CONSTRUCTION SERVICES AGREEMENT

(Michigan – Private Project)

[// GUIDANCE: This template is drafted for use on private commercial or residential construction projects located in the State of Michigan. It is designed to comply with Michigan’s Construction Lien Act, MCL 570.1101 et seq., and related state requirements. Attorneys should tailor bracketed provisions to the specific project, parties, and transaction structure.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

1.1 Agreement Title. Construction Services Agreement (“Agreement”).

1.2 Parties.
(a) “[OWNER LEGAL NAME], a [STATE] [ENTITY TYPE]” (“Owner”); and
(b) “[CONTRACTOR LEGAL NAME], a [STATE] [ENTITY TYPE]” (“Contractor”).

1.3 Effective Date. This Agreement is effective as of [EFFECTIVE DATE] (“Effective Date”).

1.4 Project. Construction of “[PROJECT NAME/DESCRIPTION]” located at [PROJECT ADDRESS] (“Project Site”).

1.5 Consideration & Mutual Promises. In consideration of the mutual covenants herein, the Parties agree as follows.

II. DEFINITIONS

For ease of reference, defined terms are capitalized. Any term used but not defined has the meaning given under applicable Michigan law.

“Applicable Law” – All federal, state, and local statutes, ordinances, rules, regulations, and lawful orders, including without limitation the Michigan Construction Lien Act, MCL 570.1101 et seq.

“Change Order” – A written modification of the Work executed in accordance with Section 3.8.

“Contract Documents” – Collectively, this Agreement, the Plans & Specifications, Change Orders, schedules, exhibits, and any documents incorporated by reference.

“Contract Price” – The total amount payable to Contractor for full performance of the Work, as defined in Section 3.3.

“Critical Path Schedule” – The baseline and updated construction schedules approved by Owner under Section 3.4.

“Force Majeure Event” – An event described in Section 7.4 that is beyond the reasonable control of the affected Party.

“Lien Claimant” – Any party entitled to a lien under the Michigan Construction Lien Act.

“Payment Bond” – The bond, if any, furnished under Section 7.6 to secure payment to Subcontractors and material suppliers.

“Project Manager” – Owner’s designated representative identified in Exhibit B.

“Retainage” – The portion of each Progress Payment retained by Owner under Section 3.6, subject to the limits of MCL 570.132.

“Subcontractor” – Any person or entity, at any tier, engaged directly or indirectly by Contractor to perform any portion of the Work.

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

“Work” – All labor, services, materials, equipment, and other obligations to be performed or provided by Contractor as described in the Contract Documents.

III. OPERATIVE PROVISIONS

3.1 Scope of Work.
3.1.1 Contractor shall diligently perform the Work in strict accordance with the Contract Documents and all Applicable Law.
3.1.2 Contractor shall furnish all supervision, labor, materials, tools, equipment, construction aids, and incidentals necessary for timely completion.

3.2 Commencement & Completion.
(a) Commencement Date: [COMMENCEMENT DATE].
(b) Substantial Completion Deadline: [DATE]/[] calendar days from Commencement.
(c) Final Completion Deadline: [DATE]/[] calendar days after Substantial Completion.
(d) Time is of the essence.

3.3 Contract Price & Payment Milestones.
(a) Contract Price (Not-to-Exceed): $[AMOUNT].
(b) Payment Structure: [Lump Sum] / [Cost-Plus Fee Not to Exceed] / [GMP] / [Unit Price].
(c) Progress Payments: Made monthly per Section 3.5.

3.4 Schedule. Contractor shall prepare and update a Critical Path Schedule in software acceptable to Owner, showing logical sequencing and completion within the required milestones.

3.5 Applications for Payment & Progress Payments.
(a) On or before the [DAY] of each month, Contractor shall submit to Owner:
i. AIA-style payment application (or other mutually agreed form);
ii. Updated Critical Path Schedule;
iii. Sworn Statement and unconditional/conditional Lien Waivers compliant with MCL 570.1105, 570.1111, and 570.1115.
(b) Owner shall, within ten (10) Business Days after receipt of a complete and undisputed Application, pay Contractor the approved amount less (i) Retainage and (ii) any offsets permitted herein.

