CONSTRUCTION SERVICES AGREEMENT

(Private Project – State of Hawai‘i)

[// GUIDANCE: This template is drafted for private (non-public-works) vertical construction in Hawai‘i. If the project is public or involves federal funding, additional statutory and bonding requirements—particularly under Haw. Rev. Stat. ch. 103D—will apply. Customize all bracketed placeholders and confirm alignment with the specific project type before execution.*]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Scope of Work
   3.2 Contract Price & Schedule of Values
   3.3 Time for Performance & Milestones
   3.4 Changes in the Work
   3.5 Payment Terms & Procedures
   3.6 Lien, Bond, & Retainage Compliance
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

CONSTRUCTION SERVICES AGREEMENT (the “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

1. [OWNER LEGAL NAME], a [STATE] [ENTITY TYPE], having its principal place of business at [ADDRESS] (“Owner”); and
2. [CONTRACTOR LEGAL NAME], a [STATE] [ENTITY TYPE], holding Hawai‘i Contractor’s License No. [NUMBER], with its principal place of business at [ADDRESS] (“Contractor”).

Owner and Contractor are sometimes referred to individually as a “Party” and collectively as the “Parties.”

Recitals

A. Owner desires to engage Contractor to furnish all labor, materials, equipment, and services necessary to complete the Project (as defined below) in accordance with the Contract Documents (as defined below).
B. Contractor is duly licensed, experienced, and qualified to perform the Work (as defined below).
C. The Parties desire to set forth their respective rights and obligations with respect to the Project.

NOW, THEREFORE, in consideration of the mutual promises herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. DEFINITIONS

[// GUIDANCE: Confirm every defined term appears consistently capitalized throughout the Agreement.]

“Applicable Law” means all federal, state, and local statutes, regulations, codes, ordinances, and orders applicable to the Project, including but not limited to Haw. Rev. Stat. ch. 444 (Contractors), ch. 507, pt. II (Mechanic’s & Materialman’s Liens), and any building codes adopted by the County of [COUNTY].

“Change Order” means a written modification to the Contract Documents signed by both Parties pursuant to Section 3.4.

“Contract Documents” means collectively this Agreement, the Drawings and Specifications, the Project Schedule, approved Change Orders, and any other documents identified in Exhibit A.

“Contract Price” has the meaning set forth in Section 3.2.

“Contract Time” has the meaning set forth in Section 3.3.

“Force Majeure Event” has the meaning set forth in Section 7.4.

“Lien” means a mechanic’s or materialman’s lien asserted under Haw. Rev. Stat. ch. 507, pt. II, or any similar statutory or common-law lien.

“Notice” has the meaning set forth in Section 9.6.

“Project” means the improvements described in Exhibit B to be constructed on the real property located at [ADDRESS / TAX MAP KEY] (the “Site”).

“Retainage” has the meaning set forth in Section 3.6.3.

“Subcontractor” means any person or entity providing labor, materials, or equipment to Contractor for performance of the Work.

“Work” means all construction and related services required by the Contract Documents.

3. OPERATIVE PROVISIONS

3.1 Scope of Work

Contractor shall furnish and perform the Work in strict accordance with the Contract Documents, using its best skill and attention and in compliance with Applicable Law.

3.2 Contract Price & Schedule of Values

3.2.1 Contract Price. The total compensation payable to Contractor for full and complete performance of the Work (the “Contract Price”) is [NUMERIC AMOUNT IN WORDS] USD ($ [AMOUNT]).

3.2.2 Schedule of Values. Prior to the first Application for Payment, Contractor shall submit for Owner’s approval a detailed Schedule of Values allocating the Contract Price among labor, materials, equipment, overhead, profit, and contingency.

3.3 Time for Performance & Milestones

3.3.1 Commencement. Contractor shall commence the Work within [NUMBER] days after the later of (a) the Effective Date or (b) receipt of Owner’s Notice to Proceed.

