CONSTRUCTION SERVICES AGREEMENT
(Virginia – Private Project – Lien-Compliant)
[// GUIDANCE: This template is intentionally comprehensive and assumes a traditional design-bid-build delivery on a private, non-residential project in Virginia. Delete or modify any provisions that are inapplicable to the specific transaction.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Scope of Work; Contract Documents
- Contract Time; Schedule of Performance
- Compensation; Payment Procedures
- Permits; Compliance With Laws
- Representations and Warranties
- Covenants
- Changes in the Work
- Insurance
- Indemnification
- Limitation of Liability
- Events of Default; Remedies
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
Construction Services Agreement (this “Agreement”) made and entered into as of [EFFECTIVE DATE] (the “Effective Date”), by and between:
- [OWNER LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE], having its principal place of business at [ADDRESS] (“Owner”); and
- [CONTRACTOR LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE], having its principal place of business at [ADDRESS] (“Contractor”).
Owner and Contractor are each a “Party” and collectively the “Parties.”
Recitals
A. Owner desires that Contractor furnish all labor, materials, equipment, and services necessary to complete the Project (as defined below) in accordance with the Contract Documents (as defined below).
B. Contractor is duly licensed and qualified to perform the Work (as defined below) in the Commonwealth of Virginia and desires to do so in accordance with the terms and conditions of this Agreement.
C. In consideration of the mutual promises herein, the Parties agree as follows:
2. DEFINITIONS
For ease of reference, the following capitalized terms shall have the meanings set forth below. All references to Sections, Appendices, Exhibits, or Schedules are to those contained in or attached to this Agreement unless otherwise expressly stated.
“Applicable Law” means all statutes, codes, ordinances, rules, regulations, and lawful orders of any governmental authority having jurisdiction over the Project, the Premises, the Parties, or this Agreement, including without limitation Virginia mechanic’s lien statutes, Va. Code Ann. § 43-3 et seq.
“Change Order” has the meaning set forth in Section 9.2.
“Contract Documents” means collectively this Agreement, the Drawings and Specifications identified in Exhibit A, the Project Schedule in Exhibit B, the Insurance Requirements in Exhibit C, any Change Orders, and all other documents expressly incorporated herein by reference.
“Contract Price” has the meaning set forth in Section 5.1.
“Contract Time” means the period commencing on the Notice to Proceed Date and expiring upon Final Completion, subject to adjustments authorized under this Agreement.
“Final Completion” means the date upon which (a) the Work is fully completed in accordance with the Contract Documents, (b) all punch list items are resolved, (c) all close-out deliverables (including final lien waivers) have been delivered to Owner, and (d) Owner has issued written confirmation of Final Completion.
“Lien” means any mechanic’s, materialman’s, or other statutory or contractual lien, stop-notice, or claim of lien relating to the Work or the Project.
“Notice to Proceed Date” means the date specified in Owner’s written notice to Contractor to commence the Work.
“Retainage” has the meaning set forth in Section 5.3.
“Subcontractor” means any person or entity of any tier, other than Contractor, that furnishes labor, materials, or equipment in connection with the Work.
“Work” means all labor, materials, equipment, and services required by, or reasonably inferable from, the Contract Documents, properly completed and furnished by Contractor to achieve Final Completion.
[// GUIDANCE: Add or delete definitions to suit the specific project. Maintain alphabetical order.]
3. SCOPE OF WORK; CONTRACT DOCUMENTS
3.1 Scope of Work. Contractor shall diligently perform and complete the Work in strict conformity with the Contract Documents and Applicable Law.
3.2 Licensing. Contractor represents that it holds Virginia Contractor License No. [LICENSE NUMBER] and shall maintain such license in good standing throughout the Contract Time.
3.3 Contract Documents. The Contract Documents are intended to be complementary; requirements of one are binding as though repeated in all. In the event of a conflict, the order of precedence is:
i. Change Orders (most recent first);
ii. This Agreement (including Exhibits);
iii. Sealed Drawings signed by the design professional of record;
iv. Project Specifications;
v. Other documents listed in Exhibit A.
3.4 Design Responsibilities. Unless specifically provided otherwise in Exhibit A, Contractor does not undertake any design obligations and shall not be liable for errors or omissions in the design prepared by Owner’s design professionals.
