CONSTRUCTION SERVICES AGREEMENT

(Arkansas – Private Project)

[// GUIDANCE: This template is drafted for private (non-public) construction projects located in Arkansas. Counsel should confirm applicability to residential or commercial projects, amend as necessary for public works, and ensure compliance with all current statutory amendments.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
 A. Scope of Work
 B. Contract Price; Payment Terms
 C. Time of Performance
 D. Change Orders
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block
Exhibit A – Scope of Work
Exhibit B – Payment Schedule
Exhibit C – Statutory Notices & Lien Waiver Forms

I. DOCUMENT HEADER

This Construction Services Agreement (this “Agreement”) is entered into and effective as of [EFFECTIVE DATE] (the “Effective Date”), by and between:

1. [OWNER LEGAL NAME], a [STATE OF FORMATION & ENTITY TYPE] having its principal place of business at [OWNER ADDRESS] (“Owner”); and
2. [CONTRACTOR LEGAL NAME], a [STATE OF FORMATION & ENTITY TYPE] having its principal place of business at [CONTRACTOR ADDRESS] (“Contractor”).

(Each, a “Party” and collectively, the “Parties.”)

Recitals

A. Owner desires that Contractor furnish all labor, materials, equipment, and services necessary to complete the Work (as defined below) on the Project located at [PROJECT ADDRESS] (the “Project Site”).
B. Contractor represents that it is duly licensed and qualified to perform the Work in the State of Arkansas and is familiar with all applicable laws, ordinances, rules, and regulations, including without limitation Arkansas lien laws.
C. In consideration of the mutual covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

II. DEFINITIONS

For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below. Terms defined in the singular include the plural and vice-versa.

“Actual Completion” means the date on which the Work is fully completed in accordance with the Contract Documents and any punch-list items have been satisfied.

“Change Order” has the meaning set forth in Section III(D).

“Contract Documents” means this Agreement, all Exhibits hereto, the Plans and Specifications, approved Change Orders, and any other documents expressly incorporated by reference.

“Contract Price” has the meaning set forth in Section III(B)(1).

“Construction Lien Notice” means the notice required under Ark. Code Ann. § 18-44-115 (2023), as reproduced in Exhibit C.

“Event of Default” has the meaning set forth in Section VI(A).

“Lien Waiver” means a conditional or unconditional waiver and release of lien rights substantially in the form set forth in Exhibit C.

“Retainage” means the portion of each Progress Payment withheld pursuant to Section III(B)(3).

“Substantial Completion” means the stage in the progress of the Work when the Project, or a designated portion thereof, is sufficiently complete in accordance with the Contract Documents so that Owner may occupy or utilize the same for its intended use.

“Work” means all construction and related services, labor, materials, equipment, and other obligations to be performed or furnished by Contractor under this Agreement, as more particularly described in Exhibit A.

[// GUIDANCE: Add or delete definitions to align with project specifics. Verify any statutory definitions incorporated by reference.]

III. OPERATIVE PROVISIONS

A. Scope of Work

1. Contractor shall perform the Work described in Exhibit A in a good, workmanlike, and timely manner, strictly in accordance with the Contract Documents and all Applicable Laws.
2. Contractor shall procure and pay for all permits, licenses, fees, and inspections necessary for the proper execution and completion of the Work.
3. No substitutions of materials or deviations from the Plans and Specifications shall be made without Owner’s prior written approval via Change Order.

B. Contract Price; Payment Terms

1. Contract Price. Owner shall pay Contractor a total contract price of [CONTRACT PRICE IN WORDS] Dollars ($[NUMERALS]) (the “Contract Price”), subject to adjustments by Change Order.
2. Progress Payments.
    a. Contractor shall submit Applications for Payment on a [MONTHLY] basis using AIA G702/703 forms or other form acceptable to Owner.
    b. Each Application for Payment shall be accompanied by:
     i. Conditional Lien Waivers from Contractor and all lower-tier subcontractors and suppliers for Work covered by the prior Application; and
     ii. Updated schedule of values and progress schedule.
3. Retainage. Owner may withhold retainage in an amount not exceeding ten percent (10%) of each Progress Payment until Substantial Completion and five percent (5%) thereafter, or such lower percentage as may be required by Applicable Law.
    [// GUIDANCE: Arkansas currently limits retainage to a maximum of 10% on most private projects; confirm statutory cap before finalizing.]
4. Final Payment. Final payment of the unpaid balance of the Contract Price, including retained amounts, shall be due within thirty (30) days after: (i) Actual Completion; (ii) delivery of final, unconditional Lien Waivers; (iii) submission of as-built drawings, warranties, operating manuals, and other close-out documents; and (iv) Contractor’s delivery of an affidavit that payrolls, bills for materials, and other indebtedness connected with the Work have been paid or otherwise satisfied.
5. Right to Withhold. Owner may withhold payment in whole or in part on account of: (i) defective Work not remedied; (ii) third-party claims filed or reasonable evidence indicating probable filing of such claims; (iii) failure of Contractor to make payments properly to subcontractors or for labor, materials, or equipment; (iv) material breach by Contractor of any covenant or condition of this Agreement.