3.3.2 Substantial Completion. Contractor shall achieve Substantial Completion not later than [DATE] (the “Substantial Completion Date”), subject to equitable extensions for Excusable Delays.

3.3.3 Final Completion. Contractor shall achieve Final Completion within [NUMBER] days after Substantial Completion.

3.3.4 Liquidated Damages. If Contractor fails to achieve Substantial Completion by the Substantial Completion Date, Contractor shall pay Owner liquidated damages of [AMOUNT] per calendar day, not as a penalty but as a reasonable estimate of actual damages.

3.4 Changes in the Work

No change, addition, or deletion to the Work or the Contract Time or Contract Price shall be effective unless memorialized in a Change Order executed by both Parties.

[// GUIDANCE: For scope changes, include detailed cost breakdown and time impact statement in each Change Order.]

3.5 Payment Terms & Procedures

3.5.1 Progress Payments. On or before the [DAY] day of each month, Contractor shall submit an Application for Payment covering the portion of the Work completed through the preceding month, certified by Contractor as accurate.

3.5.2 Certification & Review. Owner shall review each Application for Payment within [NUMBER] days and issue a written approval or specific objections.

3.5.3 Payment. Owner shall pay approved amounts, less applicable Retainage, within [NUMBER] days after approval.

3.5.4 Final Payment. Owner shall make Final Payment of all sums due, including Retainage, within [NUMBER] days after (a) Final Completion, (b) submission of final waivers and releases of Lien, (c) delivery of as-built drawings and O&M manuals, and (d) satisfaction of all closeout requirements.

3.6 Lien, Bond, & Retainage Compliance

3.6.1 Preliminary Lien Notice. Contractor shall, within [10] days after execution of this Agreement, furnish a written list of all Subcontractors and major suppliers to Owner. Contractor shall provide prompt Notice of any additions or substitutions.

3.6.2 Statutory Compliance. Contractor shall fully comply with Haw. Rev. Stat. ch. 507, pt. II, including—but not limited to—(a) filing any required Notice of Completion, (b) timely recording of any Claim of Lien, and (c) defense and discharge of any Lien asserted by its Subcontractors or suppliers.

3.6.3 Retainage. Owner may withhold from each Progress Payment an amount not to exceed [RETAINAGE PERCENTAGE] % (“Retainage”), which percentage shall in no event exceed the maximum permitted by Applicable Law. Retainage shall be reduced and released in accordance with Section 3.5.4 and Applicable Law.

3.6.4 Payment Bond. Upon Owner’s written request, Contractor shall furnish a payment bond in the penal sum of [100%] of the Contract Price, naming Owner as dual obligee and complying with Haw. Rev. Stat. ch. 507 requirements for lien discharge.

3.6.5 Lien Waivers. As a condition precedent to any payment, Contractor shall deliver executed conditional or unconditional waivers and releases of Lien from itself and all Subcontractors and suppliers for the Work covered by the payment.

4. REPRESENTATIONS & WARRANTIES

4.1 Contractor’s Representations & Warranties
a. Valid Existence & Authority. Contractor is duly organized and in good standing under the laws of its state of formation and duly licensed to perform the Work in Hawai‘i.
b. No Conflicts. Execution and performance of this Agreement do not violate any agreement or Applicable Law binding on Contractor.
c. Standard of Care. Contractor shall perform the Work (i) in a first-class, workmanlike manner, (ii) free from defects, and (iii) in accordance with Applicable Law and industry standards.
d. Warranty Period. Contractor warrants the Work against defects in workmanship and materials for [12] months after Final Completion.

4.2 Owner’s Representations & Warranties
a. Authority. Owner has full power and authority to enter into this Agreement.
b. Site Information. Owner has disclosed to Contractor all known subsurface or latent Site conditions.
c. Funding. Owner has adequate funds or financing in place to pay the Contract Price as it becomes due.

4.3 Survival. The representations and warranties in this Section 4 shall survive Final Payment for the greater of (a) the statutory limitation period or (b) [TWO] years.

