40+ Sample Project Contracts

What Is a Project Contract?

Thomas cites a report from Gartner Research, which claims how contracts and agreements direct 60–80% of all business transactions. The Turner Corporation even generated as much as 15 billion U.S. dollars in revenue from closing construction deals with clients, as reported by Statista. These figures prove how useful contracts can be in forming working relationships with others.

A project contract is a binding agreement between two or more parties, describing the specific course of actions and agreed compensations in the business deal. These contracts govern key aspects of your project for its timely completion. Project contracts are a crucial document to have in the event of a dispute, as it clarifies any claims made by either parties. For example, a project contract can come in the form of a service contract between a property owner and a builder. The property owner may use the agreement to communicate his or her desires for the project in exchange for a monetary equivalent. Anyone who violates the construction project contract will have to face the consequences expressed somewhere in the contract.


The Advantages of a Project Contract

Not signing a contract is the biggest mistake that anyone in the business world can make. When you want to engage in business with another entity, having a strong contract in place allows you to protect your interests and asset value throughout the joint agreement. These contracts provide a variety of benefits to businesses that hope to obtain successful results for every project they pursue. Some of the common advantages of a project contract include the following:

To Eliminate “Gray” Areas: Verbal agreements leave plenty of space for misinterpretation. The words you choose and the way you deliver your points can often affect the way people understand your message. But by putting pen to paper, you can detail specific points of the agreement that contribute to its development and completion. It sheds light on the areas of your project that may be too complicated for one to understand without proper conveyance. To Avoid and Resolve Disputes: Trying to settle your problems in court can be a waste of time and money. There’s always a way to sort out your issues without seeking legal action. All that you need to do is to present these measures in your contract to put all parties on the same page. The contract may also outline the rules that each party must comply with to prevent disagreements along the way. To Set Expectations: It’s important to set forth each party’s rights and responsibilities in the arrangement. Indicating the scope, duration, and cost of the project will ensure that parties from both sides of the deal are well aware of what they are about to enter. It also creates a clear path for your team to follow in the form of individual tasks, project milestones, and overall objectives. To Make Room for Negotiations: The great thing about contracts is that they help you find the lowest cost for a product or service. Although you won’t always get the price you want for the budget you have, contracts still make it possible for you to come up with an arrangement that works for both parties. The secret is to negotiate wisely in your contract to make your proposed solution seem viable to those who seek it. Meeting the needs of the other party is sure to give you a competitive advantage. To Develop Lasting Business Relationships: Complex projects can easily tear a business relationship apart without proper management. But through carefully crafted agreements, you can establish a level of trust to make sure your project reaches a favorable outcome. It’s an opportunity for you to develop revenue streams by encouraging repeat transactions with clients and investors you’ve worked with in the past. That way, they’ll look at you as the go-to choice for certain business processes.

How to Draft a Project Contract

We need contracts for virtually everything these days. From gym membership contracts and roommate contracts to service contracts and project contracts, writing an enforceable contract is crucial in establishing a binding relationship with another party. Listed below is a step-by-step guide to help you get started with your contract.

Step 1: Identify the Parties Involved

Name all the parties involved in the project. Be sure to list their legal business names, or the names registered to the state, for proper identification. It’s the easiest yet the most critical criteria to meet, so you don’t want to get this part of the agreement wrong. Also, indicate the project, site location, and start and end date of the contract in these pages of the legal document.

Step 2: Describe the Project Scope

Describe what each party will perform to get the job done. It needs to be as specific as possible to give parties a clear idea of what their tasks will be and what tools they’ll need for its completion. Poorly defined requirements will put both parties at risk of a terrible loss, primarily if the project covers a massive scope. If you agree to perform the work that a client hires you to do, you need to make sure they know what they are paying you for and how much it would cost them. You can enumerate these items in bullets to keep the contract organized and easy to read.

Step 3: Specify Payment Terms and Scheduling

In this part of the document, you must provide the financial details of the agreement. You’ll want to state the amount of money someone owes you for delivering the service, the deposit needed to start it, and the payment schedule that the client must follow. Keep in mind that this section of the contract may vary from case to case, as projects are likely to differ in terms of size and duration. Several factors that are pertinent to the project must be considered before finalizing these details.

Step 4: Explain How You Plan to Resolve Disputes

What happens when things go wrong?

Problems occur regardless of how careful you are. The contract must contain provisions that tackle the resolution of any controversy, dispute, or claim relating to the agreement. It’s one way to settle your issues privately and inexpensively outside of court. Both you and your client must agree to these conditions before you may execute the full terms of the contract.

Step 5: Sign the Contract

You must only perform the terms of the contract if all parties agree to it. Once you finally agree, the contract must be signed and dated to signify its validity. Be sure to note the names of the individuals responsible for signing the document. If you’re working with another business, an authorized representative from the said party may sign the contract.

