Construction Contract

Summary

This construction contract is a template intended for use when a contractor is constructing a project using the traditional "Design-Bid-Build" project delivery method and where the contractor building the project will be paid via a lump sum. This template includes practical guidance, drafting notes, and alternate and optional clauses. This template is designed for a traditional design-bid-build delivery with a lump sum (fixed price) payment structure, where the owner provides completed design documents and the contractor agrees to perform the work for an agreed contract sum. In this structure, many of the most negotiated provisions address scope clarity, change management, schedule risk, payment timing, and risk allocation for concealed conditions, owner-furnished information, and delays. You should expect market practice and leverage to vary significantly depending on project size, delivery timeline, subcontracting approach, and whether the owner is a public or private entity. Several exhibits and attachments are central to risk allocation and should be treated as "deal documents," not routine back matter. In particular, the Scope of Work / Specifications, drawings, schedule milestones, payment application and retainage mechanics, insurance requirements, and any owner-prepared project requirements (site conditions, logistics, and safety protocols) often determine: (1) when changes are compensable, (2) who bears escalation or delay risk, and (3) what constitutes substantial completion and final completion. You should confirm that these exhibits are internally consistent and that defined terms (e.g., "Contract Documents," "Work," "Change Order," "Substantial Completion") align across the agreement and all attachments. This template is intended to be tailored to the transaction and the governing law. You should customize the payment provisions (including retainage, conditional payment if used, and final payment closeout), the claims and dispute resolution section, and the mechanisms for changes, delays, and differing site conditions. Some requirements are highly jurisdiction-dependent—including lien waivers and lien rights, retainage limits/timing, prompt payment statutes, notice and claim deadlines, and (where applicable) public contracting rules. Users should also review and adjust any environmental/hazardous materials language to reflect the project's regulatory context and the parties' intended allocation of remediation responsibilities. For a discussion of the fundamental provisions that must be included in an owner-contractor agreement, see Owner and Contractor Agreement Resource Kit. For a full listing of key content on the construction process, see Construction Resource Kit. For more information on contracts, see Construction Contract Methods of Compensation and Payment and Warranties in Construction Contracts, and Contractor's Fixed-Price Construction Contract Checklist. For a discussion of pay-if-paid clauses and pay-when-paid clauses in subcontracts, see Contingent Payment Clauses in Construction Subcontracts State Laws Survey. For a comprehensive analysis of potential strategies for approaching zoning contingencies, see Zoning Contingencies in Construction Contracts. For a discussion of key cost and GMP contract provisions, see Guaranteed Maximum Price Construction Agreements. For a discussion of change orders and related matters, see Changes in Work and Claims Provisions in Construction Contracts. For guidance on drafting a force majeure clause in a construction contract, see Force Majeure Clauses in Construction Contracts. For information on American Institute of Architects (AIA) construction forms, see AIA Resource Kit. For a discussion of the permissible scope of indemnification in construction contracts, see Permissible Scope of Indemnification in Construction Contracts State Law Survey. For a list of key resources covering construction-related tasks for a first-year associate, see First Year Associate Resource Kit: Construction. For a list of key resources covering construction-related tasks for a junior associate, see Junior Associate Resource Kit: Construction. For a discussion of issues and tasks commonly encountered by in-house lawyers and counsel working on construction-related matters, see In-House Construction Resource Kit. For a list of key resources covering construction-related tasks for a summer associate, see Summer Associate Resource Kit: Construction. For a discussion of issues and tasks commonly encountered by in-house lawyers and counsel working on construction-related matters, see In-House Construction Resource Kit. For a list of key resources covering construction-related tasks for a federal government summer intern, see Federal Government Summer Intern Resource Kit: Construction. For related treatises, see Construction Law P 5B.03 (Construction Mgr. Duties), Construction Law P 5B.01 (Contractor's Duty to Owner), and Southeast Transaction Guide § 280.30 (Types of Construction Contracts). To compare state law construction contract provisions, see the Construction Law State Law Comparison Tool.