Construction Contract - Utah

CONSTRUCTION SERVICES AGREEMENT

(Utah – Private Project with Lien Law Compliance)

TABLE OF CONTENTS

1. Document Header
2. Definitions

3. Operative Provisions
   3.1 Scope of Work
   3.2 Contract Time; Schedule
   3.3 Contract Price & Payment
   3.4 Changes in the Work
   3.5 Site Conditions & Access

4. Representations & Warranties

5. Covenants
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

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

Owner: [FULL LEGAL NAME], a [STATE] [ENTITY TYPE], having its principal place of business at [ADDRESS] (“Owner”); and

Contractor: [FULL LEGAL NAME], a [STATE] [ENTITY TYPE], having its principal place of business at [ADDRESS] (“Contractor”).

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

Recitals
A. Owner owns or controls the real property located at [PROJECT ADDRESS / TAX PARCEL NO.] (the “Site”).
B. Owner desires that Contractor furnish all labor, materials, equipment, and services necessary to construct the improvements described in this Agreement (the “Project”).
C. Contractor is duly licensed and qualified to perform such work in the State of Utah and desires to do so under the terms and conditions set forth herein.

NOW, THEREFORE, 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:

2. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below. Defined terms appear alphabetically for ease of reference.

“Applicable Law” – All federal, state, and local statutes, ordinances, codes, rules, regulations, and orders applicable to the Project, including without limitation Utah’s Construction Lien Act (Utah Code Ann. Title 38, Chap. 1a) and Utah retention provisions (Utah Code § 13-8-5).

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

“Completion” – Substantial completion of the Work such that Owner may occupy or utilize the Project for its intended purpose, evidenced by a certificate of occupancy or equivalent written approval from the governing authority.

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

“Contract Price” – The lump-sum or guaranteed maximum price set forth in Section 3.3, as adjusted by Change Orders.

“Contract Time” – The period commencing on the Notice to Proceed and ending upon Final Completion, as set forth in Section 3.2.

“Final Completion” – Completion of all punch-list items and transfer of all warranties and close-out documents required for final payment.

“Lien Notice Requirements” – The preliminary notice and lien waiver procedures mandated by Utah Code Title 38, Chapter 1a and applicable State Construction Registry (SCR) rules.

“Payment Bond” – The payment bond furnished by Contractor pursuant to Section 5.2 to protect persons supplying labor, services, equipment, or materials.

“Retainage” – The percentage of progress payments withheld in accordance with Section 3.3.2 and Utah Code Ann. § 13-8-5.

“Scope of Work” or “Work” – All labor, equipment, services, and materials required by the Contract Documents to construct the Project.

3. OPERATIVE PROVISIONS

3.1 Scope of Work

3.1.1 Contractor shall diligently perform the Work in strict conformity with the Contract Documents.
3.1.2 Contractor shall provide competent supervision, a qualified workforce, and industry-standard workmanship.
3.1.3 All materials shall be new and of good quality unless otherwise specified.

3.2 Contract Time; Schedule

3.2.1 Notice to Proceed. Owner shall issue a written Notice to Proceed within [___] days after the Effective Date.
3.2.2 Substantial Completion shall occur on or before [DATE] (“Substantial Completion Date”).
3.2.3 Time is of the essence. Contractor shall pay liquidated damages of $[AMOUNT] per day for failure to achieve Substantial Completion by the Substantial Completion Date, as Owner’s sole remedy for delay except for damages arising from gross negligence or willful misconduct.

3.3 Contract Price & Payment

3.3.1 Contract Price. The Contract Price is $[AMOUNT] (the “Contract Price”), subject to adjustments per Section 3.4.

3.3.2 Progress Payments & Retainage.
a. Owner shall pay Contractor monthly progress payments equal to ninety-five percent (95%) of the value of Work properly completed during the preceding month, less prior payments (“Progress Payment”).
b. Retainage shall not exceed five percent (5%) of the Contract Price or of any Progress Payment, consistent with Utah Code Ann. § 13-8-5.
c. Upon 50% completion of the Work, and provided Contractor is not in default, no additional retainage shall be withheld.

