CONSTRUCTION SERVICES AGREEMENT

(State of Tennessee – Private Project)

[// GUIDANCE: This template is drafted to comply with Tennessee private-project construction law, including lien-notice requirements (T.C.A. § 66-11-206), retainage limits and escrow obligations (T.C.A. § 66-34-103), and best-practice payment-bond provisions. Adapt bracketed placeholders before execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Scope of Work
   3.2 Contract Time
   3.3 Contract Price & Payment
   3.4 Change Orders
   3.5 Site Conditions & Access
4. Representations & Warranties
5. Covenants & Restrictions
6. Defaults & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

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

• [OWNER NAME], a [STATE] [TYPE OF ENTITY] having its principal place of business at [OWNER ADDRESS] (“Owner”); and
• [CONTRACTOR NAME], a [STATE] [TYPE OF ENTITY] holding Tennessee contractor’s license no. [LICENSE NO.] and having its principal place of business at [CONTRACTOR ADDRESS] (“Contractor”).

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

RECITALS
A. Owner desires that Contractor furnish all labor, materials, equipment, and services necessary to construct the improvements described herein on the real property commonly known as [PROJECT ADDRESS] (the “Project Site”).
B. Contractor represents that it is duly licensed, qualified, and willing to perform such work under the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth below, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following capitalized terms have the meanings set forth below. Undefined capitalized terms carry their ordinary meaning within the construction industry.

“Applicable Law” means all federal, state, and local statutes, ordinances, codes, regulations, and case law governing the Project, expressly including Tenn. Code Ann. §§ 66-11-101 et seq. (mechanics’ and materialmen’s liens) and Tenn. Code Ann. § 66-34-103 (retainage).

“Change Order” means a written modification of the Contract Price, Contract Time, or Scope of Work executed in accordance with Section 3.4.

“Contract Price” means the lump-sum amount of $[CONTRACT PRICE] payable to Contractor for full performance of the Work, subject to adjustment only by properly executed Change Orders.

“Contract Time” means the period commencing on the Notice to Proceed and ending upon Substantial Completion, as defined below.

“Draw Request” means Contractor’s itemized application for payment in the form required by Section 3.3.

“Lien Notice” means the written notice prescribed by Tenn. Code Ann. § 66-11-206 that informs Owner and any Lender of potential lien rights.

“Retainage” means that portion of each Progress Payment withheld by Owner pursuant to Section 3.3.2.

“Substantial Completion” means the stage in the progress of the Work when the Project is sufficiently complete, in accordance with the Contract Documents, so that Owner may occupy or utilize the Project for its intended use.

“Work” means all labor, services, materials, supplies, tools, equipment, and other items to be provided by Contractor to satisfy the Scope of Work.

[// GUIDANCE: Expand or modify the above definitions to match the final project manual/specifications.]

3. OPERATIVE PROVISIONS

3.1 Scope of Work

3.1.1 Contractor shall perform the Work described in Exhibit A (Scope of Work) and any approved Change Orders, in strict accordance with the Contract Documents and Applicable Law.
3.1.2 Contractor shall provide competent supervision, qualified labor, and new, first-class materials unless otherwise specified.

3.2 Contract Time

3.2.1 Owner shall issue a written Notice to Proceed within [___] days after execution of this Agreement.
3.2.2 Contractor shall achieve Substantial Completion within [NUMBER] calendar days after the Notice to Proceed and Final Completion within [NUMBER] calendar days thereafter.
3.2.3 Time is of the essence. Liquidated damages of $[LD AMOUNT] per day shall accrue for each day Substantial Completion extends beyond the Contract Time, as Contractor’s exclusive delay-related liability to Owner.

3.3 Contract Price & Payment

3.3.1 Progress Payments

(a) Contractor may submit a Draw Request on or after the [DAY] day of each month covering Work completed through the [CUT-OFF DATE].
(b) Each Draw Request shall (i) be notarized, (ii) include a conditional partial lien waiver in the form attached as Exhibit B, and (iii) list the retainage withheld pursuant to Section 3.3.2.
(c) Owner shall pay approved Draw Requests within [___] days after receipt, subject to any withholding permitted by this Agreement.

