CONSTRUCTION SERVICES AGREEMENT

(North Dakota – Private Project)

[// GUIDANCE: This template is drafted for use on private commercial construction projects located in North Dakota. Modify for public-works projects, residential projects, or multi-state undertakings as needed.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

1.1 Parties

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

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

1.2 Recitals

A. Owner desires that certain improvements (the “Project”) be constructed on real property located at [PROJECT ADDRESS / LEGAL DESCRIPTION] (the “Site”).
B. Contractor represents that it is duly qualified and willing to perform the Work (as defined below) in accordance with the terms of this Agreement.
C. The parties intend for this Agreement to comply with all applicable North Dakota construction-lien, payment-bond, and retainage statutes, including, without limitation, N.D. Cent. Code ch. 35-27.

NOW, THEREFORE, in consideration of the mutual covenants herein, and other good and valuable consideration, the sufficiency of which is acknowledged, the parties agree as follows:

2. DEFINITIONS

For ease of reference, the following capitalized terms shall have the meanings set forth below. Defined terms used in plural shall include the singular and vice-versa where the context so requires.

“Application for Payment” – A written request, in AIA G702/G703 format or other form acceptable to Owner, for payment of the Contract Price or any portion thereof.

“Change Order” – A written modification to the Contract Documents executed by Owner and Contractor in accordance with Section 3.8.

“Completion” – The stage at which (i) the Work is Substantially Complete; (ii) all governmental approvals for occupancy or use have been issued; and (iii) all punch-list items have been remedied.

“Contract Documents” – Collectively, this Agreement, the Drawings and Specifications, any Change Orders, and the documents listed in Exhibit A.

“Contract Price” – The lump sum of [CONTRACT PRICE IN WORDS] Dollars (US $[AMOUNT]) payable to Contractor for performance of the Work, subject to adjustments under the Contract Documents.

“Day” – Calendar day unless expressly stated as “Business Day.”

“Lien Laws” – North Dakota construction lien statutes codified at N.D. Cent. Code ch. 35-27, as amended.

“Project Schedule” – The critical path schedule attached as Exhibit B, as may be adjusted by Change Order.

“Retainage” – The percentage of each Progress Payment withheld by Owner pursuant to Section 3.5.

“Site” – The real property identified in Recital A.

“Subcontractor” – A lower-tier contractor or supplier 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, in accordance with the Contract Documents, so that Owner can occupy or utilize the Project for its intended use.

“Work” – All labor, materials, equipment, services, and other obligations required of Contractor under the Contract Documents.

[// GUIDANCE: Add, remove, or refine definitions to align with project-specific terminology.]

3. OPERATIVE PROVISIONS

3.1 Scope of Work

Contractor shall furnish all supervision, labor, materials, tools, equipment, and services necessary to perform and complete the Work in strict conformity with the Contract Documents and applicable Laws.

3.2 Commencement & Time for Performance

(a) Commencement Date: Work shall commence on the later of (i) [COMMENCEMENT DATE] or (ii) issuance of all required permits.
(b) Substantial Completion: Contractor shall achieve Substantial Completion no later than [SUBSTANTIAL COMPLETION DATE], subject to permissible extensions under Section 7.4 (Force Majeure).
(c) Time is of the essence with respect to all dates and deadlines herein.

3.3 Contract Price & Consideration

Owner shall pay Contractor the Contract Price, as adjusted by Change Orders, in accordance with the payment provisions of this Section 3.

3.4 Schedule of Values & Applications for Payment

(a) Within ten (10) Days after the Effective Date, Contractor shall submit a detailed Schedule of Values allocating the Contract Price to discrete Work components.
(b) On or before the [DAY] of each month, Contractor shall submit an Application for Payment covering Work performed during the preceding period.

3.5 Progress Payments; Retainage

(a) Subject to Section 3.6, Owner shall make progress payments within thirty (30) Days after receipt of an undisputed Application for Payment.
(b) Retainage: Owner shall withhold [RETAINAGE PERCENTAGE]% (not to exceed any statutory maximum under North Dakota law) from each progress payment. Upon Substantial Completion, Retainage shall be reduced to [POST-SC RETAINAGE]% and released upon Final Completion, conditioned on receipt of the documents listed in Section 3.7(b).

[// GUIDANCE: North Dakota does not impose a specific retainage cap on private projects; parties often use 5–10%. Confirm any lender requirements.]

