CONSTRUCTION SERVICES AGREEMENT

(Iowa – Private Project)

Document Header

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

1. [OWNER LEGAL NAME], a [STATE & TYPE OF ENTITY] with its principal place of business at [OWNER ADDRESS] (“Owner”); and
2. [CONTRACTOR LEGAL NAME], a [STATE & TYPE OF ENTITY] with its principal place of business at [CONTRACTOR 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) located at [PROJECT ADDRESS/LEGAL DESCRIPTION] (the “Site”).
B. Contractor is duly licensed, qualified, and willing to perform such work in accordance with the terms and conditions set forth herein for the consideration recited below.
C. The Parties intend for this Agreement to comply with all applicable federal, state, and local laws, including, without limitation, the Iowa mechanics’ lien statute, Iowa Code Chapter 572, and applicable payment-bond and retainage requirements.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Table of Contents

1. Definitions
2. Scope of Work & Performance Standards
3. Contract Time, Schedule, and Delays
4. Contract Price, Payment, and Retainage
5. Lien Notices & Waivers
6. Bonds & Insurance
7. Representations and Warranties
8. Covenants
9. Changes in the Work
10. Default and Remedies
11. Risk Allocation
12. Dispute Resolution
13. General Provisions
14. Execution

1. Definitions

Unless otherwise indicated, capitalized terms have the meanings set forth below:

“Applicable Law” – All federal, state, county, municipal, and other governmental statutes, laws, ordinances, regulations, rules, codes, orders, and directives, including Iowa Code Chapters 572 and 573.

“Approved Schedule” – The construction schedule approved by Owner pursuant to Section 3.2, as may be updated by executed Change Order.

“Change Order” – A written modification to the Agreement executed in accordance with Section 9.

“Contract Documents” – This Agreement, Exhibits A–[●], any drawings, specifications, addenda, and all Change Orders.

“Contract Price” – The lump-sum or guaranteed maximum price of [AMOUNT IN WORDS] Dollars (US $[AMOUNT]) stated in Section 4.1, subject to adjustment only by Change Order.

“Final Completion” – The date on which (i) the Work is fully completed in accordance with the Contract Documents and Applicable Law, (ii) all punch-list items are satisfied, and (iii) all close-out deliverables are accepted by Owner.

“Maximum Liability” – An amount equal to the Contract Price, constituting the aggregate cap on damages under Section 11.3.

“Project” – The construction described in Exhibit A (Scope of Work).

“Retainage” – The portion of each Progress Payment withheld by Owner pursuant to Section 4.4.

“Substantial Completion” – The date certified by Owner when the Work is sufficiently complete so that Owner may occupy or utilize the Project for its intended use.

“Work” – All labor, materials, equipment, and services to be provided by Contractor as detailed in the Contract Documents.

[// GUIDANCE: Insert additional defined terms as needed for the particular Project.]

2. Scope of Work & Performance Standards

2.1 Engagement. Owner hereby engages Contractor, and Contractor accepts such engagement, to perform the Work in strict conformity with the Contract Documents.

2.2 Standards of Performance. Contractor shall perform the Work (i) diligently, (ii) in a good and workmanlike manner, (iii) using new and merchantable materials, and (iv) in compliance with Applicable Law and industry best practices.

2.3 Supervision & Labor. Contractor shall provide competent supervision and sufficient qualified labor to complete the Work in accordance with the Approved Schedule.

2.4 Permits & Fees. Contractor shall secure and pay for all permits, licenses, inspections, and governmental fees necessary for execution of the Work.

3. Contract Time, Schedule, and Delays

3.1 Commencement. Contractor shall commence the Work on [COMMENCEMENT DATE] or upon issuance of the first Notice to Proceed, whichever is later.

3.2 Schedule. Contractor shall prepare and submit a baseline critical-path method schedule for Owner’s approval within ten (10) days after the Effective Date (the “Baseline Schedule”). The Approved Schedule shall govern.

3.3 Substantial Completion & Final Completion.
(a) Substantial Completion shall occur no later than [SUBSTANTIAL COMPLETION DATE].
(b) Final Completion shall occur no later than [FINAL COMPLETION DATE].

3.4 Liquidated Damages. [OPTIONAL] For each day Substantial Completion is delayed beyond the date stated in Section 3.3(a), Contractor shall pay Owner liquidated damages in the amount of [US $___] per day, not as a penalty but as a reasonable estimate of Owner’s damages.

3.5 Force Majeure. Excusable delays are addressed in Section 11.5 (Force Majeure).

4. Contract Price, Payment, and Retainage

4.1 Contract Price. Owner shall pay Contractor the Contract Price of US $[AMOUNT] for completion of the Work.

4.2 Schedule of Values & Applications for Payment. Contractor shall submit a Schedule of Values consistent with the Contract Price. On or before the [DAY] of each month, Contractor shall submit an Application for Payment covering Work completed through the preceding month-end, supported by required lien waivers and substantiation.

4.3 Progress Payments. Within [__] days after receipt of an undisputed Application for Payment, Owner shall pay the amount approved, less Retainage and any withholdings permitted under this Agreement.

