CONSTRUCTION SERVICES AGREEMENT
(Indiana – Private, Commercial Project)
[// GUIDANCE: This master template is drafted for use on private, commercial construction projects governed by Indiana law. Public-works projects invoke additional statutory bonding and retainage rules not fully addressed here. Practitioners should tailor all bracketed placeholders and optional provisions before issuance for signature.]
TABLE OF CONTENTS
- Document Header
- Article I – Definitions
- Article II – Engagement; Scope of Work; Performance Standards
- Article III – Contract Price; Payment; Retainage; Lien Compliance
- Article IV – Representations & Warranties
- Article V – Covenants
- Article VI – Insurance; Bonds
- Article VII – Default; Remedies
- Article VIII – Risk Allocation
- Article IX – Dispute Resolution
- Article X – General Provisions
- Execution Block
- Exhibits & Schedules
DOCUMENT HEADER
CONSTRUCTION SERVICES AGREEMENT (the “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
• [OWNER LEGAL NAME], a [STATE] [ENTITY TYPE] with a principal place of business at [ADDRESS] (“Owner”); and
• [CONTRACTOR LEGAL NAME], a [STATE] [ENTITY TYPE] with a principal place of business at [ADDRESS] (“Contractor,” and together with Owner, the “Parties,” and each a “Party”).
Recitals
A. Owner owns or controls certain real property located at [PROJECT ADDRESS] (the “Site”) and desires to engage Contractor to perform construction services thereon.
B. Contractor represents that it is duly licensed, qualified, and willing to perform such services in accordance with the terms and conditions set forth herein.
C. The Parties enter into this Agreement for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.
NOW, THEREFORE, in consideration of the mutual covenants herein, the Parties agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the meanings set forth below. All capitalized terms not defined in this Article I have the meanings ascribed elsewhere in the Agreement.
“Applicable Law” – All federal, state, county, municipal, and other laws, statutes, regulations, ordinances, building codes, rules, orders, and decrees of any Governmental Authority having jurisdiction over the Work, the Site, this Agreement, or either Party.
“Change Order” – A written amendment executed by Owner and Contractor in the form of Exhibit C modifying the Contract Scope, Contract Time, or Contract Price.
“Contract Documents” – Collectively, this Agreement, the Drawings and Specifications (Exhibit A), the Project Schedule (Exhibit B), all executed Change Orders, and any other documents expressly incorporated herein by reference.
“Contract Price” – The not-to-exceed amount of [CONTRACT PRICE IN USD], subject to adjustments only as provided herein.
“Contract Time” – The period beginning on the Notice to Proceed and ending on the Substantial Completion Date, as may be adjusted by Change Order.
“Drawings and Specifications” – The plans, drawings, details, and written specifications prepared by [ARCHITECT/ENGINEER] and identified in Exhibit A.
“Governmental Authority” – Any federal, state, or local governmental body, agency, authority, board, commission, or court having lawful jurisdiction.
“Lien” – Any mechanic’s lien, materialman’s lien, or other statutory or common-law lien relating to the Work, including those governed by Ind. Code § 32-28-3-1 et seq.
“Notice to Proceed” – Written authorization issued by Owner directing Contractor to commence the Work.
“Retainage” – The portion of each Progress Payment withheld by Owner pursuant to Section 3.4.
“Site” – The real property legally described in Exhibit D.
“Substantial Completion” – The stage of the Work when it is sufficiently complete in accordance with the Contract Documents so that Owner can occupy or utilize the Project for its intended purpose, as certified by [ARCHITECT/ENGINEER] and evidenced by a Certificate of Substantial Completion.
“Work” – All labor, materials, equipment, services, and other items required to fulfill Contractor’s obligations under the Contract Documents.
ARTICLE II
ENGAGEMENT; SCOPE OF WORK; PERFORMANCE STANDARDS
2.1 Engagement. Owner hereby engages Contractor, and Contractor accepts such engagement, to perform the Work described in Exhibit A in accordance with the Contract Documents.
2.2 Standard of Performance. Contractor shall perform the Work:
(a) with the degree of skill and care ordinarily exercised by prudent contractors performing similar work in Indiana;
(b) in strict conformity with the Contract Documents and Applicable Law; and
(c) using new materials of good quality, free from defects.
