The following is a sample of what we consider as the minimum contract required for construction of a residence. This sample is a "Fixed Price with Allowances" type contract as discussed in the "Owners Guide"
CONSTRUCTION CONTRACT
This contract, dated January 17, 1998, is by and between the following owner and contractor:
Owner: Steve & Marci Young Property Address: Stagecoach Estates, Mount Shasta, Ca. Phone: (817) 318-0720 Mailing Address : 1800 Fullerwiser Rd Apt 615 Euleuss, TX 76039
Contractor: Mountain Tech Builders 727 Alpine Rd. Mount Shasta, Ca. Telephone: (530) 926-5863 License Number: 638279
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1. GENERAL
This contract is for the following work and materials to be performed by the contractor on the property address above. The project is generally described as follows:Art studio, 1232 sq ft, and storage room of 280 sq ft per drawings prepared by Mountain Tech Builders dated December, 1997.
The contract consists of this document, any plans or specifications or exhibits submitted to the applicable Building Dept for the above named owner and project description, and the General Conditions following the signature page. Any attached specifications define work scope and quality requirements and supplement the drawings. Change orders and modifications shall be in writing and shall become part of this contract.
2. PRICE
The total price for the work agreed upon is $xx,xxx. Payment terms are set out below in Paragraph 6.3. STARTING AND COMPLETION PROVISIONS
The work will begin with site preparation on or about March 1, 1998 and will be completed, absent unusual circumstances, on or about August 1, 1998. Failure of the contractor without lawful excuse to substantially commence work within 20 days from approximate date specified in the contract when work will begin is a violation of the Contractors License Law.4. PERMITS AND APPLICABLE CODES
All work to be done under this contract will be in accordance with the building codes presently in force in the County of Siskiyou, State of California. The Contractor will obtain, for the Owner, any necessary permits to be paid by the owner.5. REQUIREMENTS FOR MATERIALS AND WORKMANSHIP
This contract will be completed by the contractor in a good and workmanlike manner, using good quality materials. The parties agree upon the materials specifications and work description, together with any plans or specifications incorporated herein. See attached specifications and drawings.6. PAYMENT
Timely payment by the owner of all sums due under this contract is of the essence to this contract. The parties agree to the following schedule of payments.Contract signing: $1,000
Work in progress:
Amounts equal to Subcontractor and/or supplier invoices and Mountain Tech payroll vouchers to be paid to Mountain Tech. Mountain Tech shall provide the owner with an invoice detailing the the amounts to be paid, signed checks for subcontractors and suppliers and addressed and stamped envelopes for check distribution.
Final inspection: A cumulative total of the contract value, adjusted for allowances and change orders less the rentention.
Retention (30 days after final inspection): $5,000
The contract price includes the following allowances:
1) Plan review, building permit, school fees at actual cost. For contract purposes, $2663 has been estimated for these expenses.
2) Finish flooring has been estimated at $3600.
3) Cabinets and counters have been estimated at $4105.
4) Bathroom tile work has been estimated at $500.
5) Decorative light fixtures and fan have been estimated at $800
The total contract value shall be adjusted for differences between the estimated and actual spent on the above noted allowance items.
The contractor may cease operations if any progress payment is not made by the owner as required herein, and proceed to collect any balance due with any legal remedy. Alternatively, the contractor may continue operations, as set forth in the attached General Conditions.
7. SIGNATURE
Attached hereto are General Conditions governing the rights and obligations of the parties to this contract. The parties are further subject to the laws of this state governing contracts and mechanics' liens.
IN WITNESS WHEREOF,
We have hereunto set our hands and seals this day of 1998.
Owner Contractor
GENERAL CONDITIONS
These General Conditions are part of the contract between Joan Roemer ("owner") and Mountain Tech Builders, contractor, for work at Stage coach Estates, Mount Shasta, California.
1. CONTRACTOR'S DUTIES - GENERAL
a. . To direct and control the work contracted for in accordance with the terms of this contract and all applicable codes, laws, and regulations, and as the building permits, if any, issued for this project require.b. To inspect the site, examine the plans and specifications, if any, and supervise all of contractor's employees, and to direct the work of all subcontractors selected by contractor.
c. To maintain the work site in a safe and clean condition, to the extent consistent with the contract.
d. To advise the owner promptly if concealed conditions are ascertained which require additional or different work, and to proceed in such event in accordance with this agreement.
