Construction Contract - Maine

COMMERCIAL CONSTRUCTION SERVICES AGREEMENT

(Maine)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Scope of Work; Contract Documents
4. Contract Price; Payment; Retainage
5. Representations and Warranties
6. Covenants
7. Risk Allocation
8. Default; Remedies
9. Dispute Resolution
10. General Provisions
11. Execution Block

1. DOCUMENT HEADER

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

• [OWNER LEGAL NAME], a [STATE] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Owner”); and
• [CONTRACTOR LEGAL NAME], a [STATE] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Contractor”).

Owner and Contractor are each a “Party” and collectively the “Parties.” In consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows.

2. DEFINITIONS

The following terms have the meanings set forth below. Defined terms appear in bold-face and apply both singularly and plurally. Cross-references are to Article and Section numbers of this Agreement.

“Affiliate” – any entity controlling, controlled by, or under common control with a Party.
“Change Order” – a written amendment executed by both Parties altering the Work, Contract Price, or Contract Time.
“Contract Documents” – collectively, this Agreement, the plans, specifications, drawings, Change Orders, schedules, and any documents listed on Exhibit A.
“Contract Price” – the lump-sum or guaranteed maximum price identified in Section 4.1, inclusive of Retainage.
“Contract Time” – the period stated in Section 3.3 for achieving Substantial Completion and Final Completion.
“Final Acceptance” – Owner's written acceptance of the completed Work for purposes of releasing retainage.
“Final Completion” – the date on which (i) the Work is fully completed in accordance with the Contract Documents, and (ii) all close-out deliverables have been accepted by Owner.
“Lien Law” – Maine mechanic’s-lien statutes, 10 M.R.S. §§ 3251 et seq., as amended.
“Notice” – written notice given in compliance with Section 10.3.
“Project” – the construction described in Section 3.1 and located at [PROJECT ADDRESS].
“Retainage” – that portion of each payment withheld pursuant to Section 4.2.
“Substantial Completion” – the stage in the progress of the Work when the Project is sufficiently complete for its intended use, as certified by Owner’s Representative.
“Work” – all labor, materials, equipment, services, and incidentals required by the Contract Documents.

3. SCOPE OF WORK; CONTRACT DOCUMENTS

3.1 Work. The Project is construction or repair of a nonresidential [TYPE OF BUILDING] used for [BUSINESS OR COMMERCIAL PURPOSE]. Contractor shall perform and furnish the Work for the Project in accordance with the Contract Documents and applicable laws.

3.2 Contract Documents; Priority. In the event of conflict, the following order of precedence governs: (a) Change Orders; (b) this Agreement; (c) supplementary conditions; (d) technical specifications; (e) drawings.

3.3 Contract Time. a) Commencement: [DATE OR EVENT]. b) Substantial Completion: no later than [DATE]/☐ calendar days after Commencement. c) Final Completion: no later than [DATE]/☐ calendar days after Substantial Completion. Time is of the essence.

3.4 Owner-Provided Information. Owner shall furnish surveys, legal descriptions, and other information reasonably required for performance.

3.5 Change Orders. Changes to the Work, Contract Price, or Contract Time shall be made only by a Change Order. Oral directives are ineffective unless confirmed in writing within three (3) business days.

4. CONTRACT PRICE; PAYMENT; RETAINAGE

4.1 Contract Price. Owner shall pay Contractor a total Contract Price of $[AMOUNT] subject to additions and deductions by Change Order.

4.2 Retainage. Owner shall withhold retainage of [____]% from each progress payment. Maine's Construction Contract Prompt Payment Act does not set a five-percent cap. Any retained amount due to Contractor upon completion shall be paid within thirty (30) days after Final Acceptance as required by 10 M.R.S. § 1116(1), subject to a good-faith withholding permitted by § 1118. Owner shall not unreasonably withhold acceptance of completed Work.

4.3 Schedule of Values & Applications for Payment.
a) Contractor shall submit a schedule of values within seven (7) days after the Effective Date.
b) Applications for Payment shall be submitted monthly using AIA-style forms or equivalent, substantiated by lien waivers and supporting documentation.

