Design-build projects give a single point of responsibility for both the project's design and construction, in contrast to traditional design-bid-build projects, when the owner enters into separate agreements with an architect for the design services and a contractor for its construction. Among other advantages, this type of contract reduces the costs and time required to get the work completed, as well as the risk of mistakes since everyone involved is on the same page.
But this also means that you as the design-builder will assume more responsibility over the project, therefore you must ensure the contract is written in a way that is not only clear and appropriate for everyone involved, but more importantly, is intended to safeguard your interests. The best way to write a flawless contract is to create a design-build contract template that ensures you cover all important information without exception.
To help you do it properly, we'll go over the essential elements your template must include.
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When creating your contract template, remember all information must be as detailed as possible. Like with all legally-binding contract documents, any mistakes can lead to disputes and legal repercussions. Let's go over the vital elements you should include when creating your template.
Although it might seem simple and obvious, this frequently overlooked element of construction contracts is necessary to give the agreement legal force and effect. It will be difficult to make the design-build contract stand up in court without the proper date or legitimate signatures on all required documents. Make sure to include full names, addresses, and contact details of all parties involved (designer, builder and project owner)
The next section of your contract template should describe the services to be delivered in great depth and include detailed information about the quality, materials, grade, and other requirements related to the building of the holdings. Provide any and all necessary labor, materials, tools, and supplies.
Your design-build contract should also specify the project requirements for each phase. These may include mechanical completion dates, inspections, testing, as well as design and engineering packages that should be provided either by the project owner or the contractor.
In the scope of work, write down when the place is substantially complete. Substantial completion is when a project, or a piece of it is ready for use. The property can then be used and occupied by the owner. The final sum due for that project or that part of the project must likewise be paid to the contractor by the owner.
In this section of your contract template, you want to specify dates for the start of construction, the completion of the project, and the contract time. It is also important to make a distinction between workdays and calendar days. It's advisable to specify in the contract that you as a contractor are not liable for the property owner's delays in acquiring any necessary permits, permissions, or easements, or for any other delays brought on by inclement weather. Check out our project schedule example for architects.
This section must be as precise and straightforward as possible. There should be no doubt as to the price of the services that are included and the price of services that are provided well before the project's scope. The expenditures that are outlined in the contract price may include overhead expenses, profit margins, transportation, handling, storage, and equipment.
This is also where you must clearly outline the payment schedule, the amount owed, and the general conditions of payment. Don't forget to establish the percentages required as deposit, partial payments, final payment, and guaranteed maximum price.
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The design-build contract must specify all parties' expected tasks and obligations. For instance, who has the responsibility to handle all equipment delivery and transport scheduling, on-site and off-site management, as well as procurement and fabrication services. Contractors may be required to guarantee that all hired personnel and subcontractors are qualified, properly trained, and equipped for the task they will be doing.
Additional duties can include making sure that facilities' existing structures are shielded from harm. It is also important to determine who has the authority to make decisions once the project has started. This level of clarity on the contract can help reduce tension and confusion during the project.
The project owner may demand for a builder's risk insurance, which covers all losses or damages to property, equipment, or fabrications supplied by the contractor. You might also be required by local law to have insurance that protects against bodily injury, illness or death, property loss or damage, contractual responsibilities, and third-party liability for motor vehicles.
This section of your contract is to provide specifications about how any desired changes will be notified to the general contractor, together with any costs associated with a change order and the time frames within which they can be made. You should also clarify that if either party decides they wish to break the agreement, they may do so only after submitting a written document that has been accepted by all parties and signed in accordance with the original agreement's formalities.
Drafting your own contract template might be a daunting task, especially if you're not entirely familiar with the structure. Luckily you don't have to do it yourself. To save you time and skip the headache, Bonsai offers you free architecture contract templates especially designed for contractors which you can fully customize to fit your business' needs.
All of our templates are legally reviewed by a contract attorney and thousands of professionals in the construction industry, so you can be sure your company will be protected. Plus, we help you streamline all the formalities by sending the contract online through a secure link and requesting a legally binding e-signature. You will receive a notification as soon as your client receives and signs the contract.
Bonsai helps you save time to focus on your passion, not your paperwork. Start today!