2. OWNER'S DUTIES - GENERAL
a. To prepare the property for construction, provide water, power, LP gas, telephone service to the building perimeter.b. To advise the contractor of any condition of the property which affects contractor's ability to perform.
c. To execute in a timely manner all permit applications and other documents necessary for the work to proceed.
d. To perform no work on the project without a written agreement with the contractor.
e . To avoid interfering with workers.
f . To make no agreements with any tradeperson, subcontractor, or contractor's employee outside the scope of this contract without the written consent of the contractor.
g. Owners shall be entitled to make periodic inspections of the work site when accompanied by a representative of the contractor, provided such inspections do not interfere with the work and can, in the sole judgment of the contractor, be made safely. Any other entry onto the construction site shall be at owner's risk.
h. Owner shall notify his insurance agent of the execution of this Agreement and obtain any necessary Riders to his current coverage or any locally customary forms of coverage, such as Builder's Risk, to cover owner's interests and liabilities during the construction process.
3. MATERIAL SUBSTITUTION
Contractor reserves the right to substitute other materials, products, and/or labor of similar, equal or superior quality, utility, or color. In the event of the substitution of any appliance or heating equipment, the warranty terms of the substituted materials shall be equal to those originally specified unless the owner otherwise agrees in writing.4. DELAY
Contractor shall not be responsible for delays caused by events beyond the control of the contractor, including but not limited to: war, acts of God, riots, governmental regulations and restrictions. Delays caused by owner's failure to make allowance materials' selections or caused by the performance by contractor of extras or unnecessary work (as described in Paragraph 7) shall likewise be excusable delays.5. INSURANCE
Contractor agrees that he shall cover his own employees for worker's compensation insurance with a reputable company licensed to do business in this state.Owner agrees to carry full coverage on the subject property covering owner's risk of loss during the construction period, together with all special forms required by reason of the performance of this contract. Specifically, owner shall contact owner's insurance agent and secure any necessary Builder's risk coverage prior to the commencement of the work.
6. HIDDEN, CONCEALED AND UNFORESEEABLE CONDITIONS
The parties agree that in the event the contractor discovers a condition requiring an extra cost that they shall proceed as follows: The contractor shall notify the owner verbally at once to expedite agreement as to the charge to correct or cure such condition, and provide a written estimate as soon as practicable. The parties must agree to such extra charges, or agree to a resolution method, or this contract may be canceled by either of them.For purposes of this section, a "hidden, concealed and unforeseeable condition" shall mean a condition not readily observable to a prudent contractor inspecting the subject property for the purpose of performing this contract.
7. CHANGES
Any changes to the scope of work defined by the drawings and specifications desired by the owner shall be agreed upon in writing and such changes shall become a part of this contract. Unless otherwise agreed, extras shall be paid for as performed. Failure of the owner to sign an extras order shall not preclude recovery for same by contractor, and acceptance of said extra work or materials shall be presumed, unless there is written notice to the contrary.Contractor shall advise owner at the time of agreement on a change as to any additional time required to perform this contract.
8. SUBCONTRACTORS
a. Contractor shall select subcontractors as required to complete this contract. Owner acknowledges that various portions of the work will be done by subcontractors. Any subcontractor selected by the contractor shall have all requisite licenses for the work to be done by such subcontractor.b. It shall be the duty of the contractor to use reasonable care in the selection of subcontractors. Absent objectionable performance by any subcontractor, the selection of subcontractors shall be with the contractor exclusively.
c. Contractor shall pay subcontractors on a timely basis.
9. LEGAL FEES
If legal recourse is pursued as a result of this contract, the awarded party shall be granted reasonable legal fees as determined by the court.10. TERMINATION AND CANCELLATION
The contractor may terminate and cancel this contract if any payment called for hereunder is not received as scheduled, provided that notice is given to the owner as provided below. Upon such termination, the contractor shall have all remedies provided by law, including such lien rights as then apply.The owner may terminate this contract upon the following conditions:
a. Failure of the contractor, or his subcontractors, to pursue the work contracted for, absent excusable delay, as provided in Paragraph 5 above, for a continuous period of ten (10) days, without a written agreement permitting same, which may be satisfied by a simple notation to this agreement.
b. Failure of the contractor to rectify any condition regarding which building code enforcement authority has issued a citation or violation notice, within fourteen (14) days notice of such violation, unless owner and contractor otherwise agree.
c. Any other failure to perform this contract required by the terms of this contract.
d. No termination shall be effective unless 10 days notice of owner's intent are given as provided below, during which time the default may be cured by the contractor.
