A builder contract agreement is a legal document between a homeowner and a builder, outlining the terms and conditions of a construction project. The contract agreement ensures that both parties are on the same page and understand their responsibilities throughout the project. In this article, we will take a closer look at the important elements of a builder contract agreement.

Scope of Work

The scope of work section of the builder contract agreement outlines the specific tasks that the builder will perform, including the materials and equipment needed, the timeline, and the method of payment. This section should include detailed specifications and plans for the project, outlining the exact nature of the work to be done.

Payment Terms

The payment terms section outlines the total cost of the project, the payment schedule, and the payment method. It is important to include a payment schedule that is based on milestones in the project, such as completion of the foundation or the framing of the structure. This will help ensure that the builder is paid for completed work rather than for work not yet started.

Change Orders

Change orders are written amendments to the original builder contract agreement. They are necessary when a change in the scope of work is requested by the homeowner or when unforeseen issues arise during construction. The change order should be agreed upon by both parties and signed before any additional work is done.


The warranties section of the builder contract agreement outlines the warranty for the work done by the builder. This section should include a description of the warranty, the duration of the warranty, and any exclusions or limitations. It is important to have a warranty to ensure that any issues or problems that arise after the project is completed are covered.


Insurance is an important consideration for any construction project. The builder contract agreement should outline the builder`s insurance coverage, including liability and workers` compensation insurance. The homeowner should also have their own insurance for the project, such as a homeowner`s policy that includes construction coverage.


A builder contract agreement is a necessary document for any construction project, outlining the terms and conditions of the project and ensuring that both parties are on the same page. The agreement should include a detailed scope of work, payment terms, change orders, warranties, and insurance coverage. A well-crafted builder contract agreement can help prevent misunderstandings and disputes, and ensure a successful project.