Construction Subcontract

This agreement is made on the date written above our signatures between
Contractor Name: __________________________________ (Contractor) and
Subcontractor Name: ______________________________________ (Subcontractor).
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.
Subcontractor
Subcontractor name ______________________________________________
Address __________________________________________
Address __________________________________________
City _______________________________________, State ______________ Zip ____________
Work Phone Number: __________________________________________
Cell Phone Number: ____________________________________
Fax Number: ___________________________________
Email Address: ___________________________________
License Number: _____________________________________
Subcontractor name ______________________________________________ will be referred to as
Subcontractor 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
Lot number: ________________________________________________
Tract: _________________________________________
City: __________________________________________, Alabama Zip: ___________
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I.

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 II. Project Description
A. For a price identified below, Subcontractor agrees to complete the Project - Subcontract (as
detailed below) for Contractor.
1. The Project, referred to as the Project - Subcontract in this agreement, includes:

____________________________________________________________________________________
_______________________________________________________
III. Contract Price
A. In addition to any other charges specified in this agreement, Contractor agrees to pay
Subcontractor the following for completing the Work described as the Project - Subcontract:
For the cost of labor as defined in this agreement.
For the cost of materials as defined in this agreement.
For the cost of Subcontract Work and services as defined in this agreement.
For the cost of equipment as defined in this agreement.
For the cost of supervision as defined in this agreement.
For the cost of overhead as defined in this agreement.
Plus a fee of $____________________-.
IV. Documents Incorporated
A. 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 Lien Rights (Code of Alabama Section 35-11-210)
B. 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 ___________________________________________
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. The Prime Contract
This Subcontract is for completion of a portion of the Work Contractor has agreed to perform for Owner
under the following Prime Contract:
The Prime Contract dated ___/___/_____
Consisting of ____ sheet(s)
And further identified as ______________________________________________