C. Time of Performance

1. Commencement. Contractor shall commence the Work within [___] days after the Effective Date or receipt of Owner’s Notice to Proceed, whichever is later.
2. Substantial Completion. Contractor shall achieve Substantial Completion of the Work no later than [SUBSTANTIAL COMPLETION DATE], subject to approved extensions of time.
3. Liquidated Damages. If Contractor fails to achieve Substantial Completion by the required date, Contractor shall pay Owner liquidated damages in the amount of $[AMOUNT] per day, not as a penalty but as a reasonable estimate of Owner’s damages.

D. Change Orders

1. Owner may order additions, deletions, or revisions to the Work by issuing a written Change Order.
2. Each Change Order shall set forth any adjustment to the Contract Price and/or the Contract Time.
3. Contractor shall not proceed with the changed Work until the Change Order is fully executed.

IV. REPRESENTATIONS & WARRANTIES

1. Authority. Each Party represents that it has full power and authority to enter into and perform this Agreement.
2. Contractor Warranties. Contractor warrants that:
    a. The Work shall be free from defects in workmanship and materials for a period of [ONE (1)] year from Actual Completion;
    b. All materials and equipment furnished shall be new and of good quality unless otherwise specified;
    c. Contractor and its subcontractors are duly licensed and in good standing under Applicable Laws.
3. Survival. The warranties set forth herein shall survive Final Payment and termination of this Agreement.

V. COVENANTS & RESTRICTIONS

1. Compliance With Laws. Contractor shall comply with all Applicable Laws, including without limitation Arkansas lien notice requirements, OSHA regulations, and environmental laws.
2. Safety. Contractor shall be responsible for initiating, maintaining, and supervising all safety precautions and programs in connection with the Work.
3. Records & Audit. Contractor shall maintain complete and accurate records relating to the Work for a period of at least five (5) years after Final Payment and shall make such records available to Owner upon reasonable request.
4. Notice Obligations. Contractor shall provide written notice to Owner of any:
    a. actual or threatened lien;
    b. material labor dispute;
    c. discovery of hazardous materials; or
    d. condition reasonably expected to delay the Work or increase costs.

VI. DEFAULT & REMEDIES

A. Events of Default

The following constitute an “Event of Default” by Contractor:
1. Failure to prosecute the Work with diligence so as to endanger timely completion and continuation thereof after three (3) days’ written notice from Owner;
2. Failure to pay subcontractors or suppliers when due after receipt of payment from Owner;
3. Filing or threatened filing of a mechanic’s or materialman’s lien in violation of Section VII(C);
4. Material breach of any representation, warranty, or covenant herein;
5. Insolvency, bankruptcy, or assignment for the benefit of creditors.

B. Owner Remedies

Upon an Event of Default, and after giving any notice and opportunity to cure required herein or under Applicable Law, Owner may exercise one or more of the following remedies:
1. Suspend further payments to Contractor;
2. Take over and complete the Work, directly or through others, and charge the cost thereof to Contractor;
3. Obtain specific performance, injunctive relief, or other equitable remedies;
4. Terminate this Agreement for cause pursuant to Section VII(D);
5. Seek reimbursement for all losses, damages, costs, and expenses (including reasonable attorneys’ fees) arising from the Event of Default.

C. Attorney Fees & Costs

In any action or proceeding arising out of or relating to this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees, court costs, and other expenses incurred.

VII. RISK ALLOCATION

A. Indemnification

To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner, Owner’s lenders, and their respective officers, directors, managers, members, agents, and employees (“Indemnitees”) from and against any and all claims, damages, losses, liens, causes of action, suits, judgments, and expenses (including reasonable attorneys’ fees) arising out of or resulting from (i) the performance of the Work, (ii) any breach of this Agreement by Contractor, or (iii) the negligent or wrongful acts or omissions of Contractor or anyone for whose acts Contractor may be liable.

B. Limitation of Liability

Notwithstanding any other provision of this Agreement, Contractor’s aggregate liability to Owner for claims arising out of this Agreement shall not exceed the Contract Price, except to the extent arising from Contractor’s gross negligence, willful misconduct, or indemnification obligations under Section VII(A).