4.4 Retainage. In compliance with Iowa law, Owner shall withhold five percent (5%) of each Progress Payment as Retainage until Substantial Completion. Upon Substantial Completion, Retainage shall be reduced to the lesser of (i) two hundred percent (200%) of the punch-list value or (ii) three percent (3%) of the Contract Price, and all remaining Retainage shall be released within thirty (30) days after Final Completion, subject to Section 5.2.
[// GUIDANCE: Iowa law generally caps retainage on private projects at 5%. Confirm current statute before finalizing.]

4.5 Final Payment. Final Payment is conditioned on (i) achievement of Final Completion, (ii) delivery of all close-out documents, warranties, as-builts, and final lien waivers, and (iii) satisfaction of all other contractual obligations.

4.6 Owner’s Right to Withhold. Owner may withhold amounts reasonably necessary to protect Owner from loss due to (i) defective Work, (ii) claims, liens, or bond claims, (iii) unresolved third-party claims, or (iv) failure of Contractor to make timely payments to Subcontractors.

5. Lien Notices & Waivers

5.1 Contractor’s Lien Notice Obligations. Contractor shall strictly comply with Iowa Code Chapter 572, including:
(a) Posting a Commencement-of-Work Notice in the Iowa Mechanics’ Notice and Lien Registry (“MNLR”) within ten (10) days of first furnishing labor or materials; and
(b) Ensuring that all Subcontractors and Suppliers timely file required preliminary notices to preserve lien rights.

5.2 Lien Waivers. As a condition precedent to each Progress Payment and Final Payment, Contractor shall furnish lien and bond-claim waivers in a form acceptable to Owner from Contractor and all lower-tier parties for Work covered by the applicable Application for Payment.

5.3 Indemnity for Lien Claims. Contractor shall, at its sole cost, bond off, discharge, and defend against any mechanics’ liens or bond claims asserted against the Project or Owner that arise out of Contractor’s or its Subcontractors’ performance, and shall indemnify Owner pursuant to Section 11.1.

6. Bonds & Insurance

6.1 Performance and Payment Bonds.
(a) When required by Applicable Law or when the Contract Price exceeds US $[THRESHOLD], Contractor shall, within ten (10) days after the Effective Date, furnish to Owner a performance bond and a separate labor and material payment bond, each in the penal sum of one hundred percent (100%) of the Contract Price, issued by a surety authorized to transact business in Iowa and rated A- or better by A.M. Best.
(b) Bonds shall remain in effect through the warranty period and shall conform to Iowa Code Chapter 573 when applicable.

6.2 Insurance Requirements. Contractor shall maintain, at its sole cost, insurance of the types and limits set forth in Exhibit B and shall cause Owner, its lenders, and their affiliates to be named as additional insureds on a primary and non-contributory basis.

7. Representations and Warranties

7.1 Mutual Representations. Each Party represents that (i) it is duly organized, validly existing, and in good standing, (ii) it has full power and authority to enter into and perform this Agreement, and (iii) its execution and performance do not violate any other agreement or Applicable Law.

7.2 Contractor’s Additional Representations. Contractor further represents and warrants that:
(a) It is properly licensed to perform the Work in Iowa.
(b) It has carefully examined the Site, Contract Documents, and Applicable Law.
(c) The Work will be free from defects in materials and workmanship for a period of [WARRANTY PERIOD] following Final Completion.
(d) It will pay all Subcontractors, Suppliers, taxes, and governmental fees related to the Work.

7.3 Survival. The warranties in this Section 7 survive Final Completion and any termination of this Agreement.

8. Covenants

8.1 Compliance with Law. Contractor shall at all times comply with Applicable Law, including environmental, safety, wage, and immigration requirements.

8.2 Safety. Contractor assumes responsibility for site safety and shall implement a comprehensive safety program.

8.3 Records & Audit. Contractor shall maintain detailed cost records for at least seven (7) years and make them available to Owner for audit upon reasonable notice.

8.4 Notice of Events. Contractor shall promptly notify Owner in writing of any (i) incidence likely to delay the Work, (ii) claims, liens, or disputes, or (iii) accidents or safety incidents.

9. Changes in the Work

9.1 Owner Changes. Owner may request changes in the Work by submitting a written Change Order proposal. Contractor shall not proceed with changed Work until a Change Order is fully executed.

9.2 Contractor Claims. Any request by Contractor for an adjustment to Contract Time or Contract Price shall be made in a written Change Order request within seven (7) days after the event giving rise to the claim. Failure to timely request constitutes a waiver.

9.3 Compensable vs. Non-Compensable Delays. Excusable, compensable delays (for which Contractor may receive time and money) are limited to delays solely and directly caused by Owner or Owner-created change orders. All other excusable delays are non-compensable.

10. Default and Remedies

10.1 Events of Default – Contractor. The following constitute Contractor defaults:
(a) Failure to prosecute the Work with diligence;
(b) Failure to pay Subcontractors or Suppliers;
(c) Material breach of warranty;
(d) Failure to maintain bonds or insurance;
(e) Insolvency or bankruptcy; or
(f) Failure to comply with a written notice to cure within the Cure Period.

