A verbal contract isn't worth the paper it's written on.
- Samuel Goldwyn
A construction contract basically consists of four documents in combination:
DRAWINGS are a graphic representation of the work to be performed consisting of a site, foundation, floor, roof, elevation, and cross section plans. They show the location, character, dimensions, and details of the work.
SPECIFICATIONS are a written description of the work to be performed consisting of product identification, types of finishes, and standards for performance. They explain the work to be performed in terms that are not easily displayed in graphic form.
AGREEMENT identifies the parties to the agreement, the date, payment schedule for the work, the basic commitment of the Trade Contractor to construct the described project in accordance with the Drawings and Specifications, the schedule on which the work is to be performed, and the signatures of the parties. Usually, this form is quite brief, but it incorporates by reference the other parts of the contract.
CONDITIONS clarify in detail the rights and obligations of the Owner, Trade Contractors, and those activities which will be shared by mutual agreement. These clauses deal with various subjects such as Owner, Construction Manager, Architect, disputes, change orders, schedule, liability insurance, safety, inspections, corrections, arbitration, termination, jurisdiction.
All parties will want to be familiar with all the WRITTEN REQUIREMENTS of an enforceable contract. Here's a list of 16 conditions between an Owner and an Architect and/or Contractor that you'll want to put into writing. Consult with an attorney practicing construction contract law to review your contract documents before forming an agreement.
Business Documentation. The legal business name, address and business owner, or legal representative, should be stated. Indicate license numbers, professional certifications, proof of bond to cover work performed, proof of occupational insurance, personal and property liability insurance (contractor), and errors and omissions insurance (designer). Be sure statutory notice is provided according to your state's law!
Scope of Work. You should identify what will be accomplished. What do you intend to do? What type of work will be performed? The preferred method is to simply refer to Drawings and Specifications, and let those documents do the talking for you, rather than try to re-describe or summarize the scope of work. If drawings and specifications are not yet created, describe how these documents will be created and what fees will be associated with their creation.
Contract Price. How much will be charged? Does the price include sales tax or not? Who is responsible for getting the permits and scheduling inspections? Is the price fixed on drawings and specifications, or cost plus a percentage with an estimate, or based on an hourly fee? Can you break the work into phases of completion?
Schedule of Payments. How are you going to pay? Is there going to be a down payment or retainer fee paid? Are there going to be progress draws? Will you utilize a voucher system? Is the balance due on completion of work? How long after substantial completion of work is final payment due?
Terms of Payments. How do you determine substantial completion of work: when the permit is issued or signed off or some other more definitive date? Will a notarized waiver of lien be required? Will dual signature checks be utilized? How often will the lender's representative visit the site to verify progress? Never agree to an assignment of funds!
Interest. Will you be charged interest? If so, on what amount are you charged interest? When does interest begin to accrue? If the schedule exceeds the time allotted by lender, who pays any additional interest or penalties?
Site Meetings and Workplace. Where will meetings take place and how frequently? Who will have the authority to call meetings? Who will observe work to be accomplished and become the contact person for all questions and inquiries? Who will maintain workplace clean up and safety? Who will be responsible for maintaining portable toilet, first aid kits, signage, and temporary services on site?
Building Codes. Who is responsible for conformance of drawings and specifications to the building code? What happens during course of construction if building codes change or a field inspector changes the interpretation of a plans examiner?
Lender Requirements. Will both designer and contractor complete a construction cost breakdown form and description of materials using lender's forms? How will you proceed from a very general estimate of costs of work to be accomplished to a specific budget based on a thorough cost analysis? Who are the specialty contractors and suppliers for each phase of the design and build endeavor?
Change Orders. How will changes to scope of work be documented? Are change orders going to be in writing, or can they be authorized orally? How will changes be billed? Will charges or credits be based on time and material at cost or markup price? Will receipts be provided for materials or work outsourced to others? Is payment to be made in advance for changes or at the time of the next progress billing? Are hourly rates established for residential designer, contractor, or staff person?
