Free Construction Contract Template

A construction contract outlines exactly what work will be done, by whom, and for how much. It also covers the scope, costs, deadlines, and who’s responsible for what. With a clear contract in place, both sides know what to expect, which cuts down on misunderstandings and expensive problems later.

When to Use a Construction Contract

You’ll want a contract anytime you’re:

• Building a house or commercial space
• Adding a room, remodeling, or doing major renovations
• Hiring for repairs, installations, or smaller construction projects

Having it all in writing keeps your project organized and gives you a solid backup if issues come up.

Before you start writing, it helps to:

• Check local rules to see what licenses, insurance, or permits are required.
• Confirm that the contractor’s credentials and insurance are current.
• Agree on the basics: the scope of work, price, payment schedule, and project duration, and how any changes will be handled.

Then, include these important details in your contract:

• Parties’ information: Names and addresses of both client and contractor, plus license numbers if needed.
• Scope of work: A clear description of the work, along with plans or specs if you have them.
• Price & payment terms: Whether it’s a fixed price, time and materials, or cost-plus, plus when and how payments will be made.
• Timeline & inspections: When work will be completed and how it will be reviewed.
• Materials & labor: Who’s providing what, and if subcontractors will be used and how they will be selected.
• Permits & licenses: Who’s responsible for getting and paying for these?
• Warranties & insurance: What’s covered if something goes wrong, plus proof of insurance.
• Termination & disputes: How can either side end the contract, and what are the options (such as mediation or arbitration) if needed? Which state’s laws will apply in the event of a dispute?

Common Contract Types & Clauses

When setting up payment terms, you might see different structures:

• Lump sum: A single fixed price for the whole project.
• Cost plus: The client pays actual costs of materials and labor, plus an agreed fee or percentage.
• Time and materials: Pay for hours worked and materials used, often with a markup.
• Unit pricing: Pay by the completed units (like square feet or installed fixtures) at a set rate.

Many contracts also mention:

• Retainage: Holding back a portion of payment until the work is fully complete and approved and has passed any required government inspections, to help ensure quality.
• General conditions: Costs tied to managing the project, like site supervision, security, or temporary facilities.