2.3 Personnel and Supervision. Contractor shall provide competent supervision and shall be responsible for all construction means, methods, techniques, sequences, and procedures.
2.4 Contractor Licensing. Contractor represents that it holds all licenses, registrations, and qualifications required under Applicable Law to perform the Work.
2.5 Schedule. Contractor shall commence the Work upon issuance of the Notice to Proceed and achieve Substantial Completion no later than [SUBSTANTIAL COMPLETION DATE].
2.6 Change Orders. No deviation from the Contract Scope, Contract Time, or Contract Price is effective unless memorialized in a Change Order executed by both Parties.
[// GUIDANCE: Insert escalation protocol for disputed Change Orders if desired.]
ARTICLE III
CONTRACT PRICE; PAYMENT; RETAINAGE; LIEN COMPLIANCE
3.1 Contract Price. Owner shall pay Contractor the Contract Price as full and complete consideration for the timely and proper performance of the Work.
3.2 Schedule of Values. Prior to the first Application for Payment, Contractor shall submit a Schedule of Values allocating the Contract Price among the various portions of the Work, which schedule shall be subject to Owner’s approval.
3.3 Progress Payments.
(a) On or before the [DAY] of each month, Contractor shall submit to Owner an Application for Payment covering Work performed through the end of the preceding month.
(b) Subject to Section 3.5, Owner shall pay approved amounts within [___] days after receipt.
3.4 Retainage.
(a) Owner shall withhold Retainage equal to [NOT TO EXCEED TEN PERCENT (10%)] of each Progress Payment until payments made equal fifty percent (50%) of the Contract Price, after which no additional Retainage shall be withheld.
(b) Retainage shall be released to Contractor within sixty (60) days after Substantial Completion, subject to Section 3.5.
[// GUIDANCE: The above complies with customary Indiana private-project practice and mirrors public-works caps; modify if Parties agree to lesser amounts.]
3.5 Lien-Related Withholding. Owner may withhold from any payment an amount reasonably necessary to satisfy any bona fide claim relating to a Lien or potential Lien arising out of the Work.
3.6 Final Payment. Final Payment of the unpaid balance of the Contract Price shall be made within thirty (30) days after the latest to occur of: (a) final completion; (b) Contractor’s delivery of all close-out documents; and (c) receipt of final lien waivers in the form of Exhibit E.
3.7 Lien Law Compliance.
(a) Preliminary Notices. Contractor shall timely serve all statutory notices necessary to preserve or release Liens, including but not limited to any pre-lien notice contemplated by Ind. Code § 32-28-3.
(b) Affidavit & Waivers. As a condition precedent to each payment, Contractor shall furnish conditional and, upon receipt of funds, unconditional lien waivers in statutory form from itself and all lower-tier subcontractors and suppliers.
(c) Bond to Discharge Liens. If any Lien is filed, Contractor shall bond over, discharge, or otherwise remove such Lien within ten (10) days after written notice, at Contractor’s sole cost.
3.8 Payment Bond. If the Contract Price equals or exceeds [THRESHOLD AMOUNT] or if required by Owner’s lender, Contractor shall furnish a payment bond in the amount of the Contract Price issued by a surety licensed in Indiana and otherwise acceptable to Owner.
ARTICLE IV
REPRESENTATIONS & WARRANTIES
4.1 Contractor Representations. Contractor represents and warrants that:
(a) it is duly organized, validly existing, and in good standing under the laws of its state of formation and qualified to transact business in Indiana;
(b) it has full power and authority to execute and perform this Agreement;
(c) the execution and performance of this Agreement have been duly authorized; and
(d) the Work will be performed in a good and workmanlike manner, free from defects, and in strict accordance with the Contract Documents and Applicable Law.
4.2 Survival. The warranties in this Article IV shall survive Substantial Completion for a period of [ONE (1) YEAR] or such longer period as required by the Contract Documents or Applicable Law.
ARTICLE V
COVENANTS
5.1 Compliance with Laws. Contractor shall at all times comply with all Applicable Law, including without limitation OSHA requirements, Indiana building codes, and environmental regulations.
5.2 Permits & Approvals. Except as expressly identified in Exhibit A as Owner’s responsibility, Contractor shall obtain and pay for all permits, licenses, fees, and inspections required for the Work.
5.3 Records & Audit. Contractor shall maintain complete and accurate cost records for a minimum of three (3) years after final payment and shall allow Owner reasonable access for audit purposes upon five (5) business days’ prior notice.
