Commercial Construction Contract

COMMERCIAL CONSTRUCTION CONTRACT

TABLE OF CONTENTS

1. Parties and Project Information
2. Definitions
3. Scope of Work
4. Contract Documents
5. Contract Price and Payment
6. Time of Performance
7. Change Orders
8. Owner's Obligations
9. Contractor's Obligations
10. Subcontractors
11. Permits, Fees, and Notices
12. Insurance and Bonds
13. Indemnification
14. Warranties
15. Substantial and Final Completion
16. Default and Termination
17. Dispute Resolution
18. Lien Rights and Waivers
19. General Provisions
20. Execution

1. PARTIES AND PROJECT INFORMATION

COMMERCIAL CONSTRUCTION CONTRACT (this "Contract") is made and entered into as of [Effective Date] (the "Effective Date") by and between:

OWNER:
Name: [Owner Full Legal Name]
Entity Type: [Corporation/LLC/Partnership/etc.]
State of Formation: [State]
Address: [Owner Address]
Phone: [Owner Phone]
Email: [Owner Email]

CONTRACTOR:
Name: [Contractor Legal Name]
Entity Type: [Corporation/LLC/Partnership/etc.]
State of Formation: [State]
Contractor License Number: [License Number]
Address: [Contractor Address]
Phone: [Contractor Phone]
Email: [Contractor Email]

PROJECT:
Project Name: [Project Name]
Project Address: [Project Address]
Legal Description: [Legal Description or "See Exhibit A"]
Project Type: [Office/Retail/Industrial/Mixed-Use/Other]

ARCHITECT/ENGINEER (if applicable):
Name: [A/E Name]
Address: [A/E Address]
Phone: [A/E Phone]

2. DEFINITIONS

"Applicable Laws" means all federal, state, and local laws, ordinances, codes, rules, regulations, orders, and requirements applicable to the Project, including building codes, zoning requirements, environmental laws, and safety regulations.

"Application for Payment" means Contractor's written request for payment submitted in accordance with Section 5.

"Architect" means the architect or engineer identified above, or such other architect or engineer as Owner may designate.

"Change Order" means a written document signed by Owner and Contractor authorizing a change in the Work, Contract Price, or Contract Time.

"Construction Change Directive" means a written order from Owner directing a change in the Work before agreement on cost or time adjustments.

"Contract Documents" means this Contract, General Conditions, Supplementary Conditions, Drawings, Specifications, Addenda, Change Orders, and other documents listed in Section 4.

"Contract Price" means the total compensation payable to Contractor as specified in Section 5.

"Contract Time" means the period from Notice to Proceed through Substantial Completion.

"Day" means calendar day unless otherwise specified.

"Final Completion" means completion of all Work including Punch List items.

"Notice to Proceed" means Owner's written authorization to commence Work.

"Project Schedule" means the schedule of activities, milestones, and completion dates as approved by Owner.

"Punch List" means a list of items to be completed or corrected after Substantial Completion.

"Retainage" means the percentage of each progress payment withheld until Final Completion.

"Specifications" means the written technical requirements for materials, equipment, systems, standards, and workmanship.

"Subcontractor" means any person or entity with a direct contract with Contractor to perform a portion of the Work.

"Substantial Completion" means the date certified by Architect when construction is sufficiently complete so Owner can occupy or use the Work for its intended purpose.

"Work" means all labor, materials, equipment, services, and other items necessary to complete the Project in accordance with the Contract Documents.

3. SCOPE OF WORK

3.1 General

Contractor shall provide all labor, materials, equipment, tools, construction equipment, transportation, and other facilities and services necessary for proper execution and completion of the Work.