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 V. Ownership of Plans
A. All Plans, Drawings and Specifications created for Work under this contract are instruments of
service and remain the property of Owner. The use of these instruments of service on Work other than
provided in this contract without permission of Owner is prohibited. All copies of Drawings and
Specifications other than a single record copy shall be returned to Owner upon request after completion
of the Work.
VI. Plans on Site
A. Subcontractor will keep a set of all relevant Plans available on-site to authorized personnel
during the period of construction.
VII. Documents Supplied to Subcontractor
A. Contractor will furnish to Subcontractor at no cost:
1. All relevant Plans and Specifications in electronic format.
2. Subcontractor will distribute Contract Documents as required by Sub-subcontractors.
VIII. Scope of Work
A. The intent of this Subcontract is to provide for the construction, complete in every detail, of the
assigned portion of the Work described in or reasonably inferred from the Contract Documents, at the
Contract Price and within the time established in the Contract Schedule. Subcontractor has the duty to
determine the means, methods, techniques, sequences and procedures required to complete the assigned
portion of the Project - Subcontract as described and inferred.
B. Contractor is responsible for coordination of the various trades and deliveries of equipment,
materials and supplies to minimize interference which could delay the Work or pose a hazard to life or
property. Contractor shall be responsible for allocation of tasks between trades and will be the final
authority on location and routing of equipment and storage of materials on the Job Site.
C. Subcontractor will ensure that Sub-subcontractors, their agents, and employees adhere to these
Contract Documents. Subcontractor accepts responsibility for all Work performed under this contract,
including Work performed by employees of Sub-subcontractors. Subcontractor will settle disputes
among Sub-subcontractors and between Subcontractor and Sub-subcontractors so that disagreements do
not delay completion of the Work or affect quality of the Work.
D. This agreement is the product of a confidential relationship between Contractor and
Subcontractor requiring that both Parties exchange confidential information, the disclosure of which
would constitute a loss. Except as provided below, Contractor and Subcontractor agree not disclose or
use for any purpose other than completion of the Project - Subcontract all or any portion of the Contract
Documents, cost estimates, diagrams, records, reports, computer data or any other information
concerning the Project - Subcontract for 5 years from the date of this agreement without mutual consent
of Contractor and Subcontractor. The following are exceptions: (1) Information required by the recipient
to complete the Project - Subcontract, (2) Information known to the recipient before disclosure, (3)
Information lawfully obtained by the recipient from a third party under no obligation of confidentiality,
(4) Information generally known or publicly available other than by unauthorized disclosure, (5)
Information developed independently by the recipient prior to disclosure, and (6) Disclosure required by
legally constituted authority, but only after notification of each Party to this agreement. In the event of a
breach or threatened breach or intended breach of this confidential relationship by either Party, the other
Party, in addition to any other rights and remedies available at Law or in equity, shall be entitled to
preliminary and final injunctions, enjoining and restraining such breach or threatened breach or intended
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breach. Contractor and Subcontractor shall, by contract or Subcontract, require others who receive
confidential information on the Project - Subcontract to comply with the Requirements of this
paragraph. Both Contractor and Subcontractor shall use at least the same degree of care in protecting
confidential information on the Project - Subcontract as in maintaining their own confidential
information but in no case less that a reasonable degree of care.
IX. Compliance with Law
A. Subcontractor and Contractor 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 Subcontractor observes that Drawings, Specifications, or other Contract Documents do not
comply with applicable Law, Subcontractor shall promptly notify Contractor of the variance. Any
changes made to the Contract Documents as a result of this notice shall be handled in the form of a
Change Order under this agreement.
C. Subcontractor shall bear none of the cost of correcting Work completed according to Contract
Documents but not in compliance with Law if Subcontractor did not know that Contract Documents or
instructions from Contractor did not comply with the Law.
D. Subcontractor is licensed to do Work described in the Contract Documents. Subcontractor will
notify Contractor of any change in that license status. Every Sub-subcontractor working for
Subcontractor will hold a license appropriate for the Work performed.
X. Survey
A. Owner will employ an engineer or licensed land surveyor to establish lines, points and levels
adequate to lay out alignment and elevations for the Project - Subcontract but assumes no responsibility
for accuracy of the survey provided. Without extra cost to Contractor and before beginning construction,
Subcontractor shall engage a licensed surveyor, if necessary, to verify accuracy of the survey provided
by Owner.
B. Before Work begins, Subcontractor shall locate all existing improvements and all utility lines on
the Job Site, including phone, electric, cable, gas, water, sewage, and drainage. Subcontractor is
responsible for any damage done to existing lines, cables, pipes, conduit, and improvements.
C. Upon Substantial Completion, Subcontractor will provide to Contractor a copy of a survey by a
licensed surveyor or engineer showing the Job Site in plan view as actually completed with distances to
adjoining property lines, easements, and utility lines indicated.
XI. Layout
A. Subcontractor shall ensure that dimensions, levels and alignment conform to Project Plans and
will correct any error in layout at no cost to Contractor so long as the error is not due to inconsistency or
ambiguity in the Contract Documents.
XII. Permits and Fees
A. Subcontractor shall secure all permits, licenses and renewals required by government authority to
complete construction of the Project - Subcontract. Contractor shall assist Subcontractor in responding
to requests for information from the permit-issuing authority. Subcontractor shall provide Contractor a
copy of each permit, license and renewal issued by government authority for the portion of the Project -
Subcontract to be completed by Subcontractor.
B. Contractor will pay the building permit fee, Plan check fee, and charges levied by government
for testing, Inspection and Re-Inspection of the Project - Subcontract.
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 XIII. Royalties, Patents and Copyrights
A. Subcontractor shall obtain all licenses necessary to use any invention, article, appliance, process,
or technique of whatever kind in the Work, and shall pay all royalties and license fees required. If,
before using any invention, process, technique, article or appliance specifically named in the
Specifications or Plans as acceptable for use in carrying out the Work, Subcontractor has or acquires
information that the same is protected by patent or copyright Law, making it necessary to secure the
permission of the patent or copyright owner, Subcontractor shall promptly advise Contractor. Contractor
may direct that some other invention, process, technique, article or appliance be used. Should
Subcontractor have reason to believe that the invention, process, technique, article or appliance so
specified is an infringement of a patent or copyright and fail to inform Contractor, Subcontractor shall be
responsible for any loss or liability due to the infringement. Subcontractor shall hold Owner and
Contractor, officers, agents, and employees, harmless against any loss or liability for or on account of
the infringement of any patent rights or copyrights in connection with any invention, process, technique,
article or appliance manufactured or used in the performance of the contract, including its use by
Contractor, unless such invention, process, technique, article or appliance is specifically named in the
Contract Documents as acceptable for use in carrying out the Work.
XIV. Employee Relations
A. Subcontractor will allow only qualified, careful and skilled personnel to do the Work. Each
worker shall have the appropriate license, certification or experience necessary to complete the tasks
assigned.
XV. Contractor's Responsibilities
A. Contractor will respond in writing and with reasonable promptness to written requests from
Subcontractor for information relevant to completion of the Work. Subcontractor is authorized to rely
on written responses from Contractor.
B. Contractor will not interfere with or permit others to interfere with, stop, hinder, or delay
completion of the Work by Subcontractor or Sub-subcontractors except as provided under this
agreement.
XVI. Representations by Subcontractor
A. Subcontractor affirms that the company is financially solvent, licensed, experienced, competent,
and has resources necessary to complete the Work in compliance with the Contract Documents.
B. Subcontractor affirms that all Sub-subcontractors will be financially solvent, licensed,
experienced, competent, and will have resources necessary to complete the Work assigned in compliance
with the Contract Documents.
XVII. Payment Plan
A. Contractor will pay to Subcontractor the Contract Price in installments consisting of progress
payments and a final payment on completion of the Work.
XVIII. Progress Payments
A. Schedule of Progress Payments
1. Each progress payment will cover Work done during the pay period. If a progress payment
would be due on a legal holiday, the payment will be made on the last business Day before that holiday.
2. Progress payments will be made twice a month on the 1st Friday and the 3rd Friday of the

