Texas Home Improvement Contract

Construction Contract This agreement is made on the date written above our signatures between Contractor Name: _______________________________________________________ (Contractor) and Owner Name: ___________________________________________________________ (Owner). Contractor Contractor Name: _____________________________________________________________________ Address: ____________________________________________________________________________ Address: ____________________________________________________________________________ City: ________________________________________________, State: _________ Zip: ____________ Work Phone Number: _________________________________________________________________ Cell Phone Number: ___________________________________________________________________ Fax Number: ________________________________________________________________________ Email Address: _______________________________________________________________________ License Number: _____________________________________________________________________ Contractor Name: ___________________________________________ will be referred to as Contractor throughout this agreement. Owner Owner Name: ________________________________________________________________________ Address: ____________________________________________________________________________ Address: ____________________________________________________________________________ City: ________________________________________________, State: _________ Zip: ____________ Day Phone Number: ___________________________________________________________________ Cell Phone Number: ___________________________________________________________________ Fax Number: ________________________________________________________________________ Email Address: _______________________________________________________________________ Owner Name: _________________________________________________ will be referred to as Owner throughout this agreement. The Construction Site Address: ____________________________________________________________________________ Address: ____________________________________________________________________________ City: ________________________________________________________, Texas Zip: _____________ ________ ________ TX Home Improvement I Page 1 I. Project Description A. For a price identified below, Contractor agrees to complete home improvements (identified as the Project in this agreement) for Owner. II. Contract Price A. In addition to any other charges specified in this agreement, Owner agrees to pay Contractor $_________________ for completing the Work described as the Project. III. A. 1. Allowances This Contract Price includes an allowance for an item to be selected later by Owner. $_________________ for _________________________________________________________. Installation will be by Contractor at a cost included in the Contract Price. The allowance price covers the cost of: Materials Taxes Delivery Handling on the Job Site IV. Scheduled Start of Construction A. Work under this agreement will begin within ______ Calendar Days after the following contingencies have been met. 1. Complete Plans and Specifications have been approved and initialed by both Owner and Contractor. 2. 3. 4. Owner has obtained a construction loan or other financing acceptable to Contractor. Owner has obtained all architectural approvals from subdivision or neighborhood authorities. All appropriate building permits have been issued. V. Scheduled Completion of Construction A. Work under this agreement will be Substantially Complete within ______ Calendar Days after the date construction begins. VI. Documents Incorporated A. The Glossary of Terms which follows our signatures is incorporated into this contract as though included in full as part of this agreement. B. This agreement incorporates by reference certain disclosures and notices required by federal and state law. The following documents are incorporated as though included in full as part of this agreement. Notice of Right to Cancel under Regulation Z (in duplicate) C. This agreement incorporates by reference certain documents which define and describe the Work to be done. The following documents are incorporated as though included in full as part of this agreement. 1. Plans Plans dated _____/_____/_____ Consisting of ______ sheet(s) Prepared by _________________________________________________________________________ Page 2 TX Home Improvement I ________ ________ Last changed on _____/_____/_____ And further identified as _______________________________________________________________ 2. Specifications Specifications dated _____/_____/_____ Consisting of ______ sheet(s) Prepared by _________________________________________________________________________ Last changed on _____/_____/_____ And further identified as _______________________________________________________________ 3. Proposal (Estimate or Bid) Proposal (Estimate or Bid) dated _____/_____/_____ Consisting of ______ sheet(s) For the amount of $_________________ Entitled _____________________________________________________________________________ And further identified as _______________________________________________________________ Reference to Contractor's proposal dated _____/_____/_____ is for convenience only. Other Contract Documents identify the Work to be completed under this agreement. VII. Ownership of Plans A. Plans, Drawings, Specifications and copies prepared for use in construction under this agreement are the property of Contractor. Contractor retains all common Law and statutory rights to these Plans, Drawings and Specifications. Owner agrees that these documents will not be used on any other project and, with the exception of one record set to be retained by Owner, will be returned to Contractor on request. VIII. Scope of Work A. Contractor shall supervise and direct the Work and accepts responsibility for construction means, methods, techniques, sequences and procedures required to complete the Project in compliance with the Contract Documents. IX. Cutting and Patching A. The color, texture and planes between existing and new materials might not match exactly. Contractor will use due diligence to create the best match possible. Owner acknowledges that patched surfaces may be detectable when construction is complete. X. Compliance with Law A. Contractor and Owner mutually commit to use reasonable care to meet the Requirements of state, federal and local Law when discharging their responsibilities under this agreement. B. If Law enacted after the Contract Date changes the Scope of Work under this agreement, Contractor and Owner will execute a Change Order adjusting the Contract Price and Contract Time to accommodate the change in the Scope of Work. XI. Permits and Fees A. Contractor shall secure all permits, licenses and renewals required by government authority to complete construction of the Project. If permits are required for Subcontracted Work, Subcontractors will secure those permits. Owner shall assist Contractor in responding to requests for information from the permit-issuing authority. Contractor shall provide Owner a copy of each permit, license and renewal ________ ________ TX Home Improvement I Page 3 issued by government authority for the Project. B. Contractor will pay the building permit fee, Plan check fee, business license fees for Contractor and Subcontractors, and charges levied by government for testing, Inspection and Re-Inspection of the Project. XII. Taxes A. Except as provided otherwise in this agreement, Contractor shall pay all federal, state, county, and municipal sales, use, consumer, gross receipts, and excise taxes which are levied or become payable as a result of completing the Work. Owner will pay all tax on materials furnished by Owner and all property taxes levied on the land which comprises the Job Site. XIII. Owner's Responsibilities A. Owner affirms that Owner has the right to enter into this agreement and has the right to contract for construction of the Project on the Job Site. Owner shall pay all taxes and assessments due on the Job Site during the period of construction and shall take all reasonable actions required to protect marketable title to the Job Site. B. On request of Contractor, Owner shall provide clear and convincing evidence that Owner has access to funds committed to payment of the unpaid balance of the Contract Price. Owner shall inform Contractor of any significant change in the availability of funds committed to make payments required under the Contract Documents. Failure of Owner to comply with the terms of this paragraph shall relieve Contractor of the obligation to begin or continue the Work. C. Owner will not interfere with or permit others to interfere