California construction service contract template

California Construction Service Contract

This Construction Service Contract (the “Agreement”) is made and entered into as of [Date], by and between:

[Contractor Full Legal Name], a [State] [Entity Type, e.g., Corporation], with a principal place of business at [Contractor Address], California, State Contractor's License Number [License Number], Classification [Classification], (hereinafter referred to as "Contractor"). Contact details: Phone [Contractor Phone], Email [Contractor Email]. License Status: [Active/Inactive]

[Client/Owner Full Legal Name], residing at [Client/Owner Address], California (hereinafter referred to as "Owner"). Contact details: Phone [Owner Phone], Email [Owner Email].

1. Project Description and Scope of Work

Option A: The Contractor shall perform the following construction services (the “Work”) at the property located at [Project Address], Assessor Parcel Number (APN): [APN]: [Detailed Description of Work]. The Work shall be performed in accordance with the attached architectural plans and specifications, identified as [Document Name(s) and Version/Date].

Option B: The Work includes, but is not limited to: [List of Specific Tasks]. Materials and equipment to be used shall be of the brand and quality specified in Exhibit A. Standards of workmanship shall conform to industry standards and best practices. Exclusions: [List of Excluded Items/Tasks].

Option C: Refer to Exhibit A ("Scope of Work") for a complete description of the work to be performed.

2. Contract Price and Payment

Option A (Lump Sum): The total contract price for the Work is [Dollar Amount] (the "Contract Price").

Option B (Cost-Plus): The Contract Price shall be the cost of the Work plus a fee of [Percentage or Fixed Amount]. The cost of the Work shall include all direct costs, including labor, materials, equipment, and subcontractors.

Option C (Time and Materials): The Contract Price shall be based on the Contractor's hourly rates for labor, plus the cost of materials. Labor rates are as follows: [List of Labor Rates]. Materials will be billed at cost plus [Percentage] markup.

Payment Schedule: Payments shall be made according to the following schedule:

• Initial Deposit: [Dollar Amount or Percentage] upon execution of this Agreement. (Note: In California, the initial deposit for home improvement contracts cannot exceed the lesser of 10% of the Contract Price or $1,000).
• Progress Payments: [Dollar Amount or Percentage] upon completion of [Specific Milestones].
• Final Payment: [Dollar Amount or Percentage] upon substantial completion of the Work. "Substantial Completion" is defined as [Definition of Substantial Completion].

Retainage: Owner shall retain [Percentage] of each progress payment as retainage, to be paid upon final completion and acceptance of the Work.

Lien Releases: Contractor shall provide unconditional lien releases for each progress payment, as required by California Civil Code.

3. Project Schedule

Option A: The Work shall commence on or before [Start Date] and shall be substantially completed on or before [Completion Date].

Option B: The project will commence within [Number] days of obtaining all necessary permits. The anticipated completion date is [Completion Date].

Milestones:

• [Milestone 1]: Completion Date: [Date]
• [Milestone 2]: Completion Date: [Date]
• [Milestone 3]: Completion Date: [Date]

Liquidated Damages: In the event that the Contractor fails to substantially complete the Work by the Completion Date, Contractor shall pay Owner liquidated damages in the amount of [Dollar Amount] per day for each day of delay, up to a maximum of [Dollar Amount or Percentage].

Delays: Contractor shall not be liable for delays caused by acts of God, weather, strikes, material shortages, or other causes beyond Contractor's reasonable control. Contractor shall provide written notice to Owner of any such delay within [Number] days of the occurrence.

4. Permits and Approvals

Contractor shall be responsible for obtaining the following building permits and approvals: [List of Permits].

Option A: Contractor shall bear the cost of all permit fees.

Option B: Owner shall reimburse Contractor for all permit fees.

All Work shall comply with the California Building Code, local ordinances, and all applicable environmental rules, health and safety regulations, including Cal/OSHA requirements.

5. Change Orders

Any changes to the Scope of Work must be documented in a written change order, signed by both parties.

Change orders shall include a detailed description of the change, the impact on the Contract Price, and the impact on the Project Schedule.

Contractor shall provide Owner with a written estimate of the cost and time impact of any proposed change order before commencing work on the change.

6. Site Conditions and Responsibilities

Option A: Owner shall be responsible for site preparation, including clearing and grading.

Option B: Contractor shall be responsible for site preparation, as described in the Scope of Work.

Owner shall provide Contractor with reasonable access to the property.

In the event that hazardous materials, such as lead paint or asbestos, are discovered during the Work, Contractor shall immediately stop work and notify Owner. Responsibility for abatement of hazardous materials shall be determined as follows: [Description of Responsibility].

7. Insurance and Bonds

Contractor shall maintain the following insurance coverage:

• General Liability Insurance: [Dollar Amount] per occurrence.
• Workers' Compensation Insurance: As required by California law.
• Builder's Risk Insurance: [Dollar Amount]

Option A: Contractor shall provide Owner with proof of insurance upon request.

Option B: Owner shall maintain Builder's Risk Insurance.

Contractor shall maintain a valid California contractor's license bond as required by law.

Payment Bond/Performance Bond: [Requirement for Payment and/or Performance Bond, and Amount].

