Construction Contract

This agreement is made on the date written above our signatures between
Contractor Name: __________________________________ (Contractor) and
Owner Name: _____________________________________ (Owner).
Contractor
Contractor Name: __________________________________
Address __________________________________________
Address __________________________________________
City _________________________________________, State:_________ Zip:__________
Work Phone Number: ___________________________________________
Cell Phone Number: ____________________________________________
Fax Number: __________________________________________________
Email Address: ________________________________________________
License Number: _______________________________________________
Contractor Name: __________________________________ will be referred to as Contractor
throughout this agreement.
Owner
Owner Name: _____________________________________
Address: _________________________________________
Address: _________________________________________
City: ___________________________________, State: ___________ Zip: ___________
Day Phone Number: __________________________________________________
Cell Phone Number: __________________________________________________
Fax Number: __________________________________________________
Email Address: __________________________________________________
Owner Name: _____________________________________ will be referred to as Owner throughout
this agreement.
The Construction Site
Lot number: ________________________________________________
Tract: _________________________________________
City: __________________________________________, Alabama Zip: ___________
I.

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 II. Project Description
A. For a price identified below, Contractor agrees to complete a new residence (identified as the
Project in this agreement) for Owner.
III. Contract Price
A. In addition to any other charges specified in this agreement, Owner agrees to pay Contractor the
following for completing the Work described as the Project:
For the cost of labor as defined in this agreement.
For the cost of materials as defined in this agreement.
For the cost of Subcontract Work and services as defined in this agreement.
For the cost of equipment as defined in this agreement.
For the cost of supervision as defined in this agreement.
For the cost of overhead as defined in this agreement.
Plus a fee of $__________________.
1. The maximum cost to Owner including cost of Work and the fee of Contractor shall not exceed
$____________________. If the cost of construction plus the fee is less than $_________________ or if
the actual cost of construction is less than the guaranteed maximum price, cost savings will be shared as
follows: ____________________________________________________________________________
____________________________________________________________________________________
_____________________________ Contractor will pay 100 percent of the cost of completing the Work
that exceeds $_______________________.
IV. Scheduled Start of Construction
A. Work under this agreement will begin within ______ Calendar Days after the building site has
been properly prepared by Owner.
V. Scheduled Completion of Construction
A. Work under this agreement will be Substantially Complete on or before ___/___/_____.
VI. Documents Incorporated
A. This agreement incorporates by reference certain disclosures and notices required by federal and
state law. The following documents are incorporated as though included in full as part of this agreement.
Thermal Insulation Disclosure
B. This agreement incorporates by reference certain documents which define and describe the Work
to be done. The following documents are incorporated as though included in full as part of this
agreement.
1. Plans
Plans dated ___/___/_____
Consisting of ____ sheet(s)
Prepared by ___________________________________________
Last changed on ___/___/_____
And further identified as ______________________________________
2. Specifications
Specifications dated ___/___/_____
Consisting of ____ sheet(s)
Prepared by _________________________________________
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Last changed on ___/___/_____
And further identified as ___________________________________
3. Shop Drawings
Shop Drawings dated ___/___/_____
Consisting of ____ sheet(s)
Prepared by ______________________________________________________
Entitled _______________________________________________________________
And further identified as ___________________________________________
VII. Ownership of Plans
A. All Plans, Drawings and Specifications created for Work under this contract are instruments of
service and remain the property of Owner. The use of these instruments of service on Work other than
provided in this contract without permission of Owner is prohibited. All copies of Drawings and
Specifications other than a single record copy shall be returned to Owner upon request after completion
of the Work.
VIII. Plans on Site
A. Contractor will keep a full set of Project Plans available on-site to authorized personnel during
the period of construction.
IX. Documents Supplied to Contractor
A. Owner will furnish to Contractor at no cost:
1. A full set of Plans and Specifications for all trades in electronic format.
2. ____ copies of ____________________________________________________.
3. Contractor will distribute Contract Documents as required by Subcontractors.
X. Scope of Work
A. The intent of this contract is to provide for the construction, complete in every detail, of the
Work described in or reasonably inferred from the Contract Documents, at the Contract Price and within
the time established in the Contract Schedule. Contractor has the duty to determine the means, methods,
techniques, sequences and procedures required to complete the Project as described and inferred.
B. Contractor is responsible for coordination of the various trades and deliveries of equipment,
materials and supplies to minimize interference which could delay the Work or pose a hazard to life or
property. Contractor shall be responsible for allocation of tasks between trades and will be the final
authority on location and routing of equipment and storage of materials on the Job Site.
C. Contractor will ensure that Subcontractors, their agents, and employees adhere to these Contract
Documents. Contractor accepts responsibility for all Work performed under this contract, including
Work performed by employees of Subcontractors. Contractor will settle disputes among Subcontractors
and between Contractor and Subcontractors so that disagreements do not delay completion of the Work
or affect quality of the Work.
D. Contractor shall provide on the Job Site during the period of construction a temporary chemical
toilet or water closet which shall be serviced no less than weekly. Upon completion of the Project,
Contractor will remove temporary toilet facilities from the site.