10.2 Notice & Cure. Owner shall give written notice specifying the default. Contractor shall have seven (7) days (the “Cure Period”) to cure or to commence and diligently pursue cure.

10.3 Owner’s Remedies. If Contractor fails to cure within the Cure Period, Owner may, without prejudice to any other right:
(a) Supplement or complete the Work and deduct the cost;
(b) Suspend or terminate this Agreement for cause;
(c) Pursue claims against bonds; and/or
(d) Seek all other remedies available at law or in equity.

10.4 Suspension for Convenience. Owner may suspend all or part of the Work for convenience by written notice; an equitable adjustment shall be made via Change Order for reasonable costs of demobilization/remobilization.

10.5 Termination for Convenience. Owner may terminate this Agreement for convenience upon seven (7) days’ written notice, in which event Contractor shall be paid (i) for Work properly performed up to the termination date, (ii) reasonable demobilization costs, and (iii) the cost of materials reasonably ordered and unrecoverable, less previous payments.

11. Risk Allocation

11.1 Indemnification. To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner, its affiliates, and their respective officers, directors, employees, and agents from and against any and all claims, damages, losses, and expenses (including reasonable attorneys’ fees) arising out of or resulting from the performance of the Work, but only to the extent caused by the negligent acts or omissions or breach of this Agreement by Contractor or those for whom Contractor is responsible.

11.2 Insurance Primary. The insurance required under Section 6.2 shall be primary and non-contributory with respect to any insurance carried by Owner.

11.3 Limitation of Liability. EXCEPT FOR (i) CONTRACTOR’S INDEMNITY OBLIGATIONS, (ii) INTENTIONAL MISCONDUCT OR GROSS NEGLIGENCE, OR (iii) CLAIMS COVERED BY INSURANCE, THE TOTAL LIABILITY OF EITHER PARTY TO THE OTHER ARISING OUT OF THIS AGREEMENT SHALL NOT EXCEED THE MAXIMUM LIABILITY.

11.4 Waiver of Consequential Damages. Except as expressly provided, each Party waives claims against the other for consequential, special, or punitive damages, including lost profits, lost use, and financing costs.

11.5 Force Majeure. Neither Party is liable for delay or failure to perform caused by events beyond its reasonable control, including acts of God, terrorism, epidemic, governmental orders, or labor strikes, provided the affected Party gives written notice within three (3) days of the event and resumes performance promptly thereafter. Contract Time shall be equitably adjusted for excusable delays.

12. Dispute Resolution

12.1 Governing Law. This Agreement is governed by and construed in accordance with the laws of the State of Iowa, without regard to conflicts-of-law principles.

12.2 Forum Selection. The Parties irrevocably submit to the exclusive jurisdiction of the state courts located in [COUNTY], Iowa for any suit, action, or proceeding arising out of or relating to this Agreement.

12.3 Optional Arbitration. [ARBITRATION IS OPTIONAL. INSERT ONE OF THE FOLLOWING:]
• If Agreed – “Any dispute shall be finally resolved by binding arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules. The place of arbitration shall be [CITY, IOWA], and judgment may be entered upon the award in any court of competent jurisdiction.”
• If Omitted – “The Parties decline to submit disputes to arbitration.”
[// GUIDANCE: Delete the option not selected.]

12.4 Jury Waiver. [OPTIONAL] To the extent not prohibited by law, each Party knowingly, voluntarily, and irrevocably waives the right to trial by jury in any action arising out of this Agreement.

12.5 Injunctive Relief. Nothing in this Section 12 precludes a Party from seeking temporary, preliminary, or permanent injunctive relief or specific performance in a court of competent jurisdiction.

13. General Provisions

13.1 Amendment and Waiver. No modification of this Agreement is binding unless in writing and signed by both Parties. No waiver is effective unless in writing and signed by the waiving Party.

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

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

13.4 Severability. If any provision is determined invalid or unenforceable, the remaining provisions remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to achieve its intent.

13.5 Entire Agreement. The Contract Documents constitute the entire agreement between the Parties and supersede all prior negotiations, representations, or agreements.

13.6 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. Electronic signatures are deemed originals and enforceable.

14. Execution

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

[OPTIONAL NOTARY BLOCK – include if required by local practice or financing]
[// GUIDANCE: For residential projects, Iowa law may require additional consumer home construction notices. Confirm applicability.]

Exhibit A – Scope of Work

[PLACEHOLDER: Insert detailed drawings, specifications, and narrative description of the Work.]

Exhibit B – Insurance Requirements

1. Commercial General Liability: $[__] per occurrence; $[__] aggregate.
2. Automobile Liability: $[__] combined single limit.
3. Workers’ Compensation & Employer’s Liability: Statutory limits.
4. Umbrella/Excess Liability: $[__] per occurrence.
5. Builder’s Risk / Course of Construction: Full replacement cost, all-risk form.

[// GUIDANCE: Tailor limits to project size and lender requirements.]

Exhibit C – Schedule of Values

[PLACEHOLDER: Attach Contractor’s detailed schedule of values.]

Exhibit D – Change Order Form

[PLACEHOLDER: Attach standard Change Order template.]