11 Things to Include in a Construction Contractor Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,801 reviews

Jump to Section

Need help with a Construction Contract?

Post Project Now

A construction contractor agreement protects both parties during a construction project. It provides clear expectations between the company or person performing the work and any employer involved in the process.

Before undertaking any new project, here are 11 things to include in your construction contractor agreement.

1. Contact Information of Both Parties

Open your contractor agreement, or roofing contract, with an introduction to the project and parties overseeing its completion.

This includes:

  • The name of the contractor or company
  • Their employer
  • The parties hiring construction services

Use legal names only, and include contact information, such as telephone numbers, email addresses, and mailing addresses.

This introduction lays the groundwork for the rest of the contract; it clearly states who is involved and whom the document's contents affect. It also needs a termination clause and possibly a liquidated damages clause, clearly stating what will occur if one or both parties choose to end the agreement.

2. Scope of Work

The construction contractor agreement must include a detailed description of the project, including the complete scope and terms of work. In addition, you may find it helpful to assign a title to the project, which you can use to refer to it throughout the rest of the agreement.

As part of this portion of the construction contractor agreement, include a description of the project and its services.

For example, suppose you are hired to remodel someone’s kitchen. In that case, you may title the project “kitchen renovation” and go on to provide a list of remodeling services. But, again, be very specific; ensure that you never perform services outside the contract’s boundaries, such as cleanup or appliance installation.

This contract section should also include any necessary permits or licenses you or your clients need to obtain for work to begin. Specify that work will not start until all applicable parties have documented proof of the required permits or licenses.

Both parties should review the scope and terms of work carefully to set clear expectations before the project’s start date. This can avoid any conflict over the nature of the project later.

Here is an article that explores construction contractor agreements.

3. Schedule of Work and Completion Date

In construction, clear timelines are critical to enforcing accountability. A construction lawyer can use specified timelines to hold contractors legally responsible if they do not complete projects according to schedule.

Likewise, if contractors experience financial loss due to client’s prolonging the schedule, they can seek legal compensation.

The construction project should have milestones and a clearly defined competition date that assures all work will be done “no later than” an agreed-upon time.

4. Cost Estimate and Payment Schedule

Construction costs can vary throughout a project, but the agreement should provide a detailed estimate. It may also include an amount that the project will not exceed.

If you are using a cost-plus contract, the contractor is to be paid for all their work, plus an additional fee for their time and labor.

With a design-build contract, the contractor oversees the design and construction of a project from start to completion. In this case, they can either charge for the entire project or break down their rates for individual services.

The design-build model is increasingly popular in residential projects, such as home renovations. They allow the clients to simplify the process by having all design and construction elements handled solely by one company.

However, payment terms can vary dramatically between each type of construction contract. Therefore, it is important to have a clear estimate and list any security deposits, payment schedules, and acceptable payment methods before starting work.

Here is an article with 8 methods on how to pay a contractor.

Meet some lawyers on our platform

Sunnita B.

16 projects on CC
View Profile

Michael M.

11 projects on CC
View Profile

Brad H.

8 projects on CC
View Profile

Michael K.

58 projects on CC
View Profile

5. Stop-work and Stop-payment Clauses

The stop-work clause allows contractors to suspend work and receive a time extension if the client does not pay on time. Whether the payment is late by days, weeks, or even months, the contractor reserves the legal right to postpone any further construction work until the client’s payments are up-to-date.

A stop-payment clause gives the client a right to request to cancel the payment of items or services that have not yet been processed. For example, this can apply when a client agrees to pay a fixed monthly amount, but the project is delayed or canceled.

During the delay, the client may not pay the contractor for any services. Only when the project resumes will the client continue to pay according to the terms in their contract.

Here is an article on how stop-work clauses benefit construction contractors.

6. Change Order Agreement

A change order is an amendment to the original work order that alters the project's scope, total cost, or project schedule. These are highly valuable clauses in a construction contractor agreement.

In a renovation contract, the change order agreement easily allows the contractor to modify the contract as the project scope evolves. For example, a client may decide that they want to change certain features or even eliminate some parts of the project.

A change order allows the contractor to thoroughly document changes to a project and ensure the client only pays for the work they order.

Here is an article to learn more about change orders.

7. Authority

The authority of a construction contractor agreement states that the contract or subcontractor will be the only ones responsible for the project. This can assure the client that only approved individuals will work on their project.

Authority can also grant a subcontractor who works under the contracting company to perform work on their behalf.

Here is an article that explores liability with subcontractors in construction.

