Free Construction Contract Templates (2026) - Download & Customize

The Real Cost of a Handshake Deal

A contractor in Texas finished a $45,000 kitchen remodel last year. The scope was discussed over coffee. Payment terms were agreed to with a nod. No signed contract.

When the homeowner refused to pay the final $18,000, claiming the work “wasn’t what they asked for,” that contractor had nothing to fall back on. No written scope. No payment schedule. No proof of what was agreed to.

This happens every single day in construction. Handshake deals feel fast and easy. But when things go sideways, and they always do eventually, you are left holding the bag.

The fix is simple. Use a written contract on every job. Every time. No exceptions.

That is exactly why we put together these free construction contract templates. They are ready to download, easy to customize, and built for how contractors actually work.

Why You Need a Written Contract on Every Job

It does not matter if the job is $500 or $500,000. A written contract protects you in three critical ways:

1. It sets clear expectations. Both you and the client agree on exactly what work will be done, when it will be done, and how much it will cost. No guessing. No “I thought you said” arguments later.

2. It gives you legal standing. If a client refuses to pay or disputes the work, a signed contract is your best evidence in court or mediation. Without one, it becomes your word against theirs.

3. It makes you look professional. Clients trust contractors who show up with clean, organized paperwork. It separates you from the guy scribbling numbers on the back of a napkin. A strong construction CRM paired with solid contracts builds the kind of reputation that wins referrals.

Now let’s walk through the four most common types of construction contracts and what each one should include.

Fixed-Price Contract Template

A fixed-price contract (also called a lump-sum contract) is the most common construction agreement template. You agree to complete a defined scope of work for one set price. Simple.

This works best when the scope is clear and you can accurately estimate costs upfront. If you need help building accurate estimates, check out Projul’s estimating tools to speed up the process.

Key Sections to Include

Project Information

• Client name and address
• Contractor name, license number, and contact info
• Project address and description
• Contract date and project start date

Scope of Work This is the most important section. Be specific. List every task, material, and deliverable. What is NOT included matters just as much as what is.

Example language:

Contractor agrees to furnish all labor, materials, and equipment necessary to complete the following work at [project address]: [detailed list of tasks]. Work NOT included in this contract: [list exclusions clearly].

Contract Price and Payment Schedule State the total price and break payments into milestones. Never agree to collect everything at the end.

Example payment schedule:

• 10% deposit upon signing
• 25% at completion of rough framing
• 25% at completion of mechanical rough-ins
• 25% at completion of finish work
• 15% upon final walkthrough and punch list completion

Change Order Process This is where most contractors get burned. Your contract must state that any changes to the scope require a written change order signed by both parties before the extra work starts. For a deeper look at this topic, read our construction change order guide.

Example language:

No changes to the scope of work shall be performed without a written change order signed by both the Contractor and the Client. Change orders will include a description of the additional work, the cost impact, and any schedule impact.

Project Timeline Include an estimated start date, estimated completion date, and a clause covering delays outside your control (weather, permit delays, material shortages).

Warranty Specify what you warrant, for how long, and what is excluded. One year on workmanship is standard for most residential work.

Dispute Resolution Choose mediation, arbitration, or litigation. Mediation is usually the cheapest and fastest option.

Termination Clause Both parties should have the right to terminate with written notice. Specify how payment for completed work will be handled if the contract ends early.

Time-and-Materials Contract Template

A time-and-materials (T&M) contract bills the client for actual labor hours and material costs, plus your markup. This is a good fit when the scope is unclear or likely to change.

T&M contracts put more risk on the client. That means you need to be extra transparent about tracking and billing. Clients want to see where every dollar goes.

Key Sections to Include

Labor Rates List every role and their hourly rate. Be clear about what is included in the rate (overhead, profit, insurance, etc.).

Example:

• Project Supervisor: $85/hr
• Journeyman Carpenter: $65/hr
• Laborer: $45/hr
• Overtime rate: 1.5x standard rate for hours over 40/week

Material Markup State your markup percentage on materials. Industry standard is typically 10% to 20%. Include whether delivery and sales tax are billed separately.

Not-to-Exceed Clause Many clients will want a cap. A not-to-exceed (NTE) clause sets a maximum total price. You bill actual costs up to that ceiling. If you come in under, the client pays less. If you hit the cap, you eat the difference or negotiate a change order.

Daily or Weekly Reporting T&M contracts should require regular progress reports. List what each report will include: hours worked by each person, materials purchased with receipts, work completed that day.

Payment Terms T&M contracts are usually billed weekly or biweekly. Specify your billing cycle, payment due date (Net 15 or Net 30 is common), and late payment penalties.

Scope of Work Even on a T&M contract, define the general scope. “Renovate master bathroom” is a start, but add as much detail as you can. This helps prevent disagreements about what falls inside the contract and what does not.

Change Order Process Same as fixed-price. All scope changes need written approval.

Lien Waiver Requirements Include language about lien waivers for progress and final payments. This protects both you and the client. Learn more in our construction lien waivers guide.

