Construction Contract - Montana

CONSTRUCTION SERVICES AGREEMENT — MONTANA

PRIVATE PROJECT

APPLICABILITY GATE

Mont. Code Ann. § 28-2-2101 defines a covered construction contract as a written owner-contractor agreement for construction, improvement, or construction management of an improvement to real property. Section 28-2-2107 excludes residential projects or improvements intended for residential purposes with a total cost below $400,000.

Sections labeled “if Part 21 applies” do not invent the same statutory rule for an excluded project. Counsel must draft the excluded project's contractual payment and suspension terms separately.

1. PARTIES, PROJECT, AND DOCUMENTS

This Construction Services Agreement (the "Agreement") is made on [DATE] between:

Owner: [FULL LEGAL NAME], [ENTITY TYPE / INDIVIDUAL], whose address is [ADDRESS] ("Owner").

Contractor: [FULL LEGAL NAME], [ENTITY TYPE / INDIVIDUAL], whose address is [ADDRESS] ("Contractor").

Project: [DESCRIPTION] at [ADDRESS / LEGAL DESCRIPTION] in [COUNTY] County, Montana.

Contract Documents: This Agreement and the final versions of:

1. Exhibit A — Scope, plans, specifications, allowances, and exclusions.
2. Exhibit B — Price, schedule of values, and payment schedule.
3. Exhibit C — Project schedule and milestones.
4. Exhibit D — Insurance and bonds.
5. Exhibit E — Required disclosures, permits, owner-furnished information, and site conditions.
6. Signed change orders and only those other documents expressly incorporated here: [________________________________].

2. SCOPE AND STANDARD OF PERFORMANCE

Contractor shall furnish the labor, supervision, materials, equipment, and services stated in Exhibit A and shall perform in accordance with the Contract Documents and applicable law.

Excluded work: [________________________________]

Owner-furnished work or materials: [________________________________]

Contractor registrations, licenses, and permits: Contractor shall maintain each registration, permit, or occupational license actually required for Contractor's scope. Do not represent that Montana uses one universal contractor license for every construction service.

3. CONTRACT PRICE

The pricing method is:

☐ Stipulated sum of $[____________].

☐ Cost of the Work plus a fee of [____________], with a guaranteed maximum of $[____________].

☐ Unit prices in Exhibit B.

☐ Other: [________________________________]

Allowances, alternates, taxes, escalation, concealed conditions, owner changes, and reimbursable costs are addressed in Exhibit B.

4. TIME AND DELAY

Commencement: [DATE / CONDITION]

Substantial completion: [DATE / DEFINITION]

Final completion: [DATE / DEFINITION]

Milestones: Exhibit C.

Contractor shall notify Owner promptly of a delay, its cause, expected effect, mitigation, and requested time or price adjustment. Excusable delay, owner-caused delay, adverse weather baseline, supply interruption, force majeure, concurrent delay, and liquidated damages are defined in Exhibit C rather than assumed.

5. PAYMENT — IF PART 21 APPLIES

5.1 Monthly Billing Cycle

Consistent with Mont. Code Ann. § 28-2-2103, the monthly billing cycle is [START DATE] through [END DATE], and Contractor shall submit each progress or final request to [OWNER-DESIGNATED RECIPIENT] at [ADDRESS / EMAIL]. Requests must cover actual or estimated work performed and materials supplied during the preceding cycle and include the agreed support.

5.2 Approval and Written Disapproval

A payment request is considered approved 21 days after actual receipt unless Owner first gives Contractor a written statement identifying the specific disapproved items. Section 28-2-2103 permits disapproval for the statutory grounds, including unsatisfactory progress, unremedied defective work or materials, disputed work or materials, material contract-document noncompliance, untimely payment of specified claims, owner damage, or reasonable evidence the work cannot be completed for the unpaid balance.

Owner may withhold only the amount reasonably expected to cover the direct expense of correcting the stated claim. Any undisputed remainder is approved.

5.3 Payment After Approval

Owner shall pay the approved amount within 7 days after approval. Contractor shall pay a subcontractor the full amount due under its subcontract within 7 days after receiving the corresponding periodic or final payment, subject to the billing and written-disapproval rules in § 28-2-2103.

5.4 Retainage

Retainage may not exceed 5%. Contractor may not withhold from a subcontractor a higher percentage than Owner withholds from Contractor. Retainage must be released upon final acceptance of each portion of work for which this Agreement states a separate price. Mont. Code Ann. § 28-2-2110.