3.3.3 Payment Application Procedure.
a. Each Payment Application shall be submitted on AIA G702/G703 (or equivalent) with conditional lien waivers.
b. Owner shall pay approved amounts within [___] days after receipt.
c. Contractor shall furnish unconditional lien waivers upon receipt of each payment.

3.3.4 Final Payment and Retention. Owner shall pay the unpaid balance other than retained proceeds within [___] days after Final Completion and receipt of required close-out documents. For a nonresidential commercial or industrial project covered by Utah Code § 13-8-5, Owner shall hold retained proceeds in a separate interest-bearing account and release them, with accrued interest, pursuant to Contractor’s billing statement with lien-release or waiver documentation within 45 days after the latest event listed in § 13-8-5(5): receipt of that billing statement, issuance of a certificate of occupancy or final acceptance notice, permitted occupancy or use without a certificate, or Contractor’s acceptance of final pay quantities. Partial occupancy requires proportional release under § 13-8-5(6). Statutory withholding for breach or unfinished work remains available under § 13-8-5(8). Contractor shall submit final-payment waivers substantially in the form in Utah Code § 38-1a-802(4)(c); waivers take effect only when the identified payment is received.

3.3.5 Failure to Pay. Unpaid sums shall accrue interest at [___]% per annum. Contractor may suspend Work upon 7 days’ written notice and may terminate for Owner default under Section 6.4. These remedies do not waive Contractor’s lien, bond, contract, or other lawful payment rights.

3.4 Changes in the Work

3.4.1 Owner may order changes to the Work by written Change Order.
3.4.2 Contractor shall not proceed with changed Work until a Change Order is signed by both Parties.
3.4.3 Adjustments to the Contract Price or Contract Time shall be based on (i) mutually agreed lump sum, (ii) unit prices, or (iii) time-and-materials with agreed mark-ups.

3.5 Site Conditions & Access

3.5.1 Owner shall provide reasonable access to the Site and obtain necessary easements.
3.5.2 Contractor has inspected the Site and accepts existing conditions, except as otherwise disclosed in writing.

4. REPRESENTATIONS & WARRANTIES

4.1 Contractor represents and warrants that:
a. It is duly licensed, bondable, and qualified in the State of Utah.
b. The Work shall be performed in a good and workmanlike manner, free from defects, and in accordance with Applicable Law.
c. Materials and equipment furnished shall be new, of good quality, and free of liens.
d. All persons furnishing labor or materials under Contractor will be paid in full in accordance with contractual agreements and Applicable Law.

4.2 Warranty Period. Contractor warrants the Work for a period of [ONE (1)] year from Final Completion, unless a longer period is required under Applicable Law or manufacturer warranties.

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

5. COVENANTS

5.1 Lien Notice Compliance.
a. Preliminary Notices. Contractor and any subcontractor or supplier wishing to preserve a construction lien shall file its own preliminary notice in the SCR under Utah Code § 38-1a-501, generally within 20 days after first providing construction work. Contractor shall give each subcontractor and supplier the project information needed to file and shall ask them to confirm their filings.
b. Lien Waivers. Contractor shall deliver the applicable statutory progress or final payment waivers with each payment request; their effectiveness follows the payment rules in Utah Code § 38-1a-802.

5.2 Payment Bond. Before award of an original commercial contract exceeding $50,000 for a project that is not residential construction as defined in Utah Code § 14-2-1(1), Owner shall obtain from Contractor a payment bond that becomes binding on award. The bond shall have a satisfactory surety, protect persons supplying labor, services, equipment, or materials, and equal the original commercial contract price, as required by § 14-2-1(2)-(3). For other projects, Contractor shall furnish a bond if the Parties state that requirement in Exhibit A.

5.3 Insurance. Prior to commencing Work, Contractor shall obtain and maintain at its expense:
a. Commercial General Liability – $[1,000,000] per occurrence / $[2,000,000] aggregate;
b. Workers’ Compensation – statutory limits;
c. Automobile Liability – $[1,000,000] combined single limit;
d. Builder’s Risk – completed value form naming Owner and Contractor as insureds.

5.4 Compliance with Laws. Contractor shall comply with all Applicable Laws, obtain required permits, and pass all inspections.

