CONSTRUCTION SERVICES AGREEMENT
(Oregon – Private Project with Lien-Law Compliance)
[// GUIDANCE: This template is drafted to comply with Oregon private-project construction requirements, including Construction Lien Law (ORS ch. 87), optional payment bond provisions, and statutory retainage limits. Customize all bracketed placeholders before execution.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Scope of Work & Performance Standards
- Contract Price; Payment Terms
- Time of Completion; Schedule Adjustments
- Lien-Law Compliance & Security Instruments
- Representations & Warranties
- Covenants
- Insurance & Risk Allocation
- Default; Remedies
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
THIS CONSTRUCTION SERVICES AGREEMENT (“Agreement”) is made and entered into as of [EFFECTIVE DATE] (“Effective Date”) by and between:
• [OWNER LEGAL NAME], a [STATE & TYPE OF ENTITY] (“Owner”), with its principal place of business at [ADDRESS]; and
• [CONTRACTOR LEGAL NAME], a [STATE & TYPE OF ENTITY] (“Contractor”), Oregon CCB License No. [LICENSE #], with its principal place of business at [ADDRESS].
RECITALS
A. Owner desires to engage Contractor to furnish all labor, materials, equipment, and services necessary to construct the improvements more particularly described herein (“Project”) on the real property located at [PROJECT ADDRESS & LEGAL DESCRIPTION] (“Site”).
B. Contractor is duly licensed and qualified to perform the Work (defined below) and is willing to do so in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein, the parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, the capitalized terms below have the meanings set forth. Terms defined elsewhere retain the same meaning when used herein.
“Applicable Law” – All federal, state, and local statutes, ordinances, regulations, building codes, and lawful orders of public authorities applicable to the Project, including without limitation Oregon Construction Lien Law, Or. Rev. Stat. ch. 87 (“Lien Law”).
“Change Order” – A written modification to the Agreement issued in accordance with § 3.6.
“Completion” – Substantial completion of the Work such that Owner may occupy or utilize the Project for its intended purpose, as certified in writing by Owner’s Representative under § 3.7.
“Contract Documents” – This Agreement, the plans and specifications listed in Exhibit A, approved Change Orders, schedules, and any other documents expressly incorporated herein.
“Contract Price” – The lump-sum amount of $[CONTRACT PRICE] or such other amount as may be adjusted pursuant to this Agreement.
“Owner’s Representative” – The individual designated in writing by Owner to act on Owner’s behalf for administration of the Contract Documents.
“Retainage” – The portion of each Progress Payment withheld pursuant to § 4.2.
“Work” – The labor, materials, equipment, services, and obligations to be performed or furnished by Contractor under the Contract Documents.
3. SCOPE OF WORK & PERFORMANCE STANDARDS
3.1 Work. Contractor shall diligently perform the Work in strict accordance with the Contract Documents, free of defects, and in a good and workmanlike manner consistent with industry standards.
3.2 Commencement. Contractor shall commence on the Site no later than [COMMENCEMENT DATE] following (i) execution of this Agreement, (ii) delivery of the statutory Information Notice to Owner required by Or. Rev. Stat. § 87.021(3) (2023), and (iii) receipt of all permits.
3.3 Permits & Approvals. Contractor shall obtain and pay for all required permits, licenses, fees, and inspections, except as otherwise provided in Exhibit B.
3.4 Supervision & Labor. Contractor shall provide competent supervision, employ skilled labor legally authorized to work in the United States, and comply with all OSHA and Oregon OSHA requirements.
3.5 Coordination. Contractor shall coordinate the Work with other contractors, subcontractors, and suppliers to avoid delay or interference.
3.6 Changes in the Work. Owner may request changes. No change is effective unless memorialized by a Change Order signed by both parties, stating scope, price, and time adjustments.
3.7 Substantial & Final Completion. Contractor shall achieve Substantial Completion by [SUBSTANTIAL COMPLETION DATE]. Final Completion shall occur upon (i) correction of punch-list items; (ii) delivery of final unconditional lien waivers; and (iii) issuance of a certificate of occupancy or equivalent.
4. CONTRACT PRICE; PAYMENT TERMS
4.1 Schedule of Payments. Owner shall pay Contractor the Contract Price in the following manner:
a. Mobilization Payment: $[AMOUNT OR %] upon commencement;
b. Progress Payments: Monthly, based on percentage of Work completed, less Retainage;
c. Final Payment: Balance, including released Retainage, within ten (10) days after Final Completion and receipt of all close-out deliverables.
4.2 Retainage. Owner shall withhold five percent (5 %) of each Progress Payment (“Retainage”), not to exceed the statutory maximum under Or. Rev. Stat. §§ 701.420–.430 (2023). Retainage shall be released within thirty (30) days after Final Completion, subject to § 6.
