Free Construction Contract Template

A solid construction contract should include the names and contact information of both parties, a detailed scope of work, the total contract price, a payment schedule with milestones, start and completion dates, change order procedures, warranty terms, insurance requirements, and dispute resolution provisions. The more specific you are, the fewer misunderstandings you will have during the project.

Retainage (also called retention) is a percentage of each payment that the owner holds back until the project is fully complete. Typical retainage is 5-10% of the contract value. It protects the owner by giving the contractor an incentive to finish all punch list items and ensures final quality. Retainage is usually released within 30 days of final completion and acceptance.

Yes. Even for small jobs, a written contract protects both the contractor and the homeowner. Many states legally require a written contract for home improvement work over a certain dollar amount (often $500 or more). A contract prevents disputes over scope, pricing, and timeline. It takes minutes to fill out and can save thousands in potential legal costs.

Use a formal change order for any modifications to the original scope. A change order should describe the new work, state the cost adjustment (add or deduct), note any schedule impact, and be signed by both parties before the work begins. Never start additional work on a verbal agreement alone.

This template provides a solid starting framework for a construction agreement. However, contract law varies by state and locality. For high-value projects or complex situations, have an attorney review your contract before signing. At minimum, both parties should sign, each should keep a copy, and the scope and payment terms should be clear and specific.