E. This agreement is the product of a confidential relationship between Contractor and Owner
requiring that both Parties exchange confidential information, the disclosure of which would constitute a
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loss. Except as provided below, Contractor and Owner agree not disclose or use for any purpose other
than completion of the Project all or any portion of the Contract Documents, cost estimates, diagrams,
records, reports, computer data or any other information concerning the Project for 5 years from the date
of this agreement without mutual consent of Contractor and Owner. The following are exceptions: (1)
Information required by the recipient to complete the Project, (2) Information known to the recipient
before disclosure, (3) Information lawfully obtained by the recipient from a third party under no
obligation of confidentiality, (4) Information generally known or publicly available other than by
unauthorized disclosure, (5) Information developed independently by the recipient prior to disclosure,
and (6) Disclosure required by legally constituted authority, but only after notification of each Party to
this agreement. In the event of a breach or threatened breach or intended breach of this confidential
relationship by either Party, the other Party, in addition to any other rights and remedies available at Law
or in equity, shall be entitled to preliminary and final injunctions, enjoining and restraining such breach
or threatened breach or intended breach. Contractor and Owner shall, by contract or Subcontract, require
others who receive confidential information on the Project to comply with the Requirements of this
paragraph. Both Contractor and Owner shall use at least the same degree of care in protecting
confidential information on the Project as in maintaining their own confidential information but in no
case less that a reasonable degree of care.
XI. Compliance with Law
A. Contractor and Owner mutually commit to use reasonable care to meet the Requirements of
state, federal and local Law when discharging their responsibilities under this agreement.
B. If Contractor observes that Drawings, Specifications, or other Contract Documents do not
comply with applicable Law, Contractor shall promptly notify Owner of the variance. Any changes
made to the Contract Documents as a result of this notice shall be handled in the form of a Change Order
under this agreement.
C. Contractor shall bear none of the cost of correcting Work completed according to Contract
Documents but not in compliance with Law if Contractor did not know that Contract Documents or
instructions from Owner did not comply with the Law.
D. Contractor is licensed to do Work described in the Contract Documents. Contractor will notify
Owner of any change in that license status. Every Subcontractor working for Contractor will hold a
license appropriate for the Work performed.
XII. Survey
A. Owner will employ an engineer or licensed land surveyor to establish lines, points and levels
adequate to lay out alignment and elevations for the Project but assumes no responsibility for accuracy
of the survey provided. Without extra cost to Owner and before beginning construction, Contractor shall
engage a licensed surveyor, if necessary, to verify accuracy of the survey provided by Owner.
B. Contractor shall maintain and preserve all survey monuments, markers, hubs and stakes on the
Job Site until authorized or required to remove them. If such marks are lost, moved or destroyed while
still needed to complete the Work, Contractor will have the marker reset by a licensed land surveyor or
engineer at no cost to Owner.
C. Before Work begins, Contractor shall locate all existing improvements and all utility lines on the
Job Site, including phone, electric, cable, gas, water, sewage, and drainage. Contractor is responsible for
any damage done to existing lines, cables, pipes, conduit, and improvements.
D. Upon Substantial Completion, Contractor will provide to Owner a copy of a survey by a licensed
surveyor or engineer showing the Job Site in plan view as actually completed with distances to adjoining
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property lines, easements, and utility lines indicated.
XIII. Layout
A. Contractor shall ensure that dimensions, levels and alignment conform to Project Plans and will
correct any error in layout at no cost to Owner so long as the error is not due to inconsistency or
ambiguity in the Contract Documents.
XIV. Permits and Fees
A. Contractor shall secure all permits, licenses and renewals required by government authority to
complete construction of the Project. If permits are required for Subcontracted Work, Subcontractors
will secure those permits. Owner shall assist Contractor in responding to requests for information from
the permit-issuing authority. Contractor shall provide Owner a copy of each permit, license and renewal
issued by government authority for the Project.
B. Owner will pay the building permit fee, Plan check fee, and charges levied by government for
testing, Inspection and Re-Inspection of the Project.
XV. Royalties, Patents and Copyrights
A. Contractor shall obtain all licenses necessary to use any invention, article, appliance, process, or
technique of whatever kind in the Work, and shall pay all royalties and license fees required. If, before
using any invention, process, technique, article or appliance specifically named in the Specifications or
Plans as acceptable for use in carrying out the Work, Contractor has or acquires information that the
same is protected by patent or copyright Law, making it necessary to secure the permission of the patent
or copyright owner, Contractor shall promptly advise Owner. Owner may direct that some other
invention, process, technique, article or appliance be used. Should Contractor have reason to believe that
the invention, process, technique, article or appliance so specified is an infringement of a patent or
copyright and fail to inform Owner, Contractor shall be responsible for any loss or liability due to the
infringement. Contractor shall hold Owner, officers, agents, and employees, harmless against any loss or
liability for or on account of the infringement of any patent rights or copyrights in connection with any
invention, process, technique, article or appliance manufactured or used in the performance of the
contract, including its use by Owner, unless such invention, process, technique, article or appliance is
specifically named in the Contract Documents as acceptable for use in carrying out the Work.
XVI. Employee Relations
A. Contractor will allow only qualified, careful and skilled personnel to do the Work. Each worker
shall have the appropriate license, certification or experience necessary to complete the tasks assigned.
XVII. Owner's Responsibilities
A. Owner will respond in writing and with reasonable promptness to written requests from
Contractor for information relevant to completion of the Work. Owner will identify a Representative
qualified to respond to questions from Contractor when Owner is not available. Contractor is authorized
to rely on written responses from Owner and the identified Representative.
B. Owner shall have sole responsibility to secure financing for the Project and shall pay all fees,
charges, or other costs of such financing, including Inspection fees charged by any lender. The
nonperformance of any lender shall not affect the obligation of Owner to Contractor. Owner hereby
authorizes and directs any lender on the Project to furnish Contractor with full information on
undisbursed loan proceeds when requested by Contractor.
