[DRAFT] CONSTRUCTION SERVICES AGREEMENT
(State of Washington – Private Project)
[// GUIDANCE: This template is designed for private commercial projects located in Washington State. It is structured for a traditional “owner / prime contractor” relationship. Delete or modify bracketed text to suit the transaction. Ensure that all exhibits referenced herein are attached before execution.]
TABLE OF CONTENTS
- Document Header..................................................... 2
- Definitions.......................................................... 3
- Operative Provisions................................................. 6
3.1 Scope of Work................................................... 6
3.2 Contract Price; Payment Terms................................... 6
3.3 Time for Performance; Delays.................................... 8
3.4 Change Orders................................................... 8 - Representations & Warranties......................................... 9
- Covenants & Restrictions............................................ 10
- Default; Suspension; Remedies....................................... 11
- Risk Allocation..................................................... 13
- Dispute Resolution.................................................. 15
- General Provisions.................................................. 17
- Execution Block..................................................... 20
1. DOCUMENT HEADER
THIS CONSTRUCTION SERVICES AGREEMENT (this “Agreement”) is entered into and made effective as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
• [OWNER LEGAL NAME], a [STATE] [entity type] having its principal place of business at [ADDRESS] (“Owner”); and
• [CONTRACTOR LEGAL NAME], a [STATE] [entity type] duly registered as a contractor under RCW 18.27 (Registration No. ____) with 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 desires to engage Contractor to perform certain construction services for the project commonly known as “[PROJECT NAME]” located at [PROJECT ADDRESS] (the “Project”).
B. Contractor is duly qualified and willing to perform such services in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for 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, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in a given section shall have the meaning assigned in this Section 2.
“Applicable Law” means all federal, state, and local statutes (including without limitation RCW 60.04 (Mechanics’ and Materialmen’s Liens) and RCW 60.28 (Retainage)), regulations, ordinances, building codes, rules, and lawful orders of any Governmental Authority applicable to the Work, the Project, or either Party.
“Change Order” has the meaning given in Section 3.4.
“Completion” means Substantial Completion and Final Completion, as those terms are defined in Exhibit C.
“Contract Documents” means this Agreement, all exhibits and attachments hereto, the plans and specifications identified in Exhibit A, approved Change Orders, and any written amendments executed by the Parties.
“Contract Price” means the not-to-exceed sum of $[AMOUNT] ([WORDS]) subject to additions and deductions by Change Order.
“Day” means a calendar day unless expressly stated otherwise.
“Governmental Authority” means any federal, state, county, municipal, or other governmental or quasi-governmental agency having jurisdiction over the Project or the Parties.
“Lien Notice” means a notice satisfying the requirements of RCW 60.04.031 (Washington Notice of Right to Claim a Lien).
“Retainage” has the meaning set forth in Section 3.2(e).
“Site” means the real property legally described in Exhibit B.
“Subcontractor” means any person or entity engaged by Contractor to perform a portion of the Work.
“Work” means all labor, materials, equipment, services, and other items required to complete the Project as described in the Contract Documents.
[// GUIDANCE: Add additional defined terms alphabetically as needed for the complexity of the transaction.]
3. OPERATIVE PROVISIONS
3.1 Scope of Work
(a) Contractor shall furnish all supervision, labor, materials, equipment, tools, supplies, services, and incidentals necessary to perform and complete the Work in strict accordance with the Contract Documents and Applicable Law.
(b) Contractor shall perform the Work in a good and workmanlike manner, using new and first-class materials, and in compliance with industry standards.
3.2 Contract Price; Payment Terms
(a) Schedule of Values. Contractor shall submit a detailed schedule of values within five (5) Days after the Effective Date.
(b) Progress Payments. Owner shall pay Contractor, on or before the [___] Day of each month, the amount properly invoiced for Work performed in the preceding month, less Retainage and previous payments.
(c) Invoicing Requirements. Each invoice shall:
(i) reference this Agreement;
(ii) include a sworn statement that all Subcontractors and suppliers have been (or will be) paid in accordance with RCW 60.04.
(d) Retainage. Owner shall withhold five percent (5%) of each progress payment (“Retainage”) in compliance with RCW 60.28.011. Retainage shall be released upon the later of (i) forty-five (45) Days after Final Completion, or (ii) receipt of lien releases and clearances required under Applicable Law.
(e) Lien Releases. As a condition precedent to each payment, Contractor shall deliver conditional or unconditional lien waivers in a form compliant with RCW 60.04.071 from itself and all tiers of Subcontractors and suppliers.
(f) Interest on Late Payments. Unpaid amounts not disputed in good faith shall accrue interest at the lesser of one percent (1%) per month or the maximum legal rate.
[// GUIDANCE: Edit Retainage percentage only if the project qualifies for a different statutory rate. RCW 60.28 currently caps retainage at 5%.]
