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Construction Contract Checklist

Construction and Contracts Resource

Draft and review construction contracts with our construction contract checklist. For owners, general contractors, subcontractors, and construction counsel. Covers parties and roles, scope of work, contract price and payment terms, schedule and milestones, change orders, warranties, insurance and indemnity, lien waiver and bond requirements, dispute resolution, termination, and permits. Use it for new builds, renovations, and subcontracts so key terms are clear and risks are allocated. Contract forms (e.g. AIA, ConsensusDocs) can be used with this checklist to verify critical items.

Key Benefits

Define parties, scope of work, and contract price clearly
Set schedule, milestones, and liquidated damages (if any)
Address change orders and payment procedures
Allocate risk with insurance and indemnity
Align lien waiver and bond requirements
Professional construction contracting workflow

Common Use Cases

Owners negotiating prime contracts with general contractorsGeneral contractors drafting subcontractsContractors and owners reviewing AIA, ConsensusDocs, or custom formsCommercial and residential construction projectsRenovation and tenant improvement agreementsDesign-build and construction management arrangements

Frequently Asked Questions

What are the main parts of a construction contract?
A construction contract typically identifies the parties (owner, contractor, sometimes architect or CM), defines the scope of work (often by reference to drawings and specs), sets the contract price and payment terms, establishes the schedule and milestones, and covers change orders, warranties, insurance, indemnity, lien waivers, dispute resolution, and termination. The exact structure depends on whether you use a standard form (e.g. AIA, ConsensusDocs) or a custom agreement.
What is the difference between fixed price and cost-plus?
In a fixed-price (lump sum) contract, the contractor agrees to perform the scope for a set price; the owner bears less cost risk but may pay for changes. In cost-plus (time and materials or cost-plus-fee), the owner pays actual costs plus a fee or markup; the owner bears more cost risk but may have more flexibility. Guaranteed maximum price (GMP) caps the owner's exposure while often allowing cost-plus accounting up to the cap. Choose based on project certainty and risk tolerance.
Why is scope of work so important?
The scope defines what the contractor must do and what is excluded. Ambiguity leads to disputes over extras, change orders, and delays. Scope is usually defined by contract documents (drawings, specifications, addenda). Clearly reference those documents and state that work not shown or specified is not included unless covered by a change order. This reduces 'that's not in my scope' conflicts.
How should change orders be handled?
The contract should require that changes to scope, price, or schedule be approved in writing (change order or similar). Specify who can authorize changes (owner, architect, CM), time and format for pricing, and that no extra work is performed without an executed change order unless emergency or otherwise agreed. This protects both sides and keeps the contract sum and schedule under control.

Checklist

Parties

Identify parties: owner, contractor, architect/engineer or CM (if applicable)
Required

Full legal names and roles. For subcontracts: GC and sub. Specify who has authority to bind each party and who will give directions (e.g. owner vs architect).

Scope

Define scope of work (drawings, specs, addenda; exclusions)
Required

Contract documents that define the work. List them by date and title. State that work not shown or specified is not included unless by change order. Clarify exclusions (e.g. owner-furnished items, permits by owner).

Price & Payment

Contract price: lump sum, GMP, cost-plus, or unit prices; payment schedule
Required

Total contract sum and how it is calculated. For progress payments: frequency (e.g. monthly), application format, retainage (if any), and when payment is due. Comply with prompt-payment or other state rules if applicable.

Schedule

Schedule: start date, substantial completion, key milestones; liquidated damages (if any)
Required

Define contract time and critical dates. If liquidated damages apply for delay, state the daily rate and cap. Address notice and excusable delay (e.g. weather, owner-caused).

Changes

Change order process: written approval, pricing method, no extra work without signed change order
Required

All changes in scope, price, or time must be in writing. Specify who may approve (owner, architect, CM). Require pricing (lump sum, T&M, or unit price) before work. Prohibit performance of extra work without executed change order except emergency or agreed procedure.

Warranties

Warranties: workmanship, materials, duration; warranty start (substantial completion vs final)
Required

Contractor warrants work will be free from defects and in conformity with the contract. Specify warranty period (e.g. one year from substantial completion) and any special warranties (e.g. roof, systems). Define when warranty period begins.

Risk

Insurance: types, limits, additional insured, waiver of subrogation; certificates
Required

Require commercial general liability, auto (if applicable), workers comp, umbrella. Owner and GC often as additional insured. Waiver of subrogation where appropriate. Require COIs before work and at renewal.

Indemnity: who indemnifies whom, scope (e.g. claims arising from contractor's work); state limits
Required

Contractor typically indemnifies owner (and sometimes others) for claims arising from contractor's work. Many states limit indemnity to the extent of fault or prohibit broad form; ensure clause complies with state law.

Compliance

Lien waivers: requirement to provide waivers with pay applications; conditional/unconditional per state
Required

Contract should require contractor (and subs) to provide lien waivers with each payment request. Specify conditional vs unconditional and partial vs final per state law. Use our lien waiver template checklist when preparing waivers.

Bonds: payment and performance bonds (if required); amount and obligee

Public projects and many private projects require payment and performance bonds. State bond amount (often 100% of contract price), obligee (owner or lender), and that bonds must be in place before work.

Permits: who obtains and pays; responsibility for code compliance
Required

Specify who pulls permits (usually contractor) and who pays fees. Contractor typically warrants work will comply with laws and codes. Owner may be responsible for zoning or special approvals.

Disputes

Dispute resolution: notice, negotiation, mediation, arbitration or litigation; venue
Required

Steps for resolving disputes: written notice, good-faith meeting, then mediation and/or arbitration or litigation. Specify governing law and venue. Some contracts require arbitration; others allow court.

Termination

Termination: for cause (default) and for convenience; payment for work performed and materials
Required

Rights to terminate for cause (e.g. failure to perform, insolvency) with cure period. Owner may want right to terminate for convenience with payment for work done and materials ordered. Define how unpaid balance is calculated.