C. Owner will not interfere with or permit others to interfere with, stop, hinder, or delay completion

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of the Work by Contractor or Subcontractors except as provided under this agreement.
D. Owner shall obtain all consents and approvals required from any architectural review committee,
homeowners association, or similar entity having the right to review and approve Plans prior to
construction.
XVIII. Representations by Contractor
A. Contractor affirms that the company is financially solvent, licensed, experienced, competent, and
has resources necessary to complete the Work in compliance with the Contract Documents.
B. Contractor affirms that all Subcontractors will be financially solvent, licensed, experienced,
competent, and will have resources necessary to complete the Work assigned in compliance with the
Contract Documents.
XIX. Payment Plan
A. Owner will pay to Contractor the Contract Price in installments consisting of progress payments
and a final payment on completion of the Work.
XX. Progress Payments
A. Schedule of Progress Payments
1. Each progress payment will cover Work done during the pay period. The amount of each
progress payment will be based on the value of Work completed. If a progress payment would be due on
a legal holiday, the payment will be made on the last business Day before that holiday.
2. Progress payments will be made twice a month on the 1st Friday and the 3rd Friday of the
month.
B. Processing of Progress Payments
1. No less than 7 Calendar Days before each progress payment is due under the terms of this
contract, Contractor shall provide Owner with an application for payment (invoice) in a form which
complies with generally accepted trade practice.
2. Except as provided otherwise in this agreement, Owner shall pay the amount due within 7
calendar days after approval of any application for progress or final payment.
3. The amount of each progress payment shall be based on payments by Contractor during the
payment period to Subcontractors, Material Suppliers, employees, consultants and others, as provided in
this contract.
4. Each application for payment shall include a certification by Contractor that the charges are an
accurate statement of the amount earned and payable under the terms of this contract for the current
payment period, and include no items for which payment has been made previously.
5. With each application for payment, Contractor shall certify that: (1) Contractor has applied the
proceeds of prior payments, if any, to discharge all prior mechanics' and materialmen's liens outstanding
as of the date of application, (2) There are no new mechanics' or materialmen's liens outstanding as of
the date of application, (3) All due and payable bills with respect to Work completed in the payment
period have been paid or are included in the amount requested in the current application, (4) Except for
such bills not paid, there is no known basis for the filing of any mechanics' or materialmen's liens on the
Work, and (5) Waivers from all Subcontractors and materialmen have been obtained to constitute an
effective waiver of lien under the Laws of Alabama.

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6. With each application for payment, Contractor shall include the following signed statement:
"Except as listed and attached to this certificate, Contractor unconditionally waives and releases Owner
of any and all claims now existing on the Project for delay, acceleration, extensions of time, Indemnity,
damages, or change in the Contract Price for Extra Work."
7. Unless otherwise provided in the Contract Documents, applications for payment may include, at
the option of Contractor, itemized charges for materials and equipment not yet incorporated in the Work
but delivered and suitably stored on the Job Site. Application for payment for stored materials and
equipment shall include a bill of sale or other confirmation that stored materials and equipment are the
property of Owner.
8. Owner may withhold payment for charges which lack supporting information or for which there
is no lien release.
9. Payments to Contractor do not constitute a waiver of any Claim that Owner may have for
Defective or inadequate workmanship or materials installed on the Project.
10. The check issued by Owner to Contractor may include one or more Subcontractors or Material
Suppliers as joint payees.
XXI. Payment for Materials Stored Off-Site
A. No application for payment shall include materials stored off-site unless: (1) Contractor has
received written approval from Owner to store the materials or equipment off-site in advance of
delivery, (2) A certificate of insurance is furnished by Contractor evidencing the property in question is
covered by all-risk property insurance naming the materials or equipment stored and naming Owner as
an insured party, (3) Owner is provided with a detailed inventory of the stored materials or equipment,
(4) The materials or equipment are clearly marked and identified and made available for Inspection and
verification during normal business hours, (5) The materials or equipment are properly and safely stored,
protected from weather, damage, vandalism and theft in a Bonded warehouse or a facility otherwise
approved in advance by Owner, (6) Contractor provides documentation of the purchase price and that
Contractor can pass clear title to the materials or equipment upon payment by Owner, and (7) Contractor
warrants that the materials and equipment shall not be moved from the approved storage location except
to the Job Site.
XXII. Retainage
A. Progress payments to Contractor shall be reduced by the amount set out in this contract for
Retainage. Except as otherwise provided in this agreement, all Retainage shall be released to Contractor
no later than 30 Calendar Days after Final Completion of Project.
B. Except as otherwise provided in this agreement, Owner shall retain ________ percent of the total
amount due on progress payments.
C. After 50 percent of the Work of any Subcontractor is complete, and if progress of that
Subcontractor is satisfactory in the sole opinion of Owner, and with the consent of Sureties providing
Bonds for Work of that Subcontractor, Retainage on progress payments attributable to Work of that
Subcontractor shall terminate. Thereafter, the remaining progress payments made for Work of that
Subcontractor shall be paid in full without Retainage so long as, in the sole opinion of Owner, that
Subcontractor continues to make satisfactory progress.
D. When any Subcontractor has finished Work in a manner that complies with the Contract
Documents, Owner may release to Contractor all Retainage attributable to Work performed by that
Subcontractor. No such release of Retainage shall be made without written approval from each Surety

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company furnishing a Bond for either Contractor or the Subcontractor affected.