3.2 Project Description

[Insert detailed project description including:

• Building type and size
• Number of floors
• Gross square footage
• Major building systems
• Site work included]

3.3 Detailed Scope

The complete Scope of Work is described in the Contract Documents, including:

• Drawings dated [Date] prepared by [Architect/Engineer]
• Specifications dated [Date]
• Addenda numbered [List]

3.4 Exclusions

The following work is excluded from this Contract:

• ☐ Tenant improvements beyond base building
• ☐ Furniture, fixtures, and equipment (FF&E)
• ☐ Technology/data cabling beyond [specify]
• ☐ Signage
• ☐ [Other exclusions]

4. CONTRACT DOCUMENTS

4.1 Contract Documents

The Contract Documents consist of:

1. This Contract (including all exhibits)
2. General Conditions (Exhibit A)
3. Supplementary Conditions (Exhibit B)
4. Drawings (Exhibit C)
5. Specifications (Exhibit D)
6. Addenda (Exhibit E)
7. Approved Change Orders
8. Other documents listed: [List]

4.2 Order of Precedence

In case of conflict, documents shall govern in the following order:

1. Change Orders (most recent first)
2. Supplementary Conditions
3. This Contract
4. General Conditions
5. Specifications
6. Drawings (larger scale governs over smaller scale)
7. Addenda

4.3 Document Interpretation

Contractor shall not take advantage of any apparent error, omission, or discrepancy in Contract Documents. Contractor shall promptly notify Owner and Architect of any discrepancy and shall request clarification before proceeding.

5. CONTRACT PRICE AND PAYMENT

5.1 Contract Price

Owner shall pay Contractor for performance of the Work the Contract Price of:

$[Amount] ([Amount in Words] Dollars)

5.2 Contract Type

☐ Stipulated Sum (Lump Sum)
The Contract Price is a fixed amount for complete performance of the Work.

☐ Guaranteed Maximum Price (GMP)
The Contract Price shall not exceed the Guaranteed Maximum Price of $[Amount]. Any savings below GMP shall be distributed: [___]% to Owner; [___]% to Contractor.

☐ Cost Plus Fixed Fee
Contract Price = Cost of Work + Fixed Fee of $[Amount].
GMP (if applicable): $[Amount]

☐ Cost Plus Percentage Fee
Contract Price = Cost of Work + [___]% of Cost of Work.
GMP (if applicable): $[Amount]

5.3 Schedule of Values

Within [10] days after execution, Contractor shall submit a Schedule of Values allocating the Contract Price to various portions of the Work. The Schedule of Values shall be used as the basis for Applications for Payment.

5.4 Applications for Payment

• Contractor shall submit Applications for Payment monthly by the [___] day of each month
• Each Application shall show Work completed, materials stored, and amounts previously paid
• Applications shall be accompanied by required lien waivers
• Architect shall review and certify Applications within [7] days

5.5 Payment Terms

• Owner shall pay certified amounts within [30] days after receipt of Architect's certificate
• Late payments bear interest at [1.5]% per month or the maximum legal rate
• Owner may withhold payment for: defective Work, third-party claims, failure to pay subcontractors, damage to Owner or others, or reasonable evidence of inability to complete

5.6 Retainage

• Owner shall retain [5]% of each progress payment as Retainage
• Upon Substantial Completion, Retainage may be reduced to [___]%
• Retainage shall be released within [30] days after Final Completion

5.7 Final Payment

• Application for Final Payment shall include all required closeout documents
• Owner shall make Final Payment within [30] days after Final Completion
• Acceptance of Final Payment constitutes waiver of all claims by Contractor except those previously made in writing and unsettled

6. TIME OF PERFORMANCE

6.1 Contract Time

The Work shall be substantially complete within [___] calendar days from Notice to Proceed, or by [Date].

6.2 Notice to Proceed

Owner shall issue Notice to Proceed within [30] days after Contract execution. Contract Time begins on the date specified in Notice to Proceed.

6.3 Project Schedule

• Contractor shall submit a detailed Project Schedule within [14] days after Contract execution
• Schedule shall show critical path, milestones, and completion dates
• Contractor shall update the Schedule monthly
• Material changes to Schedule require Owner approval

6.4 Milestone Dates

6.5 Delays and Extensions

6.5.1 Excusable Delays
Contract Time shall be extended for delays caused by:

• Owner-caused delays
• Architect-caused delays
• Changes in the Work
• Force Majeure events
• Unusually severe weather
• Unforeseen conditions
• Government actions

6.5.2 Delay Notice
Contractor shall provide written notice of delay within [5] days of occurrence, describing cause, anticipated duration, and mitigation efforts.

6.5.3 Concurrent Delays
For concurrent delays (one Owner's responsibility, one Contractor's), Contractor receives time extension but not delay damages.

