CONSTRUCTION SERVICES AGREEMENT (Alabama)

[// GUIDANCE: This form is drafted for private, non-public construction in Alabama. Practitioners should modify for public works to address the Alabama “Little Miller Act” and agency-specific requirements.]

TABLE OF CONTENTS

1. Article I – Document Header & Recitals
2. Article II – Definitions
3. Article III – Operative Provisions
4. Article IV – Representations & Warranties
5. Article V – Covenants & Restrictions
6. Article VI – Default & Remedies
7. Article VII – Risk Allocation
8. Article VIII – Dispute Resolution
9. Article IX – General Provisions
10. Article X – Execution Block
11. Exhibits

ARTICLE I – DOCUMENT HEADER & RECITALS

1.1 Agreement Title. Construction Services Agreement (the “Agreement”).
1.2 Effective Date. This Agreement is entered into and effective as of [EFFECTIVE DATE] (the “Effective Date”).
1.3 Parties.
(a) “Owner”: [OWNER LEGAL NAME], a [STATE] [ENTITY TYPE], with a principal address at [OWNER ADDRESS].
(b) “Contractor”: [CONTRACTOR LEGAL NAME], a [STATE] [ENTITY TYPE], Alabama General Contractor License No. [LICENSE #], with a principal address at [CONTRACTOR ADDRESS].
1.4 Recitals.
A. Owner is the fee simple owner (or authorized agent) of certain real property located at [PROJECT ADDRESS] (the “Site”).
B. Owner desires to engage Contractor to furnish all labor, materials, equipment, and services necessary to construct the improvements described in Exhibit A (the “Work”) in accordance with the Contract Documents (as defined below).
C. Contractor desires to perform the Work under the terms, conditions, and covenants set forth herein, in compliance with applicable Alabama construction, lien, and licensing laws, including Ala. Code §§ 35-11-210 et seq.

NOW, THEREFORE, in consideration of the mutual covenants and promises herein, the parties agree as follows:

ARTICLE II – DEFINITIONS

The following capitalized terms shall have the meanings set forth below. Terms defined in the singular include the plural and vice-versa.

“Affected Party” has the meaning set forth in Section 7.4.
“Change Order” means a written modification of the Contract Price, Contract Time, or Scope of Work, executed in the form attached as Exhibit E.
“Completion” means Substantial Completion and Final Completion collectively.
“Contract Documents” means (i) this Agreement; (ii) the plans, drawings, and specifications listed in Exhibit A; (iii) the Project Schedule (Exhibit B); (iv) approved Change Orders; (v) the Performance and Payment Bond (Exhibit F); and (vi) any addenda issued prior to execution.
“Contract Price” has the meaning set forth in Section 3.1.
“Contract Time” has the meaning set forth in Section 3.3.
“Final Completion” means completion of all punch-list items, delivery of all close-out documents, and acceptance by Owner under Section 3.4.
“Indemnified Parties” has the meaning set forth in Section 7.1(a).
“Lien Laws” means Ala. Code §§ 35-11-210 et seq. and any successor statutes.
“Partial Lien Waiver” and “Final Lien Waiver” have the meanings set forth in Section 3.7.
“Retainage” has the meaning set forth in Section 3.2(b).
“Substantial Completion” means the stage in the progress of the Work when the Work (or a designated portion) is sufficiently complete so that Owner can occupy or utilize the Work for its intended use, evidenced by issuance of a Certificate of Substantial Completion (Exhibit G).
[// GUIDANCE: Add or delete definitions to align with project-specific terminology.]

ARTICLE III – OPERATIVE PROVISIONS

3.1 Scope of Work & Performance Standards.
(a) Contractor shall furnish all supervision, labor, materials, tools, equipment, supplies, permits, licenses, inspections, and services required to perform the Work in strict accordance with the Contract Documents, applicable laws, and industry best practices.
(b) Contractor shall employ only properly licensed, qualified, and insured subcontractors.

