Free Construction Contract Template
Draft a comprehensive construction contract for residential or commercial projects. Cover scope of work, payment schedules, timelines, warranties, and legal protections with our professional US template.
Westbrook Family Trust, with an address at 1450 Hillside Terrace, Scottsdale, AZ 85251 ("Owner"), and
Horizon Builders Inc., with an address at 8200 E Camelback Road, Suite 120, Scottsdale, AZ 85251, License No. ROC-287456 ("Contractor").
Owner and Contractor may be referred to individually as a "Party" and collectively as the "Parties."
Project: Primary Residence Renovation
Location: 1450 Hillside Terrace, Scottsdale, AZ 85251
Type: New Construction
Description of Work: Complete interior renovation including kitchen and master bath remodel, flooring replacement, electrical upgrade to 200-amp panel, plumbing fixture replacement, interior painting, and custom cabinetry installation.
Plans and Specifications: The work shall be performed in accordance with Architectural plans by Desert Design Studio, dated February 15, 2026, Revision B, which are incorporated herein by reference.
Contractor shall perform all work in a good and workmanlike manner, in compliance with all applicable building codes, regulations, and industry standards. Consistent with the Spearin doctrine (United States v. Spearin, 248 U.S. 132 (1918)), Owner warrants the adequacy of the plans and specifications furnished by Owner, and Contractor shall not be responsible for defects arising from Owner-furnished plans if the work is performed in accordance with them. All materials shall be new and of good quality unless otherwise specified.
Fixed Price: The total contract price for all work described in this Contract is 175,000.00 USD. This price includes all labor, materials, equipment, overhead, and profit.
Deposit: Owner shall pay a deposit of 17,500.00 USD upon execution of this Contract. The deposit shall be applied toward the contract price.
Retainage: Owner shall withhold 10% of each progress payment as retainage. Retainage shall be released within thirty (30) days after substantial completion, final inspection, and receipt of all required lien waivers.
Final Payment: Final payment due within 30 days of substantial completion, final inspection approval, and receipt of all unconditional lien waivers.
Late payments shall accrue interest at a rate of 1.5% per month or the maximum rate permitted by applicable law, whichever is less. Payments made under this Contract shall comply with any applicable state prompt-payment statute (e.g., Cal. Bus. and Prof. Code §7108.5; Fla. Stat. §§218.70-.79; Tex. Gov't Code §§2251.021 et seq.; NY Gen. Bus. Law §756). For federally funded projects, payments to subcontractors and suppliers shall comply with the Miller Act, 40 U.S.C. §§3131-3134, and applicable state Little Miller Act analogs.
a) The work has reached substantial completion as defined in this Contract
b) All required inspections have been passed and certificates of occupancy or completion obtained (if applicable)
c) Contractor has provided unconditional lien waivers from all subcontractors and suppliers
d) All punch list items have been completed to Owner's reasonable satisfaction
e) Contractor has provided all warranties, manuals, and as-built drawings
Substantial Completion: The stage when all major construction work is complete, the residence is safe for occupancy, and only minor punch list items remain.
Time is of the essence in this Contract. Contractor shall prosecute the work diligently and shall notify Owner promptly of any circumstances that may delay the scheduled completion.
a) Acts of God (earthquakes, floods, hurricanes, tornadoes)
b) Fire or explosion
c) War, terrorism, or civil unrest
d) Government actions, embargoes, or sanctions
e) Epidemics or pandemics
f) Strikes or labor disputes (not involving Contractor's own employees)
The affected Party shall provide written notice within five (5) business days of the force majeure event and shall use commercially reasonable efforts to mitigate the delay. The completion date shall be extended by the duration of the force majeure event.
No changes to the scope, schedule, or price of the work shall be made except by written change order signed by both Parties, consistent with customary AIA Document A201 General Conditions Article 7 change-order practice. All change orders shall describe the proposed change in detail, including the effect on the contract price and completion date.
Contractor shall not proceed with any changed work until the change order has been approved by Owner.
Markup: Change order work shall be priced at cost plus a 15% markup for overhead and profit.