6.6 Liquidated Damages

☐ Applicable: If Contractor fails to achieve Substantial Completion by the required date (as extended), Contractor shall pay Owner $[Amount] per calendar day as liquidated damages. This amount represents a genuine pre-estimate of Owner's damages, which are difficult to calculate precisely.

Maximum liquidated damages: $[Amount] or [___]% of Contract Price.

☐ Not Applicable: Liquidated damages do not apply.

6.7 Early Completion Bonus (Optional)

☐ If Contractor achieves Substantial Completion more than [___] days early, Owner shall pay Contractor $[Amount] per day.

7. CHANGE ORDERS

7.1 Owner's Right to Order Changes

Owner may order changes in the Work within the general scope of the Contract. Changes shall be authorized by Change Order or Construction Change Directive.

7.2 Change Order Process

1. Proposed change is identified by Owner, Architect, or Contractor
2. Contractor submits proposal within [10] days including:
   - Detailed description of change
   - Itemized cost breakdown
   - Time impact
   - Effect on other Work
3. Owner reviews and negotiates
4. Upon agreement, Change Order is executed
5. Work proceeds after Change Order execution

7.3 Construction Change Directive

If Owner and Contractor cannot agree on cost or time, Owner may issue a Construction Change Directive. Contractor shall proceed with changed Work. Cost shall be determined by:

• Mutual agreement
• Unit prices in Contract
• Cost of Work plus agreed percentage for overhead and profit
• Independent estimate

7.4 Pricing Methods

Changes shall be priced using:

• Lump Sum: Agreed fixed price
• Unit Prices: Pre-established rates in Contract Documents
• Time and Materials:
• Labor: Actual cost plus [___]% for overhead/profit
• Materials: Actual cost plus [___]% for overhead/profit
• Equipment: Actual rental rates
• Subcontractor work: Subcontractor cost plus [___]%

7.5 Documentation

Contractor shall maintain detailed records for all changed Work including daily logs, time sheets, material invoices, and photographs.

7.6 No Oral Changes

No change shall be effective unless in writing and signed by authorized representatives of both parties.

8. OWNER'S OBLIGATIONS

Owner shall:

• ☐ Provide site access
• ☐ Provide surveys and geotechnical information
• ☐ Obtain Owner-responsible permits (zoning, environmental, etc.)
• ☐ Provide evidence of financing if requested
• ☐ Furnish Architect's services
• ☐ Make timely payments
• ☐ Provide timely decisions and approvals
• ☐ Designate authorized representative:

Owner's Representative:
Name: [Name]
Phone: [Phone]
Email: [Email]

9. CONTRACTOR'S OBLIGATIONS

9.1 General Duties

Contractor shall:

• ☐ Supervise and direct the Work using best skill and attention
• ☐ Be responsible for construction means, methods, techniques, sequences, and procedures
• ☐ Employ competent, qualified personnel
• ☐ Use only licensed subcontractors where required
• ☐ Comply with Applicable Laws
• ☐ Maintain a safe work site complying with OSHA requirements
• ☐ Protect the Work, Owner's property, and adjacent property
• ☐ Keep the site clean and orderly
• ☐ Provide proper storage and security for materials

9.2 Key Personnel

Key Personnel shall not be removed or replaced without Owner's prior written consent.

9.3 Submittals

Contractor shall prepare and submit shop drawings, product data, samples, and other submittals as required. Owner's or Architect's review of submittals does not relieve Contractor of responsibility for compliance with Contract Documents.

9.4 Coordination

Contractor shall coordinate Work with Owner's separate contractors and with utility companies, governmental agencies, and others as necessary.

9.5 Quality Control

Contractor shall implement a quality control program and conduct regular inspections to ensure Work complies with Contract Documents.

9.6 Safety

Contractor shall:

• Comply with all OSHA regulations and safety laws
• Provide appropriate personal protective equipment (PPE) for all workers
• Maintain safety equipment and first aid supplies on site
• Report all accidents and safety incidents promptly
• Designate a qualified safety representative

10. SUBCONTRACTORS

10.1 Award of Subcontracts

Contractor may employ subcontractors to perform portions of the Work. Major subcontractors shall be subject to Owner's approval, which shall not be unreasonably withheld.