4. CONTRACT TIME; SCHEDULE OF PERFORMANCE
4.1 Commencement. Contractor shall commence the Work on the Notice to Proceed Date.
4.2 Substantial Completion and Final Completion. Contractor shall achieve Substantial Completion of the Work on or before [DATE] and Final Completion within [NUMBER] calendar days thereafter. Time is of the essence.
4.3 Schedule Updates. Contractor shall submit monthly schedule updates identifying actual v. planned progress, critical path changes, and recovery actions, if any.
4.4 Delays; Extensions. Contractor may request an equitable extension of the Contract Time for delays caused by (a) Owner-caused changes, (b) Force Majeure (as defined in Section 15.9), or (c) other causes beyond Contractor’s reasonable control, provided Contractor strictly complies with Section 15.5 (Notices).
5. COMPENSATION; PAYMENT PROCEDURES
5.1 Contract Price. Owner shall pay Contractor the total fixed price of [WRITE-OUT AMOUNT] USD ($[NUMERIC]), subject to adjustment only as expressly provided in this Agreement (the “Contract Price”).
5.2 Schedule of Values. Within ten (10) days after the Effective Date, Contractor shall submit for Owner’s approval a detailed, itemized Schedule of Values allocating the Contract Price among all portions of the Work, consistent with Exhibit B.
5.3 Progress Payments and Retainage.
(a) On or before the [DAY] day of each month, Contractor shall submit a sworn Application for Payment covering Work performed through the last day of the preceding month, accompanied by (i) partial lien waivers in form satisfactory to Owner and (ii) evidence of payment to Subcontractors.
(b) Owner shall remit payment of all undisputed amounts within [NUMBER] days following receipt.
(c) Owner shall withhold retainage (“Retainage”) in the amount of five percent (5%) of each progress payment, or such lesser percentage as required by Va. Code Ann. § 43-11. Retainage shall be released upon Final Completion; provided, Owner may retain sufficient funds to cover unresolved claims or Punch List items.
[// GUIDANCE: Virginia private projects are not statutorily subject to retainage caps; however Va. Code Ann. § 43-11 caps retainage on certain escrowed funds. 5% is conventional for private work. Adjust as required.]
5.4 Payment Conditions Precedent. Owner’s obligation to make any payment is conditioned upon Contractor’s (a) compliance with all payment application requirements, (b) delivery of lien waivers, and (c) absence of any Event of Default.
5.5 Lien Waivers and Releases. Contractor shall, as a condition precedent to each progress payment, deliver partial or full lien waivers, as applicable, from Contractor and each Subcontractor and supplier whose Work is covered by the application. All lien waivers shall be in recordable form and comply with Va. Code Ann. § 43-3 et seq.
5.6 Payment Bond. Within ten (10) days after the Effective Date, Contractor shall furnish an unconditional payment bond in the penal sum of one hundred percent (100%) of the Contract Price, issued by a surety licensed in Virginia and listed on U.S. Treasury Circular 570.
[// GUIDANCE: A payment bond shifts lien exposure from the Project real estate to the surety. Required on Virginia public projects; optional for private projects but highly recommended to protect Owner.]
6. PERMITS; COMPLIANCE WITH LAWS
6.1 Permits. Except as expressly stated in Exhibit A, Contractor shall obtain and pay for all permits, licenses, inspections, and governmental fees necessary for proper execution and completion of the Work.
6.2 Laws and Regulations. Contractor shall comply with all Applicable Law, including OSHA, environmental, and immigration laws. Contractor shall immediately notify Owner of any alleged violation and shall indemnify Owner against fines or penalties resulting therefrom.
6.3 Safety. Contractor is solely responsible for the safety of the Work and all persons whom the Work may affect, and shall implement a comprehensive safety program conforming to Applicable Law.
7. REPRESENTATIONS AND WARRANTIES
7.1 Contractor’s Representations. Contractor represents and warrants that:
(a) it is duly organized, validly existing, and in good standing;
(b) it has full power and authority to enter into and perform this Agreement;
(c) the individual executing this Agreement is duly authorized to bind Contractor;
(d) it possesses the requisite skill, experience, and resources to perform the Work in a timely, first-class, and professional manner; and
(e) it holds and shall maintain all licenses required by Applicable Law.