with, stop, hinder, or delay completion of the Work by Contractor or Subcontractors except as provided under this agreement. D. On written request from Contractor, Owner shall identify (1) The legal description of the property being improved, (2) Whether there is a Surety Bond in effect on the improvement Project and, if so, the name and last known address of the Surety and a copy of the Bond, and (3) Whether there are any prior recorded liens or security interests on the real property being improved and, if so, the name and address of the person having the lien or security interest. XIV. Construction by Others A. Owner shall neither hire nor retain Separate Contractors, Subcontractors, employees or agents of Owner to perform Work on the Job Site while Work is being done under this agreement by Contractor. XV. Representations by Contractor A. Owner has reported to Contractor all conditions known to Owner which may not be apparent to Contractor and which might significantly increase cost of the Work or delay completion. These concealed conditions include, but are not limited to, hazards on the Job Site, unsuitable soil conditions, prior Defective Work of others, latent Defects in the Plans or Specifications, earlier attempts to do Similar or related Work, and obligations imposed by government. XVI. Disclaimer by Owner, Reliance by Contractor A. Owner has provided Contractor with information on subsurface or concealed conditions at the Job Site. Except to the extent that Contractor knows this information to be false, Contractor is entitled to rely on the accuracy of this information. Page 4 TX Home Improvement I ________ ________ XVII. Discrepancy Between Plans and Field Conditions A. If any concealed structure, water, power, waste, drain or gas line is uncovered or revealed during construction which is not as indicated in the Contract Documents or is inconsistent with information provided by Owner, Contractor shall promptly, and before any such structure or line is disturbed or damaged (except in an Emergency), notify Owner. Contractor shall submit a Claim for a Change Order which covers the additional cost incurred as a result of such structure, water, power, waste, drain, or gas line uncovered or revealed during construction. XVIII. Differing Site Conditions A. Contractor shall promptly, and before the conditions are disturbed, give a written notice to Owner on encountering unforeseeable conditions adversely affecting the Work. Owner shall investigate the site conditions promptly after receiving notice. If the conditions cause an increase in cost to Contractor or the time required for performing any part of the Work and were not reasonably foreseeable by an experienced Contractor, an equitable adjustment shall be made under this clause and the contract modified in writing accordingly. B. If concealed or unanticipated conditions require a change in the Plans or Specifications, Owner will issue a Change Order modifying the Contract Documents, Contract Price and Contract Completion Date, if any. C. Anything in this contract notwithstanding, Contractor is entitled to rely on express or implied representations concerning site conditions made by Owner and those employed by Owner regardless of whether those representations are made in Contract Documents or otherwise. XIX. Payment Plan A. Owner will pay to Contractor the Contract Price in installments consisting of an initial payment, progress payments, and a final payment on completion of the Work. XX. A. Initial Payment On initial delivery of materials to the Job Site, Owner shall pay to Contractor $_______________. B. The initial payment is refundable to Owner, less actual cost to Contractor, if Owner is not able to obtain a commitment for construction financing in an amount adequate to complete the Work. XXI. A. 1. I. II. III. IV. Progress Payments Schedule of Progress Payments Progress payments are due as each phase of the Work is completed. Amount due when Job Phase 1 is complete: $_________________ Job Phase 1 is complete when _____________________________________________________. Amount due when Job Phase 2 is complete: $_________________ Job Phase 2 is complete when _____________________________________________________. Amount due when Job Phase 3 is complete: $_________________ Job Phase 3 is complete when _____________________________________________________. Amount due when Job Phase 4 is complete: $_________________ Job Phase 4 is complete when _____________________________________________________. ________ ________ TX Home Improvement I Page 5 V. VI. Amount due when Job Phase 5 is complete: $_________________ Job Phase 5 is complete when _____________________________________________________. Amount due when Job Phase 6 is complete: $_________________ Job Phase 6 is complete when _____________________________________________________. B. Processing of Progress Payments 1. No less than 2 Calendar Days before each progress payment is due under the terms of this contract, Contractor shall provide Owner with an application for payment (invoice) in a form which complies with generally accepted trade practice. 2. Except as provided otherwise in this agreement, Owner shall pay the amount due within 2 Calendar Days after approval of any application for initial, progress or final payment. 3. Unless otherwise provided in the Contract Documents, applications for payment may include, at the option of Contractor, itemized charges for materials and equipment not yet incorporated in the Work but delivered and suitably stored on the Job Site. Application for payment for stored materials and equipment shall include a bill of sale or other confirmation that stored materials and equipment are the property of Owner. XXII. Contract Allowances A. The Contract Price includes the sum of all contract allowance items identified in this agreement. The price listed for each contract allowance item is a preliminary estimate made before actual selection by Owner of the item to be installed. Contractor makes no representation that purchase and Installation of any contract allowance item can be performed for the contract allowance price. Cost to Owner for any contract allowance item may be more or less than the contract allowance price. B. If the cost to Contractor for a contract allowance item is more or less than the allowance price, the Contract Price shall be adjusted for the difference by a Change Order. C. Selection by Owner of contract allowance items shall be submitted in writing to Contractor. At the request of Contractor, Owner shall verify selection of each contract allowance item with the Material Supplier and provide Contractor with confirmation that the order is correct. D. If selection of any contract allowance item by Owner delays the Work, the Contract Completion Date shall be extended by the equivalent of the delay and Contractor shall be entitled to recover for the cost of delay, including liquidated damages, shutdown or startup expense, lost profits, or consequential damages. XXIII. Interest A. Payments due and not paid under the Contract Documents shall bear interest from the date payment is due at the rate of 1-1/2 percent per month. B. When payment is withheld pending settlement of a bona fide dispute on the quantity, quality, or timeliness of the Work, interest shall accrue only on the amount ultimately paid. C. Any interest which remains unpaid at the end of any 30-Calendar Day period shall be added to the principal amount due and thereafter shall accrue interest at the same rate as the principal. XXIV. A. Liens and Waivers Contractor will ensure that Subcontractors, tradesmen and Material Suppliers working under Page 6 TX Home Improvement I ________ ________ direction of Contractor are paid when due to avoid the exercise of lien rights provided by state Law. XXV. Waivers of Lien A. With each application for payment, Contractor shall provide to Owner (1) Conditional waivers of lien from Contractor, from each Material Supplier, and from each Subcontractor to the Project confirming payment for all Work and materials covered by the application, and (2) Certification from each Material Supplier and Subcontractor covered in a prior application for payment that previous conditional waivers of lien have become unconditional. Waivers of liens shall be in a form satisfactory to Owner, title insurer, and lenders. Contractor shall furnish any supplemental waivers of lien as may be reasonably required by Owner, title insurer, or lenders. Conditional waivers of lien become unconditional on receipt of the payment which is requested. XXVI. Details on Lien Claims A. On request of Contractor, Owner shall provide to Contractor a legal description of the Site and all information about the Project as may be required by Contractor, Subcontractors, Material Suppliers, or tradesmen to enforce