CONSTRUCTION SERVICES AGREEMENT

(Texas — Private Commercial Project)

[// GUIDANCE: This comprehensive template is drafted for private, commercial construction projects located in Texas. It incorporates Texas lien-law compliance, payment-bond requirements, and statutory retainage limits. Practitioners should tailor bracketed items, choose between the optional dispute-resolution regimes, and confirm project-specific statutory changes before execution.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

1. Title; Parties.
   This Construction Services Agreement (this “Agreement”) is entered into by and between [FULL LEGAL NAME OF OWNER], a [STATE & ENTITY TYPE] (“Owner”), and [FULL LEGAL NAME OF CONTRACTOR], a [STATE & ENTITY TYPE] (“Contractor,” and together with Owner, the “Parties,” and each, a “Party”).

2. Effective Date.
   This Agreement is effective as of [DATE] (“Effective Date”).

3. Project.
   Contractor shall furnish all labor, materials, equipment, services, and supervision necessary to construct [BRIEF PROJECT DESCRIPTION] located at [PROJECT ADDRESS / LEGAL DESCRIPTION] (the “Project”).

4. Consideration & Intent.
   In consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows.

II. DEFINITIONS

The following capitalized terms have the meanings set forth below; singular includes plural and vice-versa.

“Applicable Law” means all federal, state, and local statutes, ordinances, regulations, and codes applicable to the Project, specifically including the Texas Property Code Chapter 53 (the “Texas Lien Law”).

“Claim” means any claim, demand, lien, cause of action, damage, loss, liability, cost, or expense, including reasonable attorneys’ fees.

“Contract Documents” means (i) this Agreement, (ii) the Scope of Work attached as Exhibit A, (iii) the Project Schedule attached as Exhibit B, (iv) the Payment Schedule attached as Exhibit C, (v) all approved Change Orders, and (vi) any other documents expressly incorporated herein.

“Contract Price” means the lump-sum price of $[AMOUNT] or such other amount as adjusted in accordance with this Agreement.

“Final Completion” means the date when (a) Contractor’s Work is fully complete in accordance with the Contract Documents, (b) Owner has accepted the Work in writing, and (c) all Lien Releases have been delivered.

“Lien Release” means a conditional or unconditional waiver and release of lien rights that complies with Texas Property Code §§ 53.281–53.285.

“Payment Bond” means a bond meeting the requirements of Texas Property Code §§ 53.201–53.211 in a penal sum equal to the Contract Price, naming Owner as obligee and issued by a surety authorized to do business in Texas.

“Retainage” means the portion of each Progress Payment withheld pursuant to Section 3.4.

“Scope of Work” or “Work” means all labor, materials, equipment, and services Contractor is obligated to perform or furnish as described in Exhibit A and as amended by approved Change Orders.

[// GUIDANCE: Add or delete defined terms as needed to match your exhibits and project specifics.]

III. OPERATIVE PROVISIONS

3.1 Scope; Performance Standard.
(a) Contractor shall execute the Work diligently, in a good and workmanlike manner, strictly in accordance with the Contract Documents and Applicable Law.
(b) Contractor shall comply with all licensing, safety, and environmental requirements and shall obtain and pay for all permits unless otherwise provided in Exhibit A.

3.2 Commencement & Substantial Completion.
(a) Commencement Date: [DATE OR NOTICE-TO-PROCEED].
(b) Substantial Completion shall occur no later than [DATE] (“Substantial Completion Date”), subject to extensions under Section 7.5 (Force Majeure).

3.3 Contract Price & Payment Procedure.
(a) Owner shall pay Contractor the Contract Price in monthly Progress Payments per Exhibit C.
(b) Each Payment Application must include (i) a sworn statement of account, (ii) completed conditional Lien Releases from Contractor and all Subcontractors/Suppliers for the current payment, and (iii) unconditional Lien Releases for the prior payment.
(c) Owner shall pay approved amounts within [XX] days after receipt of a complete and correct Payment Application.

3.4 Statutory Retainage.
(a) Owner shall withhold Retainage equal to 10 percent of each Progress Payment, consistent with Texas Property Code § 53.101(b).
(b) Retainage shall be released within 30 days after Final Completion, provided no lien claims remain.

[// GUIDANCE: 10% is the statutory maximum for private projects; reduce percentage if desired but do not exceed statutory cap.]

3.5 Change Orders.
All changes in the Work, Contract Price, or Project Schedule require a written Change Order signed by both Parties.

3.6 Conditions Precedent to Final Payment.
Final Payment is conditioned on (i) Final Completion, (ii) delivery of a complete set of unconditional final Lien Releases, and (iii) submission of all warranties, as-built drawings, operation manuals, and other close-out documents specified in Exhibit A.