5.4 Safety. Contractor shall implement and enforce a safety program meeting or exceeding industry standards and shall be solely responsible for the safety of its employees, agents, and subcontractors.
5.5 Subcontracting. Contractor shall not subcontract more than [___]% of the Work without Owner’s prior written consent and shall ensure every subcontract incorporates the substance of the Contract Documents.
ARTICLE VI
INSURANCE; BONDS
6.1 Contractor Insurance. Contractor shall, at its sole cost, procure and maintain throughout the Contract Time the following insurance with carriers rated A-/VII or better by A.M. Best:
(a) Commercial General Liability – $[] per occurrence / $[] aggregate;
(b) Workers’ Compensation – statutory limits;
(c) Employer’s Liability – $[] each accident;
(d) Automobile Liability – $[] combined single limit;
(e) Umbrella/Excess Liability – $[___] each occurrence; and
(f) Builder’s Risk or Installation Floater – full replacement cost of the Work (as applicable).
6.2 Additional Insured; Waiver of Subrogation. Owner, [ARCHITECT/ENGINEER], and their affiliates shall be named as additional insureds (CG 2010 11/85 or equivalent). All policies shall contain waivers of subrogation in favor of Owner.
6.3 Certificates. Certificates evidencing the required coverage shall be delivered to Owner prior to commencement of the Work and upon each renewal.
6.4 Performance and Payment Bonds. If required under Section 3.8 or Applicable Law, Contractor shall furnish separate performance and payment bonds, each in the penal sum of 100% of the Contract Price.
ARTICLE VII
DEFAULT; REMEDIES
7.1 Contractor Events of Default. Each of the following constitutes a Contractor Event of Default:
(a) failure to prosecute the Work with diligence, causing, in Owner’s reasonable opinion, substantial delay;
(b) failure to pay subcontractors or suppliers when due;
(c) filing or recording of a Lien in violation of Section 3.7;
(d) failure to maintain required insurance or bonds;
(e) material breach of any representation, warranty, or covenant; or
(f) insolvency, bankruptcy, or assignment for the benefit of creditors.
7.2 Owner Events of Default. Owner’s failure to pay undisputed amounts due within [30] days after receipt of written notice constitutes an Owner Event of Default.
7.3 Notice & Cure. The non-defaulting Party shall give written notice describing the default. The defaulting Party shall have:
(a) seven (7) days to cure a monetary default; and
(b) ten (10) days to commence and thirty (30) days to diligently pursue cure of a non-monetary default (unless a shorter period is required for safety).
7.4 Owner Remedies. If Contractor fails to timely cure, Owner may, without prejudice to any other remedy:
(a) supplement Contractor’s forces and deduct the cost;
(b) withhold payments;
(c) terminate for cause under Section 7.6; and/or
(d) seek specific performance or injunctive relief.
7.5 Contractor Remedies. If Owner fails to timely cure, Contractor may suspend performance or terminate for cause under Section 7.6.
7.6 Termination.
(a) For Cause. Either Party may terminate for cause after expiration of applicable cure periods.
(b) For Convenience. Owner may, at any time, terminate for convenience upon seven (7) days’ written notice, in which event Contractor shall be paid (i) the value of Work satisfactorily performed, (ii) reasonable demobilization costs, and (iii) [10%] of the unpaid balance of the Contract Price as markup for overhead and profit.
7.7 Liquidated Damages. If Contractor fails to achieve Substantial Completion by the required date, Contractor shall pay Owner liquidated damages of $[LD AMOUNT] per calendar day, which the Parties agree is a reasonable pre-estimate of Owner’s damages.
7.8 Attorneys’ Fees. The prevailing Party in any dispute arising out of the Contract Documents is entitled to recover reasonable attorneys’ fees and costs.
ARTICLE VIII
RISK ALLOCATION
8.1 Indemnification by Contractor. To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner and Owner’s Indemnitees from and against any and all claims, damages, losses, liabilities, and expenses (including reasonable attorneys’ fees) arising out of or relating to the Work, but only to the extent caused by the negligent acts or omissions, strict liability, or breach of the Contract Documents by Contractor or those for whom Contractor is responsible.