7.2 Warranty of Workmanship. Contractor warrants that all materials and equipment furnished under this Agreement shall be new (unless otherwise specified), of good quality, and free from defects, and that all Work shall be performed in a good and workmanlike manner consistent with industry standards. This warranty shall survive Final Completion for a period of twelve (12) months (the “Correction Period”) unless a longer period is prescribed by Applicable Law or manufacturer’s warranty.
7.3 Warranty Remedies. If any Work is found not to conform to the requirements of the Contract Documents within the Correction Period, Contractor shall, at its own cost, promptly correct such Work or, if Owner elects, pay Owner all costs of correction.
8. COVENANTS
8.1 Affirmative Covenants. Contractor covenants that it will:
(a) furnish labor, materials, and equipment promptly;
(b) pay all Taxes, wages, and benefits when due;
(c) keep the Premises free and clear of Liens (other than Permitted Mechanics Liens as expressly defined and allowed herein);
(d) cooperate with Owner, Designer, and separate contractors; and
(e) maintain accurate books and records available for Owner’s inspection.
8.2 Negative Covenants. Contractor shall not:
(a) assign or delegate its rights or obligations except as permitted in Section 15.2;
(b) materially deviate from the Contract Documents without an approved Change Order; or
(c) knowingly employ persons not lawfully permitted to work in the United States.
8.3 Notice Obligations. Contractor shall give Owner written notice of (a) any event or condition that may delay the Work or increase the Contract Price within three (3) business days of discovering same, and (b) any accident or injury on the Premises within twenty-four (24) hours.
9. CHANGES IN THE WORK
9.1 Owner-Directed Changes. Owner may, without invalidating this Agreement, order changes in the Work consisting of additions, deletions, or revisions.
9.2 Change Order Procedure. Contractor shall promptly submit cost and time proposals for any proposed change. No change shall be binding unless evidenced by a written Change Order executed by both Parties.
9.3 Constructive Changes. Contractor shall notify Owner in writing before proceeding with any Work that Contractor believes constitutes a change entitling it to an adjustment in the Contract Price or Contract Time; failure to provide such notice waives the claim.
10. INSURANCE
10.1 Contractor’s Insurance. Contractor shall, at its own expense, maintain in full force the insurance coverages set forth in Exhibit C with carriers rated A- VII or better by A.M. Best.
10.2 Certificates. Contractor shall furnish certificates of insurance to Owner prior to commencement of the Work, and shall cause its insurers to provide thirty (30) days’ advance written notice of cancellation.
10.3 Builder’s Risk. [SELECT ONE:]
☐ Owner shall procure builder’s risk coverage.
☐ Contractor shall procure builder’s risk coverage and may invoice Owner at cost.
11. INDEMNIFICATION
11.1 Contractor Indemnification. To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner and its affiliates, lenders, directors, officers, agents, and employees (collectively, “Indemnitees”) from and against any and all claims, damages, losses, liabilities, fines, penalties, judgments, and expenses (including reasonable attorneys’ fees) arising out of or resulting from:
(a) bodily injury, sickness, disease, or death of any person;
(b) damage to or loss of property;
(c) any Lien or claim of Lien; or
(d) breach of this Agreement,
but only to the extent caused by the negligence, recklessness, or intentional misconduct of Contractor or anyone for whom Contractor is responsible.
11.2 No Limitation. The indemnity obligations herein shall not be limited by insurance limits or other limitation of liability provisions, except as set forth in Section 12.
12. LIMITATION OF LIABILITY
Notwithstanding anything to the contrary, Contractor’s aggregate liability to Owner under this Agreement (exclusive of (i) Contractor’s indemnity obligations in Section 11, (ii) obligations to obtain insurance, (iii) obligations to remove Liens, and (iv) liability for fraud or willful misconduct) shall not exceed the Contract Price.
[// GUIDANCE: Modify or delete carve-outs as negotiated. Virginia generally enforces clear, mutually agreed caps, but not for personal injury or willful misconduct.]
13. EVENTS OF DEFAULT; REMEDIES
13.1 Contractor Events of Default. Any of the following shall constitute an “Event of Default” by Contractor:
(a) failure to prosecute the Work diligently and in a timely manner;
(b) failure to pay Subcontractors or suppliers when due;
(c) failure to maintain required insurance;
(d) failure to comply with lien-release requirements;
(e) breach of any material covenant, representation, or warranty;
(f) insolvency or bankruptcy.