lien rights in Texas. XXVII. Final Payment A. Contractor will submit an application for final payment to Owner when the Work has been completed in compliance with the Contract Documents. If Owner agrees that Work has been completed, payment is due Contractor for the entire unpaid balance of the contract amount (including any Retainage). B. Making of final payment constitutes waiver of all Claims by Owner against Contractor except those Claims previously made in writing and delivered to Contractor and those obligations otherwise provided by this agreement or by operation of Law. C. The acceptance of final payment by Contractor shall constitute a release by Contractor of known Claims against Owner arising out of this contract except those Claims which (1) Have been made in writing and identified by Contractor as not having been settled at that time, or (2) Are based on fraud or misconduct by Owner. D. Owner will notify Contractor of the date when notice of Final Completion is recorded. E. If completion of the Work is delayed unreasonably at no fault of Contractor, Contractor shall be entitled to final payment for all Work completed (including Retainage) without prejudice to the right of Contractor to complete the Project at a later date and without prejudice to the right of Owner to make Claims against Contractor for Defects in Work completed. XXVIII. Changes in the Work A. Except as provided elsewhere in this agreement, no change to this contract (including Modification, clarification, interpretation or correction of the Plans or Specifications) shall be made without mutual agreement and a written Change Order signed by Contractor and Owner identifying the change, the cost of the change, and the effect on Project Schedule, if any. B. Contractor is authorized to make minor changes in the Work which are in the interest of Owner, do not materially alter the quality or performance of the Work, and do not affect the cost or time of performance, and comply with applicable Laws, codes, ordinances and regulations. Contractor will inform Owner of each minor change made in the Work. C. Other clauses in this agreement notwithstanding, there will be no reduction in the value of the ________ ________ TX Home Improvement I Page 7 Work without a written Change Order. XXIX. A. Defective Work General Requirements 1. On written notice from Owner, Contractor shall promptly remove from the Job Site all Work or materials not in compliance with the Contract Documents, whether or not such rejected Work or materials are incorporated in the Project. Contractor shall promptly repair or replace such rejected Work or materials at no cost to Owner. B. Rejected Work - Contractor's Rights 1. If Contractor disagrees with a decision on rejection of Work or materials, Contractor is entitled to an expedited resolution of the issue under the provisions of this agreement which cover dispute resolution. Pending resolution of this dispute, the obligation of Contractor to make correction is suspended. The Contract Time, if any, is extended for the period the dispute remains unresolved. 2. Owner acknowledges and agrees that it may be inappropriate or unreasonably expensive to replace, refabricate or refinish building components with minor Defects or which are damaged slightly due to wear and tear commonly associated with the construction process. Contractor may, at the sole discretion of Contractor, (1) Correct minor Defects using procedures commonly accepted as good construction practice, or (2) Conclude that a cosmetic Defect is acceptable under good construction practice and take no corrective action. XXX. Call-Backs A. On written notice from Owner within 30 Calendar Days after Substantial Completion (the callback period), Contractor shall promptly repair or replace any portion of the Work which becomes Defective due to faulty materials or workmanship. B. The obligation of Contractor to repair or replace Defects due to faulty materials or workmanship during the call-back period is in addition to and does not limit any other remedy Owner may have under the Contract Documents, Law, or any warranty provided by Contractor or others. This call-back remedy does not limit the liability of Contractor for Defective Work or limit the time within which proceedings may be commenced to enforce rights and obligations under this agreement. C. Failure of Owner to give notice of a Defect within the call-back period constitutes a waiver of rights to repair or replacement of that Defect. XXXI. Warranty Contractor warrants that the Work shall be free of Defects identified in this agreement for the period specified in this agreement. A. General Requirements 1. Except as otherwise provided in this agreement, the warranty period shall begin from the date of Substantial Completion. 2. Work done by Contractor in compliance with warranty provisions of this agreement does not extend the period of the warranty. 3. Contractor shall deliver to Owner all warranties provided by vendors and manufacturers of materials and equipment used to complete the Project. Contractor shall have no obligation under warranties provided by others except to render any assistance that Owner may require in enforcing the Page 8 TX Home Improvement I ________ ________ terms of those warranties. 4. Except as provided in this agreement, and to the extent permitted by Law, Contractor disclaims all warranties, whether express or implied, whether of fitness for purpose, merchantability, habitability or workmanlike completion. 5. Failure of Owner to give notice of a breach of warranty within the warranty period constitutes a waiver of the right to repair or replacement by Contractor. 6. To make a warranty Claim under this agreement, Owner must send a clear and specific written complaint to Contractor at the following address within 60 Calendar Days of discovering Defects, unless otherwise specified in the list of items covered under this warranty. Contractor shall make repairs, replacements and corrections promptly and at no expense to Owner. Contractor Name: _____________________________________________________________________ Address: ____________________________________________________________________________ Address: ____________________________________________________________________________ City: ________________________________________________, State: __________ Zip: ___________ 7. Upon receipt of written notification, Contractor must notify Owner within 30 Calendar Days of a disputed Claim. Contractor and Owner agree to a dispute resolution process as specified in the Contract Documents. Under the Magnuson-Moss Warranty Act and under this warranty, suit may not be filed against Contractor until the Claim has been submitted for informal dispute settlement and a decision has been reached, or a waiting period of 40 Calendar Days has been exceeded for a decision, following the submission of a request for warranty repair, whichever comes first. State or federal Laws may permit filing a suit without the waiting period, despite the terms of this agreement. 8. Owner must provide Contractor with reasonable access during the Work Day to perform obligations created by this warranty. If Owner fails to provide access, Contractor is relieved of the obligation to make repairs for which access has been denied. 9. Upon repair or replacement of the Defect, Owner must sign and deliver to Contractor a full release of all legal obligations with respect to the Defect. B. 1. Exclusions from Warranty The warranty provided by this contract does not cover any of the following items or conditions: I. Damages or Defects that result from circumstances beyond the control of Contractor including, but not limited to, accidents, fire, explosion, smoke, falling objects, damage from aircraft, vehicles, lightning, windstorm, hail, flood, mudslide, earthquake, volcanic eruption, wind-driven water, or unforeseeable change in the underground water table. II. Damage or Defects in materials or workmanship supplied by anyone other than Contractor, employees of Contractor, agents or those working under the direction of Contractor, including Subcontractors. III. Damages or losses that result from water leakage. IV. Dampness, condensation or standing water due to failure of Owner to maintain adequate ventilation or other cause beyond the control of Contractor. V. Any Claim for warranty that is not filed in compliance with the terms required by the Contract Documents. VI. Claimed Defects that are obvious, apparent and accepted at the time of completion. ________ ________ TX Home Improvement I Page 9 VII. Damages caused or made worse by: A. Failure of Owner or anyone other than Contractor, employees of Contractor, agents or Subcontractors to comply with the warranty Requirements of the manufacturer. B. C. Failure of Owner to give Contractor notice of Defects within a reasonable time. Loss that results from failure of Owner to take timely action to mitigate or minimize damage. 