REALWorld Law


Parties to a construction or engineering contract

Typically, who are the parties to an engineering or construction contract or package of contracts and who is responsible to whom?

United States

United States

Depending on the type of project, and the project delivery method selected by the owner, the main parties to a construction or engineering contract include the following:


A party who owns or develops a project, engages parties to design and construct the project, and compensates those parties for their services and work.

Architect or engineer

A party engaged by the owner to design the project. An engineer is required to design and engineer specialized projects, such as public works (eg bridges, highways) or plants (eg manufacturing facilities, utilities).

General contractor and subcontractor

A general contractor is a party engaged by the owner to construct the project. The general contractor typically hires subcontractors to perform and complete separate parts of the project. Those subcontractors, in turn, may hire sub-subcontractors to perform a portion of the part of the project