3.3.2 Retainage

(a) Owner shall withhold retainage equal to [RETAINAGE PERCENTAGE]% of each Progress Payment, not to exceed five percent (5%), in strict compliance with Tenn. Code Ann. § 66-34-103.
(b) If the Contract Price exceeds $500,000, Owner shall deposit all retainage into an interest-bearing escrow account at [ESCROW BANK], account no. [ACCOUNT NO.], and shall furnish Contractor with written evidence of the deposit within five (5) business days.
(c) Retainage shall be released to Contractor within thirty (30) days after Final Completion, provided no unresolved Claims exist.

[// GUIDANCE: Delete escrow language if Contract Price below statutory threshold.]

3.3.3 Final Payment

Final Payment shall be due upon (i) Final Completion, (ii) receipt of an unconditional final lien waiver from Contractor and all lower-tier claimants, (iii) delivery of warranties, as-built drawings, and O&M manuals, and (iv) satisfaction of all other contractual prerequisites.

3.3.4 Payment Not Acceptance

No payment by Owner shall constitute acceptance of defective or non-conforming Work.

3.4 Change Orders

Changes in the Work, Contract Price, or Contract Time shall be authorized only by a written Change Order executed by duly authorized representatives of both Parties. Contractor shall proceed with changed Work only upon such written authorization.

3.5 Site Conditions & Access

Owner shall provide Contractor reasonable access to the Project Site. Contractor has inspected the Site and accepts its condition, except as expressly noted in Exhibit C.

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Representations
Each Party represents that (a) it has full power and authority to enter into and perform this Agreement, and (b) execution does not violate any other agreement to which it is a party.

4.2 Contractor Representations
(a) Contractor holds all required licenses, permits, and registrations to perform the Work.
(b) Contractor is financially solvent and has the experience and capability to complete the Project.
(c) The Work will (i) conform to the Contract Documents, (ii) be free from defects in workmanship and materials, and (iii) comply with Applicable Law.
(d) All materials furnished shall be new and of good quality unless otherwise specified.

4.3 Warranty Period
Contractor warrants the Work for a period of one (1) year from the date of Substantial Completion or such longer period as may be required by the Contract Documents or manufacturer’s warranty.

4.4 Survival
The warranties and representations in this Article survive Final Payment and termination.

5. COVENANTS & RESTRICTIONS

5.1 Compliance with Law
Contractor shall perform the Work in compliance with Applicable Law and shall obtain and pay for all permits, inspections, and licenses.

5.2 Lien Law Compliance
(a) Contractor shall timely deliver the Lien Notice to Owner and any construction lender in accordance with Tenn. Code Ann. § 66-11-206.
(b) Contractor shall cause its subcontractors and suppliers to provide similar notices as required by law.
(c) No Party shall record a lien until the statutory notice and waiting periods have elapsed.
(d) Upon each payment, Contractor shall provide Owner with duly executed conditional or unconditional lien waivers, as applicable.

5.3 Insurance
Contractor shall maintain insurance of the types and minimum limits set forth in Exhibit D and shall furnish certificates evidencing same prior to commencing Work.

5.4 Payment and Performance Bonds
If (i) the Contract Price exceeds $[BOND THRESHOLD] or (ii) Owner or any Lender so requests, Contractor shall furnish payment and performance bonds each in the penal sum of 100% of the Contract Price, issued by a surety licensed in Tennessee and otherwise acceptable to Owner. The payment bond shall protect all claimants supplying labor and material to the Project to the fullest extent permissible under Tennessee law.

5.5 Notice & Cure
Except for emergencies, a Party claiming the other is in breach shall provide written notice describing the default with reasonable particularity. The breaching Party shall have [CURE PERIOD] days to cure, after which the non-breaching Party may invoke remedies under Article 6.

6. DEFAULTS & REMEDIES

6.1 Contractor Defaults
Events of default include, without limitation:
(a) Failure to prosecute the Work diligently;
(b) Failure to pay subcontractors or suppliers;
(c) Failure to maintain required insurance or bonds;
(d) Filing or suffering voluntary or involuntary bankruptcy;
(e) Material breach of any covenant, warranty, or representation.

6.2 Owner Remedies
Upon Contractor default and expiration of applicable cure periods, Owner may, after written notice:
(a) Suspend Work;
(b) Correct defective Work and back-charge Contractor;
(c) Take possession of materials, tools, and equipment on Site;
(d) Terminate this Agreement for cause and complete the Work by other means;
(e) Seek indemnification under Article 7; and/or
(f) Pursue any other remedy available at law or in equity.

6.3 Contractor Remedies
If Owner fails to make timely payments not subject to good-faith dispute, Contractor may, after [] days’ notice and Owner’s failure to cure, suspend performance—or terminate for cause if suspension exceeds [] days—and recover demobilization costs.