2. Contractor has no liability for incidental or consequential damages from breach of any warranty provided by this agreement insofar as the loss claimed is covered by insurance of Owner or for which Owner has a right of recovery from any other party. C. 1. Basic Warranty Coverage Warranty on Cabinets I. It is a breach of warranty if cabinet doors or drawers bind or stick during the first 180 days. Occasional adjustment of doors and drawers is necessary as part of routine building maintenance. Defects due to abuse, impact, modification, or improper maintenance are not covered under this warranty. II. Cabinet materials shrink as they dry. It is a breach of warranty if, during the first 180 days, cabinet doors or drawer fronts are found to have visible cracks in excess of 1/8 inch by 2 inches. Defects due to abuse, impact, modification, or improper maintenance are not covered under this warranty. III. It is a breach of warranty if cabinet doors or drawer faces warp more than 1/4 inch in 12 inches during the first 180 days. Some movement can be expected when natural wood products adjust to moisture levels within a building. Cabinets that warp due to abuse or prolonged contact with moisture are not covered under this warranty. IV. It is a breach of warranty if closed cabinet doors have gaps in excess of 1/4 inches by 2 inches during the first 180 days. Cabinet doors that become misaligned due to abuse or improper loading are not covered under this warranty. V. It is a breach of warranty if, during the first 180 days, cabinet doors do not stay closed when shut. Frequent use of cabinet doors can result in misalignment. Occasional adjustment of cabinet hardware is a part of routine building maintenance. VI. Cabinet materials shrink as they dry. It is a breach of warranty if, during the first 180 days, visible gaps greater than 1/4 inch by 3 inches open between the wall or ceiling and any cabinet. Smaller gaps are not covered under this warranty. VII. It is a breach of warranty if a cabinet, a cabinet corner or a cabinet face is found to be more than 1/4 inch out of alignment during the first 180 days unless the Defect is caused by abuse, impact, modification or improper loading. 2. Warranty on Carpentry, Interior Finish I. It is a breach of warranty if a shelf fails due to Defective workmanship during the first 180 days. Shelves should be supported by brackets fastened securely to framing. Any shelf is subject to overloading. Defects due to overloading, modification, or improper maintenance are not covered under this warranty. Page 10 TX Home Improvement I ________ ________ 3. Warranty on Resilient Flooring I. It is a breach of warranty if vinyl flooring develops surface bubbles more than 1/16 inch higher than adjacent surfaces during the first 180 days. Contractor may puncture vinyl flooring material to release trapped air as part of the repair. Defects that result from abuse, impact, modification, normal wear, or improper maintenance are not covered under this warranty. Fading, slip resistance, abrasion resistance, stain resistance, freeze-thaw stability, durability, compressive strength, moisture sensitivity and texture retention of vinyl or resilient flooring may be covered under the manufacturer's warranty, but are not covered under this warranty. Removing mold from vinyl floor materials is a part of normal building maintenance and is not covered under this warranty. II. Joints are required in resilient sheet flooring when room dimensions exceed roll widths. It is a breach of warranty if, during the first 180 days, joints in resilient flooring leave a gap between pieces of more than 1/8 inch and more than 12 inches long. The visibility of joints in resilient flooring may be exaggerated by the color, pattern, and texture of the material, and by reflected light, such as from a large window. Defects that result from abuse, modification, or improper maintenance are not covered under this warranty. III. It is a breach of warranty if, during the first 180 days, resilient flooring is found to be installed with stains, discoloration or faded colors. Stain resistance does not mean that resilient flooring won't stain. Staining and loss of gloss can result from normal use and is not necessarily an indicator of Defective material or workmanship. It is normal for resilient flooring to vary slightly from display Samples in color and texture. Display Samples come from different dye lots and may be used for many years. Over time, color, texture, and feel of the Sample may change with handling. The color and gloss of resilient flooring can fade under sunlight and traffic. Slight variations are common within a specified color or pattern. Variations will be greater when material is selected from differing dye lots. Manufacturing Defects may be covered under the manufacturer's warranty, but are not covered under this warranty. IV. It is a breach of warranty if resilient flooring is found to be installed out of compliance with the recommendations of the manufacturer during the first 180 days. All manufacturers recommend that the surface on which resilient flooring is laid be free of bumps, protrusions, or irregularities such as fasteners, loose knots, or free aggregate. Defects that result from sharp objects such as spike heel shoes or roller blades, moisture, hydrostatic pressure, alkali in the subfloor, heavy sunlight penetration, ultraviolet ray exposure, pallet jack or fork lift traffic, or contact with caustic or corrosive liquids, are not covered under this warranty. The flooring manufacturer may offer a warranty against premature wear or fading. Premature wear and fading are not covered under this warranty. 4. Warranty on Lighting I. It is a breach of warranty if, during the first 180 days, a lighting fixture becomes discolored or fails to operate normally due to faulty Installation by Contractor. Defects in lighting fixtures caused by abuse, improper maintenance, or exceeding the recommended maximum bulb wattage are not covered under this warranty. 5. Warranty on Plumbing Systems I. It is a breach of warranty if a water supply, drain, or vent line to a plumbing fixture develops a leak during the first 180 days due to a Defect in materials or workmanship. It is a breach of warranty if, during the first 180 days, a plumbing fixture is found to be installed out of compliance with either the recommendations of the manufacturer or the building Plans or Requirements of the building code. Inspection and maintenance of caulking and sealants around plumbing fixtures is a part of normal ________ ________ TX Home Improvement I Page 11 building maintenance, and is not covered under this warranty. Defects that result from abuse, condensation, modification, the shrinkage of materials as they age, or improper maintenance are not covered under this warranty. II. It is a breach of warranty if, during the first 180 days, any part of the plumbing system fails to deliver water or discharge wastes due to a Defect in materials or workmanship or failure of Contractor to comply with the applicable plumbing code or building Plans. Any plumbing vent or waste line can be obstructed by frost or debris. Removing frost and debris from vent lines is a part of normal building maintenance, and is not covered under this warranty. Defects in plumbing supply, waste, or vent lines that result from abuse, modification, or improper maintenance are not covered under this warranty. III. It is a breach of warranty if, during the first 180 days, a faucet, plumbing fixture or valve runs or drips when fully closed or turned off. Defects that result from abuse, modification, or improper maintenance are not covered under this warranty. IV. It is a breach of warranty if, during the first 180 days, plumbing fixtures, fittings or trim are found to be installed out of compliance with recommendations of the manufacturer or out of compliance with the plumbing code. Flaws in the appearance or performance of plumbing fixtures, fittings or trim may be covered under the manufacturer's warranty, but are not covered under this warranty. Defects that result from abuse, improper maintenance, or modification are not covered under this warranty. V. It is a breach of warranty if plumbing supply lines are found to be out of compliance with approved Plans or the building code during the first 180 days. Severe weather can cause any plumbing supply line to freeze and burst. Defects in plumbing supply lines caused by cold weather are not covered under this warranty. When temperature of the building envelope is not controlled during cold weather, it's a normal part of building maintenance to close the main supply value and drain water from the supply