10.2 Subcontractor List

Contractor shall provide a list of proposed subcontractors within [10] days of Contract execution.

10.3 Subcontract Terms

All subcontracts shall:

• Incorporate appropriate provisions of the Contract Documents
• Require subcontractors to be properly licensed
• Include flow-down of insurance requirements
• Require lien waivers as condition of payment

10.4 Contractor Responsibility

Contractor is fully responsible for all acts and omissions of subcontractors and their employees.

10.5 No Privity

Nothing in this Contract creates any contractual relationship between Owner and any subcontractor.

10.6 Prompt Payment to Subcontractors

Contractor shall pay subcontractors within [7] days of receiving payment from Owner for such subcontractor's Work.

11. PERMITS, FEES, AND NOTICES

11.1 Permits

Contractor shall obtain and pay for all construction permits and governmental fees required for the Work, including:

• Building permit
• Electrical permit
• Plumbing permit
• Mechanical permit
• Fire alarm/sprinkler permits
• Other trade permits

11.2 Permit Costs

Permit costs are ☐ included in / ☐ excluded from the Contract Price.

11.3 Notices

Contractor shall give required notices to governmental authorities and comply with all Applicable Laws.

11.4 Code Compliance

If Contractor discovers any portion of the Contract Documents to be contrary to Applicable Laws, Contractor shall promptly notify Owner in writing and shall not proceed until directed.

12. INSURANCE AND BONDS

12.1 Contractor's Insurance

Contractor shall maintain throughout the Project:

12.2 Additional Insured

Owner, Architect, and their officers, directors, and employees shall be named as additional insureds on Contractor's CGL and Umbrella policies.

12.3 Insurance Requirements

• Policies shall be written by insurers rated A- VII or better by A.M. Best
• Policies shall be primary and non-contributory
• Policies shall include waiver of subrogation in favor of Owner
• 30 days' notice of cancellation required

12.4 Certificates

Contractor shall provide certificates of insurance and applicable endorsements prior to commencing Work and annually thereafter.

12.5 Bonds

☐ Performance Bond: Contractor shall provide a Performance Bond in the amount of [100]% of the Contract Price.

☐ Payment Bond: Contractor shall provide a Payment Bond in the amount of [100]% of the Contract Price.

Bonds shall be issued by a surety licensed in the state of the Project, rated A- or better by A.M. Best.

13. INDEMNIFICATION

13.1 Contractor's Indemnity

To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner, Architect, and their officers, directors, employees, and agents from and against all claims, damages, losses, and expenses, including attorney's fees, arising out of or resulting from:

• Performance of the Work
• Contractor's breach of this Contract
• Any negligent or wrongful act or omission of Contractor
• Bodily injury or property damage caused by Contractor
• Contractor's failure to comply with Applicable Laws

13.2 Owner's Indemnity

Owner shall indemnify Contractor from claims arising from Owner's negligent acts or omissions unrelated to the Work.

13.3 Indemnity Limitations

• Indemnity obligations are limited to amounts available under applicable insurance
• Neither party indemnifies the other for the other's sole negligence
• Indemnity obligations survive Contract completion or termination

14. WARRANTIES

14.1 Contractor's Warranty

Contractor warrants to Owner that:

• Materials and equipment shall be new unless otherwise specified
• Work shall be of good quality and free from defects
• Work shall conform to requirements of Contract Documents
• Work shall be free from defects in materials and workmanship for the Warranty Period

14.2 Warranty Period

• General warranty: [One (1) Year] from Substantial Completion
• Roofing systems: [___] years
• Waterproofing: [___] years
• HVAC equipment: [___] years
• Other: [As specified]

14.3 Correction of Work

During the Warranty Period, Contractor shall correct defective Work at no cost to Owner within [30] days after receipt of written notice (or immediately if emergency). If Contractor fails to correct, Owner may do so and charge Contractor.

14.4 Warranty Exclusions

Warranty does not cover:

• Normal wear and tear
• Damage from Owner's misuse, improper maintenance, or alterations
• Damage from casualty events
• Work performed by others

14.5 Extended Warranties

Contractor shall obtain and assign to Owner all manufacturers' warranties for materials and equipment incorporated in the Work.