Disputes and Remedies. If there is a misunderstanding, how will it be resolved? Are you going to spend endless years in mediation or arbitration, or are you going to resolve this through Mandatory Arbitration Rules, which is set up and paid for by the Superior Court system in your state? Will disputes be settled in accordance with the American Arbitration Association and their Construction Industry Arbitration Rules? How will legal fees be paid? Can you terminate the relationship without paying penalties or additional fees to a designer or contractor?
Warranty. What kind of warranty is being offered for products and services? Who is responsible for maintaining warranty? How long does the warranty remain in effect? Will the designer or contractor agree to maintain warranty of habitability according to provisions of your state's law? What limitations are placed on warranty? Does warranty cover workmanship, products and materials? Who is responsible for collecting and disseminating product specifications, warranties, and installation instructions?
Unforeseen Conditions. Who is responsible for identifying or removing hazardous waste? Who identifies and fixes structural defects, nonconforming plumbing, mechanical or electrical conditions, or concealed problems with the structure? Who takes financial responsibility for theft and vandalism? What special conditions arise during inclement weather that may affect work schedule or performance?
Scheduling. Whose responsibility is it to schedule the work? If the workplace is not ready at each phase of construction, then who takes responsibility? Who pays for unnecessary trips to the workplace? Are provisions given for labor and delay damages? Who determines who will be responsible for causes of delay? If work is interrupted, how will you correct the problem?
Correction or Completion of Work. Who has the right to create the final punch list? Who has the right to complete pickup work? Will any payment be withheld for any reason? Is it necessary to report deficiencies in writing or can these be described orally? How long is a reasonable opportunity to perform corrections? Who will determine substantial completion of a phase of work for designer or contractor's work?
Acceptance of Conditions. Is there a place for signatures by owner and designer and contractor indicating their Agreement? When is the start date of acceptance? How long are conditions in effect? Whose forms are to be utilized for formal agreement?
Becoming familiar with each of these issues begins with an informal meeting of all parties either together or separately to discuss the expectations of each participant. This meeting will open lines of communication on these issues and inform all participants of what is expected of them during the course of construction. No firm agreements should be made during information gathering meetings; this is a time for becoming acquainted with the various issues which contribute to the overall project success. It's always a process of progressive approximation so agree to meet again to discuss the "Conditions" of your "Agreement."
Owner's interest may best be served by meeting separately with the principal players: Construction Manager, Architect, and Trade Contractors and Suppliers. Arranging a meeting with everyone may prove impossible given busy schedules, the difficulty of locating a room which adequately provides for the number of people the Owner may want to attend, and the variety of issues related to each participant.
One scenario which has proven effective is for the Owner and Construction Manager to initially meet and develop an overall strategy geared specifically for the Owner's situation. As the Owner proceeds through the Design/Build process, there is continuity in the contract documents. Drawings and Specifications are developed and end-means relationships are made clear.
At each meeting with Trade Contractors and Suppliers, there should be a prepared agenda so the discussion is organized and comments made at the appropriate time. Begin on time and take notes. Define terms, establish procedures, and stick to the agenda. Solicit opinions from all parties requiring everyone at the meeting to present their opinions and positions at this time. At the meeting's conclusion summarize decisions made and identify concerns that are still open for discussion. As soon as possible, type these conditions on one side of standard 8 1/2" by 11" paper (if possible use a word processor for ease of correction) and use it for later discussions.
Remember: Each profession/business produces standard form contracts which favor their particular interests. For instance, most Trade Contractors have a boilerplate contract to divert Owners from bringing their own, and then customize any special conditions for a particular client. Similarly, Architects usually subscribe to the contracts generated by the American Institute of Architects. There may also be a suggestion to take what's been generated at your meeting and attach it to a standard contract labeled "Addendum," "Rider," "Contingency," "Option." Consider this arrangement carefully.
After the "rough draft" contract documents have been reviewed, there's still plenty of time for changes. Ask for comments, suggestions, deletions, or problems to be identified and meet again to make changes to your Conditions. Keep an open mind to alternatives and solutions. Discussing problems without proposing viable solutions wastes time and may cause dissention needlessly. If possible, complete the "Conditions" of your "Agreement" in its entirety and create a clean copy to be circulated among all parties for review. At any point in this process, all participants should take the document to a Lawyer familiar with construction contract law for review.