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month.
B. Processing of Progress Payments
1. No later than 5 Calendar Days before each Progress Payment is due under the terms of this
contract, Subcontractor shall provide Contractor with an application for payment (invoice) in a form
which complies with generally accepted trade practice.
2. Except as provided otherwise in this agreement, Contractor shall make progress and final
payments within 14 calendar days after delivery of the invoice by Subcontractor.
3. The amount of each progress payment shall be based on payments by Subcontractor during the
payment period to Sub-subcontractors, Material Suppliers, employees, consultants and others, as
provided in this contract.
4. Each application for payment shall include a certification by Subcontractor that the charges are
an accurate statement of the amount earned and payable under the terms of this contract for the current
payment period, and include no items for which payment has been made previously.
5. With each application for payment, Subcontractor shall include the following signed statement:
"Except as listed and attached to this certificate, Subcontractor unconditionally waives and releases
Contractor of any and all claims now existing on the Project - Subcontract for delay, acceleration,
extensions of time, Indemnity, damages, or change in the Contract Price for Extra Work."
6. Unless otherwise provided in the Contract Documents, applications for payment may include, at
the option of Subcontractor, 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.
7. Contractor may withhold payment for charges which lack supporting information or for which
there is no lien release.
8. Payments to Subcontractor do not constitute a waiver of any Claim that Contractor may have for
Defective or inadequate workmanship or materials installed on the Project - Subcontract.
9. The check issued by Contractor to Subcontractor may include one or more Sub-subcontractors or
Material Suppliers as joint payees.
C. Discharge of Liens
1. With each application for payment, Subcontractor shall certify that: (1) Subcontractor has
applied the proceeds of prior payments, if any, to discharge all prior mechanics' and materialmen's liens
outstanding as of the date of application, (2) There are no new mechanics' or materialmen's liens
outstanding as of the date of application, (3) All due and payable bills with respect to the Work
completed in the payment period have been paid to date or are included in the amount requested in the
current application, (4) Except for such bills not paid, there is no known basis for the filing of any
mechanics' or materialmen's liens on the Work, and (5), Waivers from all Sub-subcontractors and
materialmen have been obtained to constitute an effective waiver of lien under the laws of Alabama.
XIX. Payment for Materials Stored Off-Site
A. No application for payment shall include materials stored off-site unless: (1) Subcontractor has
received written approval from Contractor to store the materials or equipment off-site in advance of
delivery, (2) A certificate of insurance is furnished by Subcontractor evidencing the property in question
is covered by all-risk property insurance naming the materials or equipment stored and naming Owner
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as an insured party, (3) Contractor is provided with a detailed inventory of the stored materials or
equipment, (4) The materials or equipment are clearly marked and identified and made available for
Inspection and verification during normal business hours, (5) The materials or equipment are properly
and safely stored, protected from weather, damage, vandalism and theft in a Bonded warehouse or a
facility otherwise approved in advance by Contractor, (6) Subcontractor provides documentation of the
purchase price and that Subcontractor can pass clear title to the materials or equipment upon payment by
Contractor, and (7) Subcontractor warrants that the materials and equipment shall not be moved from the
approved storage location except to the Job Site.
XX. Retainage
A. Progress payments to Subcontractor shall be reduced by the amount set out in this contract for
Retainage.
B. Except as otherwise provided in this agreement, Contractor shall retain _________ percent of the
total amount due on progress payments.
C. After 50 percent of the Work of Subcontractor is complete, and if progress is satisfactory in the
sole opinion of Contractor, and with the consent of Sureties providing Bonds for Work, Retainage on
progress payments shall terminate. Thereafter, the remaining progress payments shall be paid in full
without Retainage so long as, in the sole opinion of Contractor, Subcontractor continues to make
satisfactory progress.
D. When Subcontractor has finished Work in a manner that complies with the Contract Documents,
Owner may release to Contractor all Retainage attributable to Work performed by Subcontractor. No
such release of Retainage shall be made without written approval from each Surety company furnishing
a Bond for either Contractor or Subcontractor.
E. Retainage shall be held to assure faithful performance of the contract and may also be used as a
source of funds for amounts due to or claimed by Owner, including, but not limited to, repair of Defects,
deductive Change Orders, credits, uncorrected Defective Work, interest, and damages.
F. Contractor shall not withhold from Subcontractor any greater proportion of payments due than
Owner withholds from Contractor unless Work of Subcontractor is not in compliance with the Contract
Documents, in which case, Contractor may retain additional sums to ensure satisfactory performance.
G. Retainage shall be released to Subcontractor upon Substantial Completion of the Project -
Subcontract except for (1) An amount equal to 200 percent of the estimated value of any Work
remaining to be completed on a Punch List developed under the terms of this contract, and (2) Any
amount required to ensure compliance with Warranty provisions of this contract. All Retainage shall be
released to Subcontractor on Final Completion.
XXI. Cost-Plus Reimbursements
A. General Requirements
1. Applications for payment shall be accompanied by copies of invoices, receipts, cancelled checks,
vouchers and ledgers which validate each charge in the application for payment.
2. On requests of Contractor, Subcontractor shall make all payment records on the Project -
Subcontract available for audit by a representative of Contractor or Owner. Records shall be available
for audit during regular business hours for the duration of the Project and until 4 years after the date of
final payment under this contract.
3. Unless caused by negligence of Subcontractor or someone acting on behalf of Subcontractor,