8. Warranties

Warranties have many applications in construction law. The two most common are:

  • Workmanship: The contractor promises to perform high-quality work free of any defects. The workmanship warranty can also explicitly include professional, appropriate techniques and best practices in construction.
  • Habitability : This warranty promises that the project's final result will be safe and habitable. The renovated or newly constructed space will fulfill its intended role without any defects or hazards.

The contractor can also provide warranties for their services if any of the materials used in construction do not perform as intended. However, there is a statute of limitations for how long a client can file a claim.

It is important to list all warranties, disclaimers, and applicable statutes based on state law in clear, easy-to-understand language.

A contractor can also protect themselves by reserving the right to file a lien if their state allows it. A construction lien can hold property owners responsible for payment if they are not unsatisfied with the work.

You can also include a hold harmless agreement that indicates neither party will be held responsible for injuries the other sustains.

Here is an article with more information on warranties in construction contracts.

9. Act of God Clause

The act of god clause protects the contractor from being held liable for events beyond their control. This primarily covers damages and losses sustained during natural disasters, such as:

  • Tornadoes
  • Hurricanes
  • Flash floods
  • Earthquakes

Here is an article that explains Acts of God provisions in legal terms.

10. Dispute Resolution

Disputes are not uncommon in construction. Projects may not be coming along as the client would lie or issues with outstanding payments. If contract terms are unclear or misunderstood, you may experience a breach of contract or other violations.

A dispute resolution clause can require the client to follow a specific protocol before pursuing legal action against you or your company. For example, you may require the first step to be negotiation, where you and the client discuss the problem and work toward a resolution together.

Here is an article that explores four methods for resolving construction contract disputes.

11. Signatures of Both Parties

Finally, close the contract with signatures of both the contractor’s and client’s legal first and last names. Include their title, e.g., “contractor” and “homeowner”, and dates.

Ensure the contract has a clear, blank space with visible signature and datelines to conclude the construction contractor agreement.

Post a project in ContractsCounsel’s marketplace to receive flat fee bids from lawyers for your project. All lawyers have been vetted by our team and peer-reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Christopher R. on ContractsCounsel
View Christopher
Member Since:
August 25, 2020

Christopher R.

Free Consultation
Get Free Proposal
Boston, MA
8 Yrs Experience
Licensed in MA, NH
Suffolk University Law School

Corporate and transactional attorney in sixth year of practice. Focus areas include general corporate counsel, labor and employment law, business partnership matters, securities matters related to privately-held companies, and regulatory compliance in securities and finance matters.

Forest H. on ContractsCounsel
View Forest
Member Since:
July 14, 2020

Forest H.

Free Consultation
Get Free Proposal
Nashville, TN
24 Yrs Experience
Licensed in FL, TN, TX
Washington and Lee University

Forest is a general practice lawyer. He provides legal advice regarding small business law, contracts, estates and trusts, administrative law, corporate governance and compliance. Forest practiced complex commercial litigation in Florida for eight years, representing clients such as Host Marriott, Kellogg School of Business, and Toyota. Since moving to Nashville in 2005, he has provided legal advice to clients forming new businesses, planning for the future, and seeking funding through the use of equity and/or debt in their businesses. This advice has included the selection of business type, assistance in drafting and editing their business plans and offering material, reviewing proposed term sheets, and conducting due diligence. Forest is a member of the Florida, Tennessee, and Texas Bars; in addition. Forest has held a Series 7, General Securities Representative Exam, Series 24, General Securities Principal, and Series 63, Uniform Securities Agent State Law.

Anjali S. on ContractsCounsel
View Anjali
Member Since:
July 15, 2020

Anjali S.

Free Consultation
Get Free Proposal
Orlando, FL
11 Yrs Experience
Licensed in CA, FL, NY
NYU School of Law

CA, NY, and FL licensed attorney with nearly a decade of experience in intellectual property, data privacy, commercial contracts, and employment. I also have both the CIPP/US and CIPP/E privacy credentials. Basically, everything your business needs!

David C. on ContractsCounsel
View David
Member Since:
July 15, 2020

David C.

Law Firm Principal
Free Consultation
Get Free Proposal
Miami, FL
41 Yrs Experience
Licensed in FL, NJ
University of Florida, Levin College of Law

David H. Charlip, the principal of Charlip Law Group, LC, is one of only 101 Board Certified Civil Trial Lawyers in Miami-Dade, with over 40 years of litigation experience. Mr. Charlip is also one of only 136 Florida Civil Law Notaries. He is also a Florida Supreme Court Certified Circuit Civil Mediator and a Florida Supreme Court Approved Arbitrator. He has managed and litigated cases across the country. Mr. Charlip has advised businesses, drafted business formation and purchase and sale documents and litigated business disputes for over 40 years and is very familiar with all aspects of contractual relations.

