CONSTRUCTION SERVICES AGREEMENT

(Massachusetts – Private Project)

[// GUIDANCE: This template is drafted for private, non-residential construction projects located in the Commonwealth of Massachusetts. It reflects current Massachusetts lien, retainage, and payment-bond statutes as of the date of drafting. Counsel should confirm that the project falls within the scope of those statutes (e.g., G.L. c. 149, § 29F applies only to certain private projects with an original contract price of $3,000,000 or more) and tailor provisions accordingly.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Scope of Work and Performance Standards
4. Contract Sum; Payment Procedures; Retainage
5. Time of Performance; Scheduling
6. Change Management
7. Representations and Warranties
8. Covenants and Ongoing Obligations
9. Insurance and Bonds
10. Lien Law Compliance
11. Indemnification; Limitation of Liability
12. Default and Remedies
13. Suspension and Termination
14. Dispute Resolution
15. General Provisions
16. Execution Block

1. DOCUMENT HEADER

THIS CONSTRUCTION SERVICES AGREEMENT (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”), by and between:

• [OWNER NAME], a [STATE] [TYPE OF ENTITY] having an address at [ADDRESS] (“Owner”); and
• [CONTRACTOR NAME], a [STATE] [TYPE OF ENTITY] having an address at [ADDRESS] (“Contractor”).

Owner and Contractor are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

A. Owner owns or controls the real property located at [PROJECT ADDRESS], as more particularly described in Exhibit A (the “Property”).
B. Owner desires to have constructed on the Property the improvements described in Exhibit B (the “Project”), and Contractor desires to perform such work in accordance with the terms and conditions of this Agreement.
C. In consideration of the mutual covenants herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. DEFINITIONS

For ease of reference, capitalized terms used in this Agreement have the meanings set forth below. Terms defined in one Section and used in another shall have the same meaning unless the context clearly requires otherwise.

“Application for Payment” – A written request for payment submitted by Contractor in accordance with Section 4.2.

“Change Order” – A written modification to the Work, Contract Time, or Contract Sum executed in accordance with Section 6.

“Contract Documents” – Collectively, this Agreement and all documents listed or referenced in Exhibit C, including any Drawings, Specifications, Change Orders, schedules, addenda, and written amendments executed by the Parties.

“Contract Sum” – The total amount payable to Contractor for performance of the Work, as set forth in Section 4.1, subject to adjustments authorized by this Agreement.

“Contract Time” – The period allocated for Substantial Completion of the Work, as established in Section 5.1.

“Final Completion” – The date on which the Work is fully completed in accordance with the Contract Documents and all conditions precedent to Owner’s final payment have been satisfied.

“Mechanics’ Lien Law” – M.G.L. c. 254, as the same may be amended.

“Retainage” – Portions of payments withheld by Owner pursuant to Section 4.3 and in conformity with M.G.L. c. 149, § 29F.

“Subcontractor” – Any person or entity, other than Contractor’s employees, that performs any portion of the Work at any tier.

“Substantial Completion” – The stage in the progress of the Work when the Work (or a designated portion) is sufficiently complete in accordance with the Contract Documents so Owner can occupy or utilize the Work for its intended use.

“Work” – All construction and services required by the Contract Documents, including labor, materials, equipment, and incidentals necessary to fulfil Contractor’s obligations.

[// GUIDANCE: Add or delete defined terms as project complexity dictates and ensure cross-references remain intact.]

3. SCOPE OF WORK AND PERFORMANCE STANDARDS

3.1 Scope. Contractor shall furnish all supervision, labor, materials, equipment, tools, supplies, and services necessary to perform the Work in strict accordance with the Contract Documents, applicable laws, and industry standards prevailing in the Commonwealth of Massachusetts.

3.2 Standards of Performance.
(a) Contractor shall perform the Work (i) in a good, substantial, and workmanlike manner; (ii) in compliance with all applicable federal, state, and local statutes, ordinances, codes, rules, and regulations (collectively, “Laws”); and (iii) so as not to interfere unreasonably with Owner’s operations or other contractors at the Property.
(b) All materials incorporated into the Work shall be new and of good quality unless otherwise specified.

