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What is a Construction Management Agreement?
A Construction Management Agreement can help to safeguard your business interests as you plan to offer construction management to a property owner. Construction Management Agreements are essential to set expectations and limit disputes between the construction foreman and the property owner.
Also referred to as a Construction Management Contract, this document is more commonly used for large-scale projects where professional assistance is needed in the planning and execution of the construction work. It can contain the project’s description and timeline, services to be provided, compensation and payment terms, as well as responsibilities and liabilities.
And what’s better: We can help you beyond building the document. More than a blank Construction Management Agreement template, any contract under an active Rocket Lawyer Premium membership also comes with optional access to Document Defense® support from an attorney.
When to use a Construction Management Agreement:
- You're hiring a construction manager to manage a construction project.
- You're being hired as a construction manager to oversee a construction project.
Sample Construction Management Agreement
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Construction Management Agreement
THIS CONSTRUCTION MANAGEMENT AGREEMENT is entered into on , by and between , , , (hereinafter referred as the Owner), and , , , (hereinafter referred as the Manager).
RECITALS:
WHEREAS, Owner intends to construct (herein after referred as the Project) and desires to engage Manager to render general management services with respect thereto; and
WHEREAS, Manager has significant expertise in connection with the management of construction projects and desires to manage the Project;
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter contained, the parties agree as follows:
MANAGEMENT OF PROJECT. In connection with the construction of the located at , , , Owner hereby employs Manager and Manager does hereby agree to undertake all construction management obligations and services with respect to the project.
DUTIES OF THE MANAGER. Manager's duties shall include, without limitation, the following:
| a. | Consult and advise Owner on all aspects of the Project including the consideration of green alternatives proposed by the architect in the schematic design phase; |
| b. | Review agreements which Owner may desire to enter into with respect to the Project; |
| c. | Consult with Owner in connection with the preparation of budgets, reports, scheduling, evaluations, cost estimates, bid packages in connection with the selection of contractors, materials, and issuance of permits; |
| d. | Approve invoices and issue payments for contractors, subcontractors, material men and other ordinary expenses related to the Project; |
| e. | Advise Owner obtaining necessary permits, complying with applicable laws, and making sure that all necessary safety precautions have been obtained; and |
| f. | Advise Owner as to the types and amounts of insurance that Owner should carry with respect to the Project. |
WORKING HOURS. Time is of the essence for this Agreement. The parties acknowledge that Manager will devote a minimum of per week during the planning and development phase of the project and a minimum of per week during the construction phase.
COMPENSATION. Owner agrees to pay Manager for the sum of per hour. Manager shall keep track of, and account to Owner for, the number of hours which he works directly for the Project.
TERM. This Contract
INDEMNITY. To the fullest extent permitted by law, Manager shall indemnify, defend and hold harmless Owner and Owner's agents and employees from and against all claims, damages, losses and expenses, including, but not limited to, attorneys' fees arising out of or resulting from the performance or non-performance of his duties hereunder. Manager will obtain errors and omissions insurance with respect to his duties hereunder in such amounts as Owner shall reasonably designate.
DEBRIS. Manager agrees that at all times Manager shall keep the premises free from accumulation of waste materials or rubbish caused by any contractor's operations.
DEFAULT. The occurrence of any of the following shall constitute a material default under this Agreement.
| a. | The failure to make a required payment when due. |
| b. | The insolvency or bankruptcy of either party. |
| c. | The subjection of any of either party's property to any levy, seizure, general assignment for the benefit of creditors, application or sale for or by any creditor or government agency. |
| d. | The failure to make available or deliver the Services in the time and manner provided for in this Contract. |
REMEDIES. In addition to any and all other rights a party may have available according to law, if a party defaults by failing to substantially perform any provision, term or condition of this Agreement (including without limitation the failure to make a monetary payment when due), the other party may terminate the Agreement by providing written notice to the defaulting party. This notice shall describe with sufficient detail the nature of the default. The party receiving such notice shall have days from the effective date of such notice to cure the default(s). Unless waived by a party providing notice, the failure to cure the default(s) within such time period shall result in the automatic termination of this Agreement.
GOVERNING LAW. This Agreement shall be construed in accordance with the laws of the State of .
WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
NOTICE. Any notice or communication required or permitted under this Agreement shall be sufficiently given if delivered in person or by certified mail, return receipt requested, to the address set forth in the opening paragraph or to such other address as one party may have furnished to the other in writing.
SEVERABILITY. If any provision of this Agreement will be held to be invalid or unenforceable for any reason, the remaining provisions will continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision will be deemed to be written, construed, and enforced as so limited.
ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties, and there are no other promises or conditions in any other agreement whether oral or written concerning the subject matter of this Agreement. This Agreement supersedes any prior written or oral agreements between the parties.
AMENDMENT. This Agreement may be modified or amended in writing, if the writing is signed by the party obligated under the amendment.
BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of Owner and Owner's successors or assigns, and shall be binding upon and inure to the benefit of Manager and Manager's heirs, personal representatives, successors or permitted assigned.
The parties have hereunto set their hands the day and year first above written.
ATTORNEYS' FEE. If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees in addition to any other relief to which that party may be entitled.
SIGNATURES. This Agreement shall be signed on behalf of by , and on behalf of by .
OWNER:
| By: | Date: |
,
MANAGER:
| By: | Date: |
,
Construction Management Agreement FAQs
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Does a construction foreman always need to use a Construction Management Agreement?
No matter what specific work you plan to do, a Construction Management Agreement is always recommended for construction managers. You may decide that you want this document due to the fact that, when made correctly, it yields the following list of benefits:
- Roles and responsibilities are understood by everyone.
- Fee requirements are clearly defined.
- Neither party is surprised by how much time is needed.
Ultimately, if you decide not to use a Construction Management Agreement, neither party may enjoy the aforementioned benefits and protections.
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How should I organize my Construction Management Agreement?
In order to complete your Construction Management Agreement with Rocket Lawyer, you'll need to prepare the following information in advance:
- Your client's contact information.
- What services will be delivered.
- How payment will be made.
- How long the project will last.
Construction Management Agreements that you build with Rocket Lawyer also include the standard language with regard to the non-employment relationship, confidentiality, and liability for losses. As you make your contract, you'll also be able to determine which state's laws apply. After building your document, additional personalization and edits are easy to make.
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How can I fill out a custom Construction Management Agreement online?
Luckily, you do not need to start from scratch when putting your contract in writing. When using the document tools on Rocket Lawyer, any construction foreman can make a Construction Management Agreement online with ease. Your agreement will be built section by section, as you answer simple questions to provide more details throughout the process. Normally, for this level of customization, you might end up paying a traditional lawyer fees in the hundreds of dollars, if not more.
If you have any particular questions about how to move forward, ask a Rocket Lawyer network attorney. You can also check out the other business legal documents in our library.
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Will there be any next steps that I should take once a Construction Management Agreement has been written?
In order to make your Construction Management Agreement legally binding, you and the client will need to sign it. RocketSign® makes that easy to do online. You'll want to make sure that your client has a copy of the final agreement. With a Rocket Lawyer membership, you also will be able to print out, copy, and save it as a Word or PDF document.
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Where can I get my Construction Management Agreements checked out by a professional?
Some lawyers may charge high hourly fees or not even accept requests to review documents that they did not draft. Rocket Lawyer members, however, have the ability to request document reviews from experienced Rocket Lawyer network attorneys or get answers to other legal questions. Whether you need help with your Construction Management Agreement or anything else legal, we are here for you.
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