Contract Types · April 15, 2026 · 8 min read
What Should Be in a Contractor Agreement? The Complete Checklist
Whether you're reviewing someone else's contract or writing your own, these are the 12 provisions that every contractor agreement needs to have — and what to watch for in each one.
The 12 Things Every Contractor Agreement Needs
A contractor agreement doesn't have to be 50 pages long. But it does need to cover certain things clearly — or you're going to have problems when something goes wrong. And in construction, something always goes wrong.
Here's the complete list of what should be in every contractor agreement, whether you're the GC, the sub, or an independent contractor.
1. Identification of Parties
What it should include:
- Full legal names of all parties (not just "Owner" and "Contractor")
- Business entity type (LLC, Inc., sole proprietor)
- Contact information and addresses
- License numbers if applicable
Why it matters: If you need to file a lien or take legal action, you need to know exactly who you contracted with — not just the superintendent's first name.
2. Scope of Work
What it should include:
- Detailed description of the work to be performed
- Reference to specific plans, specs, and drawings (with revision dates)
- Explicit exclusions — work you're NOT doing
- Standards of workmanship (building codes, manufacturer specs, etc.)
Why it matters: The scope defines the boundaries of your obligation. If it's vague, you'll be doing work you never agreed to.
3. Contract Price and Payment Terms
What it should include:
- Total contract price (fixed, T&M, cost-plus, or unit price)
- Payment schedule (milestone-based, monthly, percent complete)
- Retainage percentage and release terms
- Invoice submission process and approval timeline
- Late payment penalties or interest provisions
- Lien waiver requirements
Why it matters: The most common contractor dispute is about money. Spell out every detail.
4. Project Schedule
What it should include:
- Start date and substantial completion date
- Milestone deadlines if applicable
- Notice requirements for delays
- Excusable delay provisions (weather, force majeure, owner-caused delays)
- Liquidated damages terms, if any (with a cap)
Why it matters: Delays cost money. The schedule section determines who pays for them.
5. Change Order Process
What it should include:
- Written change order required before extra work begins
- Pricing method for changes (agreed markup, T&M rates, etc.)
- Approval process and timeline
- How changes affect the schedule
Why it matters: Without a change order process, you'll do extra work and not get paid for it.
6. Insurance Requirements
What it should include:
- Required coverage types and minimum limits
- Additional insured requirements
- Certificate of insurance delivery requirements
- Waiver of subrogation provisions
Why it matters: If your insurance doesn't meet the contract requirements, you could be in breach before you ever start working.
7. Indemnification
What it should include:
- Mutual indemnification (both parties indemnify each other for their own negligence)
- "Comparative fault" or "limited form" indemnification
- Compliance with state anti-indemnity statutes
What to reject: Broad-form indemnification that makes you responsible for the GC's negligence. This is unenforceable in many states but still shows up frequently.
8. Termination Provisions
What it should include:
- Termination for cause — specific events that trigger it, with notice and cure period
- Termination for convenience — reasonable notice period, payment for completed work, demobilization costs
- Your right to terminate (not just theirs)
Why it matters: If the other party can end the contract on 24 hours' notice and only pay for "accepted" work, you're carrying all the risk.
9. Dispute Resolution
What it should include:
- Step-by-step process: negotiation, then mediation, then arbitration or litigation
- Venue in the county where the project is located
- Each party bears their own costs (unless bad faith)
- Continuation of work during the dispute process
Why it matters: The wrong dispute clause can make it more expensive to fight for your rights than the amount you're owed.
10. Safety and Compliance
What it should include:
- Compliance with OSHA regulations
- Site-specific safety requirements
- Drug testing requirements if applicable
- Responsibility for safety violations and fines
Why it matters: Safety violations can result in fines, work stoppages, and liability exposure. Know who's responsible for what.
11. Warranty
What it should include:
- Warranty period (1 year from substantial completion is standard)
- Clear definition of defective work
- Reasonable access and notification provisions
- Warranty exclusions (normal wear and tear, owner modifications, etc.)
Why it matters: An open-ended warranty or an unclear defect standard gives the other side a blank check to call you back years later.
12. Governing Law and General Provisions
What it should include:
- Which state's laws govern the contract
- Assignment restrictions (can the GC transfer the contract?)
- Entire agreement / integration clause
- Severability (if one clause is invalid, the rest survives)
- Notice provisions (how formal communications are delivered)
Why it matters: These "boilerplate" provisions actually matter when disputes arise. They determine which laws apply and how the contract is interpreted.
Missing Something?
If your contract is missing any of these 12 provisions, you have a gap that could cost you money. Upload your contract to ContractDoctors and our AI will tell you exactly what's there, what's missing, and what needs to be fixed — in minutes, not hours.
contractor agreement · checklist · essentials · provisions