C. Insurance

1. Prior to commencing the Work, Contractor shall procure and maintain at its own expense:
    a. Commercial General Liability Insurance with limits of not less than $[] per occurrence and $[] aggregate;
    b. Workers’ Compensation Insurance as required by Arkansas law;
    c. Automobile Liability Insurance covering all owned, non-owned, and hired vehicles with a combined single limit of $[___];
    d. Builder’s Risk Insurance on an “all-risk” basis covering the full insurable value of the Work.
2. Certificates of insurance evidencing the required coverages shall be delivered to Owner prior to commencement of the Work and shall provide for thirty (30) days’ prior written notice of cancellation or material change.

D. Payment & Performance Bonds

[OPTIONAL – check box] ☐ Required ☐ Not Required
If checked “Required,” Contractor shall furnish to Owner, within ten (10) days after the Effective Date, separate Payment and Performance Bonds each in penal sums equal to one hundred percent (100%) of the Contract Price, written by a surety licensed in the State of Arkansas and otherwise acceptable to Owner. Such bonds shall comply with Ark. Code Ann. §§ 18-44-501 et seq. (2023).

E. Force Majeure

Neither Party shall be liable for delay or failure in performance due to acts of God, strikes, boycotts, fire, pandemic, governmental actions, or other causes beyond its reasonable control, provided the affected Party gives prompt written notice to the other Party and uses commercially reasonable efforts to mitigate the delay.

F. Lien Compliance

1. Statutory Notice. Contractor shall deliver the Construction Lien Notice to Owner as required by Ark. Code Ann. § 18-44-115, prior to commencing the Work or within the statutory period.
2. Lien Waivers. Contractor shall, as a condition precedent to each payment, furnish Owner with executed Conditional or Unconditional Lien Waivers in the forms attached as Exhibit C from Contractor and all subcontractors and suppliers of any tier.
3. Satisfaction of Liens. Contractor shall promptly discharge (by payment, bond, or otherwise) any mechanic’s or materialman’s lien filed against the Project arising out of the Work.

VIII. DISPUTE RESOLUTION

1. Governing Law. This Agreement and all disputes arising hereunder shall be governed by and construed in accordance with the laws of the State of Arkansas, without regard to its conflict-of-laws rules.
2. Forum Selection. The state courts located in [COUNTY], Arkansas shall have exclusive jurisdiction and venue over any action arising out of or relating to this Agreement, except as provided in Section VIII(3) below.
3. Arbitration (Optional).
    ☐ Elect Arbitration ☐ Decline Arbitration
    If “Elect Arbitration” is checked, any dispute shall be resolved by binding arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.
4. Jury Trial Waiver (Optional).
    ☐ Waive Jury ☐ Do Not Waive Jury
    If “Waive Jury” is checked, EACH PARTY HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.
5. Injunctive Relief. Nothing in this Section shall limit a Party’s right to seek injunctive or other equitable relief in any court of competent jurisdiction.

IX. GENERAL PROVISIONS

1. Amendments & Waivers. No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by authorized representatives of both Parties.
2. Assignment. Neither Party may assign or delegate its rights or obligations hereunder without the prior written consent of the other Party, except that Owner may assign this Agreement to its lender or successor-in-interest upon written notice to Contractor.
3. Successors & Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
4. Severability. If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be replaced by a valid provision that most closely reflects the Parties’ original intent.
5. Integration. This Agreement, together with the Contract Documents, constitutes the entire agreement between the Parties and supersedes all prior negotiations, understandings, or agreements.
6. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.
7. Electronic Signatures. The Parties agree that electronic signatures shall be deemed to have the same legal effect as original signatures.

X. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Construction Services Agreement as of the Effective Date first written above.

[Notary Block – include if required by Arkansas law or Project lender]

EXHIBIT A – SCOPE OF WORK

[Attach detailed description of the Work, plans, specifications, drawings, and technical requirements.]

EXHIBIT B – PAYMENT SCHEDULE

[Insert schedule of values, milestone payment schedule, or other agreed method of payment, including Retainage percentages.]

EXHIBIT C – STATUTORY NOTICES & LIEN WAIVER FORMS

1. Construction Lien Notice (Ark. Code Ann. § 18-44-115)
2. Conditional Waiver and Release on Progress Payment
3. Unconditional Waiver and Release on Final Payment

[// GUIDANCE: Insert statutory language verbatim. Confirm current statutory text and formatting requirements. Provide bilingual versions if required.]

[// GUIDANCE: Prior to use, counsel should:
• Confirm statutory citations and update for any amendments;
• Tailor insurance limits and coverage to project size and risk profile;
• Verify licensing, bonding, and retainage requirements for residential versus commercial projects;
• Conform arbitration and jury-waiver selections to client preference; and
• Review lender or surety riders for additional mandatory terms.]