Contracting

Residential Construction Agreement

For Use in Utah Home Construction Projects

DOPL and its sister agency, the Utah Division of Consumer Protection, often receive complaints about violations of construction work, then learn that no agreement exists or the agreement lacks the specificity to make clear what the expectations are under the contract. DOPL created this contract to assist homeowners and contractors, but it is still up to the parties to protect themselves through the terms of the contract and the specificity of the contract terms.

The Residential Construction Agreement is intended for contractors and homeowners to use for residential construction projects in Utah. While it is optional, it is recommended that if you use it, both parties read, understand, complete, and sign each page. This agreement is provided “as-is”; however, it can be customized to your specific needs. This agreement is not intended as legal or professional advice, and any questions regarding the agreement or its effects should be directed to an attorney.

"This is more than just a document; it's a cornerstone for fostering stronger trust in Utah's commercial activities, especially within the realm of home improvement projects. This customizable tool empowers Utahns by providing clarity and understanding of roles and responsibilities for both homeowners and contractors. Serving as an invaluable guide for those unfamiliar with contract details, this agreement helps consumers know what to look for, ensuring they are equipped to navigate their construction journeys with confidence." This message is approved by John Simonson, Chairman of the Utah Construction Services Commission

📄 Download the Agreement

⚠️ Important: This agreement is optional. If you choose to use it, both parties should read, understand, and sign it accordingly.

Frequently Asked Questions

Please note: The Residential Construction Agreement is not intended to be used as legal advice and can be modified for specific needs. If you have questions about the agreement or its effect, please consult an attorney for legal advice.

This agreement is a mutual understanding between the homeowner and the contractor providing residential contracting services. Therefore, any litigation will happen in the county where the property is located. The Utah Division of Professional Licensing (DOPL) does not have the authority to enforce the contract, however they would still open an investigation following a complaint about unprofessional or unlawful conduct, as defined in current Utah Law.

Time is essential: This means that deadlines are important and any extension must be agreed to in a change order.
Calculation of time: Unless otherwise stated, performance due on a day or date is required by 11:59pm. “Days” means calendar days, and the counting excludes the triggering event day, includes intermediate Saturdays, Sundays and legal holidays, and extends to the next non-weekend/holiday if the last day falls on one.
Entire Agreement: The agreement document contains the complete agreement and no changes are binding unless made according to its terms. If any part is invalid, the rest remains in effect.
Governing law and venue: This agreement is governed by Utah law. Any litigation will happen in the county where the property is located.
Assignment: Neither party can assign or transfer the agreement or rights without the other’s written consent. The agreement binds the parties and their heirs, successors, etc.
Notices: All notices must be in writing and delivered in person, by email to the party’s email address in the agreement, or by certified mail to the party’s mailing address. Notices are effective upon delivery, successful transmission, or two days after the USPS post mark.
Force Majure: A party won’t be in breach or default due to delays or failures to perform caused by events beyond their reasonable control, such as fire, earthquake, war or emergencies (“Force Majeure events”).
Attorney’s fees: If legal proceedings are brought to interpret or enforce the agreement, the winning party will be entitled to costs, expenses, and reasonable attorney’s fees.

Your contractor is responsible for providing the materials, labor, equipment, tools and supervision needed to construct and complete the project according to the plans. They must also inform you in writing of any significant discrepancies, errors, or omissions in the plans, or any unexpected changes in project conditions. They cannot proceed with affected work until you direct them to do so.

Before starting work, the contractor must obtain all necessary governmental, community, or other association approvals for the plans, and all required approvals and permits. You are responsible for paying the costs of these approvals and permits. Unless stated otherwise, the contractor will also obtain all required inspections, tests, or similar approvals, and you will pay the associated costs and fees.

This is a fixed-price agreement. This means that the project price will already include all of the contractor’s cost, such as payments to subcontractors, employee wages, material and equipment cost, insurance, and permit and plan approval costs. Any cost changes you and the contractor agree to should be documented in a “change order” (Exhibit B).

You will make an initial payment by a specified date, which the contractor will credit towards the total amount owed. The contractor will send you an invoice on a specific day each month, itemizing all costs, labor charges, and supply expenses incurred to date, and indicating any previous payments. You must pay the full invoice amount within the agreed upon number of calendar days after receiving it.

Yes, upon your request, the contractor must provide documentation to support invoiced costs, labor charges, and supply expenses, including copies of subcontractor and supplier invoices. However, you would need to notify the contractor of any discrepancies within 30 days of receiving the documentation. You and the contractor will then work to resolve the discrepancy, and a payment delay due to this request will NOT be considered as “failure to make payment.” The contractor must keep detailed records of billed and invoiced items for three years after the project’s completion. You have the right to review these records with a written request, which the contractor must comply with within 30 days.