15. SUBSTANTIAL AND FINAL COMPLETION

15.1 Substantial Completion

15.1.1 Definition
Substantial Completion occurs when the Work is sufficiently complete so Owner can occupy or utilize the Work for its intended purpose.

15.1.2 Process

1. Contractor requests inspection when Work is substantially complete
2. Architect inspects and prepares Punch List
3. Architect issues Certificate of Substantial Completion
4. Certificate establishes date of Substantial Completion
5. Owner assumes responsibility for utilities, insurance, and security
6. Warranty Period begins

15.1.3 Effects of Substantial Completion
Upon Substantial Completion:

• Owner may occupy the Work
• Retainage may be reduced
• Liquidated damages (if any) cease
• Warranty Period commences
• Risk of loss transfers to Owner

15.2 Punch List

• Punch List shall identify items to be completed or corrected
• Contractor shall complete Punch List items within [30] days
• Owner may withhold [150]% of estimated Punch List value from retainage

15.3 Final Completion

15.3.1 Requirements
Final Completion occurs when:

• All Punch List items are complete
• All required closeout documents are submitted
• All required inspections are passed
• Certificate of Occupancy is issued (if applicable)
• All lien waivers are delivered
• All warranties and manuals are provided
• Site is clean and all temporary facilities removed

15.3.2 Closeout Documents
Contractor shall submit:

• As-built drawings
• Operation and maintenance manuals
• Equipment warranties
• Spare parts and attic stock
• Training for Owner's personnel
• Final lien waivers from all parties
• Certificate of Occupancy or equivalent
• Other documents required by Contract Documents

15.4 Partial Occupancy

Owner may occupy completed portions of the Work before Substantial Completion with Contractor's consent (not unreasonably withheld). Partial occupancy does not constitute acceptance or change Contractor's obligations.

16. DEFAULT AND TERMINATION

16.1 Contractor Default

Contractor is in default if Contractor:

• Persistently fails to perform Work in accordance with Contract Documents
• Fails to make timely payment to subcontractors or suppliers
• Persistently disregards Applicable Laws
• Fails to maintain required insurance or bonds
• Materially breaches this Contract
• Becomes insolvent or files for bankruptcy

16.2 Owner's Remedies for Contractor Default

Upon Contractor default and after [10] days' written notice:

• Owner may terminate this Contract
• Owner may complete the Work using other contractors
• Owner may pursue all available legal remedies
• Contractor is liable for additional costs of completion

16.3 Owner Default

Owner is in default if Owner:

• Fails to make payment when due for [30] days after written notice
• Persistently fails to fulfill Owner's obligations
• Materially breaches this Contract

16.4 Contractor's Remedies for Owner Default

Upon Owner default and after [14] days' written notice:

• Contractor may stop Work
• Contractor may terminate this Contract
• Contractor is entitled to payment for Work performed plus reasonable overhead and profit on unpaid Work
• Contractor may pursue all available legal remedies

16.5 Termination for Convenience

Owner may terminate for convenience upon [30] days' written notice. Contractor is entitled to:

• Payment for Work performed
• Payment for materials ordered
• Reasonable demobilization costs
• Reasonable overhead and profit on unpaid Work

16.6 Contractor's Duties Upon Termination

Upon termination, Contractor shall:

• Stop Work as directed
• Protect completed Work
• Deliver all Work, materials, and documents to Owner
• Assign subcontracts and purchase orders as directed
• Remove equipment and temporary facilities

17. DISPUTE RESOLUTION

17.1 Claims Process

A Claim is a demand by either party seeking adjustment of Contract Terms. Claims shall be submitted in writing within [21] days of the event giving rise to the Claim.

17.2 Architect's Initial Decision

For Claims not involving termination, Architect shall render an initial decision within [10] days. Either party may object within [10] days.

17.3 Negotiation

Before proceeding with mediation, the parties shall meet within [10] days to negotiate in good faith.

17.4 Mediation

Claims not resolved through negotiation shall be submitted to mediation as a condition precedent to binding dispute resolution. Mediation shall be conducted by [AAA/JAMS/other]. Costs shall be shared equally.