4.4 Prompt Payment. Under the payment term selected by the Parties, Owner shall pay approved amounts within seven (7) days after receipt of a complete invoice. Owner may withhold an amount reasonably related to the value of a good-faith claim described in 10 M.R.S. § 1118. Interest accrues on late payments at [___]% per month, subject to applicable law.

4.4A Invoice Defects and Downstream Payments. A party receiving an incorrect, incomplete, or otherwise defective invoice shall notify its sender in writing within the period required by 10 M.R.S. § 1115. Contractor shall disclose Owner's payment due date to each subcontractor or material supplier before entering into its contract with that party. Contractor shall pay each subcontractor or material supplier the full or proportional amount received for that party's completed work or supplied materials within seven (7) days after receiving the applicable progress or final payment or that party's invoice, whichever is later. Contractor shall pass through retainage due to each subcontractor or material supplier within seven (7) days after receiving it. Any mandatory payment and interest duties under 10 M.R.S. §§ 1114–1116 control over a contrary contract term.

4.5 Lien Waivers; Lien Notices.
a) With each Application for Payment Contractor shall provide conditional lien waivers from itself and all Subcontractors for Work covered by that application.
b) Contractor shall comply with the Lien Law and require each Subcontractor to comply with applicable lien-preservation steps. A claimant without a direct contract with Owner must, within 90 days after ceasing to labor, furnish materials, or perform services, record the sworn statement described in 10 M.R.S. § 3253 and mail a copy to Owner. Section 3253 does not apply to a claimant contracting directly with Owner. A separate action to preserve and enforce a lien generally must be filed within 120 days under 10 M.R.S. § 3255(1), subject to applicable exceptions.
c) Owner’s progress payments are conditioned on receipt of proper lien waivers and evidence of compliance with the Lien Law.

4.6 Final Payment Conditions. As a condition precedent to final payment, Contractor shall deliver: (i) a conditional final lien waiver effective upon receipt of final payment; (ii) as-built drawings; (iii) operation and maintenance manuals; (iv) warranties; and (v) any other close-out items set forth in Exhibit A. Contractor shall deliver an unconditional final lien waiver after the final payment clears. These deliverables do not extend a payment deadline imposed by applicable law.

5. REPRESENTATIONS AND WARRANTIES

5.1 Organization & Authority. Each Party represents that it is duly organized, validly existing, and in good standing under the laws of its formation jurisdiction and has full power and authority to enter into this Agreement.

5.2 Contractor’s Additional Representations. Contractor further represents and warrants that:
a) It holds all licenses, registrations, and permits required to perform the Work in Maine;
b) The Work will be performed in a good and workmanlike manner and in accordance with applicable Laws, the Contract Documents, and industry standards;
c) Materials and equipment furnished will be new and of good quality, free from defects, and will conform to the Contract Documents for a period of one (1) year from Final Completion, unless a longer period is specified elsewhere;
d) It is financially solvent and able to meet its obligations hereunder;
e) It has reviewed the Contract Documents and has no knowledge of conflicts, errors, or omissions that would prevent proper performance.

5.3 Survival. The representations and warranties in this Article 5 survive Final Completion and any termination of this Agreement.

6. COVENANTS

6.1 Compliance with Laws. Contractor shall comply with all federal, state, and local laws, regulations, building codes, OSHA standards, environmental requirements, and the Lien Law.

6.2 Safety. Contractor is solely responsible for site safety and shall implement a written safety program consistent with OSHA standards.

6.3 Insurance. Contractor shall maintain, at its own expense and through insurers authorized to do business in Maine, insurance of the types and minimum limits set forth in Exhibit B and shall furnish ACORD certificates naming Owner and its Affiliates as additional insureds (CG 20 10 11 85 or equivalent).

6.4 Payment Bond. If the Contract Price exceeds $[THRESHOLD] or if required by Owner, Contractor shall furnish a payment bond in the full penal sum of the Contract Price, written on a surety company licensed in Maine and otherwise acceptable to Owner.

6.5 Subcontractors. Contractor shall bind each Subcontractor and supplier to the applicable terms of the Contract Documents. No subcontract transfers Contractor’s duties or liabilities.