8.2 Limitation of Liability. Notwithstanding anything to the contrary, the cumulative liability of Owner to Contractor for all claims arising out of or related to the Contract Documents shall not exceed the Contract Price. The foregoing cap does not apply to Owner’s gross negligence or willful misconduct or to amounts expressly owed under Section 3.
8.3 Consequential Damages Waiver. Except for liquidated damages under Section 7.7, indemnification obligations under Section 8.1, and claims arising from gross negligence or willful misconduct, neither Party shall be liable to the other for consequential, incidental, or special damages.
8.4 Force Majeure. Neither Party shall be liable for delays or failures in performance due to acts of God, government acts, pandemics, labor disputes, shortages, or other causes beyond its reasonable control, provided that the affected Party gives notice within five (5) days after the occurrence and diligently resumes performance.
ARTICLE IX
DISPUTE RESOLUTION
9.1 Governing Law. This Agreement is governed by and construed in accordance with the laws of the State of Indiana, without giving effect to its conflicts-of-law principles.
9.2 Forum Selection. Subject to Section 9.3, the Parties irrevocably submit to the exclusive jurisdiction of the state courts situated in [COUNTY], Indiana.
9.3 Arbitration (Optional). [SELECT ONE AND DELETE THE OTHER]
• ☐ Arbitration Elected. 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.
• ☐ Arbitration Not Elected. Disputes shall be resolved exclusively in the courts designated in Section 9.2.
9.4 Jury Trial Waiver (Optional). [IF PERMITTED BY APPLICABLE LAW] Each Party hereby waives its right to a trial by jury in any action arising out of the Contract Documents.
9.5 Injunctive Relief. Notwithstanding Section 9.3, either Party may seek temporary, preliminary, or permanent injunctive relief or specific performance in any court of competent jurisdiction without posting bond to the extent permitted by law.
ARTICLE X
GENERAL PROVISIONS
10.1 Amendments; Waivers. No amendment or waiver of any provision is effective unless in writing and signed by the Parties. A waiver in one instance is not a waiver of any subsequent breach.
10.2 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 its lender or successor-in-interest upon notice to Contractor.
10.3 Successors & Assigns. This Agreement is binding on and inures to the benefit of the Parties and their respective successors and permitted assigns.
10.4 Severability. If any provision is held invalid, illegal, or unenforceable, the remaining provisions remain in full force, provided that the essential terms and intent of the Agreement can still be effectuated.
10.5 Integration. The Contract Documents constitute the entire agreement between the Parties and supersede all prior negotiations, representations, or agreements, whether written or oral.
10.6 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 exchanged via electronic means (e.g., PDF, DocuSign) are binding.
10.7 Notices. All notices shall be in writing and delivered by (i) certified U.S. mail (return receipt requested), (ii) nationally recognized overnight courier, or (iii) personal delivery, addressed to the Party’s address first listed above (or such other address as that Party may designate), and are deemed given upon receipt.
10.8 Independent Contractor. Contractor is an independent contractor and not an employee or agent of Owner.
10.9 No Third-Party Beneficiaries. Except as expressly provided for in Section 8.1 (indemnification of Owner’s Indemnitees), nothing in the Contract Documents creates any third-party beneficiary.
10.10 Interpretation. Headings are for convenience only and do not affect interpretation. The Parties acknowledge that each had the opportunity to consult counsel and that no presumption against the drafter shall apply.
EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
| OWNER | CONTRACTOR |
|---|---|
| [OWNER LEGAL NAME] | [CONTRACTOR LEGAL NAME] |
| By: _________ | By: _________ |
| Name: [PRINT] | Name: [PRINT] |
| Title: [TITLE] | Title: [TITLE] |
| Date: ____ | Date: ____ |
[Corporate Seals, Notary Acknowledgments, or Witness signatures as required by Applicable Law]
EXHIBITS & SCHEDULES
• Exhibit A – Drawings and Specifications / Detailed Scope of Work
• Exhibit B – Project Schedule & Milestone Dates
• Exhibit C – Change Order Form
• Exhibit D – Legal Description of Site
• Exhibit E – Statutory Lien Waiver Forms (Conditional & Unconditional)
• Exhibit F – Insurance Certificates & Endorsements
[// GUIDANCE: Confirm that Exhibit E uses the exact waiver language prescribed by Ind. Code § 32-28-5-1 where applicable. For residential projects (≤ 4 units) additional federal and state consumer-protection notices may be required.]