E. Retainage shall be held to assure faithful performance of the contract and may also be used as a
source of funds for amounts due to or claimed by Owner, including, but not limited to, repair of Defects,
deductive Change Orders, credits, uncorrected Defective Work, interest, and damages.
F. Contractor shall not withhold from Subcontractors any greater proportion of payments due than
Owner withholds from Contractor unless Work of a Subcontractor is not in compliance with the Contract
Documents, in which case, Contractor may retain additional sums to ensure satisfactory performance.
G. Retainage shall be released to Contractor upon Substantial Completion of the Project except for
(1) An amount equal to 200 percent of the estimated value of any Work remaining to be completed on a
Punch List developed under the terms of this contract, and (2) Any amount required to ensure
compliance with Warranty provisions of this contract. All Retainage shall be released to Contractor on
Final Completion.
H. No Retainage will be withheld under this contract on tender by Contractor of a Retainage Bond
satisfactory to Owner and naming Owner as obligee, issued by a Surety company authorized to issue
Surety Bonds in the state of Alabama, in the amount of the Retainage to be released and conditioned
upon Substantial Completion of the Work by Contractor.
XXIII. Cost-Plus Reimbursements
A. General Requirements
1. Applications for payment shall be accompanied by copies of invoices, receipts, cancelled checks,
vouchers and ledgers which validate each charge in the application for payment.
2. On requests of Owner, Contractor shall make all payment records on the Project available for
audit by a representative of Owner. Records shall be available for audit during regular business hours for
the duration of the Project and until 4 years after the date of final payment under this contract.
3. Unless caused by negligence of Contractor or someone acting on behalf of Contractor, Owner
shall reimburse Contractor for expenses associated with handling temporary emergencies that endanger
life, health or property on the Job Site, making repairs, remedying Defects and removing Defective
Work. However, no reimbursement shall be made for any loss covered by insurance.
4. A cost is reasonable and necessary if, in its nature and amount, it does not exceed what would be
incurred by a prudent person in the conduct of a competitive business. Specifically: (1) Is this type of
cost generally recognized as ordinary and necessary in the conduct of the Contractor's business or
contract performance? (2) Is this a generally accepted sound business practice that would result from
arm's-length bargaining? (3) Does this expense comply with the Contractor's responsibilities to the
Owner, other customers, the owners of the construction business, employees, and the public at large? (4)
Is this a significant deviation from the Contractor's established business practice?
B. Reimbursement of Labor Costs
1. Owner shall reimburse Contractor for all labor expenses reasonably necessary to complete the
Project, including the expense of construction craft personnel working on the Job Site and field office
staff as authorized in this contract. Reimbursable Labor costs shall include salary and wages, payroll
taxes, insurance based on payroll, pension, profit sharing and ESOP contributions based on payroll, sick
pay, vacation pay, medical, dental and life insurance expense, relocation costs, travel pay and
subsistence. Reimbursement shall be made for all Labor expenses actually paid by Contractor for work
performed on the Job Site and, with prior approval of Owner, for Work performed at designated
workshops, facilities or fabrication yards away from the Job Site. Reimbursable tasks shall include
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demolition, removal, dismantling, cleanup, repair and construction of all temporary and permanent
structures reasonably necessary to comply with Requirements in the Contract Documents.
2. Except as otherwise provided in this contract, labor costs for general management, technical
services, estimating, selling, accounting, bookkeeping, professional services, design and engineering
services and clerical staff of Contractor working at locations other than the Job Site are not reimbursable
under this contract.
3. Overtime wages paid to hourly or salaried construction personnel shall be reimbursable only if
approved in writing in advance by Owner. Reimbursement will be at the overtime rate actually paid. If
overtime Work is required as a result of Inexcusable Delay caused by Contractor or anyone responsible
to Contractor, the overtime premium or shift differential portion of payroll expenses and the related
labor burden costs for overtime Work will be non-reimbursable.
4. Prior to making any application for payment which includes a payroll burden markup rate for
any class of employees, Contractor shall submit a detailed description of how the proposed rate has been
computed, including charges for payroll taxes, payroll insurance and employee benefits. Prior to Final
Completion, Contractor shall prepare and submit to Owner a reconciliation of estimated and actual
payroll burden costs and include the appropriate adjustment in the final application for payment.
5. Applications for payment shall reflect only the proportionate share of FICA, Medicare, state and
federal unemployment insurance taxes actually paid by Contractor.
6. Contractor shall disclose to Owner in writing if insurance is purchased through any subsidiary,
affiliate or parent company, or if Contractor is self-insured. The cost of insurance is reimbursable only to
the extent that insurance cost is comparable to what other construction contractors doing Similar Work,
with Similar loss ratios and with Similar experience modifiers, actually pay for Similar coverage.
7. Reimbursement shall include all costs to Contractor associated with delay of the Work, including
demobilization and mobilization costs, so long as Contractor is not responsible for the delay.
C. Reimbursement of Material Costs
1. Except as provided elsewhere in this contract, the cost of all materials reasonably necessary to
complete the Project shall be reimbursable expenses and shall be included by Contractor in applications
for payment. Cost of materials shall include sales or use tax on materials, tariffs, duties, consumable
supplies, small tools, delivery expense, insurance premiums on materials when actually paid by
Contractor and all other related costs when approved in advance by Owner.
2. All purchases of materials shall be at market prices with the most attractive terms available,
including discounts and free delivery when available. Major purchases shall be made after comparing
competitive offers from principal Material Suppliers. No purchase shall be made through any subsidiary,
affiliate or parent company of Contractor without prior written consent of Owner. Contractor shall
accept no gratuity, gift or kickback from any Material Supplier without prior written approval of Owner.
