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How to Write a Construction Contract
When write a construction contract leaves you confused, worried, or unsure what it means, a clear step-by-step approach can help you sort the signal from the stress. This guide explains how to understand the situation, reflect on what matters, choose a practical next step, and know when to ask for trusted support.
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Part
1
Writing Your Construction Contract
1
Write the title and a little preamble.
Your title should describe the purpose of the contract. The preamble should simply state basics like: the date the agreement was entered into, the parties’ names, the project, the work site location, and work commencement and end dates.
- Your title should describe the purpose of the contract.
- The preamble should simply state basics like: the date the agreement was entered into, the parties’ names, the project, the work site location, and work commencement and end dates.
- Your title should describe the purpose of the contract.
- The preamble should simply state basics like: the date the agreement was entered into, the parties’ names, the project, the work site location, and work commencement and end dates.
- Your title should describe the purpose of the contract.
2
Describe the work that will be done.
State the exact description of work you'll perform. You should also describe the materials, tools, and equipment you'll use to complete the project. Be as specific as possible.
- State the exact description of work you'll perform.
- You should also describe the materials, tools, and equipment you'll use to complete the project.
- Be as specific as possible.
- State the exact description of work you'll perform.
- You should also describe the materials, tools, and equipment you'll use to complete the project.
3
Include financial information.
You'll want to state the amount of money the owner or client has agreed to pay you for performing the work. Be sure to include the contract price, non-refundable deposit, schedule of progress payments, final payment, and interest.
- You'll want to state the amount of money the owner or client has agreed to pay you for performing the work.
- Be sure to include the contract price, non-refundable deposit, schedule of progress payments, final payment, and interest.
- You'll want to state the amount of money the owner or client has agreed to pay you for performing the work.
- Be sure to include the contract price, non-refundable deposit, schedule of progress payments, final payment, and interest.
- You'll want to state the amount of money the owner or client has agreed to pay you for performing the work.
4
Include payment due dates and fees.
Be clear about payment installment dates. If you charge late fees, explain how much and when you will charge. Also include how changes in expected costs will be handled; will the contractor absorb the costs, or will the other party pay the increase? Outline how additions or deductions to the agreement as a whole will be handled.
- Be clear about payment installment dates.
- If you charge late fees, explain how much and when you will charge.
- Also include how changes in expected costs will be handled; will the contractor absorb the costs, or will the other party pay the increase?
- Outline how additions or deductions to the agreement as a whole will be handled.
- Be clear about payment installment dates.
5
Describe how any changes to the work order will be handled.
Include terms and provisions to protect you from unexpected work and additional costs. State an understanding of change orders and claims.
- Include terms and provisions to protect you from unexpected work and additional costs.
- State an understanding of change orders and claims.
- Include terms and provisions to protect you from unexpected work and additional costs.
- State an understanding of change orders and claims.
- Include terms and provisions to protect you from unexpected work and additional costs.
6
Decide how to resolve disputes and claims.
Choose a preferred forum or jurisdiction to resolve disputes and claims about your performance or completion of the job. Or, you and your client can include a provision that requires resolution in binding arbitration.
- Choose a preferred forum or jurisdiction to resolve disputes and claims about your performance or completion of the job.
- Or, you and your client can include a provision that requires resolution in binding arbitration.
- Choose a preferred forum or jurisdiction to resolve disputes and claims about your performance or completion of the job.
- Or, you and your client can include a provision that requires resolution in binding arbitration.
- Choose a preferred forum or jurisdiction to resolve disputes and claims about your performance or completion of the job.
7
Include coverage information.
State that you'll carry general liability insurance and worker’s compensation insurance as required by law. List where you received your licensing and offer the owner a right to request a performance and payout bond.
- State that you'll carry general liability insurance and worker’s compensation insurance as required by law.
- List where you received your licensing and offer the owner a right to request a performance and payout bond.
- State that you'll carry general liability insurance and worker’s compensation insurance as required by law.
- List where you received your licensing and offer the owner a right to request a performance and payout bond.
- State that you'll carry general liability insurance and worker’s compensation insurance as required by law.
8
Create a signature line.
The signature line should include space for each party to sign with his or her typed or printed name, address, and telephone number below the signature.
- The signature line should include space for each party to sign with his or her typed or printed name, address, and telephone number below the signature.
- The signature line should include space for each party to sign with his or her typed or printed name, address, and telephone number below the signature.
- The signature line should include space for each party to sign with his or her typed or printed name, address, and telephone number below the signature.
- The signature line should include space for each party to sign with his or her typed or printed name, address, and telephone number below the signature.
- The signature line should include space for each party to sign with his or her typed or printed name, address, and telephone number below the signature.
Part
2
Meeting State Requirements
1
Check your state law for required inclusions.
Many states require certain notices and disclosures be provided to consumers. You may need to state these in the contract itself. Check your state’s code for any clauses you need to include your construction contract. You can locate your state’s code using the Internal Revenue Service’s State Government Websites page. Required clauses in construction contracts may include:
- Many states require certain notices and disclosures be provided to consumers.
- You may need to state these in the contract itself.
- Check your state’s code for any clauses you need to include your construction contract.
- You can locate your state’s code using the Internal Revenue Service’s State Government Websites page.
- Required clauses in construction contracts may include:
2
Provide a projected construction schedule.
Your contract should include a schedule that specifies the number of days the project should take to complete and how the work will be divided each day. This should be an honest estimate, but you may want to include information about how variance from the schedule will be handled.
- Your contract should include a schedule that specifies the number of days the project should take to complete and how the work will be divided each day.
- This should be an honest estimate, but you may want to include information about how variance from the schedule will be handled.
- Your contract should include a schedule that specifies the number of days the project should take to complete and how the work will be divided each day.
- This should be an honest estimate, but you may want to include information about how variance from the schedule will be handled.
- Your contract should include a schedule that specifies the number of days the project should take to complete and how the work will be divided each day.
3
Determine other standard clauses you may need.
For example, if you are working on a house located on a flood plane or an area that experiences severe weather, you might include a clause noting that your schedule is contingent on these conditions. Standard clauses might include:
- For example, if you are working on a house located on a flood plane or an area that experiences severe weather, you might include a clause noting that your schedule is contingent on these conditions.
- Standard clauses might include:
- For example, if you are working on a house located on a flood plane or an area that experiences severe weather, you might include a clause noting that your schedule is contingent on these conditions.
- Standard clauses might include:
- For example, if you are working on a house located on a flood plane or an area that experiences severe weather, you might include a clause noting that your schedule is contingent on these conditions.
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