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Contractor shall reimburse Subcontractor for expenses associated with handling temporary emergencies
that endanger life, health or property on the Job Site, making repairs, remedying Defects and removing
Defective Work. However, no reimbursement shall be made for any loss covered by insurance.
4. A cost is reasonable and necessary if, in its nature and amount, it does not exceed what would be
incurred by a prudent person in the conduct of a competitive business. Specifically: (1) Is this type of
cost generally recognized as ordinary and necessary in the conduct of the Subcontractor's business or
contract performance? (2) Is this a generally accepted sound business practice that would result from
arm's-length bargaining? (3) Does this expense comply with the Subcontractor's responsibilities to the
Contractor, Owner, other customers, the owners of the construction business, employees, and the public
at large? (4) Is this a significant deviation from the Subcontractor's established business practice?
B. Reimbursement of Labor Costs
1. Contractor shall reimburse Subcontractor for all labor expenses reasonably necessary to
complete the Project - Subcontract, including the expense of construction craft personnel working on the
Job Site and field office staff as authorized in this contract. Reimbursable Labor costs shall include
salary and wages, payroll taxes, insurance based on payroll, pension, profit sharing and ESOP
contributions based on payroll, sick pay, vacation pay, medical, dental and life insurance expense,
relocation costs, travel pay and subsistence. Reimbursement shall be made for all Labor expenses
actually paid by Subcontractor for work performed on the Job Site and, with prior approval of
Contractor, for Work performed at designated workshops, facilities or fabrication yards away from the
Job Site. Reimbursable tasks shall include demolition, removal, dismantling, cleanup, repair and
construction of all temporary and permanent structures reasonably necessary to comply with
Requirements in the Contract Documents.
2. Except as otherwise provided in this contract, labor costs for general management, technical
services, estimating, selling, accounting, bookkeeping, professional services, design and engineering
services and clerical staff of Subcontractor working at locations other than the Job Site are not
reimbursable under this contract.
3. Overtime wages paid to hourly or salaried construction personnel shall be reimbursable only if
approved in writing in advance by Contractor. Reimbursement will be at the overtime rate actually paid.
If overtime Work is required as a result of Inexcusable Delay caused by Subcontractor or anyone
responsible to Subcontractor, the overtime premium or shift differential portion of payroll expenses and
the related labor burden costs for overtime Work will be non-reimbursable.
4. Prior to making any application for payment which includes a payroll burden markup rate for
any class of employees, Subcontractor shall submit a detailed description of how the proposed rate has
been computed, including charges for payroll taxes, payroll insurance and employee benefits. Prior to
Final Completion, Subcontractor shall prepare and submit to Contractor a reconciliation of estimated
and actual payroll burden costs and include the appropriate adjustment in the final application for
payment.
5. Applications for payment shall reflect only the proportionate share of FICA, Medicare, state and
federal unemployment insurance taxes actually paid by Subcontractor.
6. Subcontractor shall disclose to Contractor in writing if insurance is purchased through any
subsidiary, affiliate or parent company, or if Subcontractor is self-insured. The cost of insurance is
reimbursable only to the extent that insurance cost is comparable to what other construction contractors
doing Similar Work, with Similar loss ratios and with Similar experience modifiers, actually pay for
Similar coverage.

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7. Reimbursement shall include all costs to Subcontractor associated with delay of the Work,
including demobilization and mobilization costs, so long as Subcontractor is not responsible for the
delay.
C. Reimbursement of Material Costs
1. Except as provided elsewhere in this contract, the cost of all materials reasonably necessary to
complete the Project - Subcontract shall be reimbursable expenses and shall be included by
Subcontractor in applications for payment. Cost of materials shall include sales or use tax on materials,
tariffs, duties, consumable supplies, small tools, delivery expense, insurance premiums on materials
when actually paid by Subcontractor and all other related costs when approved in advance by
Contractor.
2. All purchases of materials shall be at market prices with the most attractive terms available,
including discounts and free delivery when available. Major purchases shall be made after comparing
competitive offers from principal Material Suppliers. No purchase shall be made through any subsidiary,
affiliate or parent company of Subcontractor without prior written consent of Contractor. Subcontractor
shall accept no gratuity, gift or kickback from any Material Supplier without prior written approval of
Contractor.
D. Reimbursement of Sub-subcontract Costs
1. Except as provided elsewhere in this contract, the cost of all Sub-subcontracts and all services
reasonably necessary to complete the Project - Subcontract shall be reimbursable expenses and shall be
included by Subcontractor in applications for payment. Reimbursable service expenses shall include
insurance and Bond premiums, finance charges, utility charges, fuel, reproduction services, permits,
testing and Inspection fees, finance charges, penalties and forfeitures (unless due to negligence of
Subcontractor or a Sub-subcontractor), professional and consulting fees, royalties and license fees,
debris hauling and tippage charges, engineering and accounting service fees, legal, mediation or
arbitration expenses (other than those arising from disputes between Subcontractor and Contractor), and
scheduling charges reasonably necessary to complete the Work.
2. Subcontractor shall award Sub-subcontracts and buy services for the Project - Subcontract on the
most attractive terms available after comparing competitive offers from reputable firms. No Sub-
subcontract shall be awarded or service contract granted to a subsidiary, affiliate or parent company of
Subcontractor without prior written consent of Contractor. Subcontractor shall accept no gratuity, gift or
kickback from any Subcontractor or service provider without prior written approval of Contractor.
E. Reimbursement of Equipment Costs
1. Except as provided elsewhere in this contract, the cost of all equipment expenses reasonably
necessary to complete the Project - Subcontract shall be reimbursable expense and shall be included by
Subcontractor in applications for payment. Reimbursable equipment expense shall include the rental
cost of machinery and equipment, small tools, temporary facilities and structures, the cost of moving
rented equipment and temporary facilities to and from the Job Site, the cost of Installation, erecting and
dismantling, and minor repairs made to equipment, machinery and temporary facilities at the Job Site.
2. Subcontractor-owned equipment shall mean tools, machinery, temporary facilities and equipment
used on the Project - Subcontract but owned by Subcontractor or by affiliates, parent companies or
related parties. Prior to Date of Commencement, Subcontractor shall submit to Contractor for approval a
schedule showing each piece of Subcontractor-owned equipment which may be used on the Project -
Subcontract. This schedule shall show the fair market value if purchased new or used, the proposed
billing rate, the forecast duration of equipment use and the estimated total cost to Contractor for the