5. COVENANTS & RESTRICTIONS

5.1 Contractor Covenants
a. Compliance. Contractor shall obtain and maintain all permits, licenses, and approvals required for the Work.
b. Safety. Contractor shall implement a comprehensive safety program consistent with OSHA and Hawai‘i Occupational Safety & Health (“HIOSH”) requirements.
c. Insurance. Contractor shall maintain the insurance coverages specified in Exhibit C.
d. Records. Contractor shall keep complete and accurate cost records for at least [4] years and permit Owner’s audit upon reasonable Notice.

5.2 Owner Covenants
a. Access. Owner shall provide Contractor reasonable access to the Site and timely decisions to avoid delay.
b. Payments. Owner shall make payments strictly in accordance with Section 3.5.

5.3 Notice & Cure. A Party alleging the other Party’s breach of any covenant shall give written Notice specifying the breach; the breaching Party shall have [10] business days (or such longer period as is reasonably necessary if the breach is not reasonably curable in 10 days) to cure before default occurs.

6. DEFAULT & REMEDIES

6.1 Events of Default – Contractor
a. Failure to perform a material obligation (including failure to prosecute the Work diligently).
b. Insolvency or bankruptcy.
c. Failure to maintain required insurance or bonding.
d. Uncured breach of warranty.

6.2 Events of Default – Owner
a. Failure to pay amounts due within [10] days after Notice of non-payment.
b. Wrongful interference with Contractor’s access to the Site.
c. Uncured material breach of any covenant.

6.3 Remedies
a. Suspension. Non-defaulting Party may suspend performance pending cure.
b. Termination for Cause. Upon an Event of Default and expiration of any applicable cure period, the non-defaulting Party may terminate this Agreement on [48] hours’ Notice.
c. Graduated Damages. Non-defaulting Party may pursue (i) recovery of direct damages, (ii) specific performance, (iii) withholding of payments or application of Retainage, and (iv) any other remedy available at law or in equity.
d. Attorney Fees. The prevailing Party shall be entitled to reasonable attorney fees and costs.

7. RISK ALLOCATION

7.1 Indemnification by Contractor

To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner, Owner’s lenders, and their respective officers, directors, employees, and agents from and against any claim, demand, loss, cost, or liability (including reasonable attorney fees) arising out of or relating to (a) performance of the Work, (b) bodily injury, death, or property damage caused by Contractor or its Subcontractors, (c) any lien or bond claim, or (d) breach of this Agreement, except to the extent caused by the sole negligence or willful misconduct of an indemnified party.

7.2 Limitation of Liability

Except for (a) Contractor’s indemnification obligations, (b) willful misconduct, or (c) claims covered by insurance, Contractor’s aggregate liability to Owner under this Agreement shall not exceed the Contract Price. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES.

7.3 Insurance

Contractor shall procure and maintain insurance in types and limits no less than those set forth in Exhibit C, naming Owner and Owner’s lender as additional insureds (ISO CG 20 10 11 85 or equivalent) on a primary and non-contributory basis.

7.4 Force Majeure

Neither Party shall be liable for delay or failure in performance caused by acts of God, pandemic, war, terrorism, strikes, or other events beyond its reasonable control (“Force Majeure Event”), provided that the affected Party gives Notice within [5] days and uses diligent efforts to mitigate.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Hawai‘i, without regard to conflict-of-laws principles.

8.2 Forum Selection. Each Party irrevocably submits to the exclusive jurisdiction of the state courts of Hawai‘i sitting in [COUNTY] County for any action arising out of this Agreement, except as provided in Section 8.3.

8.3 Arbitration (Optional).
[ARBITRATION_CHECKBOX] ☐ If this box is checked, any dispute shall be resolved by binding arbitration administered by [AAA | Dispute Prevention & Resolution] in accordance with its Construction Industry Rules. Arbitration shall be conducted in [HONOLULU], Hawai‘i, before a panel of [ONE/THREE] arbitrators. Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Jury Trial Waiver (Optional). EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.

