Use this customizable construction management agreement template to define project roles, responsibilities, and deliverables for smooth project execution.
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Navigating construction projects requires a strong legal framework. Central to this is the construction management agreement, which helps project managers, contractors and stakeholders align their goals, responsibilities and procedures.
This article explores what a construction management agreement is, its purpose and how to manage these agreements efficiently using contract management tools like Juro.
A construction management agreement is a contract between a property owner and a construction manager who oversees the project on the owner’s behalf.
This agreement details the construction manager’s roles and responsibilities throughout the project’s lifecycle.
Unlike a general contractor, a construction manager acts more as an advisor and manager, providing guidance and overseeing day-to-day operations to make sure the construction project stays within scope, budget and timeline.
The primary purpose of a construction management agreement is to establish a clear framework for collaboration between the property owner and the construction manager.
It sets out the expectations for project management, including budgeting, timelines, quality control and compliance with legal regulations.
This agreement aims to mitigate risks, enhance communication and ensure the smooth execution of construction activities, leading to successful project completion.
Construction management agreements are typically managed by construction managers or project managers with extensive experience in the construction industry.
These professionals are tasked with ensuring that the project adheres to planned specifications and resolving any issues that arise during construction.
Construction contract management covers various aspects including cost estimation, vendor negotiation, project scheduling and compliance with safety standards.
Construction management agreements are versatile and can be used in various scenarios, including:
An effective construction management agreement template should cover several key elements to ensure comprehensive protection and clarity for all parties involved. These elements of a contract include:
Managing construction management agreement templates typically involves several steps to ensure that the templates are accurate, compliant, and tailored to specific project needs. These steps include:
Regularly reviewing templates to make sure they reflect current laws, regulations, and industry standards. This means staying up-to-date on legal changes and industry best practices.
Modifying templates for different project types or specific project requirements. This might involve adding or adjusting clauses to address the unique aspects of each project, such as location-specific regulations or particular project complexities.
Coordinating with legal and project management teams to review and approve the templates. This step ensures that all stakeholders agree on the terms and that the templates meet both legal and operational standards.
Maintaining an organized and centralized home for all templates. This means they can be easily retrieved and ensures that the most current versions are used.
Training relevant team members on how to use the templates effectively. Clear communication ensures that everyone understands the importance of using the approved templates and adheres to the procedures.
Some common challenges in managing these templates include ensuring that templates are up-to-date with changing construction laws and standards, and adapting templates to suit diverse project requirements and stakeholder expectations, which can quickly become time-consuming.
And without a streamlined contract creation process, any challenges can result in costly delays to the project start date and completion.
A construction management agreement is a crucial component in the successful delivery of construction projects.
Juro offers a dynamic solution for automating and managing construction management agreements, with features designed to enhance legal productivity:
By using templates, and leveraging automation tools like Juro, companies can:
Juro’s AI-native contract automation platform empowers all teams to create, agree, execute and manage contracts up to 10x faster than traditional tools. To find out more, hit the button below to book your personalized demo.
A construction management agreement template is a ready-made contract that a property owner can adapt each time they hire a construction manager to run a project for them. It records what the manager is responsible for and how they’re paid, so both sides know who makes which decisions once work starts.
Usually, yes, if you’re paying someone to manage the work for you. Without a written agreement it’s hard to show what the manager promised to oversee, which matters most when a renovation runs over budget or past its finish date. Keep it short for a small job, but cover the fee and the scope of the manager’s role.
A general contractor usually agrees to build the project for a price and takes on the trades itself under a construction contract. A construction manager is brought in to advise and oversee, often from the design stage, while the owner may contract with the trades directly. Owners tend to choose construction management for larger or more complex projects where they want more control over cost and design decisions.
A construction manager as agent advises the owner and coordinates the work, but the owner holds the contracts with the trades and carries the cost risk. A construction manager at risk takes on those contracts itself and usually commits to a guaranteed maximum price, so it covers overruns above that figure. The agreement should make clear which model you’re using, because it changes who pays when costs go up.
Common options are a fixed fee or a percentage of construction costs, sometimes with a bonus for finishing early or under budget. A percentage fee can reward the manager for letting costs rise, so many owners prefer a fixed fee or a cap on the total. Whatever you choose, set out which costs the manager can recover on top of the fee and how they must be documented.
It’s a sound starting point, but you’ll need to tailor the scope of services and the fee structure to the project and the delivery model you choose. For specific legal advice on your contract templates, consult an attorney.
Build the template in Juro once, then generate each construction management agreement from it, with the project team filling in the site details and the fee. When your standard position changes, such as how you handle change orders, you update the one template and every new agreement follows. Signed agreements sit in one place, so you can search them for milestone dates and termination rights across all your projects.
Yes. Operator, the AI drafting feature in Juro, can draft a new construction management template from the project contracts you already use, following your drafting style and the positions you usually take on fees and liability. The first draft reflects your risk appetite, and legal approves it before your project teams start using it.
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