50+ Sample Project Agreement

What Is a Project Agreement?

A project agreement is a legally binding document between an owner, may it be an individual, group or organization, or developer of a project, and the contractor, whether a company or trade union, that will perform the work. A project agreement is an agreement that modifies the terms and conditions of existing and applicable collective agreements to implement specific projects or a predetermined set of projects. The document describes a set of actions and possible compensation packages for the business deal. The terms and provisions in the agreement govern principal aspects of the project to guarantee its completion. The project agreement must be complete before the contractor starts working on the project to reduce the occurrence of miscommunications, misunderstandings, and complications due to the client changing their minds. Project agreements also replicate economic and environmental terms that apply to construction collective agreements with specific modifications to the applied conditions. These types of agreements are prevalent in the construction industry, both to independent contractors and company-based organizations.

According to the statistical data available at Statista, the United States construction industry has a value of 1.36 trillion US dollars at the end of 2020. The overall construction projects in both residential and commercial construction further decline to 0.2 percent between 2019 and 2020. By May of 2021, construction spending on residential projects rose to 751.25 billion US dollars from 584.17 billion US dollars from the previous year.

Components of a Project Agreement

When writing a project agreement for a company, remember that there is no one official format. It is also not necessary to be familiar with highfalutin words and specific terminology to write a comprehensive and clear project agreement. However, some terms and conditions must be present in the document for the contractor to deliver the goods or services that the client hires them to do. The section below provides the necessary components that the project agreement must contain and the descriptions to help both parties to understand the document.

Name of parties, information, date: The first section of the project agreement identifies the involved parties in the arrangement, including their site addresses and the possible start and end dates of the project. It is also advisable for the person writing the agreement to assign terminologies or words to represent each party in the document to avoid any repetitions of the names of the contractor and client. Refer to the hiring body as the client and the hiree as the contractor.Project scope: The scope of the project section indicates a general description of the work that needs to be done, including all the services that they need to perform and the product that they have to deliver. As much as possible, there must be a level of specificity. The scope must contain a clear overview of the implemented process in the project. The project scope provides necessary information that the parties need for verification purposes if and when disputes arise.Project duration: The project duration section details how long a specific project lasts. If there is already an arrangement between the parties regarding the project timeline, then the section must state the closing date of the project. If the project is ongoing, there must be a section of the statement indicating that both parties must have an agreement to terminate the project in writing.Compensation: The project agreement must include a section that identifies the amount payable to the contractor, including payment methods and schedules. It contains information about the concurrent dates of payment, due dates, delivery of payment receipts and invoices, and late fee charges or interest payments. The client must be clear about the compensation section of the agreement to prevent any misinformation and miscommunication between the involved parties.Cancellation or termination: The project agreement must also have a cancellation or termination clause that states possible grounds for discontinuation of the contract. It must detail the steps that the parties must take for the termination to work. In most cases, cancellation requests must be in writing, and the client must pay for the work that the contractor accomplishes up to that point in the work schedule. It is also advisable to indicate that both parties have the right to the termination of the contract without the need for a written notice if there is a contract breach.Project changes: There are certain situations wherein changes are inevitable. There are instances that the client decides they want more out of the initial project plan while the project is ongoing. These changes often result in the extension of deadlines due to the changes in price quotes and estimates, taking into account the improvements or modifications the client wants to see. For the contractor to be ready for any of the possible changes, a section of the agreement must mention that any changes to the document must receive the approval of both parties in writing. If there are changes that require implementation, create an amendment agreement.

How To Write a Comprehensive and Effective Project Agreement

Constructing a project agreement does not have to be a difficult task. If there are uncertainties in drafting the agreement, it is best to conduct a meeting between the parties with their legal counsel. It is advantageous to seek field experts and legal attorneys, especially with certain provisions concerning the project agreement. Once all parties are present for the drafting of the project agreement, the following steps can help you to proceed and create a comprehensive document.

  • 1. Identify the Involved Parties of the Agreement

    The first step to writing the project agreement is to determine the respective parties engaging in the agreement. Guarantee that the document states the full names of the contractor and client, or if dealing with organizations, indicate the legal names of the business under state registration to properly identify them. It is one of the most vital components of the project agreement. The next thing to indicate is the site location and start and end dates on the first page of the agreement.

  • 2. Write Down the Project Description

    After identifying the parties to the agreement, the next step is to indicate the project description. Make sure that the description is not too lengthy; instead, it must be clear and concise. Ensure there is a clear overview of the project and all necessary information relating to it. It must indicate the scope of the project to give the parties a clear understanding of tasks and needed materials to accomplish these tasks. In writing the project scope, create a bulleted list for better organization, making it easier to read and understand. The agreement must also provide financial information regarding the project as budget plans are essential to make it a success. All details about payments, fee charges, and due dates must be present in the document.

  • 3. Indicate the Project Schedule

    The next step of writing the project agreement is to include a project schedule to specify and define a workable timeline of the days that the project is ongoing and how daily tasks will go about, dividing the information for each working day. The ending date must be an honest estimation on the part of the contractor and provide other options for adjusting the schedule. If the contractor or client wants to specify tasks for each job title, indicate a job description or prepare a separate job contract.

  • 4. Specify Governing Laws, Terms, and Conditions of the Agreement

    After writing down the names of the parties, indicating the project description, and specifying the project schedule, the next step is to identify the laws, terms, and conditions surrounding the agreement. The document must mention which state or county of law the agreement follows to inform both parties of associated provisions. It is also necessary to specify the terms and conditions the agreement covers, making it easier for the readers to understand what they can and cannot do. The information acts as project guidelines or rules and regulations that cover every individual working under the agreement.

  • 5. Review the Agreement and Allow the Signatories To Sign

    After accomplishing all necessary information on the agreement, the next step is to go through the document again to ensure that there are no missing details that can cause confusion or misunderstandings. Recheck the entire agreement and make the revisions as necessary. It is also critical to check for grammatical and spelling errors. After verifying that the contents of the agreement are in check, the next step is to have the parties sign the document. Once the parties sign, the agreement becomes a legally binding document under the court of law.


What is an agreement for project management?

A project management agreement is a business document, specifically a type of service agreement, where a client hires a contractor to manage or oversee a particular project on their behalf. The person responsible for governing a project is often called a project manager.

What is the purpose of writing a project labor agreement?

A project labor agreement is an example of a collective bargaining agreement that the government applies to a particular construction project, lasting only for a set duration. The purpose of writing the document is to ensure that the project uses union labor.

What is an agreement form?

An agreement form is also commonly known as a contract document. The document helps an individual to write or create a specific agreement. It also serves as a contract template.

A project agreement is essential in providing the client and contractor with the terms and conditions surrounding a particular project. For the parties to have a clear understanding of the document, it must contain essential information, including the names of the parties, site location, scope of work, project duration, compensation provisions, termination conditions, and governing laws. For a contractor to create a comprehensive agreement for their client, it is advisable to get the support of a legal attorney when constructing the agreement. It is also necessary to meet up with the client to commence negotiations of the project. Start writing a project agreement for your company by downloading from the 50+ SAMPLE Project Agreement in PDF | MS Word samples from the article above. Get yours today from Sample.net.