13.2 Notice and Cure. Owner shall give Contractor written notice describing the Event of Default. Contractor shall have seven (7) days to commence and diligently pursue a cure.
13.3 Owner Remedies. If Contractor fails to cure timely, Owner may, without prejudice to other remedies:
(a) take over and complete the Work (directly or through others) and deduct the cost from sums otherwise payable to Contractor;
(b) terminate this Agreement in whole or in part;
(c) seek specific performance, injunctive relief, and/or damages;
(d) make claim under Contractor’s payment bond or insurance.
13.4 Suspension. Owner may, for its convenience, suspend the Work in whole or in part by written notice; Contractor shall protect and secure the Work and shall be entitled to an equitable adjustment for reasonable costs of demobilization and remobilization.
14. DISPUTE RESOLUTION
14.1 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the Commonwealth of Virginia, without regard to its conflict-of-law rules.
14.2 Forum Selection. Each Party irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY, VIRGINIA] for any action arising out of or relating to this Agreement, except as otherwise provided in Section 14.3.
14.3 Arbitration (Optional). [SELECT ONE:]
☐ Binding arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules shall be the exclusive final dispute forum.
☐ No arbitration; disputes shall be resolved solely in state court as provided above.
14.4 Mediation. As a condition precedent to litigation or arbitration, the Parties shall participate in non-binding mediation administered by [MEDIATION SERVICE] within thirty (30) days after a Party’s written request.
14.5 Jury Trial Waiver (Optional). To the fullest extent permitted by law, each Party knowingly and voluntarily waives its right to a trial by jury in any action or proceeding arising out of this Agreement.
14.6 Injunctive Relief. Notwithstanding any other provision, either Party may seek temporary, preliminary, or permanent injunctive relief in a court of competent jurisdiction to preserve the status quo or prevent irreparable harm.
15. GENERAL PROVISIONS
15.1 Entire Agreement. The Contract Documents constitute the entire agreement between the Parties and supersede all prior negotiations or agreements.
15.2 Assignment. Contractor shall not assign, delegate, or transfer its rights or obligations without Owner’s prior written consent. Any attempted assignment in violation of this Section is void.
15.3 Amendment; Waiver. No amendment or waiver shall be effective unless in writing and signed by both Parties. A waiver on one occasion is not a waiver of future compliance.
15.4 Severability. If any provision is found invalid or unenforceable, it shall be reformed to the minimum extent necessary to render it enforceable, and the remaining provisions shall remain in full force.
15.5 Notices. All notices shall be in writing and delivered (i) by hand, (ii) by nationally recognized overnight courier, or (iii) by certified U.S. mail (return receipt requested) to the addresses set forth below, or to such other address as a Party may designate by notice. Notices are effective upon receipt.
Owner: [NOTICE ADDRESS]
Contractor: [NOTICE ADDRESS]
15.6 Successors and Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their permitted successors and assigns.
15.7 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which is deemed an original. Electronic signatures (including via PDF or DocuSign) are deemed originals and fully enforceable.
15.8 Independent Contractor. Contractor is an independent contractor and nothing herein creates an employment, agency, joint venture, or partnership relationship.
15.9 Force Majeure. Neither Party is liable for delay or failure to perform due to Acts of God, governmental actions, natural disasters, terrorism, epidemics, or other causes beyond its reasonable control, provided the affected Party gives prompt notice and resumes performance as soon as practicable.
16. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties hereto have executed this Construction Services Agreement as of the Effective Date.
OWNER:
[OWNER LEGAL NAME]
By: ____
Name: [NAME]
Title: [TITLE]
Date: ________
CONTRACTOR:
[CONTRACTOR LEGAL NAME]
By: ____
Name: [NAME]
Title: [TITLE]
Date: ________
[NOTARY BLOCKS – Attach if required by recording office or lender.]
EXHIBIT A
Contract Documents (Drawings, Specifications, Addenda)
EXHIBIT B
Project Schedule and Schedule of Values
EXHIBIT C
Insurance Requirements
[// GUIDANCE: Populate Exhibits with project-specific information. Verify that all cross-references align after customization. Remove any provisions inconsistent with negotiated risk allocations.]