3.3 Superintendent. Contractor shall designate a competent on-site superintendent acceptable to Owner, authorized to receive and act upon instructions from Owner.

3.4 Cooperation. Contractor shall coordinate the Work with that of Owner and other contractors to avoid conflict, delay, or interference.

4. CONTRACT SUM; PAYMENT PROCEDURES; RETAINAGE

4.1 Contract Sum. Owner shall pay Contractor the fixed sum of [CONTRACT PRICE IN WORDS] Dollars ($[CONTRACT PRICE NUMERALS]) (“Contract Sum”), subject to additions and deductions by Change Order.

4.2 Schedule of Values; Applications for Payment.
(a) Within ten (10) days after the Effective Date, Contractor shall submit to Owner for approval a schedule of values allocating the Contract Sum among the various portions of the Work.
(b) On or before the [DAY] day of each month, Contractor shall submit an Application for Payment covering the Work performed during the preceding month and supported by (i) updated schedule of values, (ii) partial lien waivers, (iii) certified payrolls if applicable, and (iv) such other documentation as Owner reasonably requires.

4.3 Retainage.
(a) Owner shall withhold retainage from each progress payment in an amount not to exceed five percent (5%) of the invoiced value of Work properly performed, consistent with M.G.L. c. 149, § 29F.
(b) Upon Substantial Completion, retainage for Work completed shall be reduced to the lesser of (i) punch-list value plus a reasonable safety margin not exceeding 2.5% of the Contract Sum or (ii) the maximum amount permitted by Law.
(c) Retainage shall be released in accordance with the procedures and time frames set forth in Section 29F, including the 30-day deadline following Contractor’s submission of a proper Notice of Substantial Completion and 60-day deadline following Final Completion, as applicable.

4.4 Payment Bond Flow-Through. Where Contractor has furnished a payment bond under Section 9.2, Owner may elect to make payments jointly to Contractor and any claimant to the bond if necessary to discharge payment obligations.

4.5 Withholding. Owner may withhold amounts otherwise due to Contractor to cover (i) defective Work not remedied, (ii) claims by third parties, (iii) reasonable doubt that the Work can be completed for the unpaid balance of the Contract Sum, or (iv) any other ground permitted under the Contract Documents or Law.

4.6 Final Payment. Upon Final Completion and Contractor’s delivery of (i) final lien waivers, (ii) warranty documents, (iii) as-built drawings, (iv) operations and maintenance manuals, and (v) an affidavit that payrolls, bills for materials, and other indebtedness connected with the Work have been paid or satisfied, Owner shall make final payment, less any amounts properly withheld.

[// GUIDANCE: Many Massachusetts owners also condition final payment on receipt of a Certificate of Occupancy; add such a condition if relevant.]

5. TIME OF PERFORMANCE; SCHEDULING

5.1 Commencement and Completion. Contractor shall commence the Work within [NUMBER] days after the Effective Date and achieve Substantial Completion not later than [DATE] (the “Substantial Completion Date”). Final Completion shall occur within [NUMBER] days thereafter.

5.2 Progress Schedule. Within ten (10) days after the Effective Date, Contractor shall deliver a detailed critical-path schedule for Owner’s review showing all significant activities, logic ties, and milestones leading to Substantial Completion.

5.3 Delays; Extensions. Contractor shall be entitled to an equitable adjustment of Contract Time for delays caused by Owner, Force Majeure events (as defined in Section 15.10), or other causes beyond Contractor’s control, provided Contractor gives written notice within seven (7) days after the event giving rise to the delay.

6. CHANGE MANAGEMENT

6.1 Owner-Initiated Changes. Owner may, at any time, by written directive, make changes in the Work. Contractor shall promptly submit a cost and time proposal reflecting the requested change.