6.6 Audit Rights. For cost-plus or GMP Work, Contractor shall maintain complete cost records for three (3) years and allow Owner access upon 48-hour notice.

7. RISK ALLOCATION

7.1 Indemnification by Contractor. To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner, its Affiliates, lenders, and their respective directors, officers, and employees (“Indemnitees”) from and against any and all claims, damages, losses, penalties, judgments, fines, and expenses (including reasonable attorneys’ fees) arising out of or relating to (i) bodily injury, sickness, disease, or death of any person, (ii) damage to or loss of property, or (iii) breach of this Agreement, but only to the extent caused by the negligent acts or omissions or willful misconduct of Contractor, its Subcontractors, or anyone directly or indirectly employed by them.

7.2 Limitation of Liability. EXCEPT FOR (a) CONTRACTOR’S INDEMNITY OBLIGATIONS; (b) LIABILITY FOR PERSONAL INJURY OR DEATH; (c) LIABILITY FOR INTENTIONAL MISCONDUCT OR GROSS NEGLIGENCE; OR (d) PAYMENT, INTEREST, PENALTIES, ATTORNEYS’ FEES, AND EXPENSES RECOVERABLE UNDER 10 M.R.S. CHAPTER 201-A, THE TOTAL CUMULATIVE LIABILITY OF EITHER PARTY UNDER THIS AGREEMENT SHALL NOT EXCEED THE CONTRACT PRICE.

7.3 Consequential Damages. Neither Party shall be liable for incidental, indirect, special, punitive, or consequential damages, including lost profits, lost rents, or business interruption, except to the extent such damages are covered by insurance proceeds or recoverable under 10 M.R.S. § 1118(2).

7.4 Force Majeure. A Party is excused from performance for events beyond its reasonable control, including acts of God, war, terrorism, epidemics, or governmental restrictions, provided it gives written Notice within seven (7) days and resumes performance promptly once the event ceases.

8. DEFAULT; REMEDIES

8.1 Events of Default – Contractor. The following constitute Contractor Defaults:
a) Failure to prosecute the Work with diligence, endangering timely completion;
b) Failure to make prompt payment to Subcontractors or suppliers;
c) Material breach of any covenant or warranty.

8.2 Notice and Cure. Owner shall give written Notice specifying the default. Contractor has seven (7) days to cure (or commence diligent cure) unless an emergency endangers persons or property.

8.3 Owner Remedies. If Contractor fails to cure within the cure period, Owner may, at its option:
(i) Supplement Contractor’s forces and back-charge costs;
(ii) Issue a deductive Change Order;
(iii) Terminate for cause under Section 8.5;
(iv) Seek any other remedy at law or in equity, including injunctive relief.

8.4 Events of Default – Owner. Owner’s failure to make undisputed payments within the time required constitutes an Owner Default. Contractor shall give Notice and a ten (10)-day cure period before suspending Work.

8.5 Termination.
a) For Cause (by Owner): Upon an uncured Contractor Default, Owner may terminate this Agreement and finish the Work. Contractor is liable for costs in excess of the unpaid balance of the Contract Price.
b) For Convenience (by Owner): Owner may terminate without cause upon seven (7) days’ Notice. Contractor is entitled to (i) the portion of the Contract Price for Work executed, (ii) reasonable demobilization costs, and (iii) retainage earned to date.
c) For Cause (by Contractor): Contractor may terminate if Work is stopped for 30 consecutive days through no fault of Contractor due to Owner Default or court order. Contractor shall be paid as for a convenience termination.

8.6 Attorneys’ Fees. The prevailing Party in any dispute arising under this Agreement is entitled to recover its reasonable attorneys’ fees and costs. In a proceeding to recover payment within 10 M.R.S. chapter 201-A, the substantially prevailing party shall receive reasonable attorneys’ fees and expenses as provided in § 1118(4), notwithstanding any contrary term of this Agreement.

9. DISPUTE RESOLUTION

9.1 Governing Law. This Agreement is governed by and construed in accordance with the laws of the State of Maine, without regard to its conflict-of-laws rules.