D. Reimbursement of Subcontract Costs
1. Except as provided elsewhere in this contract, the cost of all Subcontracts and all services
reasonably necessary to complete the Project shall be reimbursable expenses and shall be included by
Contractor in applications for payment. Reimbursable service expenses shall include insurance and
Bond premiums, finance charges, utility charges, fuel, reproduction services, permits, testing and
Inspection fees, finance charges, penalties and forfeitures (unless due to negligence of Contractor or a
Subcontractor), professional and consulting fees, royalties and license fees, debris hauling and tippage
charges, engineering and accounting service fees, legal, mediation or arbitration expenses (other than

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those arising from disputes between Contractor and Owner), and scheduling charges reasonably
necessary to complete the Work.
2. Contractor shall award Subcontracts and buy services for the Project on the most attractive terms
available after comparing competitive offers from reputable firms. No Subcontract shall be awarded or
service contract granted to a subsidiary, affiliate or parent company of Contractor without prior written
consent of Owner. Contractor shall accept no gratuity, gift or kickback from any Subcontractor or
service provider without prior written approval of Owner.
E. Reimbursement of Equipment Costs
1. Except as provided elsewhere in this contract, the cost of all equipment expenses reasonably
necessary to complete the Project shall be reimbursable expense and shall be included by Contractor in
applications for payment. Reimbursable equipment expense shall include the rental cost of machinery
and equipment, small tools, temporary facilities and structures, the cost of moving rented equipment and
temporary facilities to and from the Job Site, the cost of Installation, erecting and dismantling, and
minor repairs made to equipment, machinery and temporary facilities at the Job Site.
2. Contractor-owned equipment shall mean tools, machinery, temporary facilities and equipment
used on the Project but owned by Contractor or by affiliates, parent companies or related parties. Prior to
Date of Commencement, Contractor shall submit to Owner for approval a schedule showing each piece
of Contractor-owned equipment which may be used on the Project. This schedule shall show the fair
market value if purchased new or used, the proposed billing rate, the forecast duration of equipment use
and the estimated total cost to Owner for the Project, including movement to and from the Job Site.
Within 5 days of receipt of the equipment schedule, Owner shall either approve the equipment schedule
in whole or in part or elect to have Contractor buy or rent specific pieces of equipment from other
sources.
3. Except as approved by Owner, billing rates for Contractor-owned equipment shall not exceed
costs published in the current edition of the National Construction Estimator (or equivalent) for rental of
Similar equipment for a similar duration.
4. Without written approval of Owner, charges for any piece of Contractor-owned equipment shall
not exceed 90 percent of the fair market value of such equipment on the Date of Commencement.
Should the aggregate billing for any piece of equipment reach 90 percent of the fair market value at the
Date of Commencement, reimbursement for that piece of equipment shall terminate. Contractor shall not
take out of service any equipment for which reimbursement has terminated without written approval of
Owner.
F. Reimbursement of Supervision Costs
1. Owner shall reimburse Contractor for all Supervision expenses reasonably necessary to complete
the Project. Except as otherwise provided in this contract, reimbursement of Supervision expenses is
limited to charges for construction personnel actually working on the Job Site.
G. Reimbursements of Overhead Costs
1. Owner shall reimburse Contractor for all overhead expenses reasonably necessary to complete
the Project. Overhead expenses shall be billed to Owner based on estimated amounts approved in
advance by Owner and reconciled with actual expenses before the date of Final Completion. The
difference between estimated and actual overhead cost shall be debited or credited in the final payment
to Contractor.
XXIV. Audit of Records

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A. Accounting books and records of Contractor shall be available for Inspection and copying by
Owner or a person authorized by Owner during normal working hours at a place of business designated
by Contractor. Records made available shall include both electronic and paper versions of accounting
records, receipts, vouchers, purchase orders, Subcontract files (including proposals of successful and
unsuccessful bidders), original estimates, estimating worksheets, correspondence, written policies and
procedures, Change Order files (including documentation on negotiated settlements), payroll ledgers,
record of allocation of overhead expense, and other documents which relate to the Work.
B. Accounting books and records of Contractor shall be retained for Inspection and copying by
Owner for a period of 3 years after Final Completion.
C. Contractor shall require that all Subcontractors working for Contractor on the Project have the
same obligation for Inspection, copying and retention of records as Contractor has. Contractor shall bear
all costs (including attorney's fees) of enforcement of the right of Owner to Inspect and copy records in
the event a Subcontractor refuses to fully cooperate.
D. Contractor shall keep payroll records showing the name, address, Social Security number, job
classification, straight time and overtime hours worked each Calendar Day, and the actual wages paid to
each person employed in the Work.
XXV. Interest
A. Payments due and not paid under the Contract Documents shall bear interest from the date
payment is due at an annual rate of _______ percent.
B. No interest shall accrue on funds properly retained under the terms of this contract.
XXVI. Liens and Waivers
A. Within 7 Calendar Days after receipt of funds from Owner for Work done by a Subcontractor or
materials provided by a Material Supplier, Contractor will either (1) Pay for that Work and those
materials, or (2) Notify the Subcontractor or Material Supplier, in writing, of the intention to withhold
all or some portion of the payment due and explain why payment is being withheld.