Contract documents will be unique to each Owner's requirements and lifestyle. This is why standardized forms should be avoided but this doesn't mean something cannot be gained from examining documents from the American Institute of Architects and the Associated General Contractors.
A useful approach is to take standard contracts from the AIA or AGC:
cut them up into the various clauses
group clauses together so you can compare and contrast similar issues
adapt standard contracts to your situation by addition or deletion
arrange the clauses to form "Agreement" and "Conditions" statements which fit your situation.
Be sure this activity is completed PRIOR TO any meetings with Architects, Trade Contractors, or Suppliers in order to become familiar with the many issues which need to be considered and what questions you'd like to ask.
Keep in mind that whoever writes the contract often controls the terms of agreement so the point is for all parties to participate in contract formation so that all parties are fairly represented. A good beginning point is to consider HOW the contract is written. Standard forms are to be avoided. Convince all parties that documents will be written in plain, easily understood English. This means eliminating legally correct but professional language which belongs in the domain of lawyers.
Here are some examples of common legal phrases and their plain English substitutes:
* This agreement is made and entered into this day of ,
by and between "This agreement is made (date) between"
* Sometime before "Before"
* Exhibit A attached hereto "Exhibit A"
* On behalf of "For"
* Forbearance "Delay or Refrain"
* In the event that "If"
* Of even date herewith "Today"
* The law of the State of "(Your State) law"
* Heretofore "Before now"
* Hereunder "Below"
* Probity "Relationship"
* Aforementioned omit most of the time
* Herein omit most of the time
* Said "The"
* Such "The"
* Performance "Fulfill"
* Cease and desist "Stop"
* Clear and unambiguous "Clear"
* Covenant and agree "Agree"
* Made and entered into "Made"
* Full force and effect "Effect"
* Above and foregoing "Above"
* Consent and approval "Consent"
Written Contract Documents should be required for all construction jobs. Of course, the cost and scope of the project will determine the complexity of the contract so be prepared for creating documents which are proportionate to the size of your job.
Remember: Too much detail in a contract may lead to poor feelings between Owner and Trade Contractors but often this can't be avoided. You may be "comfortable" with a person's reputation but a handshake will NOT suffice! A contract whether verbal or written expresses the clarity of communication between the Trade Contractor and Owner; it's an opportunity to describe what is to be accomplished, how long it will take, determine the costs, and state under what conditions the work will occur.
The "Sample Agreement and Conditions Document" which follows is provided as an example of how terms may appear using plain, easily understood English, and how a variety of issues might be systematically organized. This document describes the relationship possible between an Owner and General Contractor.
Owners should carefully review their situation, and tailor Contract Documents to fit their project when working with the General Contractor. You'll definitely want to consult a Lawyer familiar with construction contract law.
DO NOT USE THIS DOCUMENT "AS IS"
SAMPLE AGREEMENT AND CONDITIONS DOCUMENT
The Construction Work of this contract is between _____Contractor's Name______,
____License Number______, ______Contractor's Address________, AND
_______Owner's Name_______, _____Owner's Address_________, for completion of
_____Type of Work________.
1. Description of Work and Contract Price
1.1 Contractor agrees to furnish all labor, materials, supplies, equipment, services, machinery,
tools, and other facilities required for the prompt and efficient completion of work described:
to construct, according to the Drawings and Specifications, a house located at ____Project's
1.2 Drawings and Specifications were prepared by ____Designer/Architect/Plan Service____.
Contractor will provide additional as-built sketches and depictions that describe work
1.3 The Work will be done in strict accordance with applicable codes and ordinances and to the
full satisfaction and acceptance of the Owner for the sum of ____Dollars and Cents______ to be
paid in accordance with the Payment Schedule provisions of the lender's construction loan
documents (or state other terms).