3.3 Time for Performance; Delays
(a) Commencement & Completion. Contractor shall commence the Work within [] Days after the Effective Date and shall achieve Substantial Completion no later than [DATE] and Final Completion within [] Days thereafter.
(b) Liquidated Damages. If Contractor fails to achieve Substantial Completion by the date stated above (as may be extended by approved Change Orders), Contractor shall pay Owner liquidated damages in the amount of $[AMOUNT] per Day.
(c) Excusable Delays. The time for performance shall be extended for delays caused by Force Majeure (Section 7.4) or Owner-caused delays.
3.4 Change Orders
No change, addition, or deletion to the Work or adjustment to the Contract Price or schedule shall be binding unless documented by a written change order signed by authorized representatives of both Parties (“Change Order”). Contractor shall not proceed with any change in the Work until a Change Order is executed.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Representations. Each Party represents and warrants that:
(a) it is duly organized, validly existing, and in good standing under the laws of its state of organization;
(b) it has full power and authority to enter into and perform this Agreement; and
(c) the execution, delivery, and performance of this Agreement have been duly authorized.
4.2 Contractor’s Additional Representations. Contractor further represents that:
(a) Contractor and its Subcontractors possess all licenses, registrations, and permits required to perform the Work;
(b) the Work shall be free from defects in workmanship and materials for a period of one (1) year after Final Completion (the “Warranty Period”); and
(c) all materials furnished shall be new and of good quality and shall conform to the Contract Documents.
4.3 Survival. The representations and warranties set forth herein shall survive Final Completion for the longer of (i) the Warranty Period, or (ii) the period prescribed by Applicable Law.
5. COVENANTS & RESTRICTIONS
5.1 Compliance with Laws. Contractor shall comply, and shall cause its Subcontractors to comply, with all Applicable Law, including but not limited to OSHA, RCW 60.04, and environmental regulations.
5.2 Notices.
(a) Statutory Notices. Within five (5) Days of the Effective Date, Contractor shall post in a conspicuous location at the Site the notice required under RCW 60.04.031(5).
(b) Owner’s Notice of Lien Rights. If Contractor engages any Subcontractor not in direct privity with Owner, Contractor shall ensure that such Subcontractor serves a Lien Notice on Owner within sixty (60) Days of first furnishing labor or materials.
5.3 Insurance. Contractor shall maintain, at its sole expense, insurance policies at the minimum limits set forth in Exhibit D and shall provide certificates of insurance prior to commencing the Work.
5.4 Bonds. Contractor shall furnish a payment and performance bond each in the penal sum of 100% of the Contract Price, naming Owner as obligee and otherwise compliant with RCW 18.27.040. In the alternative, Contractor may furnish a payment bond solely in the penal sum of the Contract Price if Owner waives the performance bond in writing.
5.5 Reporting & Recordkeeping. Contractor shall keep accurate records of costs, payrolls, invoices, and other data relevant to the Work for at least three (3) years after Final Completion and shall make such records available to Owner upon reasonable notice.
6. DEFAULT; SUSPENSION; REMEDIES
6.1 Events of Default – Contractor. The occurrence of any of the following constitutes a Contractor Default:
(a) failure to prosecute the Work with diligence such that Completion is endangered;
(b) failure to make prompt payment to Subcontractors or suppliers;
(c) failure to maintain required insurance or bonds;
(d) material breach of any covenant, representation, or warranty; or
(e) insolvency, assignment for the benefit of creditors, or commencement of bankruptcy proceedings.
6.2 Notice & Cure. Owner shall give Contractor written notice specifying the default. Contractor shall cure the default within seven (7) Days after receipt of notice, or, if the default cannot reasonably be cured within that period, promptly commence and diligently pursue cure to completion within a reasonable time not to exceed fourteen (14) additional Days.
6.3 Owner’s Remedies. If Contractor fails to timely cure a default, Owner may, without prejudice to any other remedy:
(a) terminate this Agreement in whole or in part;
(b) perform or procure the performance of the Work and deduct the cost thereof (including overhead and profit at 10%) from any sums due to Contractor;
(c) withhold further payments until the default is remedied; and/or
(d) seek specific performance, injunctive relief, and/or damages.
6.4 Suspension. Owner may, for its convenience, order Contractor to suspend the Work in whole or in part by written notice. Contractor shall be entitled to a reasonable adjustment in the Contract Price and schedule to the extent suspension increases cost or delays performance.
6.5 Termination for Convenience. Owner may terminate this Agreement without cause upon seven (7) Days’ written notice. In such case, Owner shall pay Contractor (i) the portion of the Contract Price attributable to Work properly performed to the termination date, plus (ii) reasonable, direct, and documented costs of demobilization, but not future lost profits.