Cost-Plus Contract Template

A cost-plus contract is similar to T&M, but the fee structure is different. Instead of marking up each line item, you charge the client for all actual costs plus a flat fee or a percentage of total costs.

This works well for large, complex projects where the scope is hard to pin down. Custom home builds are a common use case.

Key Sections to Include

Fee Structure Clearly define your fee. There are two common approaches:

• Cost plus fixed fee: Client pays all costs plus a flat dollar amount (e.g., $30,000 contractor fee regardless of total project cost)
• Cost plus percentage: Client pays all costs plus a percentage (e.g., 15% of total project costs)

The fixed-fee approach is generally better for the client because your fee does not go up as costs increase. Percentage-based fees can create a misalignment where the contractor benefits from higher costs.

Definition of Reimbursable Costs Spell out exactly what counts as a reimbursable cost. This typically includes:

• Labor (wages, benefits, payroll taxes)
• Materials and supplies
• Equipment rental
• Subcontractor costs
• Permits and fees
• Temporary facilities (portable toilets, dumpsters, fencing)

Also list what is NOT reimbursable. Your office overhead, for example, should be covered by your fee.

Cost Documentation The client will expect full transparency. Require detailed record-keeping: receipts, invoices, timesheets, subcontractor bids. Make this a contractual obligation, not an afterthought.

Budget Estimate Even though the final cost is open-ended, provide a good-faith estimate. This helps set expectations and builds trust. Include a contingency allowance (typically 5% to 15%) for surprises.

Audit Rights Many cost-plus contracts give the client the right to audit your books for the project. If you are billing everything at actual cost, this should not be a problem. Include a clause that defines how and when audits can happen.

Payment Schedule Monthly billing with Net 30 payment terms is typical for cost-plus projects. Include provisions for retainage (usually 5% to 10% held until project completion).

Subcontractor Agreement Template

If you hire subs, you need a subcontractor agreement template that is separate from your client contract. Your deal with the homeowner does not protect you from a sub who does bad work, misses deadlines, or disappears. Our subcontractor management guide covers the full process.

Key Sections to Include

Scope of Subcontractor Work Define exactly what the sub is responsible for. Reference drawings, specs, and your prime contract where applicable. Be specific about what the sub provides (labor only, labor and materials, their own tools and equipment, etc.).

Compensation and Payment Terms State the total price or unit rates. Specify when the sub gets paid (tied to your progress payments or on their own schedule). Include retainage terms.

Example:

Subcontractor shall be paid within 10 business days of Contractor receiving corresponding progress payment from the Client. A 10% retainage shall be held until final completion and acceptance of Subcontractor’s work.

Insurance Requirements Require the sub to carry their own general liability and workers’ compensation insurance. Get certificates of insurance before they start work. List your minimum coverage amounts.

Common minimums:

• General liability: $1,000,000 per occurrence
• Workers’ comp: statutory limits
• Auto liability: $500,000 (if applicable)

Schedule and Coordination Subs need to know when they are expected on site and how long they have. Include a clause that requires them to coordinate with other trades and follow the project schedule.

Quality Standards Reference applicable building codes, manufacturer installation requirements, and your own quality expectations. Include your right to inspect and reject work that does not meet standards.

Back-Charge Clause If a sub damages other work, leaves a mess, or fails to complete their scope, you need the right to back-charge them. This clause lets you deduct costs from their payment or invoice them for damages.

Lien Waiver Requirements Require the sub to provide lien waivers with every payment request. This protects you and your client from mechanic’s liens filed by subs or their suppliers.

Dispute Resolution Same options as your prime contract. Mediation first, then arbitration or litigation.

Tips for Using These Templates

1. Always get a lawyer to review your final version. Templates are a starting point. Construction law varies by state. A local attorney can make sure your contracts comply with your state’s lien laws, licensing requirements, and consumer protection rules.

2. Be specific in the scope of work. Vague scopes cause disputes. Instead of “install new flooring,” write “install 800 sq ft of 3/4-inch red oak hardwood flooring in living room, dining room, and hallway per manufacturer specifications.”

3. Never start work without a signed contract. Not a verbal agreement. Not a text message saying “go ahead.” A signed contract. Digital signatures count and are actually better because they create a timestamped record.

4. Include photos and drawings as attachments. Reference them in the scope. Photos of existing conditions, floor plans, and material selections should all be part of the contract package.

5. Keep copies of everything. Every signed contract, change order, payment receipt, and lien waiver should be stored where you can find it. Document management software makes this much easier than filing cabinets.

If you are still tracking contracts with paper files or scattered emails, it might be time to upgrade your system. Want to learn more about winning bids that turn into solid contracts? Check out our construction bidding strategies guide.

How to Write a Construction Contract Step by Step

Writing a construction contract does not require a law degree. Follow these steps and you will have a solid agreement ready for review.

Step 1: Identify the parties. List the full legal names and contact info for both the contractor and the client. Include your contractor license number and any relevant business entity info (LLC, Corp, etc.).

