A construction contract is the written agreement between a property owner and a contractor that says what gets built, for how much, by when, and how the money moves. Homeowners use one for a remodel, a deck or a roof; small general contractors and trades use one so they get paid for the job they actually quoted. Our free construction contract template below works for small residential and light commercial jobs, and you can download it as Word or PDF.
When do you need a construction contract?
You need one any time someone is going to do paid building, repair or improvement work on property and the job is big enough that a misunderstanding would hurt. In some states it isn’t optional. California requires a written contract for any home improvement project over $500 in combined labor and materials, according to the state’s Contractors State License Board.
Say (hypothetically) Dana hires a two-person crew to rebuild a back deck for $14,500. A handshake and a text thread might get the deck built. But when it turns out the joists are rotten and the price goes up, the only thing that settles the argument is a document both of them signed.
A few situations call for a different document. If the scope changes after you’ve signed, use a change order form rather than rewriting the contract. If it’s recurring outdoor service rather than a one-time build, a lawn care contract fits better.
What should a construction contract include?
Our template walks through the sections below in order. Read each one before you fill it in, because this is the part people skim and later regret.
Parties, license and property
Both parties’ full legal names and addresses, the contractor’s license number (where the state licenses the trade), and the address of the job site. California’s board says a home improvement contract must identify the contractor and give their address and license number. Even where it isn’t required, it lets the owner check the license before signing.
Scope of work
This is the heart of the construction contract agreement. Describe the work specifically: materials, brands or grades, dimensions, what’s included and, just as important, what isn’t. “Replace deck” invites a fight. “Remove existing 12x16 deck, install pressure-treated framing and composite decking, no railings” doesn’t.
Price and payment schedule
The template has a fixed price with a deposit and progress payments tied to milestones. Tie each payment to finished work, not calendar dates. Watch the deposit: California says the down payment on a home improvement job should never exceed 10 percent of the contract price or $1,000, whichever is less. Other states have their own limits, or none.
Schedule and delays
A start date, an estimated completion date, and a short list of delays nobody controls (weather, permit hold-ups, material shortages, owner-requested changes). This keeps the contract honest about how building actually goes.
Change orders
Any change to scope, price or schedule goes in a signed written change order before the extra work starts. This single clause prevents more disputes than any other.
Permits, insurance, warranty and cleanup
Who pulls permits, what insurance the contractor carries, how long the workmanship warranty lasts, and who hauls away debris. Fill in real numbers rather than leaving “standard.”
Notices, disputes and signatures
Space for any notice your state requires, a dispute process, standard boilerplate, and a signature block for the owner and the contractor.
What should you check for your state?
Three things trip people up most often.
The right to cancel. The FTC’s Cooling-Off Rule (16 CFR Part 429) covers many sales made at the buyer’s home of $25 or more, and sales of $130 or more at temporary locations. The buyer can cancel until midnight of the third business day, and the seller has to give a written notice of the right to cancel. The FTC lists exceptions, including real estate, work the buyer asked the seller to come out and do as a repair or maintenance on their personal property (anything sold beyond that request is covered), and a genuine emergency where the buyer started the contact and hands the seller a separate dated, signed statement in the buyer’s own handwriting describing the emergency and waiving the right to cancel. Some states add their own cancellation rules for home improvement contracts. If you sign contracts at kitchen tables, read the rule.
Lien notices. Contractors, subs and suppliers who aren’t paid can often claim a lien on the property, and states require specific warnings. Florida, for example, requires residential direct contracts over $2,500 to carry a construction lien notice in at least 12-point, capitalized, boldfaced type, on the front page or a separate page signed and dated by the owner. Our template leaves a space for your state’s notice; paste the official wording in, don’t paraphrase it.
Licensing and contract rules. Many states set rules for home improvement contracts through a licensing board. Look up your state’s board before you rely on any template, including this one.
How do you fill it in and get it signed?
- Download the Word version and fill in every bracketed blank. Delete options that don’t apply rather than leaving empty checkboxes.
- Attach the estimate, drawings or spec sheet and reference them in the scope section.
- Paste in any notice your state requires, in the format it requires.
- Walk through the scope and payment schedule together before anyone signs. Ten minutes on the phone is cheaper than a lien.
- Send it for signature. The owner signs, then the contractor countersigns, and both keep a copy of the fully signed PDF.
E-signing works fine for most construction contracts. The federal ESIGN Act says a contract can’t be denied legal effect solely because it’s in electronic form; our guide on whether electronic signatures are legally binding covers the details. One catch for home improvement work: if a law requires you to give a consumer a disclosure in writing, ESIGN has extra consent steps before you can deliver it electronically. And some related documents, like lien filings, are recorded with a county, which may have its own rules; see documents you can’t sign electronically.
Download it, fill in the blanks, and send it for e-signature with any tool you like. (SignWren isn’t live yet, but it’s being built for paperwork like this; the waitlist is here.)
This template is general information, not legal advice. For a specific contract or dispute, talk to a lawyer licensed where you are.
Template from signwren.com. General information, not legal advice. Check your state's rules and adapt it before you use it.
Some states require specific notices in home improvement and construction contracts (for example, a right-to-cancel notice or a construction lien notice in a set type size). Check your state's contractor licensing board and add those notices in Section 14 in the exact wording and format required.
CONSTRUCTION CONTRACT
This Construction Contract ("Contract") is made on [date] between:
Owner: [Owner's full legal name], of [Owner's mailing address], phone [phone], email [email]
Contractor: [Contractor's full legal name or business name], of [Contractor's business address], phone [phone], email [email], license number [license number, if your state licenses this work]
The Owner and the Contractor agree as follows.
1. Property
The work will be done at: [job site address] ("Property").