2. Owner's Responsibilities
2.1 The Owner will fully develop Drawings and Specifications with Construction Manager or
Architect prior to issuance of permit in a manner which allows Contractor ninety (90) days to
complete bidding process. The Owner will provide full information regarding requirements for
Work including all covenants and restrictions which apply to site. Code alterations or changes
made by inspecting agency during approval process will be considered Changes according to
2.2 The Owner will furnish the Contractor with a legal survey and description of the project
site, and obtain and pay for the necessary permits, approvals, easements, and variances
required for Work.
2.3 The Owner will furnish all necessary documents for water service, electrical service,
natural gas or propane, sewer or septic, telephone, and television cable, and obtain and pay
for installation of utility services to project site when required by Permit Application and
2.3 The Owner will be fully acquainted with the Work and has budget authority to authorize
payment to Contractor in accordance with the Payment Schedule provisions of the lender's
construction loan documents, to make Changes in the Work by mutual agreement in writing with
the Contractor, to render decisions promptly consistent with Work Schedule and furnish
2.4 The Owner will communicate with Trade Contractors and Suppliers through the Contractor.
3. Contractor's Responsibilities
3.1 The Contractor will carefully study all Drawings and Specifications and will at once
report to the Owner any error, inconsistency or omission the Contractor may discover. The
Contractor will do no Work without Drawings, Specifications, or Change Order with Owner's
3.2 The Contractor will supervise and direct the Work using the most professional skill
and attention, and be solely responsible for all construction methods, techniques, sequences,
and procedures for completing all Work. The Contractor will coordinate Trade Contractors and
Suppliers to be in harmony with one another, and conform to Project Schedule.
3.3 The Contractor will provide and pay for all labor, materials, equipment, tools,
equipment, machinery, transportation, facilities, and services necessary for the proper
execution and completion of the Work, except as provided in Paragraph 9.
3.4 All materials and products furnished for the Work will be new and free from faults,
defects, and conform to the Drawings and Specifications, unless otherwise specified by Owner.
In the event there are any discrepancies from the Drawings and Specifications, the Contractor
will arrange for the correction of such discrepancies and will notify the Owner on completion
of the work performed to eliminate any such discrepancies. All Work not so conforming to
these standards will be considered defective. If required by the Owner, the Contractor will
furnish satisfactory evidence to the kind and quality of materials and products. The
Contractor will make no deviation from the Drawings and Specifications unless requested by
the Owner to do so. The Contractor will cause any Work to conform strictly to the Drawings
and Specifications unless the Contractor receives written authorization from the Owner
describing in detail what Changes are to be made. Minor deviations may be made by the
Contractor from the Drawings and Specifications as are normal in standard practices of the
construction industry and the practical application of materials.
3.5 The Contractor will pay all sales, business, consumer, use, and other similar taxes
required by law.
3.6 The Contractor will provide all notices to comply with all laws, ordinances, rules,
regulations, and orders of any public authority bearing on the performance of the Work.
The Contractor will also comply with any conditions, covenants, and restrictions which
may be applicable to the Project.
3.7 The Contractor will employ a competent Superintendent to supply necessary assistance,
and be in attendance at the Project site during the progress of the Work to insure correct
performance of the Work. The Superintendent will be satisfactory to the Owner and not be
changed except with Owner's consent, unless the Superintendent proves to be unsatisfactory
to the Contractor and is in his employ. The Owner will at all time deal with the Contractor's
employees, Trade Contractors, and Suppliers through the Superintendent. The Superintendent
will represent the Contractor and all communication given to the Superintendent will be
binding as if given to the Contractor. All significant communications will be confirmed
in writing. The Contractor will be responsible to and answer directly to the Owner for the
acts or omissions of the Contractor and of all of the Contractor's employees, Trade
Contractors, and Suppliers, as well as the wages of all employees and all other persons
directly or indirectly employed or retained by the Contractor in connection with the Work.