5.5 Delayed-Payment Interest

If a payment required by this Agreement is delayed more than 30 days after the contractual due date, Mont. Code Ann. § 28-2-2104 requires interest beginning the day after the due date at 1.5% per month, or a pro rata fraction, on the unpaid balance. Contractor must distribute owner-paid delay interest pro rata to affected subcontractors. Acceptance of final payment releases a claim for interest on that payment.

5.6 Statutory Fees and Costs

In a civil action on the contract to enforce an obligation Part 21 imposes, the prevailing party is entitled under § 28-2-2105 to reasonable attorney fees and costs at trial and appeal. An arbitrator may award fees and costs as the arbitrator determines.

6. PAYMENT — IF PART 21 DOES NOT APPLY

For an excluded project, the parties' counsel-approved payment terms are:

7. CHANGE ORDERS

No change to scope, price, schedule, allowances, design, or material is authorized without a written change order signed by authorized representatives, except documented emergency work necessary to protect persons or property under the procedure below.

Change-request notice: [________________________________]

Pricing support and markups: [________________________________]

Time-impact method: [________________________________]

Emergency-work procedure: [________________________________]

8. SITE, DESIGN, PERMITS, AND SAFETY

Owner shall provide access, title and boundary information, known site reports, hazardous-material information, and owner-furnished design identified in Exhibit E.

Contractor shall obtain permits and inspections allocated to Contractor in Exhibit E, coordinate its work, and maintain a project-specific safety program. Allocation of safety duties does not waive a nondelegable legal duty or alter an employer's obligations to its workers.

Design responsibility, delegated design, differing site conditions, hazardous materials, utilities, testing, code compliance, and stop-work procedures are stated in Exhibit E.

9. CONSTRUCTION-LIEN COMPLIANCE

9.1 Original Contractor Exemption

Under Mont. Code Ann. § 71-3-531(1)(a), an original contractor furnishing services or materials directly to Owner at Owner's request is not required to give the statutory notice of right to claim a lien. The prior template's blanket requirement that Contractor serve a 20-day notice was incorrect.

9.2 Other Notice Exemptions and Required Notices

Section 71-3-531 also exempts specified wage earners, projects involving dwellings for five or more families, and improvements partly or wholly commercial in character. A potential claimant not within an exemption generally must give the contracting owner the statutory notice, usually no later than 20 days after first furnishing. The section provides a 45-day rule for specified regulated-lender-funded work other than an owner-occupied residence.

Required notice must be personally delivered with written acknowledgment or sent by certified mail and must be filed with the county clerk and recorder within 5 business days after notice to Owner. The filed notice generally remains effective for 1 year unless timely continued. Use the exact current statutory warning and contents in § 71-3-532.

9.3 Contract Information

For § 71-3-531(7), this Agreement states:

Owner name and address: [________________________________]

Street address or sufficient legal description: [________________________________]

Upon a qualifying subcontractor or supplier request, Contractor shall provide that information within 5 business days as § 71-3-531(8) requires.

9.4 Lien Filing and Completion Notice

A potential claimant must independently calendar the current notice and lien rules. Under § 71-3-535, a lien generally must be filed no later than 90 days after the claimant's final furnishing or Owner's filing of a notice of completion under § 71-3-533, subject to the statute's full conditions.

Owner may file a notice of completion after statutory completion, but § 71-3-533 requires the stated contents, verification, three successive weekly publications, and copies to persons who gave Owner a notice of right to claim a lien. This Agreement does not create an owner duty to post lien notices at the Site.

9.5 Waivers, Payment Controls, and Bond Substitution

Payment applications shall include only accurate, transaction-current lien waivers approved by counsel and the title company. Joint checks, escrow, sworn payment statements, retainage, and direct-payment controls are: [________________________________].

A filed lien may be replaced with a bond only through the process in §§ 71-3-551 through 71-3-553, including the 1.5-times bond amount and statutory timing. Contractor is not required to “bond off within 10 days” unless the parties deliberately create and can perform that separate contractual duty.

10. INSURANCE AND BONDS

Contractor shall maintain the coverages and endorsements in Exhibit D. Builder's risk, property insurance, general liability, workers' compensation, automobile, professional liability, pollution liability, additional-insured status, waiver of subrogation, deductibles, and bond requirements must match the Project and lawful risk allocation.