3.6 Retainage.
3.6.1 Consistent with MCL 570.132, Owner shall withhold not more than ten percent (10%) of the earned amount from each Progress Payment until fifty percent (50%) of the Work is complete.
3.6.2 After fifty percent (50%) completion, no further Retainage shall be withheld if Contractor is not in default, but previously retained amounts may be held until Final Completion.
3.6.3 Retainage Release: Within thirty (30) days after Final Completion and receipt of all close-out deliverables, including (i) final sworn statement, (ii) final unconditional Lien Waivers from all Lien Claimants, and (iii) consent of surety if a Payment Bond is in place.

3.7 Conditional/Final Lien Waivers. Contractor shall obtain and pass through to Owner all statutory Lien Waivers in the form prescribed by the Michigan Construction Lien Act.

3.8 Changes in the Work.
(a) Owner may order Changes by written Change Order or Construction Change Directive.
(b) Adjustments to Contract Price or Contract Time shall be made per Section 3.3 and documented in the Change Order.
(c) Absent a signed Change Order, Contractor bears the risk of non-payment.

3.9 Owner-Supplied Information & Materials. Owner shall timely provide access, approvals, and any Owner-furnished materials identified in Exhibit C.

3.10 Conditions Precedent.
• Delivery of Payment Bond (if required).
• Evidence of insurance per Section 7.5.
• Receipt of executed Notice of Commencement (see Section 5.2).

IV. REPRESENTATIONS & WARRANTIES

4.1 Contractor’s Representations. Contractor represents and warrants that:
(a) It is duly organized, validly existing, and in good standing under the laws of its formation state and is authorized to do business in Michigan;
(b) It is duly licensed by the Michigan Department of Licensing and Regulatory Affairs for the Work to be performed;
(c) The Work will be performed in a good and workmanlike manner, free from defects, and in accordance with the Contract Documents and Applicable Law;
(d) All materials furnished shall be new and of good quality unless otherwise specified;
(e) It has examined the Project Site and has sufficient knowledge to perform the Work.

4.2 Survival. The warranties in this Article survive Final Completion for a period of [ONE (1)] year or such longer period as may be required by statute or specific manufacturer warranties.

V. COVENANTS & RESTRICTIONS

5.1 Compliance With Law. Contractor shall comply and cause Subcontractors to comply with all Applicable Law, including obtaining and closing out all required permits.

5.2 Notice of Commencement & Notice Posting.
(a) Owner shall execute a statutory Notice of Commencement in the form required by MCL 570.1108 and post it conspicuously at the Project Site prior to commencement of the Work.
(b) Contractor shall conspicuously post a copy of the Notice of Commencement and keep it posted until completion.

5.3 Safety & OSHA Compliance. Contractor shall be solely responsible for safety precautions, programs, and OSHA compliance for itself and its Subcontractors.

5.4 Recordkeeping. Contractor shall maintain complete cost and labor records for at least three (3) years after Final Completion and make them available to Owner upon reasonable request.

5.5 Insurance. Contractor shall maintain the insurance coverages described in Exhibit D with insurers rated A-/VII or better by A.M. Best.

5.6 Notice & Cure. Each Party shall give the other written notice of any breach and a [TEN (10)] day period to cure, except where a shorter period is provided for emergencies or payment defaults.

VI. DEFAULT & REMEDIES

6.1 Events of Default – Contractor.
(a) Failure to supply sufficient labor, materials, or equipment;
(b) Failure to maintain schedule causing material delay;
(c) Failure to pay Subcontractors or suppliers when due;
(d) Filing of bankruptcy or insolvency;
(e) Failure to cure any breach within the applicable notice period.

6.2 Owner Remedies. Upon Contractor default, Owner may, after notice and opportunity to cure:
i. Withhold further payments;
ii. Supplement or take over the Work and back-charge costs;
iii. Terminate for cause per Section 6.4;
iv. Seek specific performance, injunctive relief, or any other remedy available at law or in equity.

6.3 Events of Default – Owner.
(a) Failure to make undisputed payments when due;
(b) Failure to provide access or approvals materially impairing progress;
(c) Bankruptcy or insolvency;
(d) Failure to cure any breach within the applicable notice period.

6.4 Termination.
(a) For Cause (by either Party) after uncured default;
(b) For Convenience (by Owner) upon [SEVEN (7)] days’ written notice, with payment for Work executed plus reasonable demobilization costs, but no anticipatory profit.

6.5 Attorneys’ Fees. The prevailing Party in any dispute shall be entitled to recover reasonable attorneys’ fees, expert fees, and costs.

