A construction contract is a legal document mutually entered upon by contracting parties. It contains all the formal terms and conditions set upon for fulfillment and completion. This type of contract basically encompasses all the pertinent information to come up with a construction contract agreement. A construction contract is usually binding between the developers, direct owners, builders, and possible subcontractors.
An employment contract relating to construction is vital to direct employees concerned. Majority of construction workers are covered by the terms and conditions of construction contracts. It is, therefore, only important that such contracts are tailored well for the benefit of the parties involved.
Free Construction Contract Template
Sample Management Contract
Types of Construction Contracts
There are different types of construction contracts that suit the preference of construction professionals and workers for their contract template. There may be specific conditions that need to be included in order to make a better construction offer. For some, there could also be other project specifications that need prioritization.
For whatever underlying reason, here are corresponding types of construction contracts:
- Fixed Price Construction Contract – This type of contract already has everything planned out from building materials, workers’ compensation, construction commencement, and completion to name a few. Everything is fixed and agreed upon as long as the contract is effective.
- Individual Pricing Construction Contract – If scope of works is not yet defined by the time contracting parties enter into an agreement, they could create this separate type of construction contract that includes stipulations regarding construction materials, building design, permits, and more.
- Actual Cost Construction Contract – Pricing of an entire project is liquidated upon commencement and progress of construction. This type of contract tracks the exact amount used for everything related to construction. A service contract template is ideal to fill out for this type of contract since services are evaluated first subject to actual cost breakdown.
Construction Contract Sample
Guidelines on How to Write a Construction Contract
Regardless of the type of construction contract that you aim to produce, one must know the basics of how to write a contract considering its general inclusions.
Here is an easy guideline you could follow on how to write the ideal construction contract:
- General Title – Any title for your contract may be comprehensive enough for as long as it establishes a common language to contracting parties. A general title could mean the type of construction contract being entered into. This reflects more formality in your documents as well.
- Client-Builder Party – Construction contracts are commonly executed between builders and clients hence details about contracting parties should be clearly reflected in the contract. All job contract templates include employer-employee parties in their contracts which is understood as the client and the builder in construction contracts.
- Payment Scheme – The builder and the client agrees on a certain payment scheme. It could be stated in bullets or paragraphs that could mention a payment in installment or bulk.
- Services – The type of service that builders should render depend on what the clients require. It should clearly be described as enumerated in the contract.
Create the best construction contracts by following the simple guideline provided for you above.