Typically, AIA Contract documents is appropriate when the project delivery method is design-build. It assumes the builder's responsibilities to provide both the design and construction of the project.
Write a building contract on a document with the info: due date for delivery, information of both you/your client, scope of work, responsibilities, terms of service and cost. Skip writing one and try Bonsais' pre-made template. Our templates are legally reviewed so you can feel at peace to know you are covered.
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This Contract is between Client (the "Client") and Acme LLC, a California limited liability company (the "Contractor").
The Contract is dated [the date both parties sign].
1.1 Project. The Client is hiring the Contractor to do the following: [SERVICE DESCRIPTION]
1.2 Schedule. The Contractor will begin work on [DATE] and will continue until the work is completed. This Contract can be ended by either Client or Contractor at any time, pursuant to the terms of Section 6, Term and Termination.
1.3 Payment. The Client will pay the Contractor a flat fee of [PROJECT RATE]. Of this, the Client will pay the Contractor [DEPOSIT AMOUNT] before work begins.
1.4 Expenses. The Client will reimburse the Contractor's expenses. Expenses do not need to be pre-approved by the Client.
1.5 Invoices. The Contractor will invoice the Client at [INVOICE FREQUENCY]. The Client agrees to pay the amount owed within [X] days of receiving the invoice. Payment after that date will incur a late fee of [LATE PERCENTAGE FEE]% per month on the outstanding amount.
1.6 Support. The Contractor will not provide support for any deliverable once the Client accepts it, unless otherwise agreed in writing.
2.1 Client Owns All Work Product. As part of this job, the Contractor is creating “work product” for the Client. To avoid confusion, work product is the finished product, as well as drafts, notes, materials, mockups, hardware, designs, inventions, patents, code, and anything else that the Contractor works on—that is, conceives, creates, designs, develops, invents, works on, or reduces to practice—as part of this project, whether before the date of this Contract or after. The Contractor hereby gives the Client this work product once the Client pays for it in full. This means the Contractor is giving the Client all of its rights, titles, and interests in and to the work product (including intellectual property rights), and the Client will be the sole owner of it. The Client can use the work product however it wants or it can decide not to use the work product at all. The Client, for example, can modify, destroy, or sell it, as it sees fit.
2.2 Contractor's Use Of Work Product. Once the Contractor gives the work product to the Client, the Contractor does not have any rights to it, except those that the Client explicitly gives the Contractor here. The Client gives permission to use the work product as part of portfolios and websites, in galleries, and in other media, so long as it is to showcase the work and not for any other purpose. The Client does not give permission to sell or otherwise use the work product to make money or for any other commercial use. The Client is not allowed to take back this license, even after the Contract ends.
2.3 Contractor's Help Securing Ownership. In the future, the Client may need the Contractor's help to show that the Client owns the work product or to complete the transfer. The Contractor agrees to help with that. For example, the Contractor may have to sign a patent application. The Client will pay any required expenses for this. If the Client can’t find the Contractor, the Contractor agrees that the Client can act on the Contractor's behalf to accomplish the same thing. The following language gives the Client that right: if the Client can’t find the Contractor after spending reasonable effort trying to do so, the Contractor hereby irrevocably designates and appoints the Client as the Contractor's agent and attorney-in-fact, which appointment is coupled with an interest, to act for the Contractor and on the Contractor's behalf to execute, verify, and file the required documents and to take any other legal action to accomplish the purposes of paragraph 2.1 (Client Owns All Work Product).
2.4 Contractor's IP That Is Not Work Product. During the course of this project, the Contractor might use intellectual property that the Contractor owns or has licensed from a third party, but that does not qualify as “work product.” This is called “background IP.” Possible examples of background IP are pre-existing code, type fonts, properly-licensed stock photos, and web application tools. The Contractor is not giving the Client this background IP. But, as part of the Contract, the Contractor is giving the Client a right to use and license (with the right to sublicense) the background IP to develop, market, sell, and support the Client’s products and services. The Client may use this background IP worldwide and free of charge, but it cannot transfer its rights to the background IP (except as allowed in Section 11.1 (Assignment)). The Client cannot sell or license the background IP separately from its products or services. The Contractor cannot take back this grant, and this grant does not end when the Contract is over.