XXVII. Waivers of Lien
A. With each application for payment, Contractor shall provide to Owner (1) Conditional waivers of
lien from Contractor, from each Material Supplier, and from each Subcontractor to the Project
confirming payment for all Work and materials covered by the application, and (2) Certification from
each Material Supplier and Subcontractor covered in a prior application for payment that previous
conditional waivers of lien have become unconditional. Waivers of liens shall be in a form satisfactory
to Owner, title insurer, and lenders. Contractor shall furnish any supplemental waivers of lien as may be
reasonably required by Owner, title insurer, or lenders. Conditional waivers of lien become
unconditional on receipt of the payment which is requested.
B. Contractor agrees to include in each Subcontract agreement for the Project a provision requiring
(1) A conditional waiver of lien from each Subcontractor to the Project confirming payment for all Work
and materials covered by each application for payment, and (2) Certification from each Subcontractor
covered in a prior application for payment that previous conditional waivers of lien have become
unconditional. Waivers of liens shall be in a form satisfactory to Owner, title insurer, and lenders.
XXVIII. Settlement of Lien Claims
A. Owner may withhold from money due Contractor a sum sufficient to cover lien Claims filed
under state Law by any Subcontractor, tradesman or Material Supplier working under direction of

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Contractor. Any amount paid by Owner to satisfy such lien Claim shall be credited against the amount
due Contractor.
XXIX. Details on Lien Claims
A. By making application for payment, Contractor certifies that Contractor is unaware of any lien or
property rights claimed on the Project made or threatened under state Law by Subcontractors, Material
Suppliers or tradesmen except as specified in the application for payment. Owner is entitled to withhold
payment to Contractor until such time as Contractor makes full disclosure of all details concerning lien
or property right Claims made or threatened on the Project by Subcontractors, Suppliers or tradesmen.
B. Contractor agrees to furnish to any Subcontractor on request of that Subcontractor: (1) A copy of
each invoice or payment request by Contractor, (2) Estimates made by Contractor to Owner of the
percentage of completion of the Project, and (3) Detailed information about payments made by Owner
for each portion of the Work done by such Subcontractor.
XXX. Grounds for Withholding Payment
A. Owner may withhold payment due Contractor on the filing of a legal Claim against Contractor
by any third party if the Claim relates to the subject matter of this contract and (1) May result in a lien
on the Project, or (2) May result in a judgment for damages against Owner. Filing of a legal Claim shall
not constitute grounds to withhold payment if Contractor has insurance coverage which would prevent
loss to Owner from the legal Claim made.
B. Owner may withhold payment due Contractor for failure by Contractor to meet financial
obligations to Subcontractors, tradesmen or Material Suppliers on the Project. Failure to meet financial
obligations shall not constitute cause to withhold payment if Contractor has provided a Payment Bond
from a licensed Surety, guaranteeing payment of Subcontractors, Material Suppliers, and tradesmen.
C. Owner may withhold from payments due Contractor a sum adequate to reimburse Owner for any
damage suffered by Owner or for which Owner may be liable and which was caused by an act or neglect
of Contractor or by anyone for whom Contractor may be liable. Damage to Owner shall not constitute
grounds to withhold payment if Contractor has insurance coverage which would prevent loss to Owner
from the damage claimed.
XXXI. Final Payment
A. Contractor will submit an application for final payment to Owner when the Work has been
completed in compliance with the Contract Documents. If Owner agrees that Work has been completed,
payment is due Contractor for the entire unpaid balance of the contract amount (including any
Retainage).
B. Making of final payment constitutes waiver of all Claims by Owner against Contractor except
those Claims previously made in writing and delivered to Contractor and those obligations otherwise
provided by this agreement or by operation of Law.
C. The acceptance of final payment by Contractor shall constitute a release by Contractor of known
Claims against Owner arising out of this contract except those Claims which (1) Have been made in
writing and identified by Contractor as not having been settled at that time, or (2) Are based on fraud or
misconduct by Owner.
D. Owner has no obligation to make final payment until unconditional waivers of lien in a form
satisfactory to Owner, lenders and Sureties have been received from Contractor, Subcontractors,
vendors, tradesmen, and all Material Suppliers with lien rights on the Project. Contractor may furnish a
Bond satisfactory to Owner in lieu of waivers of lien.
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E. Owner has no obligation to make final payment until all Punch List items have been
satisfactorily completed unless Owner agrees to accept a certified check equal to the value of any
uncompleted Work.
F. Owner has no obligation to make final payment until a certificate of occupancy has been issued
or a final Inspection has been completed by the appropriate governing authority.
G. Owner will notify Contractor of the date when notice of Final Completion is recorded.
XXXII. Value Engineering
A. Contractor is encouraged to submit in writing to Owner detailed value engineering proposals
which will accelerate completion, reduce cost to Owner, or which offer significant benefits (including
long-term benefits) to Owner. On acceptance of any value engineering proposal, Owner and Contractor
shall execute a detailed Change Order identifying the change and value of the direct cost saving or
enhanced value to Owner. Owner shall pay to Contractor 50 percent of the direct cost saving or
enhanced value identified in any Change Order that results from a written value engineering proposal
submitted by Contractor. In the absence of any such value engineering proposal, Contractor is deemed to
have accepted construction details provided by the Contract Documents as adequate to produce
satisfactory Work.
B. Contractor may restrict the right of Owner to make use of any value engineering proposal or
make any use of supporting data for a value engineering proposal by appending to the proposal the
following language: "No part of this value engineering proposal shall be disclosed, duplicated or used
for any purpose other than to evaluate this proposal. Once accepted by Owner by issuance of a Change
Order, Owner shall have the right to duplicate, use, and disclose any data or information in this value
engineering proposal in any manner and for any purpose whatsoever."