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Project - Subcontract, including movement to and from the Job Site. Within 5 days of receipt of the
equipment schedule, Contractor shall either approve the equipment schedule in whole or in part or elect
to have Subcontractor buy or rent specific pieces of equipment from other sources.
3. Except as approved by Contractor, billing rates for Subcontractor-owned equipment shall not
exceed costs published in the current edition of the National Construction Estimator (or equivalent) for
rental of Similar equipment for a similar duration.
4. Without written approval of Contractor, charges for any piece of Subcontractor-owned
equipment shall not exceed 90 percent of the fair market value of such equipment on the Date of
Commencement. Should the aggregate billing for any piece of equipment reach 90 percent of the fair
market value at the Date of Commencement, reimbursement for that piece of equipment shall terminate.
Subcontractor shall not take out of service any equipment for which reimbursement has terminated
without written approval of Contractor.
F. Reimbursement of Supervision Costs
1. Contractor shall reimburse Subcontractor for all Supervision expenses reasonably necessary to
complete the Project - Subcontract. Except as otherwise provided in this contract, reimbursement of
Supervision expenses is limited to charges for construction personnel actually working on the Job Site.
G. Reimbursements of Overhead Costs
1. Contractor shall reimburse Subcontractor for all overhead expenses reasonably necessary to
complete the Project - Subcontract. Overhead expenses shall be billed to Contractor based on estimated
amounts approved in advance by Contractor and reconciled with actual expenses before the date of Final
Completion. The difference between estimated and actual overhead cost shall be debited or credited in
the final payment to Subcontractor.
XXII. Audit of Records
A. Accounting books and records of Subcontractor shall be available for Inspection and copying by
Contractor or a person authorized by Contractor during normal working hours at a place of business
designated by Subcontractor. Records made available shall include both electronic and paper versions of
accounting records, receipts, vouchers, purchase orders, Sub-subcontract files (including proposals of
successful and unsuccessful bidders), original estimates, estimating worksheets, correspondence, written
policies and procedures, Change Order files (including documentation on negotiated settlements),
payroll ledgers, record of allocation of overhead expense, and other documents which relate to the Work.
B. Accounting books and records of Subcontractor shall be retained for Inspection and copying by
Contractor for a period of 3 years after Final Completion.
C. Subcontractor shall require that all Sub-subcontractors working for Subcontractor on the Project
- Subcontract have the same obligation for Inspection, copying and retention of records as Subcontractor
has. Subcontractor shall bear all costs (including attorney's fees) of enforcement of the right of
Contractor to Inspect and copy records in the event a Sub-subcontractor refuses to fully cooperate.
D. Subcontractor shall keep payroll records showing the name, address, Social Security number, job
classification, straight time and overtime hours worked each Calendar Day, and the actual wages paid to
each person employed in the Work.

XXIII. Interest
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A. Payments due and not paid under the Contract Documents shall bear interest from the date
payment is due at an annual rate of _________ percent.
B. No interest shall accrue on funds properly retained under the terms of this contract.
XXIV. Liens and Waivers
A. Within 7 Calendar Days after receipt of funds from Contractor for Work done by a Sub-
subcontractor or materials provided by a Material Supplier, Subcontractor will either (1) Pay for that
Work and those materials, or (2) Notify the Sub-subcontractor or Material Supplier, in writing, of the
intention to withhold all or some portion of the payment due and explain why payment is being
withheld.
XXV. Waivers of Lien
A. With each application for payment, Subcontractor shall provide to Contractor (1) Conditional
waivers of lien from Subcontractor, from each Material Supplier, and from each Sub-subcontractor to
the Project - Subcontract confirming payment for all Work and materials covered by the application, and
(2) Certification from each Material Supplier and Sub-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 Contractor, title insurer, and lenders. Subcontractor shall furnish any
supplemental waivers of lien as may be reasonably required by Contractor, title insurer, or lenders.
Conditional waivers of lien become unconditional on receipt of the payment which is requested.
B. Subcontractor agrees to include in each Sub-subcontract agreement for the Project - Subcontract
a provision requiring (1) A conditional waiver of lien from each Sub-subcontractor to the Project -
Subcontract confirming payment for all Work and materials covered by each application for payment,
and (2) Certification from each Sub-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 Contractor, title insurer, and lenders.
XXVI. Settlement of Lien Claims
A. Contractor may withhold from money due Subcontractor a sum sufficient to cover lien Claims
filed under state Law by any Sub-subcontractor, tradesman or Material Supplier working under direction
of Subcontractor. Any amount paid by Contractor to satisfy any such lien Claim shall be credited against
the amount due Subcontractor.
XXVII. Details on Lien Claims
A. By making application for payment, Subcontractor certifies that Subcontractor is unaware of any
lien or property rights claimed on the Project - Subcontract made or threatened under state Law by Sub-
subcontractors, Material Suppliers or tradesmen except as specified in the application for payment.
Contractor is entitled to withhold payment to Subcontractor until such time as Subcontractor makes full
disclosure of all details concerning lien or property right Claims made or threatened on the Project -
Subcontract by Sub-subcontractors, Suppliers or tradesmen.
B. Subcontractor agrees to furnish to any Sub-subcontractor on request of that Sub-subcontractor:
(1) A copy of each invoice or payment request by Subcontractor, (2) Estimates made by Subcontractor to
Contractor of the percentage of completion of the Project - Subcontract, and (3) Detailed information
about payments made by Contractor for each portion of the Work done by such Sub-subcontractor.

