Construction Contract

TENNESSEE PRIVATE COMMERCIAL CONSTRUCTION AGREEMENT

1. Project Classification — Required

This form may be used only after Tennessee counsel confirms all items below.

Do not use this form by merely changing the project label if the project is
public, residential, home-improvement, federally funded, or subject to a
special procurement, licensing, design-professional, or consumer regime.

2. Parties and Agreement

This Construction Agreement is entered on [DATE] by:

Owner: [LEGAL NAME, ENTITY TYPE, ADDRESS] (“Owner”)

Contractor: [LEGAL NAME, ENTITY TYPE, ADDRESS] (“Contractor”)

Project: [DESCRIPTION AND ADDRESS] (“Project”)

The parties agree that Contractor will perform the Work and Owner will pay the
Contract Price under this Agreement and the completed Contract Documents.

3. Contract Documents and Priority

The Contract Documents are:

1. this Agreement;
2. Exhibit A — Scope, drawings, specifications, and exclusions;
3. Exhibit B — Price and schedule of values;
4. Exhibit C — Project schedule and milestones;
5. Exhibit D — insurance and bond requirements;

6. Exhibit E — project-specific lien, notice, waiver, and payment forms approved
   by Tennessee counsel;

7. Exhibit F — safety, site, environmental, and owner rules; and

8. signed Change Orders.

If documents conflict, the following order controls: [_____________________].
A Change Order controls only to the extent it expressly changes another
Contract Document.

4. Scope of Work

Contractor shall furnish the labor, supervision, materials, equipment, and
services described in Exhibit A (“Work”). Exhibit A must identify:

• included and excluded work;
• drawings, specifications, revision dates, and design responsibility;
• allowances, alternates, unit prices, and owner-furnished items;
• permits and inspections assigned to each party;
• temporary facilities, utilities, access, storage, and cleanup;
• testing, commissioning, closeout, and training; and
• subcontracted portions and approved key subcontractors.

Neither a course of dealing nor field direction changes the scope, price, or
time unless documented under Section 8, except for documented emergency work
necessary to protect persons or property.

5. Contract Price

Pricing method: ☐ Lump sum ☐ Cost plus fee ☐ Unit price ☐ Guaranteed
maximum price ☐ Other: [________________]

Initial Contract Price: $[________________]

Exhibit B states the schedule of values, allowances, alternates, taxes,
reimbursable costs, contractor fee, contingency ownership, and audit records.
No amount is payable merely because it appears in an estimate; payment depends
on the agreed pricing method, completed Work, and the Contract Documents.

6. Contract Time

Time is of the essence: ☐ Yes ☐ No

Liquidated damages: ☐ None ☐ $[____] per [day], supported by the attached
project-specific analysis and reviewed for enforceability by counsel.

Early-completion incentive: ☐ None ☐ [_______________________________]

7. Applications for Payment

Contractor may submit an application on [DAY/FREQUENCY] using [FORM]. Each
application must identify completed Work, stored materials if allowed,
approved Change Orders, prior payments, retainage, and the current balance.

Owner or its payment reviewer shall state any disputed amount and factual or
contractual basis in writing. Payment of an application does not waive a claim
for defective, incomplete, or nonconforming Work.

Payment period after a proper application: [____ DAYS], subject to current
law and any good-faith disputed amount.

Required support: [invoices / schedule update / photos / testing / payroll /
other: ________________________________]

7.1 Retainage Election

Select one:

☐ No retainage. No amount will be characterized or withheld as retainage.

☐ Retainage. Owner may withhold [____]%, which must not exceed the
five-percent ceiling in Tenn. Code Ann. § 66-34-103(a).

For the retainage option, counsel must attach current escrow, notice, ownership,
release, downstream-payment, remedy, and nonwaiver instructions applicable to
this Project. Do not rely on a bank threshold or escrow sentence copied from
another project without current review.

Under § 66-34-103(b), Owner must release and pay retainage for completed Work to
Contractor within 90 days after completion of the Work or within 90 days after
substantial completion of the Project for completed Work, whichever occurs
first. “Work completed” must be evaluated under the contract scope, terms, and
conditions described in that subsection.

