's breach. Upon termination for cause by Contractor, Client shall pay all amounts owed plus demobilization costs and committed materials that cannot be returned.

TERMINATION FOR CONVENIENCE

Client may terminate this Agreement for any reason or no reason upon thirty (30) days' written notice to [Contractor Name]. Upon termination for Client's convenience, [Contractor Name] shall immediately secure the site, protect Work in place, and provide an accounting of amounts due.

[Contractor Name] shall be entitled to payment for: (a) all Work properly performed to the termination date; (b) reasonable demobilization and wind-down costs; (c) committed materials and equipment ordered for the Work that cannot reasonably be returned or cancelled; and (d) overhead and profit on (b) and (c). [Contractor Name] shall use commercially reasonable efforts to mitigate cancellation costs.

CONTRACTOR'S RIGHT TO SUSPEND OR TERMINATE

[Contractor Name] may suspend performance upon seven (7) days' written notice if: (a) Client fails to pay any undisputed amount when due; (b) Client fails to provide required approvals or access, materially delaying the Work; or (c) Client directs [Contractor Name] to proceed without proper authorization or in violation of applicable law.

[Contractor Name] may terminate this Agreement upon an additional seven (7) days' written notice if the condition causing suspension is not cured. Upon contractor-initiated termination, Client shall pay all amounts owed for Work performed plus reasonable suspension and termination costs.

ENTIRE AGREEMENT

This Agreement, together with all exhibits, schedules, Change Orders, and written amendments, constitutes the entire agreement between the parties and supersedes all prior proposals, negotiations, representations, and understandings, whether written or oral, relating to the Work. This Agreement may be amended only by a written instrument signed by both parties.

SIGNATURES

By signing below, the parties agree to all terms and conditions set forth in this Agreement.

CONTRACTOR

[Contractor Name]

Signature: _________________________________ Date: ____________

Print Name: _________________________________

Title: _________________________________

License No.: _________________________________

CLIENT

[Client Name]

Signature: _________________________________ Date: ____________

Print Name: _________________________________