8. Consumer Protection Notices (California Required)

MECHANICS LIEN WARNING: Anyone who helps improve your property, but who is not paid, may record what is called a mechanics lien on your property. A mechanics lien is a claim, like a mortgage or home equity loan, made against your property when a contractor, or a contractor, or supplier who helps improve your property is not paid. Even if you pay your contractor in full, unpaid subcontractors, suppliers, and laborers who helped to improve your property may record a mechanics lien and sue you in court to foreclose the lien. If a court finds the lien is valid, you could be forced to pay twice for the same work. For this reason, it is important to take precautions to protect yourself from mechanics liens.

NOTICE OF CANCELLATION: You, the buyer, have the right to cancel this contract until midnight of the third business day after the day on which you signed this agreement. If you cancel, you must return the contract to [Contractor Address].

CONTRACTOR’S LICENSE: State law requires anyone who contracts to do construction work for more than $500 (combined labor and materials) to be licensed by the Contractors State License Board (“CSLB”). If you have questions about a contractor, check the CSLB website (www.cslb.ca.gov) or call 800-321-CSLB. Only licensed contractors are required to carry bonds and workers’ compensation insurance. You should verify a contractor’s license and bond status and workers’ compensation insurance coverage.

HOMEOWNER REMEDIES: If the contractor is unable to perform, you may have remedies to protect yourself, including but not limited to: the filing of a claim against the contractor’s bond with the CSLB; pursuing a civil lawsuit against the contractor; or filing a complaint with the CSLB.

CONTRACTOR’S LICENSE STATUS DISCLOSURE:
CONTRACTOR IS LICENSED BY THE CALIFORNIA CONTRACTORS STATE LICENSE BOARD UNDER LICENSE NUMBER [License Number].

9. Warranties

Contractor warrants that all Work shall be performed in a workmanlike manner and free from defects for a period of one (1) year from the date of substantial completion.

Manufacturer warranties shall apply to materials and equipment installed by Contractor.

Structural Warranty: Structural elements of the work shall be warranted for [Number] years.

To make a warranty claim, Owner must provide written notice to Contractor within the warranty period.

10. Dispute Resolution

In the event of a dispute arising out of this Agreement, the parties shall first attempt to resolve the dispute through good faith negotiation.

If negotiation fails, the parties shall participate in mandatory mediation in [City, County], California.

If mediation fails, either party may initiate binding arbitration in accordance with the rules of the American Arbitration Association, or file suit in [County] County, California.

Option A: The prevailing party in any dispute shall be entitled to recover its reasonable attorney's fees and costs.

Option B: Each party shall bear its own attorney’s fees and costs.

Waiver of Jury Trial: Both parties agree to waive their rights to a jury trial.

11. Subcontractors and Suppliers

Contractor may engage subcontractors to perform portions of the Work. Contractor shall be responsible for the acts and omissions of its subcontractors.

Contractor shall ensure that all subcontractors are properly licensed and insured.

Contractor shall obtain lien releases from all subcontractors and suppliers.

Prevailing Wage: If applicable, Contractor shall comply with California prevailing wage laws.

12. Termination

Termination for Cause: Either party may terminate this Agreement for cause if the other party breaches a material term of this Agreement and fails to cure the breach within [Number] days of written notice.

Termination for Convenience: Owner may terminate this Agreement for convenience upon [Number] days written notice to Contractor. In the event of termination for convenience, Owner shall pay Contractor for all Work performed and materials purchased up to the date of termination, plus a reasonable profit.

Contractor's Right to Stop Work: Contractor shall have the right to stop work if Owner fails to make payments as required by this Agreement.

13. Indemnification

To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner from and against any and all claims, damages, losses, and expenses, including attorney's fees, arising out of or resulting from Contractor's performance of the Work, but only to the extent caused by the negligent acts or omissions of Contractor, its employees, or subcontractors.

Owner shall indemnify, defend, and hold harmless Contractor from and against any and all claims, damages, losses, and expenses, including attorney's fees, arising out of or resulting from Owner's actions or negligence.

14. Withholding Payment

Owner may withhold payment from Contractor for the following reasons: defective Work, failure to pay subcontractors or suppliers, or failure to comply with the terms of this Agreement. Owner shall provide Contractor with written notice of the reason for withholding payment.

15. General Provisions

Independent Contractor: Contractor is an independent contractor and is not an employee of Owner. Contractor is solely responsible for the payment of all applicable taxes and withholdings.

Assignment: This Agreement may not be assigned by either party without the written consent of the other party.

Entire Agreement: This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations and agreements.

Amendment: This Agreement may be amended only by a written instrument signed by both parties.

Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

Confidentiality: The parties agree to hold confidential any proprietary information disclosed by the other party during the course of this Agreement.

Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of California.

Notices: All notices required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, or three (3) days after being mailed by certified mail, return receipt requested, to the addresses set forth above.

Electronic Signatures: Electronic signatures shall be valid and binding.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

____________________________
[Contractor Full Legal Name]

By: ____________________________
[Contractor Signature]

____________________________
[Owner Full Legal Name]

By: ____________________________
[Owner Signature]