XXVIII. Grounds for Withholding Payment

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A. Contractor may withhold payment due Subcontractor on the filing of a legal Claim against
Subcontractor by any third party if the Claim relates to the subject matter of this contract and (1) May
result in a lien on the Project - Subcontract, or (2) May result in a judgment for damages against
Contractor or Owner. Filing of a legal Claim shall not constitute grounds to withhold payment if
Subcontractor has insurance coverage which would prevent loss to Contractor and Owner from the legal
Claim made.
B. Contractor may withhold payment due Subcontractor for failure by Subcontractor to meet
financial obligations to Sub-subcontractors, tradesmen or Material Suppliers on the Project -
Subcontract. Failure to meet financial obligations shall not constitute cause to withhold payment if
Subcontractor has provided a Payment Bond from a licensed Surety, guaranteeing payment of Sub-
subcontractors, Material Suppliers, and tradesmen.
C. Contractor may withhold from payments due Subcontractor a sum adequate to reimburse
Contractor for any damage suffered by Contractor or Owner or for which Contractor or Owner may be
liable and which was caused by an act or neglect of Subcontractor or by anyone for whom Subcontractor
may be liable. Damage to Contractor or Owner shall not constitute grounds to withhold payment if
Subcontractor has insurance coverage which would prevent loss to Contractor or Owner from the
damage claimed.
XXIX. Final Payment
A. Subcontractor will submit an application for final payment and will notify Contractor when the
Work has been completed in compliance with the Contract Documents. When, in the opinion of
Contractor, the Work has been completed, the entire unpaid balance of the contract amount is payable to
Subcontractor, less the proportionate share of any Retainage withheld under the Prime Contract between
Contractor and Owner.
B. Making of final payment constitutes waiver of all Claims by Contractor against Subcontractor
except those Claims previously made in writing and delivered to Subcontractor and those obligations
otherwise provided by this agreement or by operation of Law.
C. The acceptance of final payment by Subcontractor shall constitute a release by Contractor of
known Claims against Contractor arising out of this contract except those Claims which (1) Have been
made in writing and identified by Subcontractor as not having been settled at that time, or (2) Are based
on fraud or misconduct by Contractor.
D. Contractor has no obligation to make final payment until unconditional waivers of lien in a form
satisfactory to Contractor, lenders and Sureties have been received from Subcontractor, Sub-
subcontractors, vendors, tradesmen, and all Material Suppliers with lien rights on the Project -
Subcontract. Subcontractor may furnish a Bond satisfactory to Contractor in lieu of waivers of lien.
E. Contractor has no obligation to make final payment until all Punch List items have been
satisfactorily completed unless Contractor agrees to accept a certified check equal to the value of any
uncompleted Work.
XXX. Value Engineering
A. Subcontractor is encouraged to submit in writing to Contractor detailed value engineering
proposals which will accelerate completion, reduce cost to Subcontractor, or which offer significant
benefits (including long-term benefits). On acceptance of any value engineering proposal, Contractor
and Subcontractor shall execute a detailed Change Order identifying the change and value of the direct
cost saving or enhanced value. Contractor shall pay to Subcontractor 33 percent of the direct cost saving
or enhanced value identified in any Change Order that results from a written value engineering proposal
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submitted by Subcontractor. In the absence of any such value engineering proposal, Subcontractor is
deemed to have accepted construction details provided by the Contract Documents as adequate to
produce satisfactory Work.
B. Subcontractor may restrict the right of Contractor to make use of any value engineering proposal
or make any use of supporting data for a value engineering proposal by appending to the proposal the
following language: "No part of this value engineering proposal shall be disclosed, duplicated or used
for any purpose other than to evaluate this proposal. Once accepted by Contractor by issuance of a
Change Order, Contractor shall have the right to duplicate, use, and disclose any data or information in
this value engineering proposal in any manner and for any purpose whatsoever."
C. Proposals for value engineering changes shall be prepared at the expense of Subcontractor.
Subcontractor shall be paid for value engineering changes when the Change Order has been approved by
Contractor and the Work has been completed.
D. Subcontractor shall remain obligated to perform in accord with terms of the Contract Documents
unless and until a Change Order adopting a value engineering proposal is approved by Contractor.
E. Calculation of the saving or enhanced value to Owner that may result from a value engineering
proposal shall be based on the Project - Subcontract only, without consideration of other projects, future
acquisitions, royalties or collateral savings.
F. Contractor shall not be responsible for delays in the Project - Subcontract that result from time
required to prepare or review a value engineering proposal, either by Subcontractor or Contractor.
G. Value engineering proposals must not delay completion of the Project - Subcontract or adversely
affect the quality of design or construction or the operation or maintenance of the Project - Subcontract.
XXXI. 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.
1. Any controversy or Claim arising out of or relating to this contract or contract warranty or the
breach thereof or a Change Order or addendum to this contract 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. If a dispute arises out of or relates to this contract or contract warranty, or the breach thereof, and
if the dispute cannot be settled through negotiation, the Parties agree, in good faith, to first try settling
the dispute by mediation administered by the American Arbitration Association under its Construction
Industry Mediation Procedures before resorting to arbitration, litigation, or any other dispute resolution
procedure.
C. Arbitration provisions of this contract shall be specifically enforceable.
D. The location of arbitration hearings held under this agreement shall be the county in which the
Project - Subcontract is located unless agreed to otherwise by all Parties to the arbitration.
E. Contractor and Subcontractor agree to include in each contract for construction or design
services on the Project - Subcontract a clause which requires that disputes under that contract be settled
by arbitration administered by the American Arbitration Association under its Construction Industry