The contractor will inform you when the work is “substantially complete” meaning you have legal occupancy and full use of the project with only minor work remaining. Within ten days of substantial completion, you can inspect the work with the contractor and create a “punch list” of items needing completion or correction. The contractor must finish the Punch List within 21 days of receiving it. Final payment is due at the agreed upon number of calendar days after the contractor completes all work, including the punch list, and provides you with a release of any liens or encumbrances.

If your failure to comply with the agreement delays the project, the Substantial Completion Date will be extended by the length of the delay. If the contractor becomes aware of a delay, they must notify you within a reasonable amount of time (no longer than seven days) and inform you of the necessary extension. Any extension of the Substantial Completion Date can be documented in a Change Order, according to this agreement.

If either party requests or believes a change to the plans, project, or agreement is necessary, they must follow a specific procedure outlined in the contract. The party requesting the change must provide a written description. Before proceeding, unless it’s an emergency for safety or property damage, the contractor must give you a written estimate of the cost and time impact of the change. If both parties agree to the change, they can sign a “change order” (Exhibit B) that documents the change, any additional cost, and any extension of the substantial completion date, according to this agreement.

The contractor must construct the project in compliance with all applicable government codes, regulations, and ordinances, and in a good and workmanlike manner consistent with industry standards. They must also build according to plans under this agreement. The contractor is not liable for errors or omissions resulting from their compliance with plans prepared by you or your agent, or plans altered by you or your agent to meet homeowner association requirements.

The contractor can hire subcontractors, employees, and suppliers. Unless otherwise agreed in writing, the contractor will pay them for their work or materials. If the contractor fails to pay them, and this results in a lien on your property, the contractor will be responsible for any costs, including attorney’s fees, to resolve the lien, but you may have to take them to court to enforce their responsibility.

Your contractor is required by law to be licensed with the Utah Division of Professional Licensing (DOPL). Details of their license should be included in the “Proof of Licensure and Insurance” (Exhibit C). You can verify a DOPL-administered license online at https://secure.utah.gov/llv/search/index.html.

The contractor must maintain general liability insurance, any required workers’ compensation insurance, and any other legally required insurance. Before starting work, and upon your request, they must provide proof of insurance showing policy limits, coverages, and any exclusions, per this agreement.

The contractor is responsible for providing a safe job site for all employees, personnel, subcontractors, equipment, and materials. They and their subcontractors must provide safety and personal protective equipment as required by applicable safety laws. The contractor must promptly notify you in writing of any safety hazard or violation on the job site, or any injury that occurs on the job site.

The contractor will defend and protect you and your agents form claims, damages, losses, injuries, liabilities, and expenses (including attorney’s fees) that arise directly or indirectly from any person’s actions or omissions related to the work, project, or agreement, including hazardous materials brought onto the property by the contractor or their agents. However, the contractor does not owe indemnity if the harm was caused by your or your agent's negligence, including undisclosed hazardous materials on the property.

If you discover a nonconformity or defect during the warranty period, you must notify the contractor in writing within 30 days. The Contractor will then cure the nonconformity or defect within 30 days of receiving your notice, or within another agreed-upon timeframe. If the contractor fails to timely cure the defect, they will be responsible for paying you for all the damages and reasonable costs associated with curing it. All product warranties are assigned from the contractor to you. If your contractor is no longer in business, then you may research whether someone has assumed the company’s assets or responsibilities. Otherwise, there is no agency that covers the warranty for a defunct contractor. This is part of the reason DOPL recommends that homeowners seek out reputable contractors.

Any notice or agreement to terminate must be provided in writing, include the effective date of termination, an accounting of your payments and the work performed, and identify any payments due.

You can terminate the agreement if the contractor violates a material provision, fails to supply properly skilled or licensed workers, fails to provide proper materials, fails to pay subcontractors, or disregards applicable laws. Before terminating, you must give the contractor written notice of the violation and 14 days to fix it. If they don’t fix the violation within 14 days, or they don’t diligently begin efforts to fix a violation that can’t be fixed in 14 days, you can terminate the agreement.

The contractor can terminate the agreement if you violate any material provisions. They must give you written notice of the violation and 14 days to fix it. If you fail to cure the violation within 14 days, the contractor can terminate. You and the contractor can also mutually agree in writing to terminate the agreement. Upon termination, the contractor will stop operations, terminate existing subcontracts and purchase orders, and stop entering into new ones.

The parties will try to resolve any dispute through good faith negotiations before starting a formal legal proceeding, unless legal action is needed to protect a statute of limitations, lien, or other similar rights. If a third-party mediator is used, the cost will be shared. Any agreement reached during negotiations or mediation does not waive future breaches or violations. If these efforts do not resolve the dispute, the agreement will be litigated in court.