6.2 Contractor-Initiated Changes. Contractor may request a Change Order for unforeseen site conditions, design errors or omissions, or other circumstances warranting an adjustment.

6.3 Executed Change Orders. No change shall be binding unless memorialized in a Change Order signed by both Parties, except that Contractor shall proceed with Work directed by Owner under a Construction Change Directive, subject to later price/time negotiation pursuant to the Contract Documents.

7. REPRESENTATIONS AND WARRANTIES

7.1 Contractor represents and warrants that:
(a) It is duly organized, validly existing, and in good standing under the Laws of its state of formation and qualified to transact business in Massachusetts;
(b) It possesses requisite skill, experience, resources, and properly licensed personnel to perform the Work;
(c) The Work shall be free of defects in workmanship and materials for a period of one (1) year from Final Completion or for such longer period as may be set forth in the Contract Documents;
(d) It holds and will maintain all licenses, permits, and approvals necessary to perform the Work lawfully; and
(e) No act or omission by Contractor shall violate any Law, including OSHA, environmental regulations, and the Mechanics’ Lien Law.

7.2 Survival. The warranties set forth herein survive Final Completion and are in addition to, and not in limitation of, any other warranties provided by Law or the Contract Documents.

8. COVENANTS AND ONGOING OBLIGATIONS

8.1 Compliance With Laws. Contractor shall comply with all applicable Laws, including without limitation building codes, safety regulations, and environmental requirements.

8.2 Records and Audit. Contractor shall maintain complete and accurate books and records relating to the Work for a minimum of three (3) years after Final Completion and shall make such records available for Owner’s inspection on reasonable notice.

8.3 Notice of Events. Contractor shall promptly notify Owner in writing of (i) any claim, dispute, accident, injury, property damage, or other event that could give rise to liability or delay, and (ii) any instruction or order it believes to be inconsistent with the Contract Documents.

8.4 Anti-Lien Measures. If any lien or stop notice is recorded or served in connection with the Work, Contractor shall discharge, bond off, or otherwise remove such lien within ten (10) days after notice.

9. INSURANCE AND BONDS

9.1 Insurance. Contractor shall procure and maintain throughout the Contract Time and warranty period the following insurance coverages, with insurers rated A- or better by A.M. Best and otherwise acceptable to Owner:
(a) Commercial General Liability – $[LIMIT] per occurrence / $[LIMIT] aggregate;
(b) Automobile Liability – $[LIMIT] combined single limit;
(c) Workers’ Compensation – statutory limits and Employers’ Liability – $[LIMIT];
(d) Excess/Umbrella Liability – $[LIMIT];
(e) Builder’s Risk/Installation Floater – on an “all-risk” completed value basis naming Owner as loss payee, unless Owner elects to procure such policy.

Certificates of insurance and additional insured endorsements (CG 20 10 and CG 20 37 or their equivalents) shall be delivered to Owner prior to commencement of the Work.

9.2 Payment Bond. Contractor shall furnish, contemporaneously with execution of this Agreement, a payment bond in the full penal sum of the Contract Sum naming Owner as obligee to secure payment to Subcontractors and suppliers, consistent with M.G.L. c. 149, § 29 where applicable. The bond shall be issued by a surety licensed to transact business in Massachusetts and acceptable to Owner.

[// GUIDANCE: For private projects under $3 million, Owner may waive the payment-bond requirement by deleting this Section.]

10. LIEN LAW COMPLIANCE

10.1 Notices and Filings. Contractor shall timely execute, serve, and record all statutory notices and documents required by the Mechanics’ Lien Law, including but not limited to Notices of Contract and Statements of Account, to preserve any lien rights of Contractor or its Subcontractors.

10.2 Lien Waivers. As a condition precedent to each progress payment, Contractor shall deliver partial lien waivers, in the statutory form prescribed by M.G.L. c. 254, § 32, from Contractor and each Subcontractor and supplier whose work or materials are included in the Application for Payment. Final unconditional lien waivers shall be delivered as a condition to final payment.