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Arbitration Rules.
F. Any representative of Owner or consultant to Owner or Contractor or any Sub-subcontractor to
Subcontractor on the Project - Subcontract shall have the same rights in any arbitration proceeding as are
afforded by arbitration rules to Contractor and Subcontractor. If more than one demand for arbitration is
made by a Party with respect to the Project - Subcontract, all such Claims shall be consolidated into a
single arbitration unless the Parties otherwise agree in writing.
G. If a Claimant in arbitration recovers less than 50 percent of the amount demanded in arbitration,
Contractor and Subcontractor agree that the Claimant shall pay all costs in arbitration, including the
arbitrator's fees and the attorney's fees of the opposing Party.
H. Anything in this contract notwithstanding, any Claim arising out of or relating to the Contract
Documents or warranty or the breach thereof may, at the option of the Claimant, be filed in any Small
Claims Court having jurisdiction, in lieu of an arbitration proceeding.
I. Nothing in this article shall be interpreted as waiving any rights Subcontractor has under state
Law for enforcement of lien rights or as waiving any right of Contractor secured by a Payment or
Performance Bond.
XXXII. Insurance
A. General Requirements
1. Subcontractor shall carry workers' compensation insurance and public liability insurance as
required by Law and regulation for the protection of Subcontractor, Contractor and Owner during
progress of the Work.
XXXIII. Subcontracted Work
A. Subcontractor shall notify Contractor of each principal Sub-subcontractor and vendor
Subcontractor proposes to retain for Work on the Project - Subcontract and the Scope of their Work.
Subcontractor shall not contract with any Sub-subcontractor or vendor to whom Contractor makes a
reasonable and timely objection. Subcontractor shall not change a previously selected Sub-subcontractor
or vendor without notifying Contractor of the proposed change. Subcontractor shall bear any additional
cost incurred due to voluntary substitution of Sub-subcontractors or vendors.
B. Subcontractor shall not assign or Sub-subcontract any portion of the Work to be done under this
contract without prior consent of Contractor and until Contractor has reviewed and approved the
proposed Sub-subcontract agreement. Consent of Contractor shall not be unreasonably withheld,
delayed, or conditioned. Each assignment or Sub-subcontract shall be in writing, shall identify
Contractor as the intended third party beneficiary of the Sub-subcontract, and obligate the Sub-
subcontractor to comply with the terms and conditions of this contract.
C. This is a Subcontract written under a Prime Contract between Contractor and Owner. In this
Subcontract, Subcontractor agrees to complete a portion of the Work Contractor is obligated to perform
under that Prime Contract. For the Scope of Work of this agreement, Subcontractor assumes all the
duties and obligations of Contractor that exist under the Prime Contract between Owner and Contractor.
D. Subcontractor agrees that contracts with Sub-subcontractors and vendors for Work to be
performed under the Prime Contract between Owner and Contractor will impose the same duties and
obligations on those Sub-subcontractors and vendors for their portions of the Work as Subcontractor has
under the provisions of this Subcontract. Subcontractor warrants and guarantees that each contract with
a lower Tier Contractor or vendor will extend to each lower Tier Contractor or vendor all duties and
obligations Contractor has to Owner under the Prime Contract.
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E. Anything in this contract or the Contract Documents notwithstanding, there is no contractual
relationship between Subcontractor or vendor to Subcontractor and Owner. "Except as provided by Law
or regulation, Subcontractor acknowledges that Owner has no obligation to respond to Claims of
Subcontractor on the Project - Subcontract or to resolve disputes between or among Contractor,
Subcontractor, and vendors on the Project - Subcontract. "
F. Contractor may not subcontract any portion of the work to be done under the Prime Contract
with Owner without prior consent of Owner and until Owner has reviewed and approved this agreement.
Consequently, this contract does not become effective unless and until reviewed and approved by
Owner.
XXXIV. Consequential Damages
A. Contractor and Subcontractor waive all Claims for consequential damages against each other,
their respective officers, directors, partners, employees, agents, consultants and Subcontractors, arising
out of or relating to this contract or the termination of this contract, except those consequential damages
covered by insurance or specifically provided elsewhere in this agreement.
B. Subcontractor shall require each Sub-subcontractor on the Project - Subcontract to execute a
waiver of consequential damages in favor of Owner and Contractor with provisions coextensive with the
waiver of consequential damages that appears in this contract.
XXXV. Early Partial Occupancy
A. Without prior approval of Subcontractor, Contractor shall not grant to Owner the right to occupy
or use any portion of the Work until Substantial Completion of the Project - Subcontract. If Owner
occupies or uses any portion of the Work before Substantial Completion of the Project - Subcontract and
without prior approval of Subcontractor, the portion or portions used or occupied shall be considered
complete, finished, accepted and the responsibility of Contractor.
B. Nothing in this contract shall prevent Contractor from granting to Owner the right to store
furnishings and equipment on-site before Substantial Completion, so long as: (1) Subcontractor has
given prior consent, such consent not being unreasonably withheld, (2) Storage is in a portion of the
Work designated by Subcontractor and will not unreasonably disrupt or interfere with completion of the
Work, (3) Contractor provides proof of insurance coverage for the furnishings and equipment to be
stored, (4) Subcontractor is reimbursed for any additional liability for insurance coverage due to the
storage, (5) Contractor waives all Claims against Subcontractor for loss of or damage to the furnishings
and equipment stored, (6) Subcontractor and Contractor inspect the area designated for storage before
arrival of furnishings and equipment, noting condition of the premises, and (7) Contractor agrees to
either compensate Subcontractor or waive any Claim for any damage that occurs to the designated area
during delivery or storage of the furnishings and equipment.
C. Partial Use or occupancy of the Work by Owner prior to Substantial Completion shall relieve
Subcontractor of responsibility for loss of or damage to the portion of the Work occupied or used by
Owner.
XXXVI. Substantial Completion
A. When, in the opinion of Subcontractor, the Work is Substantially Complete, Subcontractor shall
prepare a preliminary Punch List of Work remaining to be done and deliver that Punch List to Contractor
with a request for evaluation of Substantial Completion. If, in the opinion of Contractor, items on the
preliminary Punch List are consistent with Substantial Completion, Contractor shall conduct an
Inspection of the Work to evaluate compliance with the Contract Documents.