system. Exterior hose bibs should have garden hoses disconnected and drained. Valves for exterior hose bibs should be left open. Interior valves should be shut off. Defects in plumbing supply lines caused by abuse, modification, or improper maintenance are not covered under this warranty. VI. Certain combinations of temperature and indoor humidity may naturally cause condensation to accumulate on pipes and plumbing fixtures. Eliminate excess condensation by increasing ventilation, controlling humidity, or insulating the pipes affected. Accumulation of condensation on plumbing pipes and fixtures is not a Defect and is not covered under this warranty. VII. All plumbing drain and waste lines can be obstructed by excessively large or dense objects, by the invasion of roots, or by backup of the public or private sewer. Keeping plumbing drain and waste lines free of obstructions is a part of normal building maintenance, and is not covered under this warranty. It is a breach of warranty if plumbing drain, waste, or vent lines are found to be installed out of compliance with the applicable plumbing code or out of compliance with the building Plans during the first 180 days. The following constitute abuse or improper maintenance of plumbing drain or waste lines, and are not covered under this warranty: (1) Use that exceeds that design standards of the system, (2) Disposing of non-biodegradable items through the system, (3) Connecting the system to a sump pump, roof drain, or backwash from a water conditioner or pool filter, (4) Covering a leach field with a surface that is impermeable to water, (5) Driving or parking vehicles over the leach field, and (6) Failing to periodically pump the septic tank. VIII. It is normal to hear the sound of water flowing through drain and supply pipes. It is also normal to hear the sound of pipe expanding or contracting slightly in response to heat or cold. Water hammer is a sudden thump or banging in water supply lines that occurs when water flow to a faucet or fixture stops abruptly. Water hammer can do serious damage to a plumbing system, especially when water at high pressure is shut off very quickly, such as with an automatic valve. A plumbing system subject to water Page 12 TX Home Improvement I ________ ________ hammer should be designed with a pressure-regulating valve or an air chamber to reduce the noise and potential for damage from water hammer. Failure to install a pressure-regulating valve or an air chamber is not a breach of warranty if the valve or chamber is not part of the contract and is not required by the building code. The sound of water hammer will be obvious to anyone present in the building. Progressive damage from an obvious water hammer problem is not covered under this warranty. On request, Contractor will suggest a remedy for water hammer and quote a price for taking preventative measures. IX. It is a breach of warranty if a faucet, shower head, or plumbing fixture is found to be installed out of compliance with the applicable code or the building Plans during the first 180 days. Low water pressure may cause reduced flow through any plumbing fixture. Water pressure varies in public water systems and may be low at times of peak demand or when flow is reduced in water mains. Some municipal codes require that plumbing fixtures, including faucets and shower heads, be equipped with flow control devices to conserve water. Inadequate water flow at points of supply due to either low water pressure at the main or government regulation is not covered under this warranty. X. It is a breach of warranty if, during the first 180 days, a bathtub or shower enclosure is found to be installed out of compliance with either the building code or the manufacturer's recommendations. Ensure that bathtub and shower enclosures are free of any chip, crack, scratch, blemish, or Defect at Installation, and document any concerns. After Substantial Completion, only Defects resulting from faulty workmanship of Contractor are covered under this warranty. Manufacturing Defects in bathtubs and shower enclosures may be covered under the manufacturer's warranty, but are not covered under this warranty. Bathtubs are heavy when filled and may cause the framing to flex and creak, even when installed in compliance with both the manufacturer's instructions and the building code. Flexing and creaking are not signs of failure, and are not covered under this warranty. XXXII. Contractor Claims A. If Contractor claims that any instruction, Drawing, act or omission of Owner or any representative of Owner, or any agency of government, increases costs to Contractor, requires extra time or changes the Scope of Work, Contractor shall have the right to assert a Claim for such costs or time. B. Unresolved Claims or disputes shall not cause Contractor to delay or suspend Work or for Owner to delay or suspend payments as provided by this agreement. Continued performance by Contractor shall not be deemed a waiver of any Claim for additional compensation or an extension of Time for Completion. Contractor shall cooperate with Owner and representatives of Owner to mitigate potential damages, delay and other adverse consequences arising out of the condition which is the subject of the Claim. XXXIII. Arbitration A. Any controversy or Claim arising out of or relating to this contract or contract warranty or the breach thereof which cannot be resolved by mediations shall be settled by arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. B. The location of arbitration hearings held under this agreement shall be the county in which the Project is located unless agreed to otherwise by all Parties to the arbitration. ________ ________ TX Home Improvement I Page 13 XXXIV. A. Insurance General Requirements 1. Contractor shall carry workers' compensation insurance and public liability insurance as required by Law and regulation for the protection of Contractor and Owner during progress of the Work. XXXV. Interpretation of the Contract A. Words and abbreviations defined in this contract are capitalized and should be understood as defined. Words commonly used in the construction industry are to be understood in their recognized technical or construction industry context. Any word not defined in this contract and which does not have a well-known technical or construction industry meaning is to be understood as defined in the most recent edition of the Merriam-Webster Collegiate Dictionary. B. Nothing in the Contract Documents shall be interpreted as requiring Contractor to violate any Law or regulation imposed by government. XXXVI. No Waiver of Contract Provisions A. The failure of either Party to insist on strict performance of terms, covenants and conditions in the Contract Documents shall not be construed as waiver of any term, covenant or condition in the Contract Documents. Nor shall any custom or practice which may evolve between Contractor and Owner be construed to waive or lessen the right of either Party to insist upon performance in strict compliance with the Contract Documents. XXXVII. Dealing With Plan Defects A. Contractor will rely on the Contract Documents as the final authority on what is included in the Project. The Contract Documents were created to identify the labor, material and equipment required for proper completion of the Project. The Contract Documents are defective if a reasonably skilled construction contractor doing Similar Work in the community and following generally accepted trade practice could not use the Contract Documents to identify each labor, material and equipment cost required to complete the Project. Contractor bears no responsibility for defects in the Contract Documents. B. If inconsistent, the construction Drawings take precedence over the Specifications. C. Except as specifically provided elsewhere in this agreement, inconsistencies shall be resolved by giving precedence to the less restrictive, standard quality, less demanding provision in codes, safety orders, Contract Documents, referenced manufacturers' specifications, and industry standards. D. Pending clarification by Owner, Contractor shall perform no Work on any portion of the Project requiring an interpretation of the Contract Documents. Contractor has no liability for Work done before discovering the need for interpretation so long as that Work was done in good faith reliance on one of the Contract Documents. XXXVIII. Severability A. If any provision of this contract is interpreted or rendered invalid and unenforceable, then the remainder of this contract shall remain in full force and effect. XXXIX. Cumulative Remedies A. All rights and remedies provided to Contractor by the Contract Documents are cumulative and in addition to and not in limitation of rights and remedies available to Contractor at Law or in equity. Page 