10.3 Owner’s Right to Information. Upon request, Contractor shall provide Owner with a list of all Subcontractors and suppliers, together with contract amounts and payment status sufficient for Owner to verify compliance with the Mechanics’ Lien Law.

10.4 Discharge of Liens. If any lien is asserted against the Property arising out of the Work and not caused by Owner’s failure to pay amounts due, Contractor shall within ten (10) days secure the discharge of such lien by payment, bonding, or other method permitted by Law, and shall indemnify Owner against all costs, damages, and expenses arising therefrom.

11. INDEMNIFICATION; LIMITATION OF LIABILITY

11.1 Indemnification by Contractor. To the fullest extent permitted by Law, Contractor shall defend, indemnify, and hold harmless Owner, its affiliates, lenders, and their respective officers, directors, employees, and agents (each an “Indemnitee”) from and against any and all claims, damages, losses, liabilities, fines, penalties, and expenses (including reasonable attorneys’ fees and expert fees) arising out of or resulting from (a) performance of the Work, (b) any breach by Contractor of this Agreement, (c) the negligence or willful misconduct of Contractor or its Subcontractors, or (d) any violation of Law by Contractor, except to the extent caused by the sole negligence of an Indemnitee.

11.2 Limitation of Liability. Notwithstanding anything to the contrary herein, the total aggregate liability of Contractor and of Owner, respectively, to the other Party for all claims arising under or relating to this Agreement shall not exceed the Contract Sum; provided, however, that the foregoing cap shall not apply to (i) claims covered by insurance maintained pursuant to Section 9, (ii) Contractor’s indemnity obligations for third-party bodily injury or property damage, or (iii) fraud, gross negligence, or willful misconduct.

12. DEFAULT AND REMEDIES

12.1 Events of Contractor Default. Each of the following constitutes a “Contractor Default”:
(a) Failure to prosecute the Work diligently, causing or threatening material delay;
(b) Failure to pay Subcontractors or suppliers when due;
(c) Failure to comply with any safety, insurance, bond, or lien obligation;
(d) Failure to cure any material breach of this Agreement within seven (7) days after written notice from Owner;
(e) Insolvency, bankruptcy, or assignment for the benefit of creditors.

12.2 Owner Remedies. Upon Contractor Default, Owner may, after the required notice and cure period:
(i) Supplement Contractor’s forces and deduct the cost from payments then or thereafter due;
(ii) Issue a written notice of suspension of the Work;
(iii) Terminate this Agreement for cause under Section 13.2;
(iv) Seek specific performance, injunctive relief, and/or damages as permitted by Law.

12.3 Owner Default. Owner shall be in default if it fails to make undisputed payments when due and does not cure such failure within seven (7) days after written notice. Contractor’s exclusive remedies for Owner Default are (a) suspension of the Work and (b) termination for cause pursuant to Section 13.3.

12.4 Attorneys’ Fees. The prevailing Party in any action to enforce this Agreement shall be entitled to recover its reasonable attorneys’ fees and costs.

13. SUSPENSION AND TERMINATION

13.1 Owner’s Right to Suspend. Owner may, for its convenience, direct Contractor in writing to suspend all or any portion of the Work. Contractor shall be entitled to an equitable adjustment of Contract Time and direct suspension costs (excluding lost profit or idle overhead) demonstrably incurred.

13.2 Termination by Owner for Cause. If a Contractor Default remains uncured after written notice and expiration of any applicable cure period, Owner may terminate this Agreement for cause, take possession of the site and materials, and finish the Work by whatever method it deems expedient. Contractor shall be liable for all costs in excess of the unpaid balance of the Contract Sum.

13.3 Termination by Contractor for Cause. If an Owner Default remains uncured after notice and cure, Contractor may terminate this Agreement, recover payment for Work executed, plus reasonable termination costs, and be released from further obligations.