3.8 The Contractor will correct any defects in workmanship and/or materials performed or
supplied by the Contractor for the Work or which fails to comply with the Drawings and
Specifications, whether observed on or after completion and whether or not fabricated,
installed, or completed within the time allotted to the Owner by the lender, i.e., six (6)
months (or 8, 10, 12 depending on your situation) from date of start. The Contractor will
bear all costs and financial responsibility for the failure to complete and have
approved the construction within the six (6) month period (or 8, 10, 12 depending on your
3.9 The Contractor agrees to clean Project site and remove debris from the premises after
each phase of construction. Each Trade Contractor and Supplier will be responsible for
disposal of respective waste material at completion of their portion of the Work, and
recycle or reuse material when feasible. The Project site must remain in a clean manner,
acceptable to the Owner and consistent with the "Building Green" philosophy.
4. Payment Schedule
4.1 The Contract price will be paid to the Contractor in accordance with the required
payment schedule and incorporated by this reference are the lender's disbursement
requirements to which the Contractor and Owner agree to submit (or state other terms).
4.2 With regard to a final inspection and Certificate of Occupancy from the Building
Department, the Contractor agrees to indemnify and hold harmless the Owner against any
and all mechanics' or material men's liens attaching to the property. If any liens
attaching to the property have been recorded, then the Owner may use any or the entire
amount of the final payment to remove such liens. Nothing in this subparagraph will
limit the Contractor's liability in Paragraph 13 of this Contract.
4.3 The Contractor agrees to complete Work in a lien-free condition for the Owner. Any
payment made prior to total completion of the Work will not be construed as evidence of
acceptance of any part of the Work nor a waiver of any claim by the Owner arising out
of faulty workmanship or materials or for failure of the Contractor to comply strictly
with the Drawings and Specifications.
4.4 The Owner may withhold 10% of contract price or any payment which may be necessary
in the Owner's reasonable discretion to protect the Owner from loss because of:
4.4.1 Defective Work not remedied;
4.4.2 Third-party claims filed, or reasonable evidence indicating a probable filing of
4.4.3 Failure of the Contractor to make payments promptly to Trade Contractors, Suppliers,
or for labor, materials, or equipment;
4.4.4 Reasonable doubt that the Work can be completed for the unpaid balance of the
4.4.5 Reasonable indication that the Work will not be completed within the contracted
4.4.6 Unsatisfactory execution of the Work by the Contractor.
4.5 Final payment by the Owner will not constitute a waiver or any claims by the Owner
including claims for unsettled liens, faulty or defective work, failure of the Work to
comply with the requirements of the Drawings and Specifications, any guarantee or warranty
required by the Work.
5. Change Orders
5.1 The Owner reserves the right to perform portions of the Work on the Project by prior
agreement with the Contractor. The Owner will be credited an amount equal to the sum
allowed in the payment schedule for the portion of Work performed by the Owner.
5.2 The Owner may order changes, modifications, additions, and/or deletions to the Work.
Any such changes will not invalidate the Contract. The time for the Project completion
and the Project cost will be adjusted by mutual agreement in writing by Contractor and
5.3 Changes to the Work will only be made by written order signed by the Owner and
6. Arbitration and Termination
6.1.1 Disputes between Owner and Contractor will be settled by mutual agreement. If a
dispute cannot be settled within ten (10) days, the matter will proceed to binding
arbitration according to procedures of the American Arbitration Association after
notice and demand.
6.1.2 If the Owner fails to begin or complete portion of Work on the Project which
by prior agreement would be Owner's responsibility, the Contractor may, after five (5)
days written notice, begin or complete that portion of the Work. The Contractor will
be credited an amount equal to the sum allowed in the payment schedule for the portion
of Work to be performed by the Owner.
6.1.3 If the Project is stopped for a period of ten (10) days through no act or fault
of the Contractor, then the Contractor may, after five (5) days written notice, receive
payment from the Owner for all work performed, and proceed to binding arbitration after
notice and demand.
6.1.4 If the Contractor fails to correct defective work or persistently fails to
supply materials or labor or equipment sufficient to perform Work, the Owner may,
after five (5) days written notice, order the Contractor to stop Work until the cause
for such order has been eliminated.
6.2.1 If the Owner fails to make payment under the terms of this Contract, through
no fault of the Contractor, the Contractor may, after ten (10) days written notice,
terminate the Contract. The Owner will pay for work completed and any proven loss with
respect to materials, labor, or equipment, and reasonable profit applicable to the Work.