[// GUIDANCE: Adjust Retainage percentage only if Oregon statutes change; 5 % is the widely observed private-project cap.]
4.3 Interest on Late Payments. Any undisputed amount not paid within fifteen (15) days after due accrues interest at [RATE %] per annum or the maximum lawful rate, whichever is less.
4.4 Conditional Payment. Progress and Final Payments are expressly conditioned upon Contractor’s delivery of (a) conditional/unconditional lien waivers from itself and all subcontractors and suppliers, (b) sworn statement of accounts, and (c) any payment bond required under § 6.2.
5. TIME OF COMPLETION; SCHEDULE ADJUSTMENTS
5.1 Time is of the Essence. Contractor acknowledges that timely completion is a material term.
5.2 Delays. Contractor is entitled to a time extension, but not monetary compensation, for Owner-caused delays, force majeure (as defined in § 9.4), or differing site conditions, provided Contractor gives written notice within five (5) days of the event.
5.3 Liquidated Damages. If Contractor fails to achieve Substantial Completion by the specified date (as may be extended), Contractor shall pay Owner liquidated damages of $[LD AMOUNT] per calendar day, not as a penalty but as a reasonable pre-estimate of Owner’s damages.
6. LIEN-LAW COMPLIANCE & SECURITY INSTRUMENTS
6.1 Statutory Notices.
a. Contractor shall deliver to Owner, prior to the first invoice, the “Information Notice to Owner” compliant with Or. Rev. Stat. § 87.021(3) (2023).
b. Contractor shall require each subcontractor or supplier without a direct contract with Owner to serve a written “Notice of Right to Lien” under Or. Rev. Stat. § 87.021(1) (2023) within eight (8) days of first furnishing its labor or materials.
6.2 Payment Bond (Optional).
a. If the Contract Price equals or exceeds $[BOND THRESHOLD], Contractor shall furnish a statutory payment bond in the amount of one hundred percent (100 %) of the Contract Price, naming Owner as obligee, issued by a surety admitted in Oregon and listed on U.S. Treasury Circular 570.
b. Failure to provide the bond within ten (10) days of request is an Event of Default under § 10.1.
[// GUIDANCE: A payment bond mitigates lien exposure. Delete this subsection if Owner elects not to require a bond.]
6.3 Release of Liens. Contractor shall, as a condition precedent to each payment, provide conditional or unconditional lien waivers in forms compliant with Or. Rev. Stat. § 87.025(4) (2023) from itself and all downstream participants.
6.4 Owner’s Right to Withhold. If any lien or stop-notice is filed, Owner may withhold from payments an amount sufficient to indemnify Owner against such claim until (a) bond discharge, (b) lien release, or (c) final non-appealable court determination.
7. REPRESENTATIONS & WARRANTIES
7.1 Authority. Each party represents that it has full power and authority to enter into and perform this Agreement.
7.2 Contractor Warranties. Contractor warrants that:
a. Workmanship & Materials: For a period of [ONE (1)] year after Final Completion, Work will be free from defects in materials and workmanship.
b. Compliance: Work will comply with Applicable Law and the Contract Documents.
c. Title: Title to all materials and equipment passes to Owner free of liens upon incorporation into the Work or upon payment, whichever occurs first.
7.3 Survival. The warranties in this § 7 survive Completion and any termination of this Agreement.
8. COVENANTS
8.1 Safety. Contractor shall establish and enforce a comprehensive safety program, comply with OR-OSHA standards, and hold Owner harmless from safety violations.
8.2 Taxes. Contractor shall pay all payroll, sales, use, and other taxes arising out of the Work.
8.3 Records & Audit. Contractor shall maintain cost records for at least three (3) years and make them available to Owner upon reasonable request.
8.4 Non-Discrimination. Contractor shall not discriminate against any employee or applicant in violation of Applicable Law.
9. INSURANCE & RISK ALLOCATION
9.1 Insurance. Prior to commencing Work, Contractor shall procure and maintain:
a. Commercial General Liability: $[AMOUNT] per occurrence, $[AMOUNT] aggregate, on CG 00 01 form or equivalent;
b. Auto Liability: $[AMOUNT];
c. Workers’ Compensation: Statutory limits & Employer’s Liability $[AMOUNT];
d. Builder’s Risk/Installation Floater: Full replacement value of Work in place and stored materials (may be carried by Owner – see Exhibit C).
Certificates evidencing coverage and endorsements naming Owner as additional insured (CG 20 10 04/13 & CG 20 37 04/13 or equivalent) shall be provided before mobilization.
