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Construction contract template: How to create your own contract.
Make an electronic contract to keep construction projects efficient.
Create construction contracts with electronic signature fields.
A construction contract formalizes the work agreement between a contractor and client. It outlines essential details such as project scope, timelines, payment terms, and responsibilities, helping to prevent misunderstandings and disputes. By using a well-structured template, contractors and clients can save time, maintain consistency across projects, and ensure compliance. Adobe Acrobat for business can help create a contract and gather signatures electronically.
What is a construction contract and who needs one?
A construction contract, sometimes referred to as a contractor agreement, is a legal contract created between a contractor providing construction services and the owner of the project. The contract could be between a homeowner, business owner, or a construction management company in charge of new construction work and the general contractor who is responsible for planning and carrying out the project. Or it could be between a general contractor and an independent contractor or subcontractor.
Whether it’s a simple home improvement contract or an enterprise-level business contract, this type of document is crucial in the construction industry and outlines all the details of the project to avoid conflict and confusion. This is why it's important to know how to write a contract or what type of construction contract template to use. It should make everything about the project clear, including pricing, payment terms, timeline, consequences for breach of contract, any necessary subcontractor agreements, logistics for carrying out the work, and other important information.
How to create a construction contract template.
You can streamline the contract-writing process by going digital. With Adobe Acrobat for business, you can make a construction contract template to edit and reuse for different clients and projects.
- Sign into Acrobat on the web.
- Click E-sign › E-sign a Template.
- Name your template and upload a file to start from.
- Click Preview & Add Fields.
- Drag fillable fields onto your document.
- Click Save.
When creating your construction contract template, make sure to include all essential details that cover the project. You'll find that most construction contracts include:
- Parties involved – clearly identify all parties in the agreement, including the contractor, client, and subcontractors (if applicable). Include full legal names, addresses, and contact details.
- Scope of work – define the specifics of the project, including:
- Project description – a detailed explanation of the work to be performed, materials to be used, and any special requirements.
- Timeline – the estimated start and completion dates, along with any key milestones or deadlines.
- Costs – a breakdown of total project costs, including labor, materials, and any additional charges.
- Contract length – specify the duration of the contract, including start and end dates, as well as conditions under which extensions may be granted.
- Payment terms – outline the total agreed-upon payment, installment schedule, payment methods, and penalties for late payments. Also, specify whether payments are made upon completion of milestones or in fixed increments.
- Expenses – clarify who is responsible for additional costs, such as equipment rentals, material price fluctuations, or unforeseen expenses. Indicate whether these costs will be covered by the contractor or billed separately to the client.
- Permits and licensing – state which party is responsible for obtaining necessary permits, approvals, and ensuring compliance with local construction laws and regulations.
- Liability and insurance – define the required insurance coverage, including general liability, worker’s compensation, and property damage coverage. Also, specify who bears responsibility for any on-site accidents or damages.
- Termination procedures – establish the terms under which the contract can be terminated by either party, including notice requirements, penalties, and conditions for breach of contract.
5 types of construction contracts.
There are five common types of construction contracts. Depending on the type of project you have, you can create a construction contract template for each of these or customize a general template to fit your needs.
1 Fixed price contracts. Also known as lump sum contracts, this simple and popular style of agreement specifies one fixed fee for an entire project.
2 Time and materials (T&M) contracts. If the scope of work is unclear, you may want to opt for a T&M contract, which outlines a daily or hourly pay rate for contractors and reimbursement for material costs.
3 Cost-reimbursement contracts. Also known as cost-plus contracts, this type of contract establishes that the contractor will be reimbursed for the costs they incur for the project in addition to an agreed-upon lump sum of money, often calculated as a percentage of the project costs.
4 Unit price contracts. Also known as measurement contracts or measure-and-pay contracts, these documents divide the project into separate tasks and specify a price estimate for each task.
5 Guaranteed maximum price (GMP) contracts. These are similar to T&M contracts, except that a cap is set for the total cost for the project or property owner. Should the actual cost of material or labor exceed the maximum amount, the difference is absorbed by the contractor.
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