6.2.2 If the Contractor fails to carry out the Work in accordance to the Agreement and
Conditions Statement, and Drawings and Specifications, the Owner may, after ten (10) days
written notice, terminate the Contract, and finish the Work by whatever method the Owner
determines. If the cost of completing the Work exceeds the balance due under the terms of
the Contract, the difference is to be paid to the Owner by the Contractor.
6.2.3 Any Arbitration or Termination matters described in the Contract will be submitted
to the American Arbitration Association according to its rules.
7. Project Schedule
7.1 Work commences when Building Permit is issued, weather conditions are favorable to
excavate, and Contractor's schedule allows.
7.2 The Contractor will continue the Work in a timely fashion, and maintain progress
diligently to completion with sufficient labor and material on site at all times.
7.3 If at any time the Contractor is delayed in performing the Work by Owner requested
changes or additions, the Project Schedule will be extended by the same amount of time as
caused by the additional Work.
7.4 The Contractor will be excused from performance of Work due to riots, strikes, natural
disasters, accidents, and any Act of God. In the event that any such event prevents the
Contractor from performing Work, the Owner will not have the right to terminate the
7.5 The Date of Substantial Completion or Designated Portion of Project is the date when
construction is sufficiently complete in accordance with the Drawings and Specifications
so the Owner can occupy or utilize the Project for the use it is intended.
8.1 The Contractor will indemnify and hold harmless the Owner and the Owner's agents and
employees from all claims, damages, losses and expenses, including lawyer's fees,
relating to the performance of the Work, provided that any such claim, damage, loss or
expense is attributable to bodily injury, sickness, disease, or death or injury of any
person or to damage to property, including loss of use, caused by a negligent act of the
Contractor, a Trade Contractor or Supplier, or anyone employed by them.
8.2 In all claims against the Owner or any of the Owner's agents or employees, any
employee of the Contractor, any Trade Contractor or Suppliers, or anyone employed by
them, or anyone for whose acts any of them may be liable, the indemnification obligation
will not be limited in any way by any limitation on the amount or type of damages,
compensation or benefits payable by or for the Contractor, any Trade Contractor or
Supplier under Worker's Compensation Act, Disability Benefits Act, or any other
employment benefit act.
8.3 All damage or loss to any property in whole or in part by the Contractor, any Trade
Contractor or Supplier, or anyone employed by any of them, or by anyone, for whose acts
any of them may be liable, will be remedied by the Contractor.
9.1 The Contractor will procure and maintain, during the entire term of the Project, the
following insurance policies:
9.1.1 Worker's Compensation and Employer's liability insurance;
9.1.2 General Liability, including products and completed operations;
9.1.3 Automobile Liability Insurance.
9.2 Both the General Liability and Automobile Liability coverage will have coverage with
limits as required by State law for Bodily Injury and Property Damage, and are to be with
an insurance company with a Best Rating of AA or better. The Worker's Compensation and
Employer's Liability coverage will have minimum limits as set by law.
9.3 Certificates of insurance acceptable to the Owner pertaining to the insurance
required by Paragraph 9.1 will be filed with the Owner prior to commencement of the Work.
These Certificates will contain a provision that coverage provided in the policy will not
be cancelled until at least ten (10) day prior written notice to the Owner.
9.4 The insured's loss is to be adjusted with the Owner and made payable to the Owner;
provided that the Owner will pay to the Contractor that portion of insurance proceeds which
is attributable to Work performed by the Contractor for which the Contractor has not
received payment. The Contractor waives all rights against the Owner for damages caused by
fire or other perils to the extent covered by insurance. The Contractor will require similar
waivers by Trade Contractors and Suppliers.
9.5 The Contractor agrees, at all times during the performance of the Work, to provide
insurance for the full replacement cost of the house, for the perils of fire and extended
coverage (not to include earthquake insurance), naming the Owner as the insured. The
Contractor's insurance will only cover Work to be done by the Contractor, and will not
cover any additional Work which the Owner may wish to perform on the Project. In the event
the Owner will request the Contractor to extend Contractor's insurance to cover additional
Work contracted independently by the Owner, the Owner agrees that the Owner will pay all
additional premiums required for additional insurance to Contractor on demand.
