Facts about the Construction Agreement template

What is a Construction Contract Agreement?

If you want to hire a contractor to build, remodel or renovate real estate property, a construction contract agreement helps you avoid conflict and misunderstanding. Other names for the contract document include construction agreement, construction management agreement, service agreement for construction, and construction services contract. Within the contract, you break down all work you want done on your property or land. Agreements should list everyone involved in the project, including subcontractors your contractor works with. Also, list the project's expected date of completion and how much the undertaking costs.

Some of the most common general elements found in almost every document include the property owner, contractor's name or business name, worksite address, work description, warranties, project changes, permits/licenses and starting and completion dates. Contractors often create blueprints, designs and exhibits for individual projects, so include those supplementary materials in the contract, if you have them.

You may also add supplementary elements to your document. For example, if a dispute arises, how would you like to resolve the issue before taking the matter to court? If you encounter project delays, how much should the contractor pay you for every day that the job remains at a standstill? If you want to inspect construction during the project to make sure everything meets contract terms, include that stipulation in the document.

What is a Construction Contract Agreement used for?

No matter how simple or intricate your construction project, you want the results to either match or succeed your expectations. Construction contracts ensure that you and your contractor understand the finer details and overall nature of your job. Agreements also define who bears responsibility for buying fixtures, obtaining licenses and permits, and providing construction materials. Construction may require drinking water for workers and temporary utilities provided by generators, both of which you can include in your document, so you and your contractor know who must pay resulting costs. A thorough contract covers and accounts for all eventualities, so everyone has peace of mind and a proper understanding of events and situations.

Why should you use a Construction Contract Agreement?

The main reason to create a construction agreement is to protect your rights. Imagine a contractor suddenly abandoning your project without a word about whether or when you can expect work to resume. Alternatively, while your contractor may complete the job, she or he may demand extra payment for changes that you did not agree to. With a properly written contract in place, you save yourself a lot of frustration and money. Further, legal documents protect contractors just as well as they do their clients. Start construction work with all parties understanding each other's responsibilities, expectations, schedules, and obligations. Even if the contractor is a friend or family member, do yourself a favor and get an agreement in place.

How to write a Construction Contract Agreement?

A solid construction agreement includes several major elements. Here are a few details that deserve a spot in your document:

  • Contractor details List the contractor's name or business name, license number, business address, and phone number.
  • Work description Detail the work that you and the contractor agreed upon, including minor details, so all parties understand their obligations and responsibilities.
  • Payment schedule Besides listing the full project amount, include any payment schedule you worked out with your construction professional. Add dates and project progress that initiates a payment.
  • Timeline or schedule You likely worked out a construction schedule with your contractor, so include it in the agreement. Besides the end date for the entire project, ask your contractor about deadlines for specific milestones, such as finishing certain rooms or installing specific systems.
  • Licenses, permits, and authorizations Include your contractor's license number and an image of her or his Certificate of Insurance. Your project may require permits to meet local and state requirements. Note in your document whether you expect your contractor to procure those.
  • Termination clause There may come a point in your construction project where you or your constructor wishes to terminate the agreement. This clause should stipulate the conditions that trigger termination.
  • 7: Project changes In case things do not go according to plan, devote a section of your document to describing how to navigate project modifications. For instance, must changes require your written approval?

How to fill out a Construction Contract Agreement with PDFSimpli in five steps?

Cover all your bases by using a construction contract template. Here are five steps to assembling your agreement:

  • 1: Prepare

    Gather all details for crafting an airtight contract that meets your needs and addresses your concerns. Double-check essential dates, the spelling of names, businesses, and addresses. Also, verify prices on the final quotes that your contractor gave you that you must include on the document.

  • 2: Choose a Software

    Do not rely on a word processor or standard PDF program to draft your agreement. Instead, leave the job to reputable software like PDFSimpli. What makes the software stand out is you can easily create, edit, save and sign your contract all with a single program. PDFSimpli offers users access to all tools during their trial period. Get started by selecting a contract template that meets your needs. In minutes, you can have a completed document.

  • 3: Fill Out or Edit the Construction Contract Agreement

    While PDFSimpli does most of the work, you may need to edit or delete some fields. To enter details, select the appropriate box and enter your text. To change existing text, use the "text" tool on the toolbar before selecting the section you want to modify. Eliminate unwanted paragraphs using the "erase" tool.

  • 4: Review

    Give your agreement a thorough read-through after editing and completing it. Your document may require images or copies of contractor insurance policies or licenses to make it legal, so include those while reviewing everything.

  • 5: Save, Download, Print or Send for Signature

    As the final step, save your completed contract before downloading it to your computer or hard drive. Print out a copy for yourself before sending another to your contractor. Before printing, sign the document by drawing, typing or uploading an e-signature. Make sure all other necessary parties add their signature before you download and print the agreement.

Construction Contract Agreement frequently asked questions

If you want to make money from your construction project, consult with an accountant who can look over your agreement. You can also turn to a Certified Public Accountant familiar with construction projects of your scope and type. Commonly, clients wait until the contractor completes a substantial portion of the job before determining value with the completed-contract technique. Another method is to gauge revenue via a prorated method determined by the percentage of completion.

To keep from becoming a victim of an unscrupulous contractor, you must protect your interests as a client. Only work with contractors with a current license and proper insurance, such as workers' compensation and contractor's risk. Research your contractor candidates with the Better Business Bureau to see if they have a solid reputation or formal complaints filed against them. Request references from past clients to get an idea of what to expect while working with a specific construction professional, and ask for images of past projects similar to yours.

Your contractor may subcontract a builder or another type of subcontractor to help complete a project, and those subcontractors may turn to you for payment if your contractor drops the ball. Rather than draw up a separate agreement with all subcontractors, protect yourself by including a clause in your construction contract that says that all subcontractors must agree to lien releases or waivers.