Warranty Scope: Contractor warrants that Materials and workmanship shall be free from defects for the warranty period specified above.
If any defect is discovered during the warranty period, Contractor shall, at Contractor's sole expense, repair or replace the defective work within a reasonable time after receiving written notice from Owner. Owner must notify Contractor of any defect within 60 days of discovering the defect.
Manufacturer Warranties: In addition to the Contractor's warranty, the following manufacturer warranties apply:
Roofing materials - 25 year manufacturer warranty
HVAC system - 10 year parts and compressor warranty
Windows - 20 year limited manufacturer warranty
Appliances - Standard manufacturer warranty
This warranty does not cover damage caused by Owner's misuse, neglect, failure to maintain, unauthorized modifications, or normal wear and tear.
Workers' Compensation: Contractor shall maintain workers' compensation insurance as required by the laws of the State of Arizona covering all of Contractor's employees engaged in the work. Contractor shall provide Owner with a certificate of insurance prior to commencing work. Any indemnification obligation of Contractor under this Contract shall be construed and enforced consistent with applicable state anti-indemnity statutes (e.g., Cal. Civ. Code §2782; N.Y. Gen. Oblig. Law §5-322.1; Tex. Ins. Code §§151.101-.151).
Builder's Risk Insurance: Contractor shall obtain and maintain builder's risk insurance covering the full value of the work during the construction period, protecting against loss or damage from fire, theft, vandalism, and other covered perils.
All insurance policies required under this Contract shall be maintained from the date work commences until final completion and acceptance. Contractor shall provide certificates of insurance to Owner upon request and shall provide thirty (30) days' advance written notice of any cancellation or material change in coverage.
Building Codes: Contractor shall be responsible for ensuring all work complies with applicable building codes, zoning regulations, and local ordinances. Contractor shall schedule and coordinate all required inspections with the appropriate building authorities.
a) Fall protection for work at heights above six (6) feet
b) Proper scaffolding and ladder safety
c) Personal protective equipment (PPE) for all workers
d) Hazard communication and safety data sheets for all chemicals
e) Electrical safety and lockout/tagout procedures
f) Trenching and excavation safety
Contractor shall designate a competent person responsible for site safety and shall maintain all required safety records and documentation.
a) Proper handling, storage, and disposal of construction waste and debris
b) Stormwater management and erosion control measures
c) Lead paint and asbestos abatement protocols (for renovation of structures built before 1978)
d) Dust and noise control measures
e) Protection of trees, wetlands, and other environmental features as required
If hazardous materials are discovered during construction, Contractor shall immediately stop work in the affected area, secure the area, and notify Owner. The cost of hazardous material remediation shall be the responsibility of Owner unless caused by Contractor's actions.
Pending resolution of any dispute, Contractor shall continue to perform the work diligently unless otherwise directed by Owner or unless the dispute relates to safety concerns.
Final payment shall not be due until Contractor has provided unconditional final lien waivers from Contractor, all subcontractors, and all material suppliers for the full amount of the contract price, including all change orders. Owner may withhold sufficient funds to cover any unresolved lien claims or potential lien claims.
Termination for Convenience: Owner may terminate this Contract for any reason upon thirty (30) days' written notice to Contractor. In the event of termination for convenience, Contractor shall be compensated for all work satisfactorily performed and materials purchased for the project through the date of termination, plus a reasonable amount for demobilization costs.
Suspension: Owner may suspend the work at any time upon seven (7) days' written notice to Contractor. During any suspension, Contractor shall secure the work site and protect all completed work. If the suspension exceeds thirty (30) days, Contractor may request an equitable adjustment to the contract price and completion date.
What Is a Construction Contract?
A construction contract is a legally binding agreement between a property owner and a contractor that defines the terms for a building project. It covers everything from the scope of work and materials to payment schedules, timelines, warranties, and dispute resolution procedures. Whether the project is a new home, a commercial renovation, or a simple repair, a written contract is essential to protect both parties.