The Dos and Don’ts of a Project Contract

Contracts are a crucial tool in any business relationship. It provides an overview of your project and the responsibilities that each party must uphold. Contracts don’t have to be a burden to write, nor are they something you can take for granted. Regardless of how big or small your project is, a written contract must be an essential part of your business plans. Below are tips for what you can do and need to avoid when getting into a contractual agreement.


1. Do clarify your expectations. 

After meeting with your client to discuss critical aspects of the project, it’s time to set out some ground rules on how it will all play out. Specify the rights and obligations of each party clearly in the body of your contract. It should also explain what the client may expect from your end of the venture, along with supporting details that describe the different project stages. You’ll need to cover everything discussed and agreed upon during a verbal exchange. Anything that was promised but not reflected in the project contract may raise questions that could put you in a relatively awkward situation.

2. Do address financial matters accordingly. 

The financial terms of your arrangement would depend on the type of project in question. For instance, outcome-based plans are easier to handle when you bill by the job instead of the hour. The contract must emphasize each party’s financial obligations in the project to avoid inconsistencies. It should define your payment conditions as well as the payment methods accepted. It’s also a good idea to have your clients make an initial deposit before you get started to ensure that those involved stay committed to the job.

3. Do indicate deadlines for deliverables. 

The clock starts ticking the moment you sign the project contract. To avoid unwanted delays and costly extensions, you need to set a time frame for the project’s due date and the contract’s duration. Formalizing these details in a project schedule should make it easy for you to track and examine the progress and conflicts of your project. Although unforeseen circumstances may obstruct the course of your project’s completion, the timeline and deadlines indicated in the contract should give you an idea of what to expect. It also establishes a sense of urgency to ensure that both parties remain dedicated to the shared goal.

4. Do include terms for revisions and alterations. 

Even the best project plans have their pitfalls that aren’t always apparent during the early stages of its development. That is why it’s a good idea to include a clause that addresses possible alterations and revisions to the project. Your contract must cater to these circumstances for clients to be aware of, primarily for the number of revision requests granted. It’s one way to avoid tedious editing tasks that are a time killer for your business. This approach could help you invest in projects with responsible and trouble-free clients or partners.

5. Do ensure confidentiality. 

Contracts allow you to establish a mutual promise with another party to ensure that sensitive business information remains confidential. Entities from both sides of the arrangement will likely have access to each other’s data, which makes either party vulnerable to unauthorized activities, including data theft and data leakage. To avoid instances like this, you must set terms that prohibit the concerned parties from sharing any crucial data it learns while executing the contract. Failure to comply will be subject to penalties and a potential lawsuit.


1. Don’t include wordy statements. 

The length of your contract is not something to fuss about; instead, it’s the way you deliver your points that matters the most. Some business relationships fail due to the problems brought by miscommunication. Overly long sentences leave room for ambiguity and confusion, which will then cause the reader to misinterpret your points. But by breaking them down into digestible parts, you can convey your thoughts in a way that others may quickly grasp.

2. Don’t allow verbal explanations for confusing terms. 

As the author of the contract, don’t assume the other party interprets specific terms the way you do. In the same sense, if there are terms that don’t make sense to you, feel free to have it clarified. You wouldn’t want the generality of the contract to cause problems down the road. After all, this will only put you at a disadvantage when the court reads the contract for what it is and not how either party interprets it. If your understanding of the contract is somewhat subjective, you and your project partner may want to review its terms and document the necessary revisions before moving forward.

3. Don’t execute any changes without proper documentation.

Never agree to revise the contract without putting it into writing. You can’t always rely on your memory to recall any prior agreements that apply to the new deal. With no written evidence of these modifications, it would be impossible to settle your disputes in court. It would always be your word against somebody else’s, so unless you can prove that such provisions exist in the agreement, trying to defend your claims in court will only lead you to a dead end.

4. Don’t sign a contract with unclear scope-of-work clauses.

A good business contract should spell out the terms and conditions of the arrangement in as much detail as possible. If you happen to find any vague clauses used to describe the scope of your project, don’t dare sign it. Unclear definitions can be very tricky to deal with, putting both parties at risk of its costly consequences. You need to be wary of false assumptions. Thus, it’s important to explain each party’s roles and responsibilities explicitly in the contract to avoid issues in the long run.

5. Don’t accept an agreement that makes you solely liable for indirect damages. 

If you aren’t the principal author of the contract, you need to be on the lookout for provisions that might put your team at a vulnerable state of liability. The agreement must address any issues that concern a possible breach of contract to ensure that you aren’t held accountable for indirect or consequential damages from the misfortunes that the project may encounter.

You need a contract to smooth out problems and clarify each party’s expectations in a project. With well-written and thoroughly reviewed project contracts, you can set your priorities and focus your attention on other aspects of your business operations. It eases your mind from worry and helps you strategize effectively for proposed, ongoing, and future projects with others. With all that said, feel free to use the project contract templates and examples above for your convenience!