5.5 Safety. Contractor shall be solely responsible for initiation, maintenance, and supervision of safety precautions and programs.

6. DEFAULT & REMEDIES

6.1 Events of Default – Contractor.
a. Failure to perform any material covenant, including failure to prosecute the Work diligently;
c. Failure to maintain required insurance or bonds;
d. Filing or allowing liens in violation of this Agreement;
e. Failure to cure monetary default within 7 days or non-monetary default within 14 days after written notice from Owner.

6.2 Owner Remedies.
Upon Contractor default, Owner may, after the applicable cure period:
a. Suspend Work;
b. Complete the Work and charge excess costs to Contractor;
c. Set off amounts due from any unpaid Contract Price;
d. Terminate this Agreement for cause;
e. Seek all available remedies at law or equity, including injunctive relief.

6.3 Events of Default – Owner.
a. Failure to make undisputed payments when due;
b. Material breach of any other covenant, not cured within 14 days after notice.

6.4 Contractor Remedies.
Upon Owner default, Contractor may:
a. Suspend Work;
b. Terminate this Agreement for cause;
c. Recover unpaid sums, interest, and reasonable attorney fees.

6.5 Attorney Fees. The prevailing Party in any dispute arising under this Agreement is entitled to recover its reasonable attorney fees and costs.

7. RISK ALLOCATION

7.1 Indemnification

Contractor shall indemnify, defend, and hold harmless Owner, its affiliates, and their respective directors, officers, employees, and agents (“Indemnitees”) from and against any and all claims, damages, losses, and expenses (including reasonable attorney fees) arising out of or resulting from:
a. bodily injury, sickness, disease, or death;
b. property damage (other than to the Work itself to the extent covered by the Builder’s Risk policy); or
c. violation of Applicable Law,
only to the extent caused by the fault of Contractor, its subcontractors, or anyone for whom Contractor is responsible. This duty does not require Contractor to indemnify or defend an Indemnitee for loss caused by that Indemnitee’s own fault; owner-fault allocation is subject to Utah Code § 13-8-1(3).

7.2 Limitation of Liability

Except for (i) Contractor’s indemnity obligations, (ii) claims arising from gross negligence or willful misconduct, or (iii) amounts recoverable under required insurance, Contractor’s aggregate liability under this Agreement is capped at the Contract Price.

7.3 Force Majeure

Neither Party is liable for delays or failure to perform caused by events beyond its reasonable control, including acts of God, terrorism, strikes, or governmental actions, provided the affected Party gives prompt written notice and resumes performance as soon as practicable.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement is governed by the laws of the State of Utah, without regard to its conflict-of-law principles.

8.2 Forum Selection. Any action or proceeding shall be brought exclusively in the state courts located in [COUNTY], Utah.

8.3 Optional Arbitration. At either Party’s election, made within 30 days after a dispute arises, the dispute shall be submitted to binding arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules.

8.4 Jury Trial Waiver. TO THE EXTENT NOT PROHIBITED BY LAW, EACH PARTY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY LEGAL PROCEEDING ARISING FROM THIS AGREEMENT.

8.5 Injunctive Relief. Nothing herein limits either Party’s right to seek injunctive or other equitable relief to prevent immediate and irreparable harm.

9. GENERAL PROVISIONS

9.1 Amendment; Waiver. No amendment or waiver is effective unless in writing and signed by both Parties.

9.2 Assignment. Neither Party may assign this Agreement without the other’s prior written consent, except that Owner may assign to an institutional lender as collateral security.

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 or unenforceable, the remaining provisions remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to be enforceable.

9.5 Integration. This Agreement, including all exhibits and incorporated documents, constitutes the entire agreement and supersedes all prior negotiations, understandings, and agreements.

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 are deemed originals for all purposes.

10. EXECUTION BLOCK

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

Exhibit A – Contract Documents

[List plans, specifications, schedules, and other documents comprising the Contract Documents.]

Exhibit B – Insurance Requirements

[Attach detailed insurance policy requirements, additional insured endorsement forms, etc.]

Exhibit C – Schedule of Values

[Attach initial schedule of values for progress billing.]