C. Proposals for value engineering changes shall be prepared at the expense of Contractor.
Contractor shall be paid for value engineering changes when the Change Order has been approved by
Owner and the Work has been completed.
D. Contractor shall remain obligated to perform in accord with terms of the Contract Documents
unless and until a Change Order adopting a value engineering proposal is approved by Owner.
E. Calculation of the saving or enhanced value to Owner that may result from a value engineering
proposal shall be based on the Project only, without consideration of other projects, future acquisitions,
royalties or collateral savings.
F. Owner shall not be responsible for delays in the Project that result from time required to prepare
or review a value engineering proposal, either by Contractor or Owner.
G. Value engineering proposals must not delay completion of the Project or adversely affect the
quality of design or construction or the operation or maintenance of the Project.
XXXIII. Arbitration
A. Any controversy or Claim arising out of or relating to this contract or contract warranty or the
breach thereof which cannot be resolved by mediations shall be settled by arbitration administered by
the American Arbitration Association under its Construction Industry Arbitration Rules, and judgment
on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
1. Any controversy or Claim arising out of or relating to this contract or contract warranty or the
breach thereof or a Change Order or addendum to this contract which cannot be resolved by mediations
shall be settled by arbitration administered by the American Arbitration Association under its

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Construction Industry Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
B. If a dispute arises out of or relates to this contract or contract warranty, or the breach thereof, and
if the dispute cannot be settled through negotiation, the Parties agree, in good faith, to first try settling
the dispute by mediation administered by the American Arbitration Association under its Construction
Industry Mediation Procedures before resorting to arbitration, litigation, or any other dispute resolution
procedure.
C. Arbitration provisions of this contract shall be specifically enforceable.
D. The location of arbitration hearings held under this agreement shall be the county in which the
Project is located unless agreed to otherwise by all Parties to the arbitration.
E. Contractor and Owner agree to include in each contract for construction or design services on the
Project a clause which requires that disputes under that contract be settled by arbitration administered by
the American Arbitration Association under its Construction Industry Arbitration Rules.
F. Any representative of Owner or consultant to Owner or Contractor or any Subcontractor to
Contractor on the Project shall have the same rights in any arbitration proceeding as are afforded by
arbitration rules to Contractor and Owner. If more than one demand for arbitration is made by a Party
with respect to the Project, all such Claims shall be consolidated into a single arbitration unless the
Parties otherwise agree in writing.
G. If a Claimant in arbitration recovers less than 50 percent of the amount demanded in arbitration,
Contractor and Owner agree that the Claimant shall pay all costs in arbitration, including the arbitrator's
fees and the attorney's fees of the opposing Party.
H. Anything in this contract notwithstanding, any Claim arising out of or relating to the Contract
Documents or warranty or the breach thereof may, at the option of the Claimant, be filed in any Small
Claims Court having jurisdiction, in lieu of an arbitration proceeding.
I. Nothing in this article shall be interpreted as waiving any rights Contractor has under state Law
for enforcement of lien rights or as waiving any right of Owner secured by a Payment or Performance
Bond.
XXXIV. Insurance
A. General Requirements
1. Contractor shall carry workers' compensation insurance and public liability insurance as required
by Law and regulation for the protection of Contractor and Owner during progress of the Work.
XXXV. Subcontracted Work
A. Contractor shall notify Owner of each principal Subcontractor and vendor Contractor proposes to
retain for Work on the Project and the Scope of their Work. Contractor shall not contract with any
Subcontractor or vendor to whom Owner makes a reasonable and timely objection. Contractor shall not
change a previously selected Subcontractor or vendor without notifying Owner of the proposed change.
Contractor shall bear any additional cost incurred due to voluntary substitution of Subcontractors or
vendors.
B. Contractor shall not assign or Subcontract any portion of the Work to be done under this contract
without prior consent of Owner and until Owner has reviewed and approved the proposed Subcontract
agreement. Consent of Owner shall not be unreasonably withheld, delayed, or conditioned. Each
assignment or Subcontract shall be in writing, shall identify Owner as the intended third party
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beneficiary of the Subcontract, and obligate the Subcontractor to comply with the terms and conditions
of this contract.
C. Contractor agrees that contracts with Subcontractors and vendors for the Project will impose the
same duties and obligations on those Subcontractors and vendors for their portions of the Work as
Contractor has under the provisions of the Contract Documents. Contractor warrants and guarantees that
each Subcontract with a Subcontractor or vendor for the Project will extend to Contractor all rights and
remedies provided to Owner under this agreement.
D. Anything in this contract or the Contract Documents notwithstanding, there is no contractual
relationship between any Subcontractor or vendor to Contractor and Owner. Contractor warrants and
guarantees that each agreement with a Subcontractor or vendor on the Project will include the following
language: "Except as provided by Law or regulation, Owner has no obligation to respond to Claims of
any Subcontractor or vendor on the Project or to resolve disputes between or among Contractor,
Subcontractors, and vendors on the Project. All communications between a Subcontractor or vendor on
the Project and Owner are to pass through Contractor."
XXXVI. Consequential Damages
A. Contractor and Owner waive all Claims for consequential damages against each other, their
respective officers, directors, partners, employees, agents, consultants and Subcontractors, arising out of
or relating to this contract or the termination of this contract, except those consequential damages
covered by insurance or specifically provided elsewhere in this agreement.