VII. RISK ALLOCATION

7.1 Indemnification.
7.1.1 To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner and Owner’s Related Parties from and against any and all claims, damages, liabilities, losses, costs, and expenses (including attorneys’ fees) arising out of or relating to:
(a) bodily injury, sickness, disease, or death;
(b) property damage; or
(c) breach of this Agreement,
to the extent caused by the negligent acts, errors, omissions, or willful misconduct of Contractor, its Subcontractors, or anyone for whom Contractor is responsible.
7.1.2 This indemnity survives termination or expiration of the Agreement.

7.2 Limitation of Liability. Except for (i) Contractor’s indemnity obligations, (ii) fraud, (iii) gross negligence or willful misconduct, the aggregate liability of Contractor to Owner under this Agreement shall not exceed the Contract Price.

7.3 Consequential Damages Waiver. Neither Party shall be liable to the other for consequential, incidental, or special damages, including lost profits, except to the extent covered by insurance or arising from Section 7.1.

7.4 Force Majeure. Neither Party shall be liable for delay or failure to perform due to acts of God, terrorism, war, civil unrest, labor strikes (not caused by the non-performing Party), pandemics, or governmental orders (“Force Majeure Event”), provided the affected Party gives written notice within three (3) Business Days of the event. Contract Time shall be equitably adjusted, but Contract Price shall not increase unless agreed in writing.

7.5 Insurance Requirements. Minimum limits:
• Commercial General Liability: $[2,000,000] per occurrence / $[4,000,000] aggregate;
• Automobile Liability: $[1,000,000] combined single limit;
• Workers’ Compensation: statutory; Employers’ Liability: $[1,000,000];
• Excess/Umbrella: $[5,000,000];
• Builder’s Risk: “All-Risk” completed value with Owner as loss payee.

7.6 Payment Bond.
[OPTION 1 – Required] Contractor shall furnish a payment bond in the penal sum of 100% of the Contract Price, issued by a surety listed on U.S. Treasury Circular 570 and authorized to do business in Michigan, to comply with MCL 129.201 et seq.
[OPTION 2 – Waived] No Payment Bond is required.

VIII. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement is governed by the laws of the State of Michigan, without regard to conflict-of-laws principles.

8.2 Forum Selection. Any litigation shall be filed in the state courts of [COUNTY], Michigan, and each Party irrevocably submits to such jurisdiction.

8.3 Arbitration. [OPTIONAL – CHECK ONE]
[ ] Binding arbitration administered by the American Arbitration Association (“AAA”) under its Construction Industry Arbitration Rules.
[ ] No arbitration; disputes shall be resolved exclusively in state court per Section 8.2.

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. Nothing in this Article shall restrict a Party’s right to seek temporary, preliminary, or permanent injunctive relief or specific performance in any court of competent jurisdiction.

IX. GENERAL PROVISIONS

9.1 Amendments & Waivers. No amendment or waiver is effective unless in writing and signed by authorized representatives of both Parties. No waiver of any breach constitutes a waiver of any subsequent breach.

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

9.3 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their permitted successors and assigns.

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

9.5 Integration. This Agreement (including the Contract Documents) constitutes the entire agreement between the Parties and supersedes all prior negotiations, proposals, or agreements.

9.6 Electronic Signatures & Counterparts. This Agreement may be executed in multiple counterparts, each deemed an original, and delivered by electronic means (e-mail, DocuSign, or similar), which shall be deemed legally effective.

9.7 Notice. All notices must be in writing and delivered (i) personally, (ii) by certified mail (return receipt requested), (iii) by nationally recognized overnight courier, or (iv) by e-mail with confirmation, to the addresses set forth below or as later designated. Notice is effective upon receipt or refusal.

9.8 Confidentiality. Contractor shall keep proprietary information received from Owner confidential and use it solely for performing the Work.

X. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

[Corporate seals, if applicable]

[// GUIDANCE: For notarization or witness requirements, confirm local practice. Michigan does not generally mandate notarization for private construction contracts, but lenders or recording offices may require it.]

EXHIBIT A – PLANS & SPECIFICATIONS

[Attach or incorporate by reference]

EXHIBIT B – OWNER’S PROJECT MANAGER & CONTACTS

• Project Manager: [NAME]
• Phone / E-mail: [CONTACT INFO]

EXHIBIT C – OWNER-FURNISHED MATERIALS & EQUIPMENT

[List items, delivery schedule, and acceptance criteria]

EXHIBIT D – INSURANCE REQUIREMENTS

[Insert full insurance requirement language, additional insured endorsements, waiver of subrogation, primary & non-contributory wording, etc.]

[END OF AGREEMENT]