What is a construction contract?
A construction contract is a written agreement between a contractor and an owner. It says what work will be done, what it costs, when it gets paid for, and what happens if something changes or goes wrong. A short, clear contract prevents most of the arguments that come up on small jobs.
How to write a construction contract
Start from your accepted quote. Most of the contract is the quote, made specific. Then add the clauses that cover changes, payment and problems.
- Name the parties. Your business name, address, phone and license number, and the owner's name and contact details.
- Give the project address.
- Describe the scope. What you'll do, the materials, and what's not included. Vague scope is the most common cause of disputes.
- Set the dates. A start date and a completion date, and what moves them.
- State the price and payment schedule. Tie each payment to a milestone you can point to, such as rough-in passed.
- Add the clauses. Change orders, warranty, permits, insurance, cleanup, termination and disputes.
- Add a right-to-cancel notice if it applies.
- Sign and date it. Both parties, before work starts. Give the owner a copy.
What goes in a construction contract
| Clause | What it does |
|---|---|
| Scope of work | Defines the job, so extras are clearly extras. |
| Price and payment schedule | Sets how much, when, and what triggers each payment. |
| Change orders | Requires changes to be written and signed before the work starts. |
| Materials and warranty | Sets how long you stand behind your workmanship. |
| Permits | Says who pulls and pays for permits. |
| Insurance | States the cover you carry. |
| Cleanup | Sets the condition you leave the site in. |
| Termination | How either side can end the contract, and what's owed if they do. |
| Disputes | Whether disagreements go to mediation, arbitration or court. |
Right to cancel and other state requirements
Many states require a 3-day right to cancel for home-solicitation sales, meaning contracts signed at the customer's home rather than at your place of business. Federal rules cover many of these sales too. These rules often set the exact wording of the notice, and some require it as a separate form. Many states also require home improvement contracts to show your license number, cap the deposit you can take, or include specific notices about liens. Check your state's contractor licensing board before you use this template, and use their wording where they give it.
Construction contract sample clauses
The preview shows a full construction contract sample with every clause written out in plain English. Change the options on the left and the clauses update. For example, choose who pulls permits, or switch disputes from mediation to arbitration.
Changes after you sign
Use a change order for any change to the scope, price or schedule. Get it signed before you do the work. When you're paid, a lien waiver may be asked for with each payment.
Questions
Is this construction contract template free?
Yes. Fill it in, then download it as a PDF or Word file. No account needed.
Is this contract valid in my state?
It's a starting point, not legal advice. Many states have their own rules for home improvement contracts, such as required notices, license numbers and deposit limits. Check your state's rules and have an attorney review it for large jobs.
Do I need a right-to-cancel notice?
Often, if you sign the contract at the customer's home. Many states require a 3-day right to cancel for home-solicitation sales, with specific wording. Check your state's rules.
What's the difference between a quote and a construction contract?
A quote offers a price for the work. A contract adds the terms: payment schedule, change orders, warranty, termination and disputes. On small jobs, a signed quote with terms can work. On bigger jobs, use a contract.
How much deposit can I ask for?
It depends on your state. Some states cap deposits on home improvement jobs. Check your state's rules before you set the first payment.