When should I use a construction agreement?

Use it when an owner hires a contractor for a building project that is not a new home and not a remodel of a house someone lives in.

How is this different from a subcontract?

This is the contract between the owner and the contractor. A construction subcontract is between the contractor and a trade, and it follows the prime contract.

Can I download this construction agreement template?

Yes. Use Download .docx to get a Word file with placeholders such as [Party A] and [Effective Date]. You can edit it in Word or Google Docs, or create a filled-in version in the free contract creator (https://www.formabledocs.com/contract-creator/construction-agreement).

Is the sample legally binding as shown?

No. Placeholder sample text is a starting point. It becomes an agreement for your deal after you fill in the details—manually or in the free contract creator—and the parties sign.

When should I use the free contract creator instead of editing the file?

Use the free contract creator if you want guided choices for the site, scope, price, schedule, permits, and warranty, without hunting through every blank yourself.

Construction Agreement

Owner and contractor terms for scope, price, schedule, changes, and warranty.

Create contract for free

What this contract contains

Preamble and parties. Names the agreement and each party.

Project. Names the site and the state, and says the plans and specifications control if they conflict with a general description.

Work. Describes the work and requires it to be done in a good and workmanlike manner, with the labor, materials, and equipment it needs.

Price. Sets a fixed contract price by default. A change in scope changes the price only through a written change order.

Payment. No deposit is due unless the parties agree later. The rest is paid in monthly progress payments, with final payment after completion.

Schedule. Sets when the contractor starts and when the work is complete. Time extends for a delay the contractor did not cause.

Permits. The contractor obtains the building permits, unless a permit can only be issued to the owner.

Site and materials. The owner gives access. The contractor keeps the site reasonably clean and safe, and remains responsible for materials until they are installed.

Changes. A change in the work, price, or time binds only if both parties sign a written change order first.

Completion. The work is complete when it is ready for its intended use. The owner inspects within 10 days and lists what is still unfinished.

Warranty. For 12 months after completion, the contractor repairs defects in workmanship and materials it supplied.

Insurance. Before work starts, the contractor carries general liability and workers' compensation, and provides a certificate on request.

Termination. Either party may end the agreement if a material breach is not cured within 15 days. The owner may also stop the work for convenience.

Governing law. Sets the state law that governs the construction agreement and where disputes must be brought. Choose the jurisdiction in the creator.

General. Covers assignment limits, waiver rules, severability, entire agreement language, notices, and counterpart or electronic-signature execution language.

Signature blocks. Authorized signatory and title lines for each party, ready for wet-ink or e-signature fields.

CONSTRUCTION AGREEMENT

This Construction Agreement (the "Agreement") is entered into as of [Effective Date] (the "Effective Date"), by and between:

[Party A], a corporation ("Owner"), and

[Party B], a corporation ("Contractor").

The Owner engages the Contractor to perform the Work, and the Contractor agrees to perform it, on the terms of this Agreement.

1. Project. The project is at [project location], in California. The contract documents are this Agreement and the plans and specifications the parties attach or identify in writing. If a general description conflicts with the plans or specifications, the plans and specifications control.

2. Work. The Contractor will perform [description of the work] (the "Work"), in a good and workmanlike manner, and will provide the labor, materials, and equipment the Work requires unless this Agreement says the Owner supplies them.

3. Price. The contract price is [contract price]. That price covers the scope in this agreement. A change in scope changes the price only through a written change order.

4. Payment. No deposit is due at signing unless the parties later agree in writing. The Owner will pay the rest in monthly progress payments for Work properly performed, within 15 days after a written application. The Contractor will not be paid for defective Work until it is corrected. Final payment is due after completion and acceptance, less any amount withheld for unfinished items.

5. Schedule. The Contractor will start the Work [start], and will reach completion [completion]. The time is extended for a delay the Contractor did not cause, including a change order, unusually severe weather, or an owner-caused delay, if the Contractor gives notice within a reasonable time.

6. Permits. The Contractor will obtain the building permits the work requires, at its cost, unless a permit can only be issued to the Owner. The Owner will sign the applications the Contractor reasonably needs.

7. Site and materials. The Owner will give the Contractor reasonable access to the site. The Contractor will keep the site reasonably clean and safe. Materials delivered for the Work stay the Contractor's responsibility until they are installed. The Owner may inspect the Work at reasonable times without delaying it.

8. Changes. A change in the work, price, or time is binding only if both parties sign a written change order before the changed work starts, unless waiting would create an immediate safety risk. A verbal request is not a change order.

9. Completion. The Work is complete when it is ready for its intended use and the Contractor has given notice. The Owner will inspect within 10 days and give a written list of items still to be finished. Acceptance is not a waiver of defects the Owner could not reasonably see.

10. Warranty. For 12 months after completion, the Contractor will repair defects in workmanship and materials it supplied, after written notice. This does not limit a manufacturer's warranty or a duty the law imposes. Ordinary wear is not a defect.

11. Insurance. Before work starts, the Contractor will carry commercial general liability insurance and workers' compensation as the law requires, and will provide a certificate on request.

12. Termination. Either party may terminate if the other does not cure a material breach within 15 days after written notice. The Owner may also stop the Work for convenience on written notice and pay for Work properly performed, materials ordered and not returnable, and reasonable demobilization. The Contractor will stop work and leave the site in a safe condition.

13. Governing Law. This Agreement is governed by the laws of Delaware, without regard to conflict of laws principles. Any legal suit, action, or proceeding relating to this Agreement must be instituted in the state or federal courts located in Delaware, and each Party irrevocably submits to the exclusive jurisdiction of those courts.

14. General. This Agreement is the entire agreement on its subject. It may be amended only in a writing signed by the Parties, and it may be signed in counterparts, including electronic copies. If a part is unenforceable, the rest stays in effect.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

Owner: [Party A]

By: ________________________________

Name: [Signatory]

Title: [Title]

Contractor: [Party B]