3.2 Contract Price; Payment Terms.
(a) Contract Price. Owner shall pay Contractor the lump-sum amount of $[CONTRACT PRICE] (the “Contract Price”), subject to adjustment only by Change Order.
(b) Retainage. Owner shall withhold retainage (“Retainage”) from each Progress Payment in an amount equal to ten percent (10%) until fifty percent (50%) of the Work is complete, after which Retainage shall be reduced to five percent (5%) on the remaining Progress Payments; provided, however, that total Retainage shall in no event exceed five percent (5%) of the Contract Price.
(c) Progress Payments. On or before the [DAY] of each month, Contractor shall submit a sworn Application for Payment detailing Work completed through the preceding month, supported by lien waivers as required herein. Owner shall pay the approved amount within fifteen (15) days of receipt, less Retainage and any amounts withheld under Section 3.2(d).
(d) Withholding. Owner may withhold amounts reasonably necessary to cover (i) defective Work not remedied; (ii) unpaid claims of subcontractors; (iii) reasonable evidence that the Work cannot be completed for the unpaid balance; or (iv) Contractor’s failure to comply with Lien Laws.

3.3 Contract Time. Contractor shall commence the Work within [NUMBER] days after the Effective Date and achieve Substantial Completion no later than [SUBSTANTIAL COMPLETION DATE], and Final Completion within [NUMBER] days thereafter (collectively, the “Contract Time”). Time is of the essence.

3.4 Substantial & Final Completion. Upon Contractor’s written notice of Substantial Completion, Owner and Contractor shall jointly inspect the Work, prepare a punch-list, and execute the Certificate of Substantial Completion. Final payment is conditioned upon (i) satisfaction of all punch-list items, (ii) delivery of all close-out documents, and (iii) submission of Final Lien Waivers.

3.5 Changes in the Work. No change shall be effective unless documented by a written Change Order executed by both parties. If the parties are unable to agree on price or time, Contractor shall proceed under a written Construction Change Directive, and disputes shall be resolved per Article VIII.

3.6 Licenses & Permits. Contractor shall obtain and pay for all permits, fees, and licenses necessary for the Work.

3.7 Lien Compliance; Notices & Waivers.
(a) Statutory Notices. Contractor shall serve any notices to Owner required under the Lien Laws on behalf of itself and all lower-tier subcontractors and suppliers.
(b) Lien Waivers. As a condition precedent to each Progress Payment, Contractor shall deliver a Partial Lien Waiver in the form of Exhibit D from itself and every person or entity entitled to assert a lien for the portion of Work covered by the Application for Payment. As a condition precedent to final payment, Contractor shall deliver a Final Lien Waiver from itself and all such persons or entities.
(c) Discharge of Liens. Contractor shall, within ten (10) days after notice, bond off, transfer, or otherwise discharge any lien filed against the Project arising from Contractor’s failure to pay for labor, services, or materials.

3.8 Payment Bond. Within ten (10) days after the Effective Date, Contractor shall furnish to Owner a payment bond issued by a surety licensed in Alabama and rated A- or better by A.M. Best, in the penal sum of one hundred percent (100%) of the Contract Price, on the form attached as Exhibit F, naming Owner as obligee and otherwise complying with applicable Alabama insurance statutes.

ARTICLE IV – REPRESENTATIONS & WARRANTIES

4.1 Contractor’s Representations. Contractor represents and warrants that:
(a) It is duly organized, validly existing, in good standing, and licensed to perform the Work in Alabama;
(b) It possesses the requisite skill, experience, resources, and capacity to perform the Work in a good and workmanlike manner;
(c) The Work will be free from defects in materials and workmanship for a period of one (1) year from Final Completion;
(d) All materials furnished will be new and of good quality unless otherwise specified;
(e) Its execution, delivery, and performance of this Agreement have been duly authorized.
The warranties under this Section 4.1 survive Completion and are in addition to any implied warranties and remedies under applicable law.