13.4 Termination for Convenience. Owner may terminate this Agreement without cause upon ten (10) days’ written notice. Contractor shall be paid (a) the cost of Work executed, (b) reasonable demobilization costs, and (c) a termination fee of [PERCENTAGE]% of the unperformed balance of the Contract Sum as liquidated damages for lost profit.

14. DISPUTE RESOLUTION

14.1 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts, without regard to its conflict-of-laws principles.

14.2 Forum Selection. Any action arising out of or relating to this Agreement that is not subject to arbitration under Section 14.3 shall be brought exclusively in the state or federal courts located in [COUNTY], Massachusetts, and each Party irrevocably submits to the jurisdiction of such courts.

14.3 Arbitration (Optional). Either Party may elect, by written notice served within thirty (30) days after the filing of a complaint, to resolve any dispute arising under this Agreement by binding arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.

14.4 Jury Trial Waiver (Optional). TO THE EXTENT NOT PROHIBITED BY LAW, EACH PARTY HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT.

14.5 Equitable Relief. Nothing herein shall limit a Party’s right to seek injunctive or other equitable relief in aid of arbitration or to preserve the status quo.

15. GENERAL PROVISIONS

15.1 Entire Agreement. The Contract Documents constitute the entire agreement between the Parties and supersede all prior negotiations or representations.

15.2 Amendment and Waiver. No amendment or waiver shall be effective unless in a writing signed by the Party against whom it is asserted.

15.3 Assignment. Neither Party may assign its rights or delegate its duties without the prior written consent of the other, except that Owner may assign this Agreement to its lender or a successor-in-interest without Contractor’s consent.

15.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

15.5 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be deemed reformed to the minimum extent necessary to render it enforceable.

15.6 Notices. All notices required or permitted to be given under this Agreement shall be in writing and deemed given (i) when delivered by hand, (ii) one (1) business day after deposit with a nationally recognized overnight courier, or (iii) three (3) business days after deposit in U.S. certified mail, return receipt requested, addressed to the addresses set forth in the Document Header or such other address as a Party may designate by notice.

15.7 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically (e.g., via PDF or certified e-signature platform) shall be deemed original and binding.

15.8 Independent Contractor. Contractor is an independent contractor and not an employee or agent of Owner.

15.9 No Third-Party Beneficiaries. Except as expressly set forth herein with respect to Indemnitees, nothing in this Agreement confers any right or benefit on any person other than the Parties.

15.10 Force Majeure. “Force Majeure” means acts of God, fire, flood, war, terrorism, epidemic, labor strike (excluding strikes limited to Contractor or its Subcontractors), or other events beyond the reasonable control of the affected Party. If a Force Majeure event delays performance, the affected Party shall be excused for the duration of the delay, and the Contract Time shall be extended accordingly; provided that the affected Party gives written notice within seven (7) days after onset of the event and uses diligent efforts to mitigate the impact.

15.11 Confidentiality. Contractor shall keep confidential and shall not disclose to third parties, except as required by Law or necessary to perform the Work, any proprietary or confidential information of Owner.

15.12 Interpretation. Headings are for convenience only and do not affect interpretation. The Parties acknowledge that each has had the opportunity to consult counsel and that this Agreement shall not be construed against either Party as drafter.

16. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date.

OWNER:
[OWNER NAME]
By: ____
Name: ____
Title: _____
Date: _________

CONTRACTOR:
[CONTRACTOR NAME]
By: ____
Name: ____
Title: _____
Date: _________

[NOTARY BLOCKS IF REQUIRED]

EXHIBIT A

Legal Description of the Property
[INSERT]

EXHIBIT B

Project Description / Scope of Work
[INSERT]

EXHIBIT C

Contract Documents
[List (1) Drawings dated , (2) Specifications dated , (3) Addenda __, etc.]

[// GUIDANCE: Prior to issuance, attach any statutory lien notices, retainage forms (e.g., Notice of Substantial Completion under § 29F), and the form of partial/final lien waivers to ensure downstream compliance.]