14 TX Home Improvement I ________ ________ STATE LAW REQUIRES THAT A PERSON HOLD A CERTIFICATE OF REGISTRATION FROM THE TEXAS RESIDENTIAL CONSTRUCTION COMMISSION IF THE PERSON CONTRACTS TO CONSTRUCT A NEW HOME OR IF THE PERSON CONTRACTS TO CONSTRUCT A MATERIAL IMPROVEMENT TO AN EXISTING HOME OR CERTAIN IMPROVEMENTS TO THE INTERIOR OF AN EXISTING HOME AND THE TOTAL COST OF THE IMPROVEMENT IS $ 10,000 OR MORE (INCLUDING LABOR AND MATERIALS). YOU MAY CONTACT THE COMMISSION AT 877-651-8722 TO FIND OUT WHETHER THE BUILDER HAS A VALID CERTIFICATE OF REGISTRATION. THE COMMISSION HAS INFORMATION AVAILABLE ON THE HISTORY OF BUILDERS, INCLUDING SUSPENSIONS, REVOCATIONS, COMPLAINTS, AND RESOLUTION OF COMPLAINTS. THIS CONTRACT IS SUBJECT TO CHAPTER 426, PROPERTY CODE. THE PROVISIONS OF THAT CHAPTER GOVERN THE PROCESS THAT MUST BE FOLLOWED IN THE EVENT A DISPUTE ARISES OUT OF AN ALLEGED CONSTRUCTION DEFECT. IF YOU HAVE A COMPLAINT CONCERNING A CONSTRUCTION DEFECT YOU MAY CONTACT THE COMMISSION AT THE TOLL-FREE TELEPHONE NUMBER TO LEARN HOW TO PROCEED UNDER THE STATE-SPONSORED INSPECTION AND DISPUTE RESOLUTION PROCE ________ ________ TX Home Improvement I Page 15 Signatures This contract is for immediate acceptance. Any delay in acceptance beyond _____/_____/_____ will require renegotiation of the terms of this agreement. IMPORTANT NOTICE: You and your contractor are responsible for meeting the terms and conditions of this contract. If you sign this contract and you fail to meet the terms and conditions of this contract, you may lose your legal ownership rights in your home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW. This agreement is entered into as of the date written below. Owner Name: _____________________________________________________, Owner (and spouse) ______________________________ (Signature) _____/_____/_____ (Date) Contractor Name: _________________________________________________________, Contractor ______________________________ (Signature) ______________________________ (Printed Name and Title) _____/_____/_____ (Date) Page 16 TX Home Improvement I ________ ________ Disclosure Statement Required by Texas Property Code Section 53.255 KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You are about to enter into a transaction to build a new home or remodel existing residential property. Texas law requires your contractor to provide you with this brief overview of some of your rights, responsibilities, and risks in this transaction. CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may not require you to convey your real property to your contractor as a condition to the agreement for the construction of improvements on your property. KNOW YOUR CONTRACTOR. Before you enter into your agreement for the construction of improvements to your real property, make sure that you have investigated your contractor. Obtain and verify references from other people who have used the contractor for the type and size of construction project on your property. GET IT IN WRITING. Make sure that you have a written agreement with your contractor that includes: (1) a description of the work the contractor is to perform; (2) the required or estimated time for completion of the work; (3) the cost of the work or how the cost will be determined; and (4) the procedure and method of payment, including provisions for statutory retainage and conditions for final payment. If your contractor made a promise, warranty, or representation to you concerning the work the contractor is to perform, make sure that promise, warranty, or representation is specified in the written agreement. An oral promise that is not included in the written agreement may not be enforceable under Texas law. READ BEFORE YOU SIGN. Do not sign any document before you have read and understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN UNTRUE STATEMENT. Take your time in reviewing documents. If you borrow money from a lender to pay for the improvements, you are entitled to have the loan closing documents furnished to you for review at least one business day before the closing. Do not waive this requirement unless a bona fide emergency or another good cause exists, and make sure you understand the documents before you sign them. If you fail to comply with the terms of the documents, you could lose your property. You are entitled to have your own attorney review any documents. If you have any question about the meaning of a document, consult an attorney. GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before construction commences, your contractor is required to provide you with a list of the subcontractors and suppliers the contractor intends to use on your project. Your contractor is required to supply updated information on any subcontractors and suppliers added after the list is provided. Your contractor is not required to supply this information if you sign a written waiver of your rights to receive this information. MONITOR THE WORK. Lenders and governmental authorities may inspect the work in progress from time to time for their own purposes. These inspections are not intended as quality control inspections. Quality control is a matter for you and your contractor. To ensure that your home is being constructed in accordance with your wishes and specifications, you should inspect the work yourself or have your own independent inspector review the work in progress. MONITOR PAYMENTS. If you use a lender, your lender is required to provide you with a periodic statement showing the money disbursed by the lender from the proceeds of your loan. Each time your contractor requests payment from you or your lender for work performed, your contractor is also required to furnish you with a disbursement statement that lists the name and address of each subcontractor or supplier that the contractor intends to pay from the requested funds. Review these statements and make sure that the money is being properly disbursed. CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if a subcontractor or supplier who furnishes labor or materials for the construction of improvements on your property is not paid, you may become liable and your property may be subject to a lien for the unpaid amount, even if you have not contracted directly with the subcontractor or supplier. To avoid liability, you should take ________ ________ TX Home Improvement I Page 17 the following actions: (1) If you receive a written notice from a subcontractor or supplier, you should withhold payment from your contractor for the amount of the claim stated in the notice until the dispute between your contractor and the subcontractor or supplier is resolved. If your lender is disbursing money directly to your contractor, you should immediately provide a copy of the notice to your lender and instruct the lender to withhold payment in the amount of the claim stated in the notice. If you continue to pay the contractor after receiving the written notice without withholding the amount of the claim, you may be liable and your property may be subject to a lien for the amount you failed to withhold. (2) During construction and for 30 days after final completion, termination, or abandonment of the contract by the contractor, you should withhold or cause your lender to withhold 10 percent of the amount of payments made for the work performed by your contractor. This is sometimes referred to as 'statutory retainage.' If you choose not to withhold the 10 percent for at least 30 days after final completion, termination, or abandonment of the contract by the contractor and if a valid claim is timely made by a claimant and your contractor fails to pay the claim, you may be personally liable and your property may be subject to a lien up to the amount that you failed to withhold. If a claim is not paid within a certain time period, the claimant is required to file a mechanic's lien affidavit in the real property records in the county where the property is located. A mechanic's lien affidavit is not a lien on your property, but the filing of the affidavit could result in a court imposing a lien on your property if the claimant is successful in litigation to enforce the lien claim. SOME CLAIMS MAY NOT BE VALID. When you receive a written notice of a claim or when a mechanic's lien affidavit is filed on your property, you should know your legal rights and responsibilities regarding the claim. Not all claims are valid. A notice of a claim by a subcontractor or supplier is required to be sent, and the mechanic's lien affidavit is required to be filed, within strict time periods. The notice and the affidavit must contain certain information. All claimants may not fully comply with the legal requirements to collect on a claim. If you have paid the contractor in full before receiving a notice of a claim and have fully