B. Contractor shall require each Subcontractor and Sub-subcontractor on the Project to execute a
waiver of consequential damages in favor of Owner with provisions coextensive with the waiver of
consequential damages that appears in this contract.
XXXVII. Early Partial Occupancy
A. Without prior approval of Contractor, Owner shall not occupy or use any portion of the Work
until Substantial Completion of the Project. If Owner occupies or uses any portion of the Work before
Substantial Completion of the Project and without prior approval of Contractor, the portion or portions
used or occupied shall be considered complete, finished, accepted and the responsibility of Owner.
B. Nothing in this contract shall prevent Owner from storing furnishings and equipment on-site
before Substantial Completion, so long as: (1) Contractor has given prior consent, such consent not
being unreasonably withheld, (2) Storage is in a portion of the Work designated by Contractor and will
not unreasonably disrupt or interfere with completion of the Work, (3) Owner provides proof of
insurance coverage for the furnishings and equipment to be stored, (4) Contractor is reimbursed for any
additional liability for insurance coverage due to the storage, (5) Owner waives all Claims against
Contractor for loss of or damage to the furnishings and equipment stored, (6) Owner and Contractor
inspect the area designated for storage before arrival of furnishings and equipment, noting condition of
the premises, and (7) Owner agrees to either compensate Contractor or waive any Claim for any damage
that occurs to the designated area during delivery or storage of the furnishings and equipment.
C. Partial Use or occupancy of the Work by Owner prior to Substantial Completion shall relieve
Contractor of responsibility for loss of or damage to the portion of the Work occupied or used by Owner.
XXXVIII. Substantial Completion
A. When, in the opinion of Contractor, the Work is Substantially Complete, Contractor shall prepare
a preliminary Punch List of Work remaining to be done and deliver that Punch List to Owner with a
request for evaluation of Substantial Completion. If, in the opinion of Owner, items on the preliminary

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Punch List are consistent with Substantial Completion, Owner shall conduct an Inspection of the Work
to evaluate compliance with the Contract Documents.
B. The Project shall not be considered Substantially Complete until: (1) All utilities and services are
connected and operating, (2) All installed equipment has been tested and found to be in working
condition, (3) Contractor has completed performance tests required by the Contract Documents, (4)
Reports, maintenance manuals, warranties, keys, control devices, and Drawings required by the Contract
Documents have been delivered to Owner, (5) Debris, waste, and excess materials have been removed
from the site, and (6) Final Inspection has been passed and occupancy has been approved by the public
authority.
C. If, after Inspection, the Project does not qualify as Substantially Complete, Owner shall provide
Contractor with a written list of the Work found to be: (1) Incomplete, (2) Out of compliance with the
Contract Documents, or (3) Defective in operation or workmanship. Contractor shall complete or correct
all Work listed prior to requesting a subsequent Inspection for Substantial Completion.
D. Before Owner takes possession or occupancy of the Project, Contractor shall receive a
comprehensive Punch List of discrepancies to be corrected or Work to be finished by Contractor and a
date for completing this Work. Contractor shall complete and correct items on the Punch List by the
designated date.
E. The Punch List given to Contractor is a complete and final list of Defective or incomplete Work
on the Project. Owner shall be deemed to have accepted Work not on the Punch List. Nothing in this
paragraph shall be interpreted as relieving Contractor of the obligation to meet warranty and call-back
obligations.
F. Owner and Contractor will sign an acknowledgment of Substantial Completion when the Project
or a specific portion of the Project is ready for occupancy or use. Except as otherwise provided in the
Contract Documents, the acknowledgment of Substantial Completion shall: (1) Transfer to Owner
responsibility for maintenance, safety, utility expense, controlling access at the site, and (2) Begin
running of any warranty or call-back period on the Project.
G. Upon Substantial Completion of the Project, Contractor shall promptly remove from the Job Site
all barricades, construction tools, equipment and supplies, and all temporary structures used during
construction.

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 Signatures
The signatures that follow constitute confirmation by those signing that they have examined and
understand the Contract Documents and agree to be bound by the terms of these documents.
This agreement is entered into as of the date written below.
Owner Name: _____________________________________, Owner
______________________________ ________________
(Signature) (Date)
______________________________
(Printed Name)
______________________________ ________________
(Signature) (Date)
______________________________
(Printed Name)
Contractor Name: __________________________________, Contractor
______________________________ ________________
(Signature) (Date)
______________________________
(Printed Name and Title)

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 Insulation Disclosure (In Compliance with 16 CFR Section 460)
Contractor makes the following disclosures in compliance with 16 Code of Federal Regulation Section
460. The Project includes installation of the following thermal insulation:
Exterior wall insulation
Material type: ______________________
Thickness of insulation: ______________________
R-value of that thickness: ______________________
Approximate coverage area in square feet: ______________________
Floor insulation
Material type: ______________________
Thickness of insulation: ______________________
R-value of that thickness: ______________________
Approximate coverage area in square feet: ______________________
Loose fill ceiling insulation
Type of insulation: ______________________
Initial installed thickness of insulation: ______________________
Minimum settled thickness of insulation: ______________________
R-value of that thickness: ______________________
Approximate coverage area in square feet: ______________________
Estimated number of bags to be used: ______________________
Coverage area includes framing members but not doors, windows or other large openings in the exterior
frame. R-values may be less where building components limit placement of insulation. For example, it
may not be possible to place insulation at building corners, at fireplaces and around the perimeter of
doors and windows. Listed R-values are based on information supplied by the insulation manufacturer.
Contractor may have to substitute other materials but will maintain the R-values described here.

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