9.2 Indemnification. To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless Owner, its affiliates, and their respective officers, directors, and employees from and against all claims, damages, losses, and expenses, including attorney fees, arising out of or relating to the Work, except to the extent caused by Owner’s sole negligence or willful misconduct.
9.3 Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE AGGREGATE LIABILITY OF OWNER TO CONTRACTOR FOR ALL CLAIMS ARISING UNDER THIS AGREEMENT SHALL NOT EXCEED THE CONTRACT PRICE. THIS LIMITATION SHALL NOT APPLY TO (I) OWNER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (II) PAYMENT OF SUMS EXPRESSLY DUE UNDER § 4.
9.4 Force Majeure. Neither party shall be liable for delay or failure to perform caused by events beyond its reasonable control, including acts of God, war, terrorism, pandemic, labor strikes (excluding Contractor’s own labor force), or governmental orders. The affected party shall notify the other within five (5) days, and performance shall be equitably adjusted.
10. DEFAULT; REMEDIES
10.1 Events of Default. The following constitute Contractor Events of Default:
a. Failure to prosecute Work diligently or achieve milestones;
b. Failure to supply adequate labor or materials;
c. Insolvency, bankruptcy, or assignment for creditors;
d. Material breach of any covenant, representation, or warranty;
e. Failure to furnish bond or insurance as required.
10.2 Notice & Cure. Owner shall give written notice of default. Contractor has seven (7) days to cure (forty-eight (48) hours in emergencies affecting life or safety).
10.3 Owner Remedies. Upon Contractor Event of Default and failure to cure, Owner may, without prejudice to other remedies:
a. Supplement or take over the Work and deduct the cost from unpaid balance;
b. Terminate this Agreement for cause, finish the Work, and recover excess completion costs;
c. Seek specific performance or injunctive relief;
d. Pursue any other remedy available at law or equity.
10.4 Termination for Convenience. Owner may terminate for convenience upon ten (10) days’ notice, paying Contractor for (i) Work satisfactorily performed, (ii) proven demobilization costs, and (iii) no more than five percent (5 %) of the unpaid Contract Price as termination fee.
10.5 Attorney Fees. The prevailing party in any dispute arising from this Agreement is entitled to recover reasonable attorney fees, costs, and expenses, including those incurred on appeal.
11. DISPUTE RESOLUTION
11.1 Governing Law. This Agreement is governed by the laws of the State of Oregon, without regard to its conflict-of-laws principles.
11.2 Forum Selection. The parties consent to exclusive jurisdiction and venue in the state courts located in [COUNTY], Oregon.
11.3 Mediation (Condition Precedent). As a condition precedent to litigation or arbitration, the parties shall participate in non-binding mediation under the Construction Industry Mediation Rules of the American Arbitration Association (“AAA”) within thirty (30) days after a written demand.
11.4 Arbitration (Optional). If the parties initial below, disputes not resolved in mediation shall be decided by binding arbitration administered by the AAA under its Construction Industry Arbitration Rules, and judgment may be entered in any court of competent jurisdiction.
OWNER INITIALS _ CONTRACTOR INITIALS _
11.5 Jury Trial Waiver (Optional). IF, BUT ONLY IF, ARBITRATION IS NOT ELECTED, THE PARTIES WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO ANY DISPUTE ARISING HEREUNDER.
11.6 Interim Relief. Either party may seek temporary injunctive or equitable relief from a court of competent jurisdiction to preserve the status quo pending final resolution.
12. GENERAL PROVISIONS
12.1 Entire Agreement; Integration. This Agreement, including exhibits, constitutes the entire agreement and supersedes all prior discussions.
12.2 Amendments. No amendment or waiver is effective unless in a writing signed by both parties.
12.3 Assignment. Contractor may not assign or delegate its rights or obligations without Owner’s prior written consent.
12.4 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the parties and their permitted successors and assigns.
12.5 Severability. If any provision is held invalid, the remaining provisions remain in effect, and the invalid provision shall be reformed to the minimum extent necessary to be enforceable.
12.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Signatures transmitted electronically (e.g., via DocuSign or PDF) are binding.
12.7 Notices. All notices shall be in writing and delivered (i) personally, (ii) by certified mail (return receipt requested), or (iii) by nationally recognized overnight courier, to the addresses set forth above, with copies as indicated. Notices are effective upon receipt or first refusal.
13. EXECUTION BLOCK
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
OWNER:
[OWNER LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
CONTRACTOR:
[CONTRACTOR LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
[// GUIDANCE: Attach exhibits as needed—e.g., Exhibit A (Plans & Specs), Exhibit B (Permit Responsibility Matrix), Exhibit C (Insurance Matrix), Exhibit D (Schedule). Consider notarization if required for recordable memoranda or for Owner’s financing purposes.]