4.2 Owner’s Representations. Owner represents and warrants that:
(a) Owner has fee simple title (or lawful authority) to the Site, free of monetary liens other than those disclosed in writing to Contractor;
(b) Owner has the financial ability to pay the Contract Price as required; and
(c) The information and surveys supplied to Contractor are, to Owner’s knowledge, complete and accurate.

ARTICLE V – COVENANTS & RESTRICTIONS

5.1 Compliance with Laws. Contractor shall perform the Work in compliance with all applicable federal, state, and local statutes, rules, ordinances, and regulations, including OSHA, environmental, and Lien Laws.
5.2 Safety. Contractor shall be solely responsible for initiating, maintaining, and supervising safety precautions and programs in connection with the Work.
5.3 Insurance. Prior to commencement, Contractor shall procure and maintain insurance policies not less than the limits described in Exhibit C, naming Owner as an additional insured on a primary, non-contributory basis.

ARTICLE VI – DEFAULT & REMEDIES

6.1 Contractor Default. Each of the following constitutes a “Contractor Default”:
(a) Failure to prosecute the Work diligently and continuously;
(b) Failure to comply with lien obligations or maintain the payment bond;
(c) Failure to maintain required insurance;
(d) Insolvency, bankruptcy, or assignment for benefit of creditors; or
(e) Material breach of any provision herein.

6.2 Notice & Cure. Owner shall give Contractor written notice of default specifying the basis thereof. Contractor shall cure within seven (7) days (forty-eight (48) hours in the event of life-safety conditions). If Contractor fails to cure within the applicable period, Owner may:
(i) Take over the Work and complete it by whatever method Owner deems expedient;
(ii) Terminate this Agreement for cause upon written notice and recover all costs of completion in excess of the unpaid balance of the Contract Price; and/or
(iii) Invoke any additional remedy available at law or in equity.

6.3 Owner Default. Owner shall be in default upon failure to pay sums due within ten (10) days after receipt of written notice from Contractor. Contractor’s exclusive remedy for an uncured Owner default is suspension of the Work and, if not remedied within twenty-one (21) days thereafter, termination of the Agreement and payment for Work executed plus reasonable demobilization costs.

6.4 Attorneys’ Fees. The prevailing party in any dispute arising hereunder is entitled to recover its reasonable attorneys’ fees, costs, and expenses.

ARTICLE VII – RISK ALLOCATION

7.1 Indemnification by Contractor.
(a) To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless Owner, its lenders, affiliates, officers, directors, managers, agents, and employees (“Indemnified Parties”) from and against any and all claims, liens, demands, damages, losses, penalties, liabilities, costs, and expenses (including attorneys’ fees) arising out of or resulting from the performance of the Work, but only to the extent caused by the negligence, breach of contract, or statutory violation of Contractor, its subcontractors, or anyone for whose acts they may be liable.
(b) The obligations under this Section 7.1 survive Completion and termination.

7.2 Limitation of Liability. Notwithstanding any other provision, Owner’s aggregate liability to Contractor under this Agreement shall not exceed the Contract Price. The foregoing limitation does not apply to Owner’s obligation to pay the Contract Price for Work properly performed.

7.3 Waiver of Consequential Damages. Except for damages arising from gross negligence, willful misconduct, or third-party indemnity claims, each party waives all claims against the other for consequential, incidental, special, punitive, or exemplary damages.

7.4 Force Majeure. Neither party (“Affected Party”) shall be liable for delay or failure to perform caused by events beyond its reasonable control, including acts of God, terrorism, epidemic, labor disputes, or governmental actions. The Contract Time shall be equitably adjusted for the period of delay.

ARTICLE VIII – DISPUTE RESOLUTION

8.1 Governing Law. This Agreement is governed by the internal laws of the State of Alabama, without regard to conflict-of-law principles.

8.2 Forum Selection. The parties consent to exclusive jurisdiction and venue in the state courts located in [COUNTY], Alabama.
[// GUIDANCE: Insert county where Project is located.]