Construction contracts are used across residential and commercial projects to ensure that all parties understand their responsibilities before work begins. They establish clear expectations for quality, cost, and timeline while providing legal recourse if either side fails to perform. In most US states, contractors are legally required to provide a written contract for projects above a certain dollar threshold.
A well-drafted construction contract reduces the risk of disputes, cost overruns, and project delays. It addresses common issues like change orders, payment retainage, insurance requirements, and permit responsibilities. Both the property owner and the contractor benefit from having these terms documented in writing before the first shovel hits the ground.
What's Covered in This Template
Doxuno's construction contract template includes all the essential sections needed to create a comprehensive agreement for any building project. Each section can be customized to fit residential or commercial construction needs.
Property Owner Information
Contractor Details
Scope of Work
Contract Price and Payment
Timeline and Schedule
Change Order Process
Warranties
Insurance Requirements
Permits and Compliance
Dispute Resolution
Termination Clauses
Signatures and Execution
How to Create a Construction Contract
Creating a solid construction contract protects both the property owner and the contractor throughout the building process. Our template guides you through each section so nothing is overlooked. Follow these five steps to build your agreement.
- 1
Identify the Parties
Enter the full legal names, addresses, phone numbers, and emails for both the property owner and the contractor. Include the contractor's state license number and insurance policy number so both parties are clearly identified and verifiable before work begins.
- 2
Define the Scope of Work
Describe the project in detail: the type of work (new construction, renovation, addition, repair, demolition, or landscaping), the site address, a thorough description of what will be built or modified, the materials to be used, and any referenced architectural plans or specifications.
- 3
Set the Price and Payment Terms
Choose the contract type (fixed price, cost plus, time and materials, or unit price) and enter the total amount. Specify the deposit or down payment, retainage percentage (typically 5-10%), and select a payment schedule: monthly progress, milestone based, draw schedule, or upon completion.
- 4
Establish the Timeline
Set the project start date and estimated completion date. Define what constitutes substantial completion and decide whether to include liquidated damages for delays (a daily or weekly penalty). Address force majeure events like natural disasters or government orders that could excuse delays beyond either party's control.
- 5
Add Warranties and Legal Protections
Specify the warranty period for workmanship and materials, define the change order process, set insurance requirements, assign permit responsibilities, and choose a dispute resolution method (mediation, arbitration, or litigation). Select the governing state law and review everything before signing.
Legal Considerations for US Construction Contracts
Construction contracts in the United States are governed by a combination of state contract law, building codes, and industry-specific regulations. Understanding the legal landscape helps both property owners and contractors protect their interests and avoid common pitfalls that lead to disputes and litigation.
This template is provided for informational purposes and does not constitute legal advice. For large or complex construction projects, consult a licensed attorney in your state who specializes in construction law.
Reviewed by legal professionals. The content on this page and the template clauses have been reviewed by licensed attorneys in the United States to ensure accuracy and legal soundness for standard construction contract scenarios.
Contractor Licensing Requirements
Most US states require contractors to hold a valid license for construction work above a certain dollar threshold. Working with an unlicensed contractor can void your contract, eliminate your ability to enforce warranties, and leave you without legal recourse if problems arise. Always verify a contractor's license status with your state's licensing board before signing the agreement.
Mechanic's Lien Rights
Under US law, contractors, subcontractors, and material suppliers have the right to file a mechanic's lien against a property if they are not paid for their work or materials. Lien laws vary significantly by state, but they generally require the claimant to file within a specific timeframe after completing work. Property owners can protect themselves by requiring lien waivers with each progress payment and by using a joint-check arrangement for subcontractors.
Retainage and Final Payment
Retainage (typically 5-10% of each progress payment) is a standard practice in the construction industry that protects the property owner by holding back a portion of payment until the project reaches substantial completion. Many states regulate the maximum retainage percentage and the timeline for releasing retained funds. The contract should clearly state the retainage rate, conditions for release, and the process for final inspection and acceptance.
Frequently Asked Questions
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Create a professional U.S. construction contract in minutes. Our American template covers scope of work, payment terms, timelines, warranties, and everything you need to protect your building project in the United States.
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