Step 2: Define the scope of work. This is where most contract disputes start, so get specific. List every task, material, and deliverable. Call out exclusions clearly. Reference attached drawings, specs, or proposals for additional detail.

Step 3: Set the contract price. Whether you are using a fixed price, T&M, or cost-plus structure, put the total (or rate structure) in writing. Break down how the number was calculated so nobody is guessing later. If you need help building accurate numbers, our guide on how to estimate a construction job walks through the full process.

Step 4: Build the payment schedule. Tie payments to milestones, not dates. This protects both sides. Include your deposit amount, progress payment triggers, retainage terms, and final payment conditions. For tips on collecting faster, see our guide on how to get paid faster as a contractor.

Step 5: Add the change order clause. State that all scope changes require a written, signed change order before extra work begins. Include how pricing and schedule impacts will be documented. Our change order templates make this easy to set up.

Step 6: Include timeline and delay provisions. Set an estimated start and completion date. Add a force majeure clause covering delays outside your control like weather, permit hold-ups, and material shortages. A solid construction schedule keeps the project on track.

Step 7: Add warranty, dispute resolution, and termination clauses. Cover what you warrant and for how long, how disputes will be resolved (mediation is usually cheapest), and how either party can terminate with written notice.

Step 8: Get it reviewed and signed. Have a local construction attorney review your final version. Then send it for e-signature so you have a timestamped, trackable record.

Lump Sum vs Cost-Plus vs T&M Contracts

Choosing the right contract type can make or break your profit on a project. Here is a quick breakdown to help you pick.

Lump Sum (Fixed-Price) You quote one price for the entire job. You take on the cost risk. If materials spike or the job takes longer than planned, that comes out of your margin. This works best for well-defined scopes where you can estimate accurately. Most residential contractors and remodelers use lump sum contracts for standard projects.

Cost-Plus The client pays actual project costs plus your fee (flat amount or percentage). The client carries the cost risk, but gets full transparency. This is common for home builders doing custom work where the scope evolves as the project moves forward. For a deeper comparison, read our cost-plus vs fixed-price contracts guide.

Time and Materials (T&M) You bill hourly labor rates plus materials with markup. Similar to cost-plus, but priced differently. T&M is a good fit for service work, demolition, or projects where the scope is truly unknown at the start. Clients often want a not-to-exceed cap.

Which one should you use? If the scope is clear and you are confident in your numbers, go lump sum. If the scope is fuzzy or the client wants transparency, go cost-plus or T&M. Many contractors use different contract types depending on the project. For a full breakdown, check out our construction contract types guide.

Related Templates

Looking for more free templates to run your business? Here are the ones contractors download the most:

• Free Construction Change Order Templates - Document scope changes the right way
• Free Construction Scope of Work Templates - Define the work before you price it
• Free Construction Budget Templates - Track project costs from start to finish
• Free Construction Schedule Template - Plan your timeline and keep crews on track
• Free Construction Daily Report Template - Log progress, weather, and crew hours daily
• Free Construction Business Plan Template - Map out your growth strategy
• Free Construction Invoice Templates - Bill clients professionally and get paid faster
• Free General Contractor Estimate Templates - Build winning estimates for any trade

Need help turning estimates into contracts and tracking everything in one place? Projul’s templates feature lets you save and reuse your best contract formats across every project.

How Projul Makes Contract Management Easier

Templates are a great start. But managing contracts across dozens of active projects with paper or basic tools gets messy fast.

Projul is construction management software built by contractors, for contractors. Here is how it helps with contracts and everything that surrounds them:

• E-signatures built in. Send contracts and change orders for digital signature. No printing, scanning, or chasing down wet signatures.
• Change order tracking. Create, price, and get approval on change orders directly from the project. Every change is documented and tied to the original contract.
• Estimating that flows into contracts. Build your estimate in Projul, convert it to a contract, and send it for signature. One smooth workflow. Check out our estimating features to see how it works.
• Subcontractor management. Track sub agreements, insurance certificates, lien waivers, and payments in one place.
• Full project history. Every document, message, photo, and change is stored on the project record. If a dispute ever comes up, you have everything you need in one click.

Projul Pricing

Projul offers three plans billed annually:

• Core: $4,788/year ($4,788/yr). Estimating, scheduling, contractor CRM, and essential project management tools.
• Core+: $7,188/year ($7,188/yr). Everything in Core plus advanced reporting, subcontractor management, and client portal.
• Pro: $14,388/year ($14,388/yr). Full platform with custom workflows, priority support, and unlimited storage.

Visit our pricing page for full plan details.

Stop Gambling With Handshake Deals

Every job without a written contract is a gamble. Sometimes you win. Eventually, you lose big.

These free construction contract templates give you a solid foundation. Download them, customize them for your business, and get a lawyer to sign off on your final versions.

And when you are ready to stop juggling paper contracts and scattered files, Projul is here to help you run your projects from estimate to final payment, all in one place.

Your future self will thank you for putting it in writing.