8.3 Mediation. As a condition precedent to litigation (and, if elected, arbitration), the parties shall participate in non-binding mediation administered by the American Arbitration Association (“AAA”) Construction Industry Mediation Rules within thirty (30) days after a party’s written demand.

8.4 Arbitration – Optional.
[OPTIONAL – SELECT IF ARBITRATION DESIRED] Any controversy arising out of or related to this Agreement that is not resolved by mediation shall be settled by binding arbitration administered by the AAA in accordance with its Construction Industry Arbitration Rules. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction.

8.5 Jury Trial Waiver – Optional.
[OPTIONAL – SELECT IF LITIGATING IN COURT] EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT.

8.6 Injunctive Relief. Notwithstanding anything to the contrary, either party may seek temporary, preliminary, or permanent injunctive relief or specific performance in a court of competent jurisdiction to prevent irreparable harm.

ARTICLE IX – GENERAL PROVISIONS

9.1 Entire Agreement; Integration. This Agreement, together with the Contract Documents, constitutes the entire agreement between the parties and supersedes all prior negotiations, proposals, and communications.

9.2 Amendment & Waiver. No amendment or waiver shall be effective unless in a written instrument executed by both parties. A waiver of any breach shall not be deemed a waiver of any other or subsequent breach.

9.3 Assignment. Neither party may assign or delegate its rights or obligations without the prior written consent of the other, except that Owner may assign its rights to a lender providing construction financing.

9.4 Successors & Assigns. This Agreement binds and benefits the parties and their respective successors and permitted assigns.

9.5 Severability. If any provision is held unenforceable, the balance of the Agreement shall be enforced to the fullest extent permitted, and the unenforceable provision shall be reformed to preserve the parties’ original intent.

9.6 Notice. All notices shall be in writing and delivered (i) personally, (ii) by certified mail (return receipt requested), or (iii) by nationally-recognized overnight courier, to the addresses set forth in Section 1.3 (or such other address designated in writing). Notice is effective upon delivery or attempted delivery if acceptance is refused.

9.7 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically (e.g., via PDF or verified e-signature platform) are deemed original and binding.

9.8 No Third-Party Beneficiaries. Except as expressly provided (e.g., indemnified parties, surety), nothing herein is intended to confer any rights or remedies upon any person other than the parties.

9.9 Independent Contractor. Contractor is an independent contractor, and nothing herein creates any partnership, joint venture, or employment relationship between Owner and Contractor.

ARTICLE X – EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Construction Services Agreement as of the Effective Date.

OWNER:
[OWNER LEGAL NAME]

By: ____
Name: ____
Title: _____
Date: _________

CONTRACTOR:
[CONTRACTOR LEGAL NAME]

By: ____
Name: ____
Title: _____
Date: _________

[// GUIDANCE: Add notary acknowledgment blocks if local recording, lender, or title company requirements dictate.]

EXHIBITS

Exhibit A – Detailed Scope of Work
Exhibit B – Project Schedule & Payment Schedule
Exhibit C – Insurance Requirements
Exhibit D – Form of Conditional/Unconditional Lien Waiver (Partial & Final)
Exhibit E – Change Order Form
Exhibit F – Performance and Payment Bond
Exhibit G – Certificate of Substantial Completion

[// GUIDANCE FOR PRACTITIONERS:
1. Review Alabama lien timeframes (currently 6 months for prime contractors, 4 months for remote claimants) to ensure waivers and bond timelines integrate with payment cycle.
2. Verify Retainage percentages comply with any project-specific loan or owner requirements.
3. For residential projects, incorporate Alabama Home Builders Licensure Board disclosures.
4. Tailor Exhibit C insurance limits to project size and risk profile (typical GL $1M / $2M aggregate; umbrella $5M; workers’ comp statutory; auto $1M CSL).
5. Confirm that any arbitration clause meets Ala. Code § 6-6-2 requirements for enforceability of predispute arbitration agreements.
6. Attach copies of any architectural/engineering plans referenced to avoid incorporation ambiguity.
7. Consider adding a liquidated damages schedule if timely completion is critical.
]