3.6 Conditions Precedent to Payment

Owner’s duty to make any payment is conditioned upon:
(i) Contractor’s delivery of duly executed lien waivers, sworn statements, and other documents reasonably requested by Owner;
(ii) Absence of any filed mechanic’s or materialman’s lien against the Project; and
(iii) Contractor’s compliance with the Lien Laws, including timely service of the Notice to Owner required by N.D. Cent. Code § 35-27-02.

3.7 Final Payment

(a) Contractor shall submit a final Application for Payment (“Final Application”) upon Completion.
(b) As a condition precedent to final payment, Contractor shall deliver: (1) unconditional final lien waivers; (2) as-built drawings; (3) all warranties; (4) evidence of cancellation of temporary insurance; and (5) a copy of the recorded Notice of Completion, if applicable.

3.8 Change Orders

(a) No modification to the Work, Contract Price, or time shall be valid unless set forth in a written Change Order executed by both parties.
(b) If Contractor encounters concealed conditions or material price escalation beyond its control, it shall notify Owner within two (2) Business Days, failing which Contractor waives any related adjustment.

3.9 Permits & Approvals

Except as listed in Exhibit C, Contractor shall obtain and pay for all permits, licenses, and inspections required for the Work.

3.10 Safety & Clean-Up

Contractor shall implement and enforce industry-standard safety measures, comply with OSHA requirements, and keep the Site free from accumulation of waste materials.

4. REPRESENTATIONS & WARRANTIES

4.1 Contractor represents and warrants to Owner that:
(a) It is duly organized, validly existing, and in good standing under the laws of its state of formation and is qualified to transact business in North Dakota;
(b) It holds all licenses and registrations required to perform the Work;
(c) The Work will be performed in a good and workmanlike manner, in accordance with the Contract Documents, applicable Laws, and professional standards;
(d) Materials furnished will be new and of good quality unless otherwise specified;
(e) The Work will be free from defects for one (1) year following Substantial Completion (“Warranty Period”) or such longer period as may be provided in the Contract Documents.

4.2 Survival. The warranties in this Article 4 shall survive expiration or termination of this Agreement to the extent provided by law.

5. COVENANTS & RESTRICTIONS

5.1 Affirmative Covenants of Contractor
(a) Compliance with Laws. Contractor shall comply with all federal, state, and local statutes, regulations, and ordinances applicable to the Work, including the Lien Laws.
(b) Insurance. Contractor shall maintain the insurance coverages and limits set forth in Exhibit D and shall furnish certificates evidencing such coverage prior to mobilization.
(c) Notice Obligations. Contractor shall provide prompt written notice of any event which may give rise to a lien, claim, or delay.

5.2 Negative Covenants
Contractor shall not:
(i) Assign any contract right or delegate any duty without Owner’s prior written consent, except to the extent of customary subcontracting;
(ii) Permit work stoppages that would jeopardize the Project Schedule;
(iii) File or permit filing of any lien against the Site except as expressly permitted by this Agreement.

6. DEFAULT & REMEDIES

6.1 Events of Default – Contractor

Any of the following constitutes a “Contractor Default”:
(a) Failure to prosecute the Work diligently or to adhere to the Project Schedule after five (5) Days’ notice;
(b) Filing of a mechanic’s lien contrary to Section 7.2;
(c) Failure to maintain required insurance;
(d) Insolvency, bankruptcy, or assignment for the benefit of creditors;
(e) Material breach of any representation, warranty, or covenant herein.

6.2 Owner Remedies

Upon Contractor Default and failure to cure within the period stated in the notice (not less than three (3) and not more than ten (10) Days, depending on urgency), Owner may, without prejudice to other remedies:
(i) Supplement or take over the Work and deduct completion costs;
(ii) Terminate this Agreement for cause;
(iii) Invoke the performance provisions of any bonds;
(iv) Seek specific performance, monetary damages, and/or injunctive relief.

6.3 Owner Default & Contractor Remedies

Owner’s failure to make undisputed payments within the period required constitutes an “Owner Default.” After ten (10) Days’ written notice and opportunity to cure, Contractor may suspend the Work or terminate this Agreement and recover unpaid amounts, reasonable demobilization costs, and direct damages.

6.4 Attorney Fees

The prevailing party in any dispute arising out of or related to the Contract Documents shall be entitled to recover reasonable attorneys’ fees and costs.