9.2 Forum Selection. Any lawsuit arising out of or relating to this Agreement shall be brought exclusively in the state courts of [COUNTY], Maine, or, if jurisdiction exists, the United States District Court for the District of Maine. Each Party irrevocably submits to such courts and waives any objection based on venue or inconvenient forum.

9.3 OPTIONAL – Arbitration.
a) Any dispute not resolved by negotiation within thirty (30) days after Notice of the dispute shall, upon written election of either Party, be resolved by binding arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules.
b) The arbitration shall take place in [CITY], Maine before a panel of three (3) arbitrators with at least ten (10) years’ experience in construction law.
c) Judgment on the award may be entered in any court of competent jurisdiction.

9.4 OPTIONAL – Jury Trial Waiver. TO THE EXTENT PERMITTED BY LAW, EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY LITIGATION ARISING FROM OR RELATED TO THIS AGREEMENT.

9.5 Injunctive Relief. Nothing in this Article 9 limits either Party’s right to seek temporary, preliminary, or permanent injunctive relief in a court of competent jurisdiction to prevent irreparable harm pending final resolution of the dispute.

10. GENERAL PROVISIONS

10.1 Amendments; Waivers. This Agreement may be amended only by a writing signed by both Parties. No waiver of any right is effective unless in writing and signed by the waiving Party.

10.2 Assignment. Neither Party may assign or delegate its rights or duties without the prior written consent of the other, except that Owner may assign its rights to its lender as collateral security.

10.3 Notices. All Notices required or permitted shall be in writing and delivered (i) by hand, (ii) certified mail (return receipt requested), (iii) reputable overnight courier, or (iv) email with confirmed receipt, to the addresses set forth below (or as later changed by Notice). Notices are effective on receipt.

10.4 Severability. If any provision is held unenforceable, it shall be reformed to the minimum extent necessary to make it enforceable, and the remaining provisions remain in full force.

10.5 Integration. The Contract Documents constitute the entire agreement between the Parties and supersede all prior negotiations or representations.

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

10.7 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts. The Parties agree to treat signatures transmitted by electronic means, including PDF or an electronic-signature platform, as originals to the extent permitted by applicable law.

11. EXECUTION BLOCK

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

[NOTARY BLOCKS IF REQUIRED BY LENDER OR LOCAL RECORDING PRACTICES]

EXHIBIT A – LIST OF CONTRACT DOCUMENTS

1. Drawings dated [DATE] prepared by [ARCHITECT/ENGINEER].
2. Project Manual/Specifications dated [DATE].
3. Schedule of Values.
4. Project Schedule.
5. [OTHER].

EXHIBIT B – INSURANCE REQUIREMENTS

1. Commercial General Liability: $1,000,000 per occurrence / $2,000,000 aggregate, ISO CG 00 01 or equivalent, primary and non-contributory.
2. Automobile Liability: $1,000,000 combined single limit for all owned, non-owned, and hired autos.
3. Workers’ Compensation: statutory limits for Maine; Employer’s Liability $1,000,000.
4. Umbrella/Excess Liability: $[AMOUNT] per occurrence, following form.
5. Builder’s Risk (by Owner or Contractor as designated): Completed value, all-risk.

OFFICIAL SOURCES

• 10 M.R.S. ch. 201-A: https://legislature.maine.gov/statutes/10/title10ch201-A.pdf
• 10 M.R.S. § 1113: https://legislature.maine.gov/statutes/10/title10sec1113.html
• 10 M.R.S. § 1114: https://legislature.maine.gov/statutes/10/title10sec1114.html
• 10 M.R.S. § 1115: https://legislature.maine.gov/statutes/10/title10sec1115.html
• 10 M.R.S. § 1116: https://legislature.maine.gov/statutes/10/title10sec1116.html
• 10 M.R.S. § 1118: https://legislature.maine.gov/statutes/10/title10sec1118.html
• 10 M.R.S. § 3253: https://legislature.maine.gov/statutes/10/title10sec3253.html
• 10 M.R.S. § 3255: https://legislature.maine.gov/statutes/10/title10sec3255.html