Retainage account/instructions exhibit: [____________________________]

Contractor's downstream retainage process: [_________________________]

7.2 Final Payment

Final payment is due after the completed closeout requirements selected below:

• ☐ final application and schedule of values;
• ☐ correction of listed punch work, subject to any agreed withholding;
• ☐ final inspections and certificates required for the Work;
• ☐ warranties, manuals, training, and as-built records;
• ☐ consent of surety if a bond requires it; and
• ☐ project-specific lien/payment documentation approved by Tennessee counsel.

Do not demand an unconditional waiver or sworn payment statement before the
facts stated in that document are true. Payment and waiver sequencing must be
set claimant by claimant in Exhibit E.

8. Changes

Only an authorized written Change Order changes price, time, scope, allowances,
or other material terms. A Change Order must state:

If immediate direction is necessary before price or time is agreed, use a
written interim directive that reserves disputed adjustments and defines
records Contractor must keep. No party waives a claim merely by performing
documented emergency protection work.

9. Site, Existing Conditions, and Owner Information

Owner shall provide lawful access and the owner-furnished information listed in
Exhibit A. Contractor shall promptly report concealed, unknown, or materially
different conditions before disturbing them when practicable.

The parties shall document investigation, safety measures, direction, cost,
delay, and responsibility through the change process. A site visit is not an
automatic waiver of concealed-condition, design, environmental, or owner-
information issues.

10. Performance Standards and Warranty

Contractor shall perform the Work in accordance with the Contract Documents,
applicable permits and codes, and the standards expressly stated in Exhibit A.

Correction/warranty period: [________________], subject to longer product,
manufacturer, code, or Contract Document obligations and any rights that cannot
be shortened by contract.

Contractor shall give Owner written product and subcontractor warranties at
closeout. This section does not create a liability cap or shorten a statutory
period of limitation or repose.

11. Insurance and Bonds

Exhibit D must identify required coverage, limits, deductibles, endorsements,
additional insured status, primary/noncontributory terms, completed-operations
duration, certificates, and notice expectations after broker review.

Performance bond: ☐ Not required ☐ Required by [PROJECT-SPECIFIC SOURCE]

Payment bond: ☐ Not required ☐ Required by [PROJECT-SPECIFIC SOURCE]

No private-project bond duty or full-price bond threshold is created by a blank
in this form. State the contractual, lender, owner, or statutory basis.

12. Safety, Protection, and Compliance

Contractor shall control its means, methods, sequencing, and safety precautions,
except to the extent the Contract Documents assign a design or coordination
responsibility differently. Each party shall report an imminent hazard and take
reasonable steps within its control to protect persons and property.

Contractor shall maintain required licenses and permits for its assigned Work.
Owner may request current verification, but acceptance of a certificate does
not enlarge or reduce either party's obligations.

13. Suspension and Termination

13.1 Owner Suspension

Owner may direct a written suspension stating its scope, start, site-security
requirements, and anticipated duration. Unless caused by Contractor's breach,
the parties shall evaluate documented cost and time effects under Section 8.

13.2 Termination for Cause

After written notice describing a material breach and a cure opportunity of
[____ DAYS] when cure is reasonably possible, the nonbreaching party may use
the remedies stated in this Agreement and applicable law. Immediate protective
action may be taken for an emergency or an uncured imminent danger.

13.3 Owner Termination for Convenience

☐ Not included.

☐ Included on [____ DAYS'] notice. Compensation is limited to completed Work,
properly ordered noncancelable materials, reasonable demobilization, and
[NEGOTIATED TERMINATION FEE OR NONE], less prior payments and documented
offsets. No profit on unperformed Work is payable unless stated here:
[____________________________________________________________]

13.4 Insolvency Events

An insolvency, receivership, or bankruptcy event triggers only the rights that
current bankruptcy and other applicable law permits. It is not an automatic
self-executing forfeiture of property, payment, or contract rights.

14. Claims, Records, and Mitigation

A party requesting price, time, or other relief shall give written notice within
the negotiated target of [____ DAYS] after it knew or reasonably should have
known of the event. The target and its consequences must be reviewed for the
claim involved; this form does not call every late notice an automatic waiver.