7. RISK ALLOCATION

7.1 Indemnification

Contractor shall, to the fullest extent permitted by law, indemnify, defend, and hold harmless Owner, Owner’s affiliates, and their respective directors, officers, employees, and agents (“Indemnitees”) from and against any and all claims, damages, losses, liabilities, fines, penalties, and expenses (including reasonable attorney fees) arising out of or related to:
(a) bodily injury, sickness, disease, or death of any person;
(b) damage to or loss of use of property; or
(c) breach of this Agreement or negligent act or omission of Contractor or its Subcontractors;
except to the extent caused by the negligence or willful misconduct of an Indemnitee.

7.2 Mechanic’s Liens

(a) Contractor shall comply strictly with the notice provisions of N.D. Cent. Code § 35-27-02 and shall obtain executed lien waivers in forms compliant with N.D. Cent. Code § 35-27-05 from itself and all Subcontractors and suppliers as a precondition to payment.
(b) If any lien is filed, Contractor shall, within five (5) Days, secure its release by bond, payment, or other means acceptable to Owner.

7.3 Limitation of Liability

EXCEPT FOR (i) INDEMNITY OBLIGATIONS UNDER SECTION 7.1, (ii) WILLFUL MISCONDUCT, OR (iii) CONTRACTOR’S GROSS NEGLIGENCE, THE TOTAL AGGREGATE LIABILITY OF EITHER PARTY TO THE OTHER SHALL NOT EXCEED THE CONTRACT PRICE.

7.4 Force Majeure

Neither party shall be liable for delay or failure in performance caused by force majeure events beyond its reasonable control (e.g., acts of God, war, epidemics, governmental actions). The affected party shall give notice within three (3) Days after the occurrence and shall resume performance as soon as practicable. Schedule adjustments shall be by Change Order.

7.5 Payment Bond

[OPTIONAL] If required by Lender or applicable Law, Contractor shall furnish a payment bond in the amount of the Contract Price, issued by a surety licensed in North Dakota and acceptable to Owner.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of North Dakota, without regard to its conflict-of-laws principles.

8.2 Forum Selection

Any action or proceeding arising out of or related to this Agreement shall be filed and maintained exclusively in the state courts located in [COUNTY], North Dakota. Each party irrevocably submits to such jurisdiction.

8.3 Mediation

As a condition precedent to litigation or arbitration, the parties shall participate in non-binding mediation administered by [MEDIATION PROVIDER] within thirty (30) Days after a written request for mediation.

8.4 Arbitration

[OPTIONAL – STRIKE IF NOT ELECTED] In lieu of litigation, any dispute not resolved through mediation may, upon mutual written agreement, be submitted to binding arbitration under the Construction Industry Arbitration Rules of the American Arbitration Association (“AAA”). The arbitration shall be conducted in [CITY], North Dakota before a panel of one (1) arbitrator with at least ten (10) years’ construction-law experience. Judgment on the award may be entered in any court of competent jurisdiction.

8.5 Jury Trial Waiver

[OPTIONAL – STRIKE IF NOT ELECTED] TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION RELATING TO THIS AGREEMENT.

8.6 Injunctive Relief

Nothing herein shall prevent either party from seeking temporary, preliminary, or permanent injunctive relief in aid of its rights under this Agreement.

9. GENERAL PROVISIONS

9.1 Entire Agreement; Integration. The Contract Documents constitute the entire agreement between the parties and supersede all prior negotiations, representations, or agreements, written or oral.

9.2 Amendments & Waivers. No amendment or waiver shall be effective unless in writing and signed by the party against whom enforcement is sought. A waiver shall not constitute a waiver of any subsequent breach.

9.3 Assignment. Neither party may assign its rights or delegate its duties without the prior written consent of the other, except that Owner may assign its rights to a lender providing financing for the Project.

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 intent.

9.5 Successors & Assigns. This Agreement shall bind and inure to the benefit of the parties and their respective successors and permitted assigns.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Electronic signatures shall be deemed originals and enforceable.

9.7 Notices. All notices shall be in writing and delivered by (i) personal delivery, (ii) nationally recognized overnight courier, or (iii) certified U.S. mail, return-receipt requested, to the addresses set forth in Section 1.1. Notices are effective upon receipt or refusal.

9.8 Interpretation. Headings are for convenience only. “Including” means “including without limitation.” This Agreement shall not be construed against the drafter.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Construction Services Agreement as of the Effective Date.

[Optional Notary Acknowledgment – include if project lender, title company, or recording office requires.]

EXHIBITS (List)

• Exhibit A – List of Contract Documents
• Exhibit B – Project Schedule
• Exhibit C – Permits/Approvals by Owner
• Exhibit D – Insurance Requirements

[// GUIDANCE: Insert or attach additional exhibits such as drawings, specifications, safety plan, and lender requirements.]

End of Document