2. Scope of work
The Contractor will furnish the labor, materials, equipment and supervision needed to complete the following work ("Work"):
[Describe the work in detail: what will be built, removed or repaired; materials, grades, brands or models; dimensions; finishes.]
The following are not included in the Work: [exclusions, e.g. painting, electrical, landscaping repair, furniture moving].
These documents are part of this Contract: ☐ Estimate dated [date] ☐ Drawings/plans dated [date] ☐ Specifications ☐ Other: [describe]. If one of them conflicts with this Contract, this Contract controls.
3. Contract price
The Owner will pay the Contractor a total of [$ amount] ("Contract Price") for the Work, subject to written change orders under Section 6.
4. Payment schedule
| Payment |
Amount |
Due when |
| Deposit |
[$ amount] |
On signing (check your state's deposit limit) |
| Progress payment 1 |
[$ amount] |
[Milestone, e.g. framing complete and inspected] |
| Progress payment 2 |
[$ amount] |
[Milestone] |
| Final payment |
[$ amount] |
Work substantially complete and final walkthrough done |
Payments will not get ahead of the value of work completed and materials delivered to the Property. The Contractor will send an invoice for each payment, and the Owner will pay within [number] days of receiving it. Payment method: ☐ Check ☐ Bank transfer ☐ Card ☐ Other: [describe].
Late payments may accrue interest at [rate]% per month or the maximum rate allowed by law, whichever is lower.
5. Schedule
The Contractor will start the Work on or about [start date] and expects to substantially complete it by [completion date]. The completion date will be extended by a reasonable time for delays the Contractor does not control, including severe weather, permit or inspection delays, material shortages, changes requested by the Owner, and delays caused by the Owner or the Owner's other contractors. The Contractor will tell the Owner promptly, in writing, about any delay and its expected length.
6. Change orders
Any change to the Work, the Contract Price or the schedule must be made in a written change order signed by both parties before the changed work begins. Each change order will describe the change, the amount added to or subtracted from the Contract Price, and any effect on the schedule and payment schedule. Once signed, a change order becomes part of this Contract.
If the Contractor finds a hidden condition that could not reasonably have been seen before work began (for example, rot, mold, or wiring that is not to code), the Contractor will stop the affected work, tell the Owner, and propose a change order. Neither party is required to accept a change order it does not agree to, but work affected by the condition may pause until they agree.
7. Permits and inspections
☐ The Contractor ☐ The Owner will obtain and pay for the permits required for the Work. The Contractor will schedule the required inspections and do the Work to meet applicable building codes.
8. Materials, site and cleanup
All materials will be new and of the quality described in Section 2 unless the Owner agrees otherwise in writing. The Owner will give the Contractor reasonable access to the Property during working hours of [hours] on [days], plus access to [water/electricity/restroom, as agreed]. The Contractor will keep the work area reasonably clean, secure tools and materials at the end of each day, and remove construction debris when the Work is complete.
9. Insurance
The Contractor carries, and will keep during the Work: ☐ general liability insurance with limits of at least [$ amount] ☐ workers' compensation insurance as required by law ☐ Other: [describe]. The Contractor will give the Owner certificates of insurance on request.
10. Subcontractors and liens
The Contractor may use subcontractors for parts of the Work and remains responsible for their work. The Contractor will pay its subcontractors and suppliers for work and materials the Owner has paid the Contractor for. On request with each payment, the Contractor will give the Owner lien releases or waivers from the Contractor and from any subcontractor or supplier who has given the Owner a notice, in the form required by state law.
11. Warranty
The Contractor warrants that the Work will be done in a good and workmanlike manner and will be free from defects in workmanship for [number] months after completion. The Contractor will repair defects in its workmanship reported in writing during that period at no charge. This warranty does not cover damage from misuse, lack of normal maintenance, or changes made by others. Manufacturer warranties on materials and equipment pass through to the Owner.
12. Completion and walkthrough
When the Work is substantially complete, the parties will do a walkthrough and list any remaining items ("punch list"). The Contractor will finish the punch list within [number] days. The Owner will not withhold more than the reasonable cost of the unfinished punch-list items from the final payment.
13. Termination
Either party may end this Contract by written notice if the other party materially breaches it and does not fix the breach within [number] days after receiving written notice describing it. If the Contract ends, the Owner will pay for work properly done and materials delivered or specially ordered up to the date of termination, less any amount needed to fix defective work.
14. Required notices
[Insert any notice your state or the FTC Cooling-Off Rule requires, in the exact wording and format required. For example: a notice of the Owner's right to cancel with the cancellation form, or a construction lien notice. If a notice must be separately signed or initialed by the Owner, add that line here.]
15. Disputes
The parties will first try to resolve any dispute by talking in good faith. If that fails within [number] days, either party may ☐ bring the dispute in a court with jurisdiction ☐ request mediation before filing suit ☐ Other: [describe]. Nothing in this section stops a party from using a remedy the law gives it, such as a lien.
16. General terms
Entire agreement. This Contract, with any documents listed in Section 2 and signed change orders, is the entire agreement between the parties about the Work and replaces any earlier discussions.
Amendments. Any change to this Contract must be in writing and signed by both parties.
Notices. Notices under this Contract must be in writing and delivered by hand, mail or email to the addresses above.
Governing law. This Contract is governed by the laws of [State].
Severability. If any part of this Contract is found unenforceable, the rest stays in effect.
Signatures. The parties agree this agreement may be signed electronically and in counterparts, and an electronic signature has the same effect as a handwritten one.
Signatures
Owner
Signature: ______________________________
Name: [full name]
Date: [date]
Contractor
Signature: ______________________________
Name: [full name]
Date: [date]