IV. REPRESENTATIONS & WARRANTIES

4.1 Mutual.
(a) Each Party is duly organized, validly existing, and in good standing under the laws of its state of formation.
(b) Each Party has full power and authority to execute and perform this Agreement.

4.2 Contractor.
(a) Contractor possesses all licenses required to perform the Work.
(b) The Work shall be free from defects in workmanship and materials for [ONE (1) YEAR] from the date of Final Completion (“Warranty Period”).
(c) All materials shall be new and of good quality unless otherwise specified.
(d) Contractor has reviewed the Project site and Contract Documents and has no knowledge of conditions that would prevent completion of the Work for the Contract Price and by the Substantial Completion Date.

4.3 Survival.
The warranties in this Section survive Final Completion and any termination of this Agreement.

V. COVENANTS & RESTRICTIONS

5.1 Compliance with Lien Law.
(a) Contractor shall timely pay all Subcontractors and Suppliers and strictly comply with Texas Lien Law notice requirements.
(b) Contractor shall, within 10 days of request, bond around, discharge, or otherwise remove any lien filed against the Project attributable to Contractor or those claiming through Contractor.

5.2 Payment Bond.
Contractor shall deliver the Payment Bond to Owner within [10] days after the Effective Date and before commencing Work. Failure to do so is a material breach.

5.3 Insurance.
Contractor shall maintain, at its own expense:
(i) Commercial General Liability — $[AMOUNT] per occurrence;
(ii) Workers’ Compensation — statutory limits;
(iii) Automobile Liability — $[AMOUNT] combined single limit;
(iv) Builder’s Risk (if indicated in Exhibit A).

Owner and its lenders shall be named as additional insureds on CGL and Auto policies (ISO CG 20 10 12 19 or equivalent).

5.4 Safety; OSHA.
Contractor assumes all responsibility for site safety and shall comply with OSHA and applicable safety programs.

5.5 Notice & Cure.
Each Party shall give the other Party written notice describing any breach. The breaching Party has [10] days to cure monetary defaults and [15] days to commence cure of non-monetary defaults (or sooner if an emergency endangers person or property).

VI. DEFAULT & REMEDIES

6.1 Events of Default — Contractor.
(a) Failure to timely supply sufficient labor, materials, or equipment;
(b) Failure to maintain required insurance or Payment Bond;
(c) Failure to timely cure any lien;
(d) Insolvency, bankruptcy, or assignment for benefit of creditors.

6.2 Owner Remedies.
Upon a Contractor Event of Default and expiration of any applicable cure period, Owner may, at its option:
(i) withhold further payments;
(ii) supplement or take over the Work and back-charge Contractor;
(iii) terminate this Agreement for cause under Section 6.4;
(iv) pursue any other remedies available at law or in equity.

6.3 Events of Default — Owner.
(a) Failure to make any undisputed payment when due;
(b) Failure to provide reasonable access to the Project site;
(c) Material breach of any covenant herein.

6.4 Termination.
(a) For Cause (Contractor Default). Owner may terminate on 48-hour written notice if Contractor fails to commence and diligently pursue cure.
(b) For Cause (Owner Default). Contractor may suspend Work or terminate on 7-day written notice if Owner fails to cure.
(c) For Convenience. Owner may terminate for convenience upon 7-day written notice; Contractor shall be paid (i) for Work properly performed to date, (ii) proven direct costs of demobilization, and (iii) a termination fee of [PERCENT]% of the unpaid Contract Price, not to exceed the statutory cap in Texas Property Code § 53.255.

6.5 Attorneys’ Fees.
The prevailing Party in any dispute arising out of or related to this Agreement is entitled to recover its reasonable attorneys’ fees and costs.

VII. RISK ALLOCATION

7.1 Indemnification.
To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner and its affiliates, lenders, and representatives (“Indemnitees”) from and against any Claim arising out of or resulting from (i) the performance of the Work, (ii) any lien, labor, or payment dispute, or (iii) Contractor’s breach of this Agreement, except to the extent caused by the sole negligence of an Indemnitee.

[// GUIDANCE: The above mirrors Tex. Civ. Prac. & Rem. Code § 130.002 carve-outs for construction indemnities.]

7.2 Limitation of Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE COLLECTIVE LIABILITY OF CONTRACTOR TO OWNER FOR ALL CLAIMS SHALL NOT EXCEED THE CONTRACT PRICE. THIS LIMITATION DOES NOT APPLY TO (i) CONTRACTOR’S INDEMNITY OBLIGATIONS FOR THIRD-PARTY BODILY INJURY OR DEATH, OR (ii) COSTS TO ACHIEVE COMPLETION CAUSED BY CONTRACTOR DEFAULT.