complied with the law regarding statutory retainage, you may not be liable for that claim. Accordingly, you should consult your attorney when you receive a written notice of a claim to determine the true extent of your liability or potential liability for that claim. OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you receive a notice of claim, do not release withheld funds without obtaining a signed and notarized release of lien and claim from the claimant. You can also reduce the risk of having a claim filed by a subcontractor or supplier by requiring as a condition of each payment made by you or your lender that your contractor furnish you with an affidavit stating that all bills have been paid. Under Texas law, on final completion of the work and before final payment, the contractor is required to furnish you with an affidavit stating that all bills have been paid. If the contractor discloses any unpaid bill in the affidavit, you should withhold payment in the amount of the unpaid bill until you receive a waiver of lien or release from that subcontractor or supplier. OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain a title insurance policy to insure that the title to your property and the existing improvements on your property are free from liens claimed by subcontractors and suppliers. If your policy is issued before the improvements are completed and covers the value of the improvements to be completed, you should obtain, on the completion of the improvements and as a condition of your final payment, a 'completion of improvements' policy endorsement. This endorsement will protect your property from liens claimed by subcontractors and suppliers that may arise from the date the original title policy is issued to the date of the endorsement. Page 18 TX Home Improvement I ________ ________ IN COMPLIANCE WITH TEXAS PROPERTY CODE SECTION 53.256, CONTRACTOR INTENDS TO USE THE FOLLOWING SUBCONTRACTORS AND SUPPLIERS ON PROJECT: NOTICE: THIS LIST OF SUBCONTRACTORS AND SUPPLIERS MAY NOT BE A FINAL LISTING. UNLESS YOU SIGN A WAIVER OF YOUR RIGHT TO RECEIVE UPDATED INFORMATION, THE CONTRACTOR IS REQUIRED BY LAW TO SUPPLY UPDATED INFORMATION, AS THE INFORMATION BECOMES AVAILABLE, FOR EACH SUBCONTRACTOR OR SUPPLIER USED IN THE WORK PERFORMED ON YOUR RESIDENCE Name: ______________________________________________________________________________ Address: ____________________________________________________________________________ City: _____________________________________________________, Texas Zip: ________________ Phone: _____________________________________________________________________________ ________ ________ TX Home Improvement I Page 19 NOTICE OF RIGHT TO CANCEL UNDER REGULATION Z To: Owner Re: Your right to cancel Project You are entering into a transaction that will result in a security interest being placed on your home. You have a legal right under federal law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last: (1) The date of the transaction, which is _____/_____/_____, or (2) The date you receive your Truth in Lending disclosures, or (3) The date you receive this notice of your right to cancel. If you cancel this transaction, the security interest is also cancelled. Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that the security interest on your home has been cancelled, and we must return to you any money or property you have given us or to anyone else in connection with this transaction. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. How to cancel: If you decide to cancel this transaction, you may do so by notifying us in writing at: Contractor Name: _____________________________________________________________________ Address: ____________________________________________________________________________ Address: ____________________________________________________________________________ City: __________________________________________________, State: _________ Zip: __________ ____________________________________________________________________________________ You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of _______________________ (midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL. ______________________________ Signature _____/_____/_____ Date See the next page for important information about what happens if this agreement is cancelled. Page 20 TX Home Improvement I ________ ________ Notice Required by 12 Code of Federal Regulation Section 226.15(d), Effects of Rescission (1) When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void, and the consumer shall not be liable for any amount, including any finance charge. (2) Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest. (3) If the creditor has delivered any money or property, the consumer may retain possession until the creditor has met its obligation under paragraph (d)(2) of this section. When the creditor has complied with that paragraph, the consumer shall tender the money or property to the creditor or, where the latter would be impracticable or inequitable, tender its reasonable value. At the consumer's option, tender of property may be made at the location of the property or at the consumer's residence. Tender of money must be made at the creditor's designated place of business. If the creditor does not take possession of the money or property within 20 calendar days after the consumer's tender, the consumer may keep it without further obligation. ________ ________ TX Home Improvement I Page 21 NOTICE OF RIGHT TO CANCEL UNDER REGULATION Z To: Owner Re: Your right to cancel Project You are entering into a transaction that will result in a security interest being placed on your home. You have a legal right under federal law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last: (1) The date of the transaction, which is _____/_____/_____, or (2) The date you receive your Truth in Lending disclosures, or (3) The date you receive this notice of your right to cancel. If you cancel this transaction, the security interest is also cancelled. Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that the security interest on your home has been cancelled, and we must return to you any money or property you have given us or to anyone else in connection with this transaction. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. How to cancel: If you decide to cancel this transaction, you may do so by notifying us in writing at: Contractor Name: _____________________________________________________________________ Address: ____________________________________________________________________________ Address: ____________________________________________________________________________ City: __________________________________________________, State: _________ Zip: __________ ____________________________________________________________________________________ You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of _______________________ (midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL. ______________________________ Signature _____/_____/_____ Date See the next page for important information about what happens if this agreement is cancelled. Page 22 TX Home Improvement I ________ ________ Notice Required by 12 Code of Federal Regulation Section 226.15(d), Effects of Rescission (1) When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void, and the consumer shall not be liable for any amount, including any finance charge. (2) Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest. (3) If the creditor has delivered any money or property, the consumer may retain possession until the creditor has met its obligation under paragraph (d)(2) of this section. When the creditor has complied with that paragraph, the consumer shall tender the money or property to the creditor or, where the latter would be impracticable or inequitable, tender its reasonable value. At the consumer's option, tender of property may be made at the location of the property or at the consumer's residence. Tender of money must be made at the creditor's designated place of business. If the creditor does not take possession of the money or property within 20 calendar days after the consumer's tender, the consumer may keep it without further obligation. ________ ________ TX Home Improvement I Page 23 Glossary of Terms Bid means the proposal of a construction contractor offering to do certain work at the price stated. Bond means the security offered by a licensed surety company which may be used to satisfy a claim of failure to perform obligations undertaken in this Agreement. Calendar Day means any day shown on the calendar beginning at midnight and ending at midnight the following day. Contrast the term Work Day which excludes Saturdays, Sundays and state-recognized holidays. Change Order is a written modification of the