11. INDEMNITY

To the extent permitted by Mont. Code Ann. § 28-2-2111, Contractor shall indemnify, hold harmless, insure, or defend Owner and Owner's officers, employees, and agents only to the extent liability, damages, losses, or costs are caused by the negligence, recklessness, or intentional misconduct of Contractor, Contractor's officers, employees, agents, subcontractors, or other third parties for whom the clause lawfully allocates responsibility.

This clause does not require Contractor to indemnify, hold harmless, insure, or defend Owner or Owner's officers, employees, or agents for liability caused by their own negligence, recklessness, or intentional misconduct. Any project-specific protective or builder's-risk insurance is governed by Exhibit D.

12. WARRANTY AND CORRECTION

Contractor warrants that the Work will conform to the Contract Documents and will be performed with the skill and care stated in Exhibit A. The correction period is [____] after [SUBSTANTIAL / FINAL COMPLETION], without shortening any longer right or warranty that controlling law, a manufacturer, or another Contract Document supplies.

Warranty notice, access, response, emergency correction, excluded maintenance, and pass-through manufacturer warranties are: [________________________________].

13. DEFAULT, SUSPENSION, AND TERMINATION

13.1 Contractor Default

Owner may give a detailed notice and reasonable cure opportunity for material failure to prosecute, defective work, nonpayment of subcontractors, safety breach, unauthorized lien, or other material breach. Owner's step-in, supplement, suspension, termination, accounting, and completion-cost remedies are: [________________________________].

Do not use bankruptcy status alone as a default without bankruptcy counsel's review.

13.2 Nonpayment — If Part 21 Applies

Under Mont. Code Ann. § 28-2-2117, Contractor may suspend for Owner's failure to pay a timely approved amount and may terminate if the payment remains unsatisfied within 30 days after suspension. Contractor must give at least 7 calendar days' written notice before the intended suspension or termination unless this Agreement prescribes a shorter period. The Agreement may not extend the statutory time to suspend or terminate.

The statute contains related subcontractor rights, protects a compliant suspension or termination from being treated as breach, and allows recovery of shutdown and restart mobilization and rescheduling costs with the approved payment. Use the verified-delivery methods in § 28-2-2117(7).

Section 28-2-2116 voids a clause barring suspension or termination for failure to make prompt payment under § 28-2-2103.

13.3 Owner Convenience Termination

Owner may terminate for convenience only under these notice, payment, demobilization, material, subcontract, and profit terms: [________________________________].

14. DISPUTE RESOLUTION

This Agreement is governed by Montana law. Any litigation, arbitration, mediation, or other proceeding concerning a Montana project must occur in Montana; Mont. Code Ann. § 28-2-2116 voids another-state governing-law or dispute-location clause.

The parties select:

☐ Montana court litigation in a court with subject-matter jurisdiction and proper venue.

☐ Mediation followed by Montana-seated arbitration under [RULES], with details in Exhibit F.

☐ Other Montana-based process approved by counsel: [________________________________]

This Agreement contains no pre-dispute jury waiver unless Montana counsel adds one after transaction-specific review.

15. GENERAL TERMS

Notices: [METHODS, ADDRESSES, AND EFFECTIVE-DATE RULE]

Assignment and subcontracting: [________________________________]

Confidentiality and publicity: [________________________________]

Records and audit: [________________________________]

Independent contractor: Contractor controls its means and methods subject to the Contract Documents and law; this clause does not decide worker classification for every purpose.

Amendment: Signed writing identifying the changed Contract Document.

Electronic signatures: [COUNSEL TO CONFIRM TRANSACTION METHOD AND EVIDENTIARY REQUIREMENTS].

Severability: An unenforceable provision is severed only to the extent lawful and consistent with the transaction.

16. SIGNATURES

OFFICIAL SOURCES

• Mont. Code Ann. §§ 28-2-2101 through 28-2-2117 — construction payment and contract provisions
• Mont. Code Ann. § 28-2-2103 — payment to contractor and subcontractor
• Mont. Code Ann. § 28-2-2104 — delayed-payment interest
• Mont. Code Ann. § 28-2-2107 — residential-project exclusion
• Mont. Code Ann. § 28-2-2110 — retainage
• Mont. Code Ann. § 28-2-2111 — construction indemnity
• Mont. Code Ann. §§ 28-2-2116 and 28-2-2117 — void terms and payment suspension
• Mont. Code Ann. §§ 71-3-521 through 71-3-564 — construction liens
• Mont. Code Ann. § 71-3-531 — notice of right to claim lien
• Mont. Code Ann. § 71-3-535 — lien filing
• Mont. Code Ann. § 71-3-551 — bond substitution