2.5 Contractor's Right To Use Client IP. The Contractor may need to use the Client’s intellectual property to do its job. For example, if the Client is hiring the Contractor to build a website, the Contractor may have to use the Client’s logo. The Client agrees to let the Contractor use the Client’s intellectual property and other intellectual property that the Client controls to the extent reasonably necessary to do the Contractor's job. Beyond that, the Client is not giving the Contractor any intellectual property rights, unless specifically stated otherwise in this Contract.
The Contractor won’t work for a competitor of the Client until this Contract ends. To avoid confusion, a competitor is any third party that develops, manufactures, promotes, sells, licenses, distributes, or provides products or services that are substantially similar to the Client’s products or services. A competitor is also a third party that plans to do any of those things. The one exception to this restriction is if the Contractor asks for permission beforehand and the Client agrees to it in writing. If the Contractor uses employees or subcontractors, the Contractor must make sure they follow the obligations in this paragraph, as well.
Until this Contract ends, the Contractor won’t: (a) encourage Client employees or service providers to stop working for the Client; (b) encourage Client customers or clients to stop doing business with the Client; or (c) hire anyone who worked for the Client over the 12-month period before the Contract ended. The one exception is if the Contractor puts out a general ad and someone who happened to work for the Client responds. In that case, the Contractor may hire that candidate. The Contractor promises that it won’t do anything in this paragraph on behalf of itself or a third party.
5.1 Overview. This section contains important promises between the parties.
5.2 Authority To Sign. Each party promises to the other party that it has the authority to enter into this Contract and to perform all of its obligations under this Contract.
5.3 Contractor Has Right To Give Client Work Product. The Contractor promises that it owns the work product, that the Contractor is able to give the work product to the Client, and that no other party will claim that it owns the work product. If the Contractor uses employees or subcontractors, the Contractor also promises that these employees and subcontractors have signed contracts with the Contractor giving the Contractor any rights that the employees or subcontractors have related to the Contractor's background IP and work product.
5.4 Contractor Will Comply With Laws. The Contractor promises that the manner it does this job, its work product, and any background IP it uses comply with applicable U.S. and foreign laws and regulations.
5.5 Work Product Does Not Infringe. The Contractor promises that its work product does not and will not infringe on someone else’s intellectual property rights, that the Contractor has the right to let the Client use the background IP, and that this Contract does not and will not violate any contract that the Contractor has entered into or will enter into with someone else.
5.6 Client Will Review Work. The Client promises to review the work product, to be reasonably available to the Contractor if the Contractor has questions regarding this project, and to provide timely feedback and decisions.
5.7 Client-Supplied Material Does Not Infringe. If the Client provides the Contractor with material to incorporate into the work product, the Client promises that this material does not infringe on someone else’s intellectual property rights.
This Contract is ongoing until the work is completed. Either party may end this Contract for any reason by sending an email or letter to the other party, informing the recipient that the sender is ending the Contract and that the Contract will end in 7 days. The Contract officially ends once that time has passed. The party that is ending the Contract must provide notice by taking the steps explained in Section 11.4. The Contractor must immediately stop working as soon as it receives this notice, unless the notice says otherwise. The Client will pay the Contractor for the work done up until when the Contract ends and will reimburse the Contractor for any agreed-upon, non-cancellable expenses. The following sections don’t end even after the Contract ends: 2 (Ownership and Licenses); 3 (Competitive Engagements); 4 (Non-Solicitation); 5 (Representations); 8 (Confidential Information); 9 (Limitation of Liability); 10 (Indemnity); and 11 (General).
The Client is hiring the Contractor as an independent contractor. The following statements accurately reflect their relationship:
8.1 Overview. This Contract imposes special restrictions on how the Client and the Contractor must handle confidential information. These obligations are explained in this section.
8.3 Third-Party Confidential Information. It’s possible the Client and the Contractor each have access to confidential information that belongs to third parties. The Client and the Contractor each promise that it will not share with the other party confidential information that belongs to third parties, unless it is allowed to do so. If the Client or the Contractor is allowed to share confidential information with the other party and does so, the sharing party promises to tell the other party in writing of any special restrictions regarding that information.