The notice should identify facts, requested relief, schedule effect, mitigation,
and records. The parties shall preserve daily reports, correspondence, cost
records, schedules, photographs, testing, payment records, and change documents.

15. Risk Allocation Schedule

No indemnity, duty to defend, consequential-damages waiver, or Contract-Price
liability cap is created by default. Counsel must complete this schedule after
reviewing the parties, fault allocation, insurance, work, and current law.

16. Dispute Process

Executive negotiation: [representatives and period]

Mediation: ☐ Required before binding process ☐ Optional

Binding process: ☐ Tennessee court selected after jurisdiction and venue
review ☐ Arbitration under attached counsel-approved clause

Forum or arbitral seat: [________________________________]

Jury waiver: ☐ None. Any waiver must be separately drafted and reviewed for
conspicuousness, assent, bargaining context, and current Tennessee law.

Attorney fees and costs: ☐ Each party bears its own, subject to applicable
law ☐ Attached negotiated clause reviewed by counsel

Nothing in this section creates jurisdiction, changes a statutory venue rule,
or bars emergency relief that the selected court or tribunal may grant.

17. General Terms

17.1 Notices

Contract notices must be written and delivered by the selected methods:
[personal delivery / recognized courier / certified mail / agreed project
platform / email with stated confirmation]. Addresses and deemed-receipt rules:
[____________________________________________________________]

17.2 Assignment and Subcontracting

Neither party may assign this Agreement without [CONSENT STANDARD], except as
stated here: [__________________________________________________________].
Contractor remains responsible for subcontracted Work unless an enforceable
written novation or other agreement states otherwise.

17.3 Independent Parties

The parties are independent contracting parties. This Agreement does not itself
create a partnership, joint venture, employment relationship, or authority for
one party to bind the other.

17.4 Entire Agreement and Amendment

The Contract Documents are the entire agreement concerning the Work. A material
amendment must be in a writing signed by authorized representatives, subject to
the interim-direction process in Section 8.

17.5 No Automatic Reformation

If a provision is unenforceable, it is severed only to the extent a court or
tribunal determines. This Agreement does not authorize automatic rewriting to
the maximum extent possible.

17.6 No Implied Waiver

A waiver must be intentional and applies only to the identified matter. Payment,
inspection, occupancy, or failure to enforce once does not by itself waive a
different claim.

17.7 Counterparts and Electronic Process

The parties may sign counterparts and use an agreed electronic process after
confirming identity, authority, document integrity, delivery, and retention.
No notary acknowledgment is included unless a separate document or current law
requires one.

18. Signatures

The authorized representatives sign this Agreement after completing all
schedules and exhibits.

Exhibits

• Exhibit A — Scope, drawings, specifications, and exclusions
• Exhibit B — Price, schedule of values, and audit records
• Exhibit C — Project schedule and milestones
• Exhibit D — Insurance and bonds

• Exhibit E — Lien, notice, waiver, affidavit, and payment forms selected by
  Tennessee counsel

• Exhibit F — Safety, site, environmental, and owner requirements

• Exhibit G — Retainage escrow and notice instructions, if retainage is used
• Exhibit H — Indemnity, damages, and dispute clauses selected by counsel

Sources and Currency Record

• 2025 consolidated text and History, Tenn. Code Ann. § 66-34-103:
  https://law.justia.com/codes/tennessee/title-66/chapter-34/part-1/section-66-34-103/

• 2007 Tenn. Pub. Acts ch. 201:
  https://publications.tnsosfiles.com/acts/105/pub/pc0201.pdf

• 2008 Tenn. Pub. Acts ch. 804:
  https://publications.tnsosfiles.com/acts/105/pub/pc0804.pdf

• 2012 Tenn. Pub. Acts ch. 609:
  https://publications.tnsosfiles.com/acts/107/pub/pc0609.pdf

• 2020 Tenn. Pub. Acts ch. 749:
  https://publications.tnsosfiles.com/acts/111/pub/pc0749.pdf