8.5 Injunctive Relief. Either Party may seek temporary, preliminary, or permanent injunctive relief to prevent irreparable harm, without posting bond to the extent permitted by law.

9. GENERAL PROVISIONS

9.1 Amendments & Waivers. No amendment or waiver shall be effective unless in writing and signed by both Parties. A waiver on one occasion shall not be deemed a waiver of any future breach.

9.2 Assignment. Neither Party may assign this Agreement without the prior written consent of the other, except that Owner may assign its rights to a lender as collateral.

9.3 Successors & Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.

9.4 Severability. If any provision is held invalid, the remaining provisions shall remain in full force; the invalid provision shall be reformed to the minimum extent necessary to render it enforceable.

9.5 Entire Agreement. This Agreement, together with the Contract Documents, constitutes the entire agreement between the Parties and supersedes all prior negotiations.

9.6 Notices. All notices (“Notice”) shall be in writing and deemed given (a) when delivered in person, (b) one business day after deposit with a nationally recognized overnight courier, or (c) three business days after deposit in U.S. certified mail (return receipt requested), addressed to the recipient at its address set forth in the preamble or such other address as it may designate by Notice.

9.7 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original and all of which constitute one instrument. Signatures transmitted by electronic means (e.g., PDF, DocuSign) shall be deemed originals.

10. EXECUTION BLOCK

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

OWNER
[OWNER LEGAL NAME]
By: ____
Name: [PRINTED NAME]
Title: [TITLE]
Date: ________

CONTRACTOR
[CONTRACTOR LEGAL NAME]
Hawai‘i Contractor’s License No. [LICENSE #]
By: ____
Name: [PRINTED NAME]
Title: [TITLE]
Date: ________

[NOTARY BLOCKS, if required under Haw. Rev. Stat. § 456-3, may be attached.]

EXHIBIT A – LIST OF CONTRACT DOCUMENTS

1. Drawings (dated [DATE]) prepared by [ARCHITECT/ENGINEER]
2. Project Manual / Specifications (dated [DATE])
3. Project Schedule (Revision [#])
4. Approved Change Orders (collectively)
5. [OTHER]

EXHIBIT B – PROJECT DESCRIPTION & SITE INFORMATION

[Insert legal description, TMK, detailed scope, and any environmental or geotechnical reports.]

EXHIBIT C – INSURANCE REQUIREMENTS

1. Commercial General Liability: $ [AMOUNT] per occurrence / $ [AMOUNT] aggregate
2. Workers’ Compensation: Statutory (Haw. Rev. Stat. ch. 386) & Employer’s Liability $ [AMOUNT]
3. Commercial Auto Liability: $ [AMOUNT] combined single limit
4. Umbrella / Excess Liability: $ [AMOUNT] per occurrence
5. Builder’s Risk / Course of Construction: Full replacement cost, “all-risk,” including windstorm and flood
6. Professional Liability (if design-build): $ [AMOUNT] per claim

[// GUIDANCE:
1. Lien Compliance: Hawaii requires a Claim of Lien to be filed within 45 days after the date of completion of the improvement and adjudicated in the circuit court. Verify deadlines under Haw. Rev. Stat. ch. 507, pt. II for each project.
2. Retainage: Hawai‘i currently limits retainage on private construction contracts to a maximum of 10 % of progress payments; confirm statutory or contractual reductions if more than 50 % complete.
3. Bonding: A payment bond in the full Contract Price may be used to discharge potential Liens; confirm surety qualifications under Haw. Rev. Stat. ch. 431.
4. Public Works Exception: If the project is public, retainage drops to 5 % after 50 % completion (Haw. Rev. Stat. § 103-32.1) and statutory performance/payment bonds are mandatory (Haw. Rev. Stat. § 103D-324). Adjust template accordingly.
]

© 20 25 [LAW FIRM/AUTHOR NAME] – All rights reserved.
This template is provided for general informational purposes and does not constitute legal advice. Counsel should tailor each provision to the specific transaction and verify all statutory citations and deadlines before use.