17.5 Binding Dispute Resolution

☐ Arbitration: Claims not resolved through mediation shall be decided by binding arbitration under the [AAA Construction Industry Arbitration Rules/JAMS/other]. The award is final and binding. Judgment may be entered in any court of competent jurisdiction.

☐ Litigation: Claims not resolved through mediation may be litigated in courts of competent jurisdiction.

17.6 Governing Law

This Contract is governed by the laws of the State of [State], without regard to conflict of laws principles.

17.7 Venue

Any litigation shall be brought in state or federal courts located in [County, State].

17.8 Continuation of Work

Pending resolution of any Claim, Contractor shall continue the Work and Owner shall continue to make payments in accordance with this Contract.

17.9 Consolidation

Owner may consolidate disputes with Contractor and disputes with Architect, subcontractors, or others in a single proceeding.

17.10 Attorneys' Fees

The prevailing party is entitled to recover reasonable attorneys' fees, costs, and expenses.

18. LIEN RIGHTS AND WAIVERS

18.1 Lien Waivers Required

As a condition of each payment, Contractor shall provide:

• Conditional lien waiver from Contractor for current payment
• Unconditional lien waiver from Contractor for previous payment
• Conditional lien waivers from subcontractors/suppliers for current payment
• Unconditional lien waivers from subcontractors/suppliers for previous payment

18.2 Final Lien Waivers

As a condition of Final Payment, Contractor shall provide unconditional final lien waivers from Contractor and all subcontractors/suppliers.

18.3 Form of Waivers

Lien waivers shall be in statutory form or, if no statutory form exists, in form attached as Exhibit.

18.4 Lien Claims

Contractor shall keep the Project free from liens. If a lien is filed, Contractor shall within [15] days:

• Pay and remove the lien, OR
• Provide a bond or other security acceptable to Owner
• Failure to remove liens is a material breach

18.5 Defense of Liens

If a lien is filed as a result of Contractor's default, Contractor shall indemnify Owner for all costs including attorneys' fees.

19. GENERAL PROVISIONS

19.1 Entire Agreement

This Contract, including all Contract Documents, constitutes the entire agreement. Prior negotiations and agreements are superseded.

19.2 Amendments

Amendments must be in writing and signed by authorized representatives of both parties.

19.3 Assignment

Neither party may assign without written consent, except Contractor may assign payment rights.

19.4 Severability

Invalid provisions shall be severed; remaining provisions remain in effect.

19.5 Waiver

Failure to enforce any provision is not a waiver of future enforcement.

19.6 Notices

All notices shall be in writing and delivered by hand, certified mail, overnight courier, or email with confirmation to addresses in Section 1.

19.7 Third-Party Beneficiaries

This Contract is for the benefit of the parties only. No third-party beneficiaries are intended.

19.8 Joint and Several Liability

If either party consists of multiple entities, their liability is joint and several.

19.9 Independent Contractor

Contractor is an independent contractor, not an employee, agent, or partner of Owner.

19.10 Survival

Provisions regarding indemnification, warranties, confidentiality, and dispute resolution survive termination or expiration.

19.11 Counterparts and Electronic Signatures

This Contract may be executed in counterparts. Electronic signatures are valid and binding.

19.12 Confidentiality

Neither party shall disclose the terms of this Contract or confidential information of the other without consent, except as required by law.

19.13 Records

Contractor shall maintain complete records for [6] years after Final Completion. Owner may audit records with reasonable notice.

20. EXECUTION

IN WITNESS WHEREOF, the parties have executed this Contract as of the Effective Date.

OWNER:

CONTRACTOR:

EXHIBITS

Exhibit A: General Conditions

[Attach or reference General Conditions]

Exhibit B: Supplementary Conditions

[Attach project-specific supplementary conditions]

Exhibit C: Drawings

[List all drawings by number and date]

Exhibit D: Specifications

[List all specification sections]

Exhibit E: Addenda

[List all addenda by number and date]

Exhibit F: Schedule of Values

[To be submitted by Contractor after execution]

Exhibit G: Insurance Requirements

[Detail specific insurance requirements]

Exhibit H: Bond Forms

[Attach Performance Bond and Payment Bond forms]

Exhibit I: Lien Waiver Forms

[Attach required lien waiver forms]