7. RISK ALLOCATION
7.1 Indemnification
Contractor shall indemnify, defend, and hold harmless Owner, its affiliates, and their respective officers, directors, employees, and agents (collectively, “Indemnitees”) from and against any and all claims, liabilities, losses, damages, and expenses (including reasonable attorneys’ fees) arising out of or relating to:
(a) bodily injury, sickness, disease, or death of any person;
(b) damage to or loss of property; or
(c) breach of this Agreement or violation of Applicable Law
to the extent caused by the negligent acts, errors, or omissions, or willful misconduct of Contractor or its Subcontractors.
[// GUIDANCE: Washington’s anti-indemnity statute (RCW 4.24.115) voids clauses requiring a party to indemnify the indemnitee for the indemnitee’s sole negligence. The above clause is drafted to comply.]
7.2 Limitation of Liability
Except for (i) Contractor’s indemnity obligations under Section 7.1, (ii) losses covered by insurance, and (iii) Contractor’s gross negligence or willful misconduct, Contractor’s aggregate liability to Owner arising out of or relating to this Agreement shall not exceed the Contract Price.
7.3 Insurance
See Section 5.3 and Exhibit D.
7.4 Force Majeure
Neither Party shall be liable for delays or failures in performance caused by acts of God, labor disputes, embargoes, governmental actions, epidemics, or other causes beyond its reasonable control (“Force Majeure”). The affected Party shall provide prompt written notice and shall use diligent efforts to mitigate the impact.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Washington, without regard to conflict-of-laws principles.
8.2 Forum Selection. The Superior Court of the State of Washington in and for the county where the Project is located shall have exclusive jurisdiction of any action arising out of or relating to this Agreement, subject to Section 8.3.
8.3 Arbitration (Optional). [SELECT ONE – DELETE THE OTHER]
• [OPTION A – ARBITRATION ELECTED] Any dispute not resolved by negotiation shall be finally resolved by binding arbitration administered by the American Arbitration Association (“AAA”) under its Construction Industry Arbitration Rules. The arbitration shall take place in [CITY, WA], and judgment on the award may be entered in any court having jurisdiction.
• [OPTION B – NO ARBITRATION] The Parties do not elect arbitration, and disputes shall be resolved exclusively in the state courts specified in Section 8.2.
8.4 Jury Trial Waiver (Optional). TO THE EXTENT PERMITTED BY LAW, EACH PARTY HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT.
8.5 Injunctive Relief. Each Party acknowledges that a breach of Sections 3.4, 5.3, or 7 may cause irreparable harm for which monetary damages are inadequate and agrees that the non-breaching Party shall be entitled to seek injunctive relief in addition to any other remedies.
8.6 Attorneys’ Fees. The prevailing Party in any dispute shall be entitled to recover its reasonable attorneys’ fees, expert fees, and costs.
9. GENERAL PROVISIONS
9.1 Entire Agreement. The Contract Documents constitute the complete and exclusive agreement between the Parties.
9.2 Amendment & Waiver. No amendment or waiver shall be effective unless in writing and signed by the Party against whom enforcement is sought.
9.3 Assignment. Contractor may not assign or delegate its rights or obligations without Owner’s prior written consent; any unpermitted assignment is void.
9.4 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their permitted successors and assigns.
9.5 Severability; Reformation. If any provision is found invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to comply with Applicable Law.
9.6 Notices. All notices shall be in writing and delivered by (i) personal delivery, (ii) nationally-recognized overnight courier, or (iii) certified U.S. mail, return receipt requested, to the addresses first set forth above (or such other address as a Party may designate in writing).
9.7 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Electronic signatures and pdf copies shall be deemed originals for all purposes.
9.8 Independent Contractor. Contractor is an independent contractor and not an employee or agent of Owner.
9.9 No Third-Party Beneficiaries. Except as expressly stated, nothing herein is intended to confer any rights upon any third party.
10. 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: ____
Title: ____
Date: ______
CONTRACTOR:
[CONTRACTOR LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: ______
[Corporate Seals, if applicable]
[// GUIDANCE: Notarization is generally not required for enforceability of private construction contracts in Washington, but consider notarizing signatures and attaching a legal description when recording any memoranda of agreement.]
EXHIBIT A – Plans and Specifications
EXHIBIT B – Legal Description of Site
EXHIBIT C – Definitions of Substantial & Final Completion; Punch-List Procedures
EXHIBIT D – Insurance Requirements
EXHIBIT E – Sample Conditional and Unconditional Lien Waiver Forms (RCW 60.04.071)
EXHIBIT F – Statutory “Notice to Owner” (RCW 60.04.031)
[// GUIDANCE: Attach the mandatory Notice to Owner form verbatim from RCW 60.04.031(4). Provide both conditional and unconditional lien waiver forms exactly as set forth in RCW 60.04.071 to ensure statutory compliance.]