9.6 The Owner, at the Owner's option, may purchase and maintain other insurance as the
Owner may deem appropriate.
10. Prevention of Liens
10.1 The Contractor agrees to pay, when due, all claims for labor and/or materials furnished
for Work, and to prevent the filing of any liens by mechanics or material men, or
attachments, garnishments or suits involving the title of the property on which the Work is
performed. The Contractor agrees, within fifteen (15) days after written demand is mailed to
the Contractor, at the address stated in this Contract by United States mail, to cause the
effect of any such suit or lien to be removed from the premises. In the event the Contractor
has a dispute with a Trade Contractor, Supplier, or person supplying labor or materials to
the Project, the Contractor will bond the Owner against any loss from any such claim of liens
and then have the right to prosecute the claim of lien to a completion at the Contractor's
sole cost and expense. In the event the Contractor can cause lien to be removed from any
policy of title insurance which the Owner may obtain covering the real property subject to
this Contract, then the Contractor will have no obligation to bond against mechanic's lien
and the Owner will accept title insurance policy as sufficient security to the Owner to
permit the Contractor to litigate claim of lien, without the necessity of posting a bond.
11. Work Safety
11.1 The Contractor will be responsible for establishing, supervising, and maintaining
all safety precautions and programs in connection with Work performed on the Project.
11.2 The Contractor and Owner will comply with all federal, state, and local laws and
regulations applicable to the Project.
11.3 The Contractor will take all reasonable steps to prevent damages, injury, or
11.3.1 All employees performing the Work and all other persons who may be affected;
11.3.2 All of the Work and materials, equipment, or products to be used on the Project,
whether in storage or on or off the site, and in the care, custody or control of the
Contractor, or any Trade Contractor or Supplier;
11.3.3 All property on the site or adjacent to the site including trees, shrubs, lawns,
lots, pavements, roadways, utilities, and structures not designated for removal, relocation,
12. Assignment and Subcontracting
12.1 The Contractor will not assign any portion of the Work to any person or other
Contractor; however, the Contractor will have the right to subcontract portions of the Work
to Trade Contractors of the Contractor's choosing without the necessity of obtaining
permission, either written or oral, from the Owner.
12.2 The Contractor will pay each Trade Contractor, on receipt of payment from the Owner,
amounts he may determine appropriate, but consistent with lender's requirements or of this
13.1 The Contractor guarantees the Owner, and the Owner's successors in interest, against
any loss or damage arising from any defect in materials furnished or workmanship performed
under this Contract for a period of one (6) years from the date of Certificate of Occupancy
issued by the Building Department
13.2 Nothing in this Contract will derogate the Contractor's liability for patent or
latent defects under applicable law.
This agreement is made (date).
Signature of Owner________________________
Signature of Contractor______________________
REMEMBER: Don't use this document "as-is." Take the time to adapt similar ideas to your project. If you decide to act as the General Contractor, you'll need to create individual Agreement and Condition documents for each Trade Contractor. Also, a Purchase Order system will be required to coordinate Supplier activities.
By assuming the responsibilities of a General Contractor, the Owner becomes involved with a myriad of contractual details but this is the only way to gain personal control on a daily basis.
Otherwise, you must be willing to relinquish control and trust a General Contractor to build your home as if it were his/her own project with a written Agreement to follow your Drawings, Specifications, and Conditions. If this is the case, a set of Contract Documents with your General Contractor will suffice. The General Contractor will then be responsible for creation of individual Agreement and Condition documents for each Trade Contractor and a Purchase Order system to coordinate Suppliers.
Acting as an Ownerbuilder makes you responsible for managing scope of work. You'll be in charge of all activities necessary to perform Drawings and Specifications and then coordinating the Conditions under which the work will be performed with each individual Trade Contractor and Supplier.
You must be assertive, confident, and organized to act as an Ownerbuilder!