11. WARRANTIES
a. The work of the contractor, including materials and labor, shall be guaranteed for a period of one (1) year, during which period contractor shall at its own expense correct any defect arising from its work. This provision is in lieu of all other warranties, express or implied, and owner has no action at law or in equity against contractor after said date.b. Any and all warranties for appliances or mechanical systems shall be delivered to the owner when contractor's final payment is received.
c. Notwithstanding any manufacturer's warranty of any component, appliance, or system, no action may be brought against the contractor on this contract, for the performance of this work, except as provided above.
12. NOTICES
Notices may be sent to either party at the addresses shown above, or mailed by certified or registered mail. Any mailed notice shall be deemed given as of the date of mailing.13. SEVERABILITY
If any portion of this agreement is found invalid or unenforceable by any court, the remaining provisions shall remain in force between the parties.14. ENTIRE AGREEMENT
This contract consists of the documents defined above, and constitutes the entire agreement of the parties. It can be modified only by a written document IN WITNESS HEREOF, we have hereunto set our hands and seals this day of __________ 1998, at, _________________ , California
____________________________ ____________________________
CALIFORNIA CONSUMER NOTICES
The following notices are required to be presented to you prior to your signing the attached contract. Please indicate that you have read the notices by placing your initials on each item.
A. The owner has the right to require the contractor to have a performance or payment bond.
(Note: The contract price may require revision for added bonding costs.)
B. Contractors are required by law to be licensed and regulated by the Contractors State License Board. Any questions concerning a contractor may be referred to the Registrar of the Board, PO Box 26000, Sacramento, CA 95826.
C. If you are signing this contract at a location other than the contractor's place of business, you may cancel this transaction at any time prior to midnight of the third business day after the date of the transaction.
D. Under the California Mechanics Lien Law any contractor, subcontractor, laborer, supplier or other person who helps improve your property, but is not paid for his/her work or supplies, has a right to enforce a claim against your property. This means that after a court hearing, your property could be sold by a court officer and the proceeds of the sale used to satisfy the indebtedness. This can happen even if you have paid your contractor in full if the subcontractors, laborers or suppliers remain unpaid.
To preserve their right to file a claim or lien against your property, certain claimants such as subcontractors or material suppliers are required to provide you with a document entitled "Preliminary Notice". Original (or prime) contractors and laborers for wages do not have to provide this notice. A Preliminary Notice is not a lien against your property. Its purpose is to notify you of persons who may have a right to file a lien against your property if they are not paid. (Generally, the maximum time allowed for filing a claim or lien against your property is ninety (90) days after completion of your project.)
TO INSURE EXTRA PROTECTION FOR YOURSELF AND YOUR PROPERTY, YOU MAY WISH TO TAKE ONE OR MORE OF THE FOLLOWING STEPS:
(1) Require that your contractor supply you with a payment and performance bond (not a license bond), which provides that the bonding company will either complete the project or pay damages up to the amount of the bond. This payment and performance bond as well as a copy of the construction contract should be filed with the county recorder for your further protection.
(2) Require that payments be made directly to subcontractors and material suppliers through a joint control. Any joint control agreement should include the addendum approved by the Registrar of Contractors.
(3) Issue joint checks for payment, made out to both your contractor and subcontractors or material suppliers involved in the project. This will help to insure that all persons due payment are actually paid.
(4) After making payment on any completed phase of the project, and before making any further payments, require your contractor to provide you with unconditional lien releases signed by each material supplier, subcontractor and laborer involved in that portion of the work for which payment was made. On projects involving improvements to single family residence or duplex owned by individuals, the persons signing these releases lose the right to file a claim against your property. In other types of construction this protection may still be important, but may not be as complete. TO PROTECT YOURSELF UNDER THIS OPTION YOU MUST BE CERTAIN THAT ALL MATERIAL SUPPLIERS, SUBCONTRACTORS AND LABORERS HAVE SIGNED.
State law requires anyone who contracts to do construction work to be licensed by the Contractors State License Board in the category in which the contractor is going to be working --- if the total price is $300 or more (including labor and materials).
Licensed contractors are regulated by laws designed to protect the public. If you contract with someone who does not have a license, the Board may be unable to assist you with a complaint. Your only remedy against an unlicensed contractor may be in civil court, and you may be liable for damages arising out of any injuries to the contractor or his employees.
You may contact the Contractors State License Board to find out if this contractor has a valid license. The board has complete information on the history of licensed contractors, including any possible suspensions, revocations, judgments and citations. The Board has offices throughout California. Please check the Government pages of the White Pages for the office nearest you, or call 1-800-321-CSLB for more information.
An example of an attachment that addresses the material cost escalation issue is shown on: Attachment