Neither party is liable for breach-of-contract damages that the breaching party could not reasonably have foreseen when it entered this Contract.
10.1 Overview. This section transfers certain risks between the parties if a third party sues or goes after the Client or the Contractor or both. For example, if the Client gets sued for something that the Contractor did, then the Contractor may promise to come to the Client’s defense or to reimburse the Client for any losses.
10.2 Client Indemnity. In this Contract, the Contractor agrees to indemnify the Client (and its affiliates and their directors, officers, employees, and agents) from and against all liabilities, losses, damages, and expenses (including reasonable attorneys’ fees) related to a third-party claim or proceeding arising out of: (i) the work the Contractor has done under this Contract; (ii) a breach by the Contractor of its obligations under this Contract; or (iii) a breach by the Contractor of the promises it is making in Section 5 (Representations).
10.3 Contractor Indemnity. In this Contract, the Client agrees to indemnify the Contractor (and its affiliates and their directors, officers, employees, and agents) from and against liabilities, losses, damages, and expenses (including reasonable attorneys’ fees) related to a third-party claim or proceeding arising out of a breach by the Client of its obligations under this Contract.
11.1 Assignment. This Contract applies only to the Client and the Contractor. The Contractor cannot assign its rights or delegate its obligations under this Contract to a third-party (other than by will or intestate), without first receiving the Client’s written permission. In contrast, the Client may assign its rights and delegate its obligations under this Contract without the Contractor's permission. This is necessary in case, for example, another Client buys out the Client or if the Client decides to sell the work product that results from this Contract.
11.2 Arbitration. As the exclusive means of initiating adversarial proceedings to resolve any dispute arising under this Contract, a party may demand that the dispute be resolved by arbitration administered by the American Arbitration Association in accordance with its commercial arbitration rules.
11.3 Modification; Waiver. To change anything in this Contract, the Client and the Contractor must agree to that change in writing and sign a document showing their contract. Neither party can waive its rights under this Contract or release the other party from its obligations under this Contract, unless the waiving party acknowledges it is doing so in writing and signs a document that says so.
11.4 Notices.
(a) Over the course of this Contract, one party may need to send a notice to the other party. For the notice to be valid, it must be in writing and delivered in one of the following ways: personal delivery, email, or certified or registered mail (postage prepaid, return receipt requested). The notice must be delivered to the party’s address listed at the end of this Contract or to another address that the party has provided in writing as an appropriate address to receive notice.
(b) The timing of when a notice is received can be very important. To avoid confusion, a valid notice is considered received as follows: (i) if delivered personally, it is considered received immediately; (ii) if delivered by email, it is considered received upon acknowledgement of receipt; (iii) if delivered by registered or certified mail (postage prepaid, return receipt requested), it is considered received upon receipt as indicated by the date on the signed receipt. If a party refuses to accept notice or if notice cannot be delivered because of a change in address for which no notice was given, then it is considered received when the notice is rejected or unable to be delivered. If the notice is received after 5:00pm on a business day at the location specified in the address for that party, or on a day that is not a business day, then the notice is considered received at 9:00am on the next business day.
11.5 Severability. This section deals with what happens if a portion of the Contract is found to be unenforceable. If that’s the case, the unenforceable portion will be changed to the minimum extent necessary to make it enforceable, unless that change is not permitted by law, in which case the portion will be disregarded. If any portion of the Contract is changed or disregarded because it is unenforceable, the rest of the Contract is still enforceable.
11.6 Signatures. The Client and the Contractor must sign this document using Bonsai’s e-signing system. These electronic signatures count as originals for all purposes.
11.7 Governing Law. The laws of the state of California govern the rights and obligations of the Client and the Contractor under this Contract, without regard to conflict of law principles of that state.
11.8 Entire Contract. This Contract represents the parties’ final and complete understanding of this job and the subject matter discussed in this Contract. This Contract supersedes all other contracts (both written and oral) between the parties.
THE PARTIES HERETO AGREE TO THE FOREGOING AS EVIDENCED BY THEIR SIGNATURES BELOW.