Contract Price (including all claims for direct, indirect and consequential damages and costs of delay), Time for Completion, and Scope of Work under this Agreement. A Change Order, once signed by all parties, is incorporated into and becomes a part of the Contract Documents. Claim means a demand or assertion by one of the parties to this Agreement seeking, as a matter of right, modification, adjustment or interpretation of contract terms, payment of money, extension of time or other relief. Contract Completion Date means the day by which the Work must be substantially complete. Contract Date is the day on which the contract becomes binding between Contractor and Owner. Contract Documents are this Agreement and all documents incorporated by reference into this Agreement. Contract Price is the amount which will become due in exchange for work performed under this Agreement. Contract Price includes allowances for purchased materials and equipment and may be modified by a Change Order or contract modification. The Contract Price may be paid in one or more installments, including an Initial Payment at or before the start of work, Progress Payments as work is completed, and a Final Payment on final acceptance of the work. Payment Period is the time elapsed between applications for progress payments or prior to the first application for progress payment. Contract Schedule is a graphical representation of a practical plan to complete Work within the Contract Time. Contract Time means the period between Date of Commencement and the date of Substantial Completion. Defective Work means construction done under this Agreement that is unsatisfactory, faulty, omitted, incomplete, deficient, or does not conform to the requirements of the Contract Documents, directives of Owner's Representative, or the requirements of an inspection, reference standard, test, or approval Page 24 TX Home Improvement I ________ ________ specified in the Contract Documents. Drawings (also called plans or prints) are scale representations of the shape, location, character and dimensions of Work to be completed under this contract. Drawings include plan views, elevation views, transverse and longitudinal sections, large and small scale sections and details, isometrics, diagrams, schedules, tables, data and pictures which depict the completed Project. A group of drawings adequate to complete construction of the Project may be referred to as a plan set. Drawings can be either paper or electronic media. Emergency means an unforeseen event, combination of circumstances, or a resulting state that poses imminent danger to health, life or property. Final Completion is the date of Owner's acceptance of the Work as fully performed according to the Contract Documents. Furnish means to supply and deliver to the job site. Inspection is any review of the Project, including a visual review of the Work completed to ascertain compliance with Contract Documents, building codes and construction standards. Install means to secure in position in compliance with the Contract Documents and includes unloading materials, supplying all necessary equipment and rigs to do the work and performing functional tests which demonstrate fitness for the intended purpose. Job Site is the address or location of the Project. Law means federal or state statutes, municipal ordinances, building codes, regulations adopted pursuant to statute, executive orders, official interpretations, and other rules and directives issued by government. Material Supplier means any manufacturer, fabricator, distributor, materialman or vendor who provides material for the Project but does not provide on-site labor. Modification is a written amendment to the Contract signed by both parties. Party (to this contract) means a person or business organization which has an obligation to perform under the terms of this contract. Plans (also called drawings or prints) are scale representations of the shape, location, character and dimensions of Work to be completed under this contract. Plans include plan views, elevation views, transverse and longitudinal sections, large and small scale sections and details, isometrics, diagrams, schedules, tables, data and pictures which depict the completed project. A group of plans adequate to complete construction of the Project may be referred to as a plan set. Plans can be either paper or electronic media. Project means Work to be completed in accord with the Contract Documents. Work at the Job Site may ________ ________ TX Home Improvement I Page 25 include other projects to be completed by the Owner or other contractors working under other agreements. Requirements means, in addition to obligations, responsibilities and limitations set out in the Contract Documents, the obligations, responsibilities and limitations imposed by law, rules, orders, ordinances, regulations, statutes, codes and executive orders of governmental authorities or fire rating bureaus. Retainage is a portion of each progress payment temporarily held back or retained by the Owner. Accumulated retainage is released to Contractor on satisfactory completion of the work. Sample means a physical example of material, equipment or workmanship intended to be representative of some portion of the Work. When approved, samples establish standards for completion of similar work on the Project. Scope of Work means the Work as defined by the Contract Documents. Separate Contractor means a person or firm working under a different contract but on the same site and at the same time as work will be done under this contract. Similar means having a like kind, quality and characteristics. Similar is not to be construed as meaning identical or by the same manufacturer. Specifications (also called specs) are the part of the Contract Documents which provide descriptions of materials, equipment, construction systems, technique and workmanship to be used on the Project. Specifications are both instructions to be followed by the Contractor and Subcontractors and a reference for the Building Official to evaluate code compliance. Subcontract is a written agreement between a specialty contractor and General Contractor. Terms of the subcontract require the specialty contractor to complete some portion of the work General Contractor is obligated to perform under another agreement, usually with the Owner. Subcontractor is any person or business entity under contract to a general contractor to perform some portion of the work general contractor is obligated to complete under a contract with the Owner. Subcontractor is an independent contractor performing services for another contractor rather than for the Owner. A person or organization providing supplies or materials for the Project but no job site labor is not a Subcontractor. Substantial Completion means the Project or a designated portion of the Project is nearly in compliance with the Contract Documents and is sufficiently complete to be considered fully operational in all its components and is fit for the intended use. Substantial Completion is reached when a limited number of non-conforming or defective items on a Punch List remain to be completed. Normally, a Project or portion of a Project cannot be considered Substantially Complete until (1) all utilities and services are connected and working, (2) all equipment is installed and in acceptable working condition, (3) additional activity by the Contractor to correct items on the Punch List will not prevent or disrupt use Page 26 TX Home Improvement I ________ ________ of the facility, and, (4) a certificate of occupancy has been issued by the appropriate authority. Surety means any qualified individual, firm or corporation other than the Contractor, which executes a bond to insure its acceptable performance of the contract. Time for Completion is the Contract Time, the period between Date of Commencement and the date of Substantial Completion. The Notice to Proceed usually states a Contract Completion Date based on the Time for Completion. Work means all labor, material, equipment, tools, transportation, permanent and temporary utilities, connections, provisions for safety and management services required to complete the Project in compliance with the Contract Documents. Work may constitute the whole or a part of the Project. Work is to be performed in a safe, expeditious, orderly and professional manner in keeping with current standards of the industry. Work includes everything that is or should be evident to a skilled construction professional after careful examination of the Contract Documents and the Job Site. Work Day means any day, excluding Saturdays, Sundays and state-recognized holidays, shown on the calendar beginning at midnight and ending at midnight the following day. ________ ________ TX Home Improvement I Page 27