6.4 Mitigation
Each Party shall mitigate damages arising from any breach.

6.5 Attorneys’ Fees
The prevailing Party in any dispute arising under this Agreement is entitled to recover reasonable attorneys’ fees, court costs, and expert-witness fees.

7. RISK ALLOCATION

7.1 Indemnification by Contractor

To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner, its affiliates, officers, directors, employees, agents, and lenders (collectively, “Indemnitees”) from and against any and all claims, damages, losses, costs, and liabilities (including reasonable attorneys’ fees) arising out of or resulting from the performance of the Work, provided such claim, damage, loss, or liability is attributable to bodily injury, sickness, disease, death, or to injury to or destruction of tangible property (other than the Work itself) but only to the extent caused by the negligent acts or omissions of Contractor, its subcontractors, or anyone directly or indirectly employed by them.

[// GUIDANCE: Adjust scope of indemnity if indemnification for Indemnitees’ concurrent negligence is disallowed by Tenn. Code Ann. § 62-6-123.]

7.2 Limitation of Liability

EXCEPT FOR (i) CONTRACTOR’S INDEMNITY OBLIGATIONS, (ii) WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, OR (iii) CLAIMS COVERED BY INSURANCE, CONTRACTOR’S TOTAL AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL NOT EXCEED THE CONTRACT PRICE.

7.3 Force Majeure

Neither Party shall be liable for delay or failure of performance caused by events beyond its reasonable control, including acts of God, pandemics, terrorism, or governmental orders (“Force Majeure Event”), provided the affected Party gives written notice within five (5) business days and resumes performance promptly after cessation.

8. DISPUTE RESOLUTION

8.1 Governing Law
This Agreement and any dispute arising hereunder are governed by the laws of the State of Tennessee, without regard to conflict-of-laws principles.

8.2 Forum Selection
The Parties irrevocably submit to exclusive jurisdiction in the state courts located in [COUNTY], Tennessee, and waive any objection based on forum non conveniens.

8.3 Arbitration (Optional)
[ARBITRATION ELECTION: Select one by initialing: Owner ___ / Contractor ___ ]
If elected, all disputes shall be finally resolved by arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules then in effect. The seat of arbitration shall be [CITY, TN]. Judgment on the award may be entered in any court having jurisdiction.

8.4 Jury Trial Waiver (Optional)
IF NOT PROHIBITED BY APPLICABLE LAW, EACH PARTY HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT. [INITIALS: Owner ___ / Contractor ___]

8.5 Injunctive Relief
Nothing herein limits a Party’s right to seek preliminary or permanent injunctive relief, specific performance, or any other equitable remedy.

9. GENERAL PROVISIONS

9.1 Entire Agreement; Integration
This Agreement, together with the Exhibits, constitutes the entire agreement between the Parties and supersedes all prior discussions, representations, or agreements, whether written or oral.

9.2 Amendments
No amendment or modification is effective unless in writing and signed by authorized representatives of both Parties.

9.3 Assignment
Neither Party may assign or delegate its rights or obligations without the prior written consent of the other, except that Owner may assign this Agreement to any lender providing financing for the Project.

9.4 Severability
If any provision is held invalid, illegal, or unenforceable, the remaining provisions remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to make it enforceable.

9.5 Notices
All notices required or permitted shall be in writing and delivered (i) personally, (ii) by certified U.S. mail, return receipt requested, (iii) by nationally recognized overnight courier, or (iv) by email with confirmation of receipt, to the addresses set forth below (or such other address a Party designates by notice). Notice is deemed given upon receipt.

9.6 Counterparts; Electronic Signatures
This Agreement may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Electronic signatures (e.g., via DocuSign) are deemed original signatures for all purposes.

9.7 Successors & Assigns
This Agreement binds and inures to the benefit of the Parties and their respective successors and permitted assigns.

9.8 No Third-Party Beneficiaries
Except as expressly provided in the indemnity provisions, nothing herein confers any rights upon any third party.

10. EXECUTION BLOCK

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

[Optional Notary Acknowledgment block per Tennessee requirements]

EXHIBITS

Exhibit A – Scope of Work
Exhibit B – Lien Waiver Forms
Exhibit C – Site Condition Exceptions
Exhibit D – Insurance Requirements
Exhibit E – Schedule of Values / Progress Payment Schedule

[// GUIDANCE: Attach or draft each Exhibit to complete the contract package.]