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B. The Project - Subcontract shall not be considered Substantially Complete until: (1) The Work
completed can be tested and evaluated, (2) Debris, waste, and excess materials have been removed from
the Job Site, and (3) The Work has passed Inspection by the public authority.
C. If, after Inspection, the Project - Subcontract does not qualify as Substantially Complete,
Contractor shall provide Subcontractor with a written list of the Work found to be: (1) Incomplete, (2)
Out of compliance with the Contract Documents, or (3) Defective in operation or workmanship.
Subcontractor shall complete or correct all Work listed prior to requesting a subsequent Inspection for
Substantial Completion.
D. Subcontractor shall receive a comprehensive Punch List of discrepancies to be corrected or Work
to be finished by Subcontractor and a date for completing this Work. Subcontractor shall complete and
correct items on the Punch List by the designated date.
E. The Punch List given to Subcontractor is a complete and final list of Defective or incomplete
Work on the Project - Subcontract. Contractor shall be deemed to have accepted Work not on the Punch
List. Nothing in this paragraph shall be interpreted as relieving Subcontractor of the obligation to meet
warranty and call-back obligations.
F. Upon Substantial Completion of the Project - Subcontract, Subcontractor shall promptly remove
from the Job Site all barricades, construction tools, equipment and supplies, and all temporary structures
used during construction.

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 Signatures
The signatures that follow constitute confirmation by those signing that they have examined and
understand the Contract Documents and agree to be bound by the terms of these documents.
This agreement is entered into as of the date written below.
Contractor Name: __________________________________, Contractor
______________________________ ______________________
(Signature) (Date)
______________________________
(Printed Name and Title)
Subcontractor Name:____________________________________, Subcontractor
______________________________ ________________
(Signature) (Date)
______________________________
(Printed Name and Title)

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 CODE OF ALABAMA § 35-11-210 -- NOTICE OF LIEN RIGHTS
Date: _______________
To (Owner or proprietor) Owner Name: _____________________________________
Take notice, that the undersigned is about to furnish to:
Prime contractor or subcontractor Subcontractor name
______________________________________________
certain material for the construction, or for the repairing, altering or beautifying of a building or
buildings, or improvement or improvements, on the following described property:
Lot number: ________________________________________________
Tract: _________________________________________
City: __________________________________________, Alabama Zip: ___________
and there will become due to the undersigned on account thereof the price of said material, for the
payment of which the undersigned will claim a lien.
Anticipated amount of lien $_______________________
Work to be performed: ___________________________________________________
Lien claimant: Subcontractor name ______________________________________________
Address __________________________________________
Address __________________________________________
City _______________________________________, State ______________ Zip ____________
Phone: __________________________________________
Email: ___________________________________

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