Christopher R. on ContractsCounsel
View Christopher
Member Since:
December 8, 2021

Christopher R.

Managing Attorney
Free Consultation
Get Free Proposal
6 Yrs Experience
Licensed in FL, OH
Capital University Law School

Trusted business and intellectual property attorney for small to midsize businesses. Helping businesses start, grow, scale and protect.

Lourdes H. on ContractsCounsel
View Lourdes
Member Since:
July 15, 2020

Lourdes H.

Free Consultation
Get Free Proposal
Miami, FL
18 Yrs Experience
Licensed in FL, NJ
University of Miami, J.D.

With over 16 years of experience in the area of estate planning, trademarks, copyrights and contracts, I am currently licensed in Florida and NJ. My expertise includes: counseling clients on intellectual property availability, use and registration; oversee all procedural details of registration and responses with the USPTO/US Copyright Office; negotiate, draft and review corporate contracts and licensing; counsel clients on personal protection, planning and drafting comprehensive estate plans.

Melissa T. on ContractsCounsel
View Melissa
Member Since:
July 15, 2020

Melissa T.

Attorney and Law Firm Owner/President
Free Consultation
Get Free Proposal
Maitland, FL
20 Yrs Experience
Licensed in FL
University of Florida Levin College of Law

Melissa Taylor, the President and founding partner of Maurer Taylor Law, specializes in business contract review and drafting and is a second-generation attorney with private firm, in-house counsel, governmental, entrepreneurial, and solo practitioner experience. Melissa has a strong legal background, a dedication to customer service, is friendly, warm and communicative, and is particularly skilled at explaining complex legal matters in a way that's easy to understand. Melissa personally handles all client matters from start to finish to ensure client satisfaction.

Lawrence S. on ContractsCounsel
View Lawrence
Member Since:
July 20, 2020

Lawrence S.

Free Consultation
Get Free Proposal
Miami/Coral Gables, FL
41 Yrs Experience
Licensed in FL
University of Miami

Lawrence A. “Larry” Saichek is an AV rated attorney and a CPA focusing on business and real estate transactions, corporate law and alternative dispute resolution. With a background including five years of public accounting and six years as “in house” counsel to a national real estate investment company, Larry brings a unique perspective to his clients – as attorney, accountant and businessman. Many clients think of Larry as their outside “in house” counsel and a valued member of their team. Larry is also a Florida Supreme Court Certified Mediator and a qualified arbitrator with over 25 years of ADR experience.

Brett G. on ContractsCounsel
View Brett
Member Since:
July 16, 2020

Brett G.

Free Consultation
Get Free Proposal
New York, NY
33 Yrs Experience
Licensed in NY
New York University

Entertainment Attorney with 30+ years of experience, representing all aspects of the TV, Film, Music and Publishing Industries

Aaron M. on ContractsCounsel
View Aaron
Member Since:
July 16, 2020

Aaron M.

Free Consultation
Get Free Proposal
New York, NY
12 Yrs Experience
Licensed in NJ, NY
Fordham University School of Law

Aaron focuses his practice on entrepreneurs and emerging growth companies, providing general counsel services for companies from formation through exit. Aaron frequently advises clients in connection with routine and unique legal, business, and strategic decisions, including corporate, business and technology transactions, angel and venture financings, mergers and acquisitions, protection of intellectual property, and information privacy and data security.

Stacey D. on ContractsCounsel
View Stacey
Member Since:
July 17, 2020

Stacey D.

Free Consultation
Get Free Proposal
Detroit, MI
12 Yrs Experience
Licensed in FL, MI
Stetson University College of Law

I enjoy helping businesses of all sizes succeed, from start-ups to existing small and medium sized businesses. I regularly advise corporate clients on a variety of legal issues including formation, day to day governance, reviewing and drafting business contracts and other agreements, business acquisitions and sales, as well as commercial and residential real estate issues, including sales, purchases and leases. As an attorney licensed in both Michigan and Florida, I also advise clients on real estate issues affecting businesses and individuals owning real property in either state, whether commercial, residential or vacation/investment property. I also regularly assist nonprofit organizations in obtaining and maintaining tax exempt status, and provide general legal counsel on all matters affecting public charities, private foundations and other nonprofit organizations.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call