7.3 Consequential Damages Waiver.
Except with respect to liquidated damages expressly set forth in Exhibit B (if any), neither Party shall be liable for incidental, special, or consequential damages.

7.4 Insurance Proceeds; Waiver of Subrogation.
To the extent permitted by their insurance policies, each Party waives subrogation against the other.

7.5 Force Majeure.
Performance is excused for delays due to acts of God, terrorism, epidemic, governmental orders, or other events beyond the reasonable control of the affected Party, provided such Party gives written notice within [5] days of the event.

VIII. DISPUTE RESOLUTION

[SELECT ONE OF THE FOLLOWING ALTERNATIVES]

ALTERNATIVE A — ARBITRATION (Recommended for Speed):
8.1 Mandatory Binding Arbitration. Any dispute shall be resolved by binding arbitration administered by the American Arbitration Association under its Construction Industry Rules then in effect.
8.2 Venue; Governing Law. The arbitration shall be held in [COUNTY, TEXAS] and governed by the laws of the State of Texas, without regard to conflict-of-laws principles.
8.3 Provisional Relief. Either Party may seek temporary or preliminary injunctive relief from a state court of competent jurisdiction in [COUNTY, TEXAS] to preserve the status quo pending arbitration.
8.4 Finality. The arbitrator’s award may be entered as a judgment in any court having jurisdiction.

ALTERNATIVE B — LITIGATION (State Court):
8.1 Exclusive Venue. The state courts located in [COUNTY, TEXAS] shall have exclusive jurisdiction.
8.2 Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY.
8.3 Mediation Condition Precedent. As a condition precedent to litigation, the Parties shall first mediate any dispute in [COUNTY, TEXAS] under the Construction Industry Mediation Rules of the AAA.

[// GUIDANCE: Delete the unused alternative and renumber accordingly.]

IX. GENERAL PROVISIONS

9.1 Amendment; Waiver.
No amendment or waiver is effective unless in a writing signed by the Party against whom enforcement is sought. A waiver on one occasion is not a waiver of any subsequent breach.

9.2 Assignment.
Neither Party may assign this Agreement without the prior written consent of the other, except Owner may assign without consent to its lender or successor in interest.

9.3 Successors & Assigns.
This Agreement binds and benefits the Parties and their permitted successors and assigns.

9.4 Severability.
If any provision is held invalid, the remaining provisions remain in effect, and the Parties shall substitute a valid provision that most closely approximates the original intent.

9.5 Integration.
This Agreement, including the Contract Documents, constitutes the entire agreement and supersedes all prior negotiations, representations, or agreements.

9.6 Notices.
All notices must be in writing and delivered (i) by certified U.S. mail, return receipt requested, (ii) by nationally recognized overnight courier, or (iii) by personal delivery, to the addresses below (or as later designated). Notices are effective upon receipt or first refusal.

Owner:
[NAME / ADDRESS / EMAIL / ATTN]

Contractor:
[NAME / ADDRESS / EMAIL / ATTN]

9.7 Counterparts; Electronic Signatures.
This Agreement may be executed in multiple counterparts, each of which is deemed an original, and all of which constitute one instrument. Electronic signatures (e.g., via DocuSign) have the same legal effect as original signatures.

9.8 Time Is of the Essence.
Time is of the essence for all obligations herein.

X. EXECUTION BLOCK

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

OWNER
[Full Legal Name]
By: ____
Name: ____
Title: _____
Date: _________

CONTRACTOR
[Full Legal Name]
By: ____
Name: ____
Title: _____
Date: _________

[Optional Notary Acknowledgment]

EXHIBITS (attach as needed)

Exhibit A — Scope of Work
Exhibit B — Project Schedule & Liquidated Damages
Exhibit C — Payment Schedule / Application for Payment Form
Exhibit D — Sample Conditional & Unconditional Lien Releases
Exhibit E — Insurance Requirements & Certificates

[// GUIDANCE:
1. Verify statutory citations before finalizing (§§ 53.001 et seq. Texas Property Code).
2. For residential or public-works projects, additional statutory requirements may apply (e.g., 5 % retainage for public jobs under Gov’t Code § 2252.032).
3. Obtain lender consent and statutory filings (e.g., Affidavit of Commencement, Notice of Contractual Retainage) to perfect lien-law protections.
4. Review indemnity, insurance, and limitation-of-liability clauses for compliance with Tex. Ins. Code § 151.102 and Tex. Civ. Prac. & Rem. Code Ch. 130 prior to execution.]