CONSTRUCTION SERVICES AGREEMENT

(State of North Carolina – Private Project)

[// GUIDANCE: This template is drafted for a private commercial construction project located in North Carolina. Adapt for public‐works jobs only after confirming additional statutory requirements (e.g., N.C. Gen. Stat. § 143-129 et seq.).]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
       3.1 Scope of Work
       3.2 Contract Sum; Payment Terms; Retainage
       3.3 Schedule; Milestones
       3.4 Changes in the Work
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

CONSTRUCTION SERVICES AGREEMENT (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

a. [OWNER LEGAL NAME], a [STATE] [ENTITY TYPE], with a principal place of business at [ADDRESS] (“Owner”); and
b. [CONTRACTOR LEGAL NAME], a [STATE] [ENTITY TYPE], holding N.C. General Contractor License No. [LICENSE #], with a principal place of business at [ADDRESS] (“Contractor”).

Owner and Contractor are sometimes referred to individually as a “Party” and collectively as the “Parties.”

Recitals

A. Owner owns or has lawful control of the real property located at [PROJECT ADDRESS / LEGAL DESCRIPTION] (the “Site”).
B. Owner desires to engage Contractor to furnish certain construction services upon the terms and conditions set forth herein.
C. Contractor is duly qualified and willing to perform such services in compliance with all applicable laws, including North Carolina mechanics’ lien statutes, N.C. Gen. Stat. § 44A-7 et seq.

NOW, THEREFORE, in consideration of the mutual covenants herein, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below. All definitions apply equally to singular and plural forms.

“Applicable Law” – all statutes, regulations, building codes, ordinances, and orders of any governmental authority with jurisdiction over the Work, including N.C. Gen. Stat. § 44A-7 et seq. (mechanics’ liens) and § 44A-26 (payment bonds, where required).

“Change Order” – a written agreement executed by Owner and Contractor altering the Scope of Work, Contract Sum, or Contract Time, issued pursuant to Section 3.4.

“Contract Documents” – collectively, (a) this Agreement, (b) the plans, specifications, and drawings listed in Exhibit A, (c) all Change Orders, and (d) the project schedule attached as Exhibit B.

“Contract Sum” – the not-to-exceed amount of $[AMOUNT] payable to Contractor for performance of the Work, subject to adjustments by Change Order.

“Contract Time” – the period beginning on the Commencement Date and ending on the date of Substantial Completion, as set forth in Section 3.3.

“Lien Agent” – the title insurance company or licensed title insurance agent designated by Owner pursuant to N.C. Gen. Stat. § 44A-11.1, as identified in Exhibit C.

“Retainage” – the portion of each Progress Payment withheld pursuant to Section 3.2(c).

“Site” – the real property described in the Recitals.

“Substantial Completion” – the date on which the Work is sufficiently complete such that Owner can occupy or utilize the Project for its intended purpose, certified in writing by Owner’s architect.

“Work” – all labor, materials, equipment, and services required of Contractor by the Contract Documents.

3. OPERATIVE PROVISIONS

3.1 Scope of Work

a. Contractor shall diligently perform the Work in strict accordance with the Contract Documents and industry best practices.
b. Contractor shall provide all supervision, labor, materials, equipment, tools, utilities, and permits necessary to complete the Work.
c. Contractor shall comply with all Applicable Law, obtain all required permits, and schedule inspections.

[// GUIDANCE: Insert detailed statement of work or incorporate by reference the plans/specs in Exhibit A.]

3.2 Contract Sum; Payment Terms; Retainage

a. Contract Sum. Owner shall pay Contractor the Contract Sum, subject to additions and deductions by Change Order.
b. Schedule of Values & Progress Payments. Contractor shall submit a schedule of values for Owner’s approval. Progress Payments shall be made monthly, based on duly certified applications for payment covering Work performed to date.
c. Retainage. Owner shall withhold five percent (5%) of each Progress Payment as Retainage until fifty percent (50%) of the Work is complete; thereafter, no further Retainage shall be withheld, and previously withheld Retainage shall be released upon Substantial Completion, less any sums reasonably necessary to protect Owner.
d. Lien Waivers. As a condition precedent to payment, Contractor shall furnish (i) a partial conditional lien waiver with each application for payment and (ii) an unconditional final lien waiver at Final Payment.
e. Notice to Lien Agent. Prior to the first payment, Contractor shall provide Owner with written evidence that it has delivered the required Notice to Lien Agent (N.C. Gen. Stat. § 44A-11.2).
f. Payment Disputes. If Owner objects to any item on an application for payment, Owner shall provide written notice within seven (7) days, specifying reasons. Undisputed amounts shall be paid timely.

3.3 Schedule; Milestones

a. Commencement Date: [DATE].
b. Substantial Completion: [DATE] (____calendar days after the Commencement Date).
c. Time is of the essence. Contractor shall achieve each milestone in Exhibit B.
d. Delays. Contractor shall be entitled to an extension of Contract Time, but not additional compensation, for delays caused solely by Owner or force majeure (Section 7.4).

3.4 Changes in the Work

a. Owner may order changes by written Change Order.
b. Contractor shall not proceed with changed Work prior to execution of a signed Change Order.
c. Adjustments to Contract Sum or Contract Time shall be based on (i) agreed lump-sum, (ii) unit prices, or (iii) time-and-materials plus agreed fee.

4. REPRESENTATIONS & WARRANTIES

4.1 Contractor represents and warrants that:
a. It is duly licensed, solvent, and qualified to do business in North Carolina.
b. The Work shall be performed in a good and workmanlike manner, free of defects, and in compliance with the Contract Documents.
c. Materials furnished shall be new (unless otherwise specified) and of good quality.
d. Title to all Work, materials, and equipment passes to Owner free of liens upon payment.

4.2 Warranty Period. Contractor’s warranty obligations shall survive Final Payment for a period of one (1) year from Substantial Completion, or longer if required by the Contract Documents or manufacturer’s warranty.

5. COVENANTS & RESTRICTIONS

5.1 Compliance. Contractor shall at all times comply with Applicable Law and shall give all notices required thereby.

5.2 Safety. Contractor shall be solely responsible for the safety of its employees, subcontractors, and the Site, and shall maintain an OSHA-compliant safety program.

5.3 Subcontractors. Contractor shall be fully responsible for acts and omissions of its subcontractors. All subcontracts shall (i) require compliance with this Agreement, (ii) contain lien waiver and indemnity provisions no less protective of Owner than those set forth herein, and (iii) preserve Owner’s rights.

5.4 Notice of Claim. Contractor shall provide written notice to Owner of any claim for additional time or money within seven (7) days after occurrence giving rise to the claim and detailed supporting documentation within fourteen (14) days thereafter.

6. DEFAULT & REMEDIES

6.1 Events of Default – Contractor. Any of the following constitutes a Contractor default:
a. Failure to prosecute the Work diligently;
b. Failure to pay subcontractors or suppliers when due, absent good-faith dispute;
c. Filing of mechanics’ liens in violation of Section 3.2(d);
d. Failure to maintain required insurance or bonds;
e. Insolvency, bankruptcy, or assignment for benefit of creditors;
f. Material breach of any covenant, representation, or warranty.

6.2 Cure Period. Owner shall provide written Notice of Default. Contractor shall have seven (7) days to commence and thirty (30) days to complete cure (unless otherwise agreed).

6.3 Owner Remedies. If Contractor fails to cure within the prescribed period, Owner may, without prejudice to other rights, (i) supplement or take over the Work, (ii) withhold further payments, (iii) terminate for cause, and/or (iv) seek all remedies at law or in equity, including specific performance and recovery of attorney fees pursuant to Section 6.5.

6.4 Events of Default – Owner. Owner’s failure to make undisputed payments within ten (10) days after written notice constitutes an Owner default. Contractor’s remedies are limited to suspension of Work and/or termination, together with interest on late payments at the lesser of eighteen percent (18%) per annum or the maximum lawful rate.

6.5 Attorneys’ Fees. The prevailing Party in any dispute arising under this Agreement shall be entitled to recover reasonable attorneys’ fees, court costs, and expenses.

7. RISK ALLOCATION

7.1 Indemnification

To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner and its officers, directors, members, agents, and lenders from and against all claims, damages, losses, and expenses (including attorneys’ fees) arising out of or resulting from the Work, provided that any such claim, damage, loss, or expense is caused in whole or in part by the negligent act or omission of Contractor or anyone for whose acts Contractor may be liable.

[// GUIDANCE: North Carolina law prohibits indemnity for the indemnitee’s sole negligence. This clause is drafted to comply with N.C. Gen. Stat. § 22B-1.]

7.2 Insurance

Contractor shall procure and maintain, at its own expense, insurance of the types and minimum limits set forth in Exhibit D, naming Owner and the Lien Agent as additional insureds using ISO CG 20 10 11 85 or its equivalent.

7.3 Bonds

a. Payment Bond (Optional). If the Contract Sum equals or exceeds $300,000, Contractor shall furnish a payment bond in the full amount of the Contract Sum, meeting the requirements of N.C. Gen. Stat. § 44A-26, naming Owner as obligee.
b. Performance Bond (Optional). Owner may, by written directive, require Contractor to furnish a performance bond in like amount.
[// GUIDANCE: Delete or adjust thresholds if project is under $300k or if Owner elects to require bonds regardless of price.]

7.4 Force Majeure

Neither Party shall be liable for delays or failure in performance due to causes beyond its reasonable control, including acts of God, war, terrorism, or governmental orders. The affected Party shall provide prompt notice and exercise diligent efforts to mitigate.

7.5 Limitation of Liability

Except for (i) Contractor’s indemnification obligations, (ii) liability for gross negligence or willful misconduct, and (iii) obligations to obtain insurance or bonds, Contractor’s aggregate liability to Owner under this Agreement shall not exceed the Contract Sum.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina, without regard to conflict-of-laws principles.

8.2 Forum Selection. The state courts of [COUNTY], North Carolina shall have exclusive jurisdiction. Each Party irrevocably submits to such courts.

8.3 Arbitration (Optional). At either Party’s election, any dispute may be submitted to binding arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules. The arbitration shall take place in [CITY, NC]. Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Jury Trial Waiver (Optional). TO THE EXTENT PERMITTED BY LAW, 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 herein shall limit either Party’s right to seek temporary, preliminary, or permanent injunctive relief in any court of competent jurisdiction.

9. GENERAL PROVISIONS

9.1 Amendment; Waiver. No modification of this Agreement is effective unless in a written instrument signed by both Parties. A waiver on one occasion is not a waiver on subsequent occasions.

9.2 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 without Contractor’s consent.

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

9.4 Severability. If any provision is held invalid, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to comply with Applicable Law.

9.5 Entire Agreement. The Contract Documents constitute the entire agreement between the Parties and supersede all prior negotiations and understandings.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which is deemed an original. Signatures exchanged via PDF, DocuSign, or similar electronic means are binding.

9.7 Notices. All notices shall be in writing and delivered by hand, certified mail (return receipt requested), or nationally recognized overnight courier to the addresses first written above (or as later designated), and shall be deemed given upon receipt.

9.8 Confidentiality. Contractor shall keep confidential all proprietary information obtained in connection with the Work, except as required by law.

10. EXECUTION BLOCK

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

[// GUIDANCE: Attach notarization blocks if required for recordable documents or as a lender condition. North Carolina does not mandate notarization for enforceability of a private construction contract, but notarization may aid in evidentiary authentication.]

EXHIBIT A – Plans & Specifications

[Attach or list detailed drawings, specifications, and any design documents.]

EXHIBIT B – Project Schedule / Milestones

[Insert Gantt chart or milestone table.]

EXHIBIT C – Lien Agent Information

Name: [LIEN AGENT NAME]
Address: [ADDRESS]
Telephone: [PHONE]
Email: [EMAIL]

EXHIBIT D – Insurance Requirements

1. Commercial General Liability: $[_] per occurrence / $[_] aggregate (ISO CG 00 01 12 07 or equivalent)
2. Workers’ Compensation: Statutory limits; Employers Liability $[____]
3. Automobile Liability: $[____] combined single limit
4. Excess/Umbrella Liability: $[____] per occurrence / aggregate
5. Builder’s Risk: Completed value form, special perils, naming Owner and Contractor as loss payees as their interests may appear.

[// END OF DOCUMENT]