Construction Contract

ALABAMA PRIVATE CONSTRUCTION AGREEMENT

This form is for a privately owned project after the parties classify the work, contractor, property, price, licensing route, permit code, financing, insurance, bond, lien, and dispute requirements. It is not a public-works contract, subcontract, design-professional agreement, home-sale contract, insurance policy, payment bond, performance bond, lien notice, lien statement, lien waiver, or statutory claim form.

1. PROJECT CLASSIFICATION AND LICENSING WORKSHEET

A. Project Type

• Project address: [________________________________]
• Legal description or parcel identifier: [________________________________]
• Owner: [________________________________]
• Contractor: [________________________________]
• Project use: ☐ Commercial ☐ Industrial ☐ Residential ☐ Mixed use ☐ Other
• Public owner, public funds, public awarding authority, or public property involved: ☐ No ☐ Yes — use a separately reviewed public-project package
• New construction: ☐ Yes ☐ No
• Repair, renovation, improvement, or reimprovement: ☐ Yes ☐ No
• Swimming-pool work involved: ☐ Yes ☐ No
• Residential roofing involved: ☐ Yes ☐ No
• Number of residential units: [____]
• Number of floors: [____]

B. Cost of Undertaking

C. Candidate Licensing Routes

Ala. Code § 34-8-1(a) defines a general contractor by covered Alabama work costing $100,000 or more. Subsection (b) separately covers swimming-pool work exceeding $5,000, and subsection (c) covers a subcontractor performing covered work costing $100,000 or more under contract to a general contractor or another subcontractor. If Chapter 8 applies, Ala. Code § 34-8-6(b) requires the license number in construction contracts, subcontracts, bids, and proposals.

Ala. Code § 34-14A-2(16) defines a residential home builder to include a person undertaking or offering covered construction or supervision of a residence or qualifying structure of not more than three floors and not more than four residential units for another's residential use when the cost exceeds $10,000. It separately includes residential roofing exceeding $2,500. Section 34-14A-5 requires residential home builders to be licensed, subject to the chapter's exceptions and license classifications.

☐ Chapter 8 general-contractor route reviewed

• License classification: [________________________________ / Not applicable]
• License number: [________________________________ / Not applicable]
• License holder and qualifying representative: [________________________________]
• Current status independently confirmed on: [__/__/____]

☐ Chapter 14A residential-home-builder route reviewed

• License type and limitation: [________________________________ / Not applicable]
• License number: [________________________________ / Not applicable]
• License holder and qualifying representative: [________________________________]
• Current status independently confirmed on: [__/__/____]

☐ Specialty, trade, local business, professional, or other licensing reviewed: [________________________________]

Do not rely only on the contract price label. Confirm the statutory cost calculation, scope, exclusions, exceptions, entity name, qualifying representative, and license classification for the actual work.

2. PARTIES AND CONTRACT DOCUMENTS

This Private Construction Agreement (the “Agreement”) is made on [__/__/____] between:

• Owner: [FULL LEGAL NAME, ENTITY TYPE, AND ADDRESS] (“Owner”); and
• Contractor: [FULL LEGAL NAME, ENTITY TYPE, ADDRESS, AND APPLICABLE LICENSE NUMBER] (“Contractor”).

The “Project” is the work at [PROJECT ADDRESS] described in Schedule 1.

Contract Documents and Priority

No bid, proposal, estimate, website term, purchase order, drawing, specification, or other document is incorporated unless it is identified above or later incorporated by a signed change order.

3. SCOPE OF WORK

Contractor shall furnish the labor, supervision, materials, equipment, and services expressly assigned to Contractor in Schedule 1. Schedule 1 must state:

• The included work and measurable deliverables;
• Plans, specifications, code edition, and design-responsibility boundaries;
• Allowances, alternates, unit prices, and owner-selected items;
• Excluded work;
• Existing-condition assumptions and concealed-condition procedure;
• Owner-furnished work, materials, access, utilities, information, and approvals;
• Permit and inspection responsibility;
• Testing, commissioning, training, manuals, warranties, and closeout deliverables; and
• Work by separate contractors and coordination responsibilities.

Contractor shall not perform a material change based only on an oral instruction. Emergency work necessary to protect people or property must be documented promptly under Section 6.

4. CONTRACT PRICE, APPLICATIONS, AND PAYMENT

4.1 Price Method

Select and complete one:

☐ Lump sum of $[________]

☐ Cost of the work plus fee under Schedule 2

☐ Unit prices under Schedule 2

☐ Guaranteed maximum price of $[________] under Schedule 2

☐ Other reviewed method: [________________________________]

4.2 Applications for Payment

Contractor shall submit an application by [DAY OR MILESTONE] showing:

1. Work completed by schedule-of-values item;
2. Properly stored materials, if payable;
3. Approved changes;
4. Prior payments;
5. Retainage, if any;
6. Current amount requested;
7. Updated schedule and completion forecast;
8. Supporting invoices, payroll, delivery, testing, or inspection records required by Schedule 2; and
9. Lien notices, claims, waivers, or payment confirmations required under Section 11 and Schedule 5.

Owner shall review the application within [____] days and pay the undisputed approved amount within [____] days after [RECEIPT / CERTIFICATION / OTHER EVENT]. Owner shall give a written itemized explanation for any withheld amount.

4.3 Retainage

The parties do not adopt a percentage by assumption. The negotiated retainage is:

• Retainage percentage or amount: [________________________________ / None]
• Work and stored-material basis: [________________________________]
• Reduction milestone: [________________________________ / None]
• Release condition and date: [________________________________]
• Separate treatment for subcontractor retainage: [________________________________]

4.4 Final Payment

Final payment is due [____] days after completion of the Schedule 4 closeout items, correction of listed deficiencies, final payment application, required approvals, and satisfaction of the payment-administration requirements in Schedule 5. Acceptance or payment does not waive a latent defect or a right expressly preserved in this Agreement.

5. TIME AND SCHEDULE

• Notice to proceed: [__/__/____ / Defined event]
• Commencement: [__/__/____ / ____ days after notice]
• Substantial completion: [__/__/____]
• Final completion: [__/__/____ / ____ days after substantial completion]
• Interim milestones: Schedule 3
• Work hours and access limits: [________________________________]

Contractor shall update the schedule [WEEKLY / MONTHLY / OTHER]. A party seeking a time adjustment must give notice within [____] days after it knew or should have known of the event and must describe cause, critical-path effect, mitigation, concurrent delay, and requested time.

Excusable-delay and compensable-delay categories are selected in Schedule 3. No event automatically changes time or price without the notice and change procedure, except as expressly stated for emergency protection.

6. CHANGES, DIRECTIVES, AND CONCEALED CONDITIONS

6.1 Change Order

A change order must identify the scope change, price adjustment, time adjustment, schedule effect, and any reservation. It is effective when signed by authorized representatives of both parties.

6.2 Interim Written Directive

If the parties cannot agree before changed work must proceed, Owner may issue a written directive only if Schedule 1 authorizes it. The directive must define the work and interim compensation method. Contractor shall preserve its price and time position through a written reservation submitted within [____] days.

6.3 Concealed or Unknown Conditions

Contractor shall stop only the affected work, protect the area, and notify Owner promptly after discovering a material condition differing from the disclosed or reasonably observable project information. The parties shall investigate and document any change before covering the condition.

7. OWNER RESPONSIBILITIES

Owner shall provide the access, decisions, information, financing evidence, owner-furnished items, separate-contractor coordination, approvals, and payments assigned in the schedules. Owner shall identify its authorized representative:

• Name and title: [________________________________]
• Authority limits: [________________________________]
• Contact: [________________________________]

Only the authorized representative may approve a change, payment, acceptance, suspension, or termination on Owner's behalf.

8. CONTRACTOR RESPONSIBILITIES

Contractor shall:

1. Perform and coordinate the included work through qualified personnel;
2. Maintain the licenses and permits assigned to Contractor;
3. Include any license number required by Ala. Code § 34-8-6(b) in applicable project contracts, subcontracts, bids, and proposals;
4. Supervise means, methods, sequencing, and site safety assigned to Contractor, subject to identified design and owner responsibilities;
5. Protect completed work, adjoining property, and persons affected by the work;
6. Manage subcontractors and suppliers and provide Owner an updated lower-tier list;
7. Keep project records supporting payment, schedule, changes, testing, and closeout; and
8. Notify Owner of material defects, conflicts, delays, safety events, claims, and governmental notices.

Subcontractor Schedule

9. QUALITY, INSPECTION, CORRECTION, AND WARRANTY

Contractor shall perform the work according to the contract documents and the code, permit, inspection, manufacturer, and testing requirements identified in Schedule 1.

• Contractor correction period: [____] months after [SUBSTANTIAL / FINAL COMPLETION / OTHER]
• Manufacturer warranties: [IDENTIFY]
• Extended or special warranties: [IDENTIFY / None]
• Notice and response procedure: [________________________________]

Owner may inspect without assuming Contractor's responsibility. Rejection, correction, destructive testing, and backcharge procedures must be documented. Contractor may inspect an alleged defect before correction by others unless emergency conditions require immediate action.

10. INSURANCE AND PROJECT-SPECIFIC SECURITY

The insurance schedule must identify required policies, limits, deductibles, additional-insured status, completed-operations duration, primary/noncontributory treatment, waiver of subrogation, evidence, cancellation notice, and allocation of uninsured risk.

No payment or performance bond is required merely because this form is used. The project-specific election is:

☐ No bond required

☐ Payment bond required under a separately reviewed bond: penal sum $[________]

☐ Performance bond required under a separately reviewed bond: penal sum $[________]

☐ Other security: [LETTER OF CREDIT / GUARANTY / ESCROW / OTHER]

11. ALABAMA LIEN AND PAYMENT ADMINISTRATION

The parties acknowledge that Alabama lien rights and deadlines depend on claimant tier, contract relationships, notices, last work or furnishing, indebtedness maturity, property, and statutory compliance.

11.1 Core Statutory Map

• Ala. Code § 35-11-210 declares the lien and generally limits employees and material suppliers of a contractor to the unpaid balance due the contractor. Its advance written material notice can support a full-price material lien when the statutory conditions are satisfied and the owner does not timely object before use.
• Section 35-11-218 requires a claimant other than the original contractor, before filing the lien statement, to give the owner or proprietor written notice stating the amount, basis, and person from whom it is owing, subject to the § 35-11-210 advance-material-notice route.
• Section 35-11-215 sets filing periods after the last work, labor, or furnishing: six months for an original contractor, 30 days for a journeyman or day laborer, and four months for every other lien claimant covered by that section.
• Section 35-11-221 requires a lien-enforcement action within six months after maturity of the entire secured indebtedness, except as otherwise provided in the lien division.

These are deadline anchors, not a complete lien opinion. Every claimant remains responsible for timely preserving its own rights. Contractor shall not represent that it can give a statutory notice on behalf of every lower-tier claimant unless documented authority and current law support that step.

11.2 Notice and Claim Log

11.3 Waivers and Payment Confirmation

Any waiver form must be separately reviewed for claimant, amount, through-date, exclusions, disputed items, change work, retainage, and payment condition. Unless counsel approves another sequence, a progress waiver becomes effective only upon receipt of the identified cleared payment, and a final waiver becomes effective only upon receipt of the identified final cleared payment.

Owner may condition payment on delivery of the following proportionate documents:

☐ Contractor's payment application and conditional waiver

☐ Lower-tier conditional waivers for amounts included in the application

☐ Contractor's sworn lower-tier payment status

☐ Evidence of previously funded lower-tier payments

☐ Final closeout and payment documents identified in Schedule 5

No party waives a claim, defense, disputed change, retainage, or unpaid amount except through the reviewed language of the signed document.

11.4 Filed Claim Response

If a lien or payment claim is asserted, the receiving party shall notify the other within [____] days and provide the claim document. The parties shall identify the responsible contract tier, undisputed amount, defenses, notice deadlines, and available statutory or contractual response. Any bond-off, transfer, discharge, settlement, contest, or withholding deadline must be supplied by counsel for the actual claim; this Agreement does not invent a ten-day discharge rule.

12. SUSPENSION, DEFAULT, AND TERMINATION

Contractor Default

Owner may give written notice describing a material failure and the required cure. The ordinary cure period is [____] days; immediate protective action may be required for an imminent threat to persons or property. If uncured, Owner may exercise the specific completion, supplementation, withholding, suspension, or termination remedy selected in Schedule 6, subject to applicable law and any surety rights.

Owner Default

Contractor may give written notice describing nonpayment, access failure, prolonged suspension, or another material failure. Any right to suspend or terminate arises only after the notice and cure periods selected in Schedule 6 and after required safety and site-protection steps.

Insolvency and Bankruptcy

Bankruptcy or insolvency is not treated as an automatic self-executing termination. The parties shall obtain current advice about any stay, assumption, rejection, ipso-facto restriction, bond, lender, or receiver issue before acting.

13. RISK ALLOCATION AND DISPUTE PROCESS

Complete Schedule 6 after reviewing insurance, fault, design responsibility, consequential loss, delay, hazardous materials, existing property, third-party claims, workers, liens, cybersecurity, confidentiality, and governing law.

This form does not impose automatic prevailing-party fees, a Contract-Price liability cap, a standalone jury waiver, no-bond relief, blanket consequential-damages waiver, or one-way duty to defend. Any selected term must state its scope, exceptions, insurance coordination, procedure, and authority.

Dispute Steps

1. Project-level written notice and meeting within [____] days;
2. Executive meeting within [____] days;
3. ☐ Mediation under [RULES / MEDIATOR / LOCATION] ☐ No mandatory mediation;
4. Final forum: ☐ Alabama court with reviewed venue ☐ Separately reviewed arbitration clause ☐ Other;
5. Work and payment during dispute: [________________________________]; and
6. Emergency or provisional relief route: [________________________________].

14. COMPLETION AND CLOSEOUT

Substantial Completion

Substantial completion occurs when [OBJECTIVE PROJECT-SPECIFIC TEST]. The parties shall inspect, identify incomplete or defective items, allocate security and maintenance, and record the date and responsibilities in a signed certificate.

Final Completion

Final completion requires the Schedule 4 items, including as applicable:

☐ Punch-list completion

☐ Final governmental approvals and certificates

☐ Testing, commissioning, and training

☐ As-built records, manuals, and keys

☐ Warranties and assignments

☐ Final payment application and accounting

☐ Conditional final waivers and lower-tier status

☐ Insurance and bond closeout items

☐ Site cleanup and removal of temporary facilities

15. GENERAL TERMS

1. Notices. Notice addresses and accepted delivery methods are listed in Schedule 7.
2. Assignment. Neither party may assign a material duty without the other party's written consent, except as Schedule 7 states for financing, surety, or project transfer.
3. Entire agreement. The contract documents listed in Section 2 are the complete agreement.
4. Amendment and waiver. A change or waiver must be documented by an authorized writing; a single waiver does not waive later performance.
5. Severability. An unenforceable term does not preserve a result that defeats the agreement's material bargain or applicable law.
6. Counterparts and signatures. Accepted signature methods are [WET INK / APPROVED ELECTRONIC PLATFORM / OTHER], subject to permit, lender, bond, record, and filing requirements.
7. Independent contractor. Contractor controls its assigned means and methods and is not Owner's employee, except that the contract documents control the required result, coordination, safety allocations, and compliance duties.
8. No unintended beneficiaries. No person has a contractual enforcement right unless this Agreement expressly identifies that right; statutory, bond, lien, insurance, and other independent rights are not eliminated by this clause.

16. SIGNATURES

Owner

• Legal name: [________________________________]
• Signatory and title: [________________________________]
• Signature: [________________________________]
• Date: [__/__/____]

Contractor

• Legal name: [________________________________]
• Applicable license number printed in this contract: [________________________________ / Not applicable]
• Signatory and title: [________________________________]
• Signature: [________________________________]
• Date: [__/__/____]

SCHEDULES

1. Scope, plans, specifications, code, inclusions, exclusions, and responsibility matrix
2. Price, allowances, unit prices, schedule of values, payment, retainage, and tax treatment
3. Milestones, critical-path schedule, delay categories, and time-adjustment procedure
4. Completion, testing, correction, warranty, and closeout requirements
5. Lien, notice, waiver, lower-tier, bond, and payment-administration requirements
6. Default, termination, indemnity, damages, insurance, fees, forum, and dispute elections
7. Party representatives, notices, financing, assignment, signature, and special terms

SOURCES AND REFERENCES

• Alabama Legislature — Ala. Code § 34-8-1
• Alabama Legislature — Ala. Code § 34-8-6
• Alabama Legislature — Ala. Code § 34-14A-2
• Alabama Legislature — Ala. Code § 34-14A-5
• Alabama Legislature — Ala. Code § 35-11-210
• Alabama Legislature — Ala. Code § 35-11-215
• Alabama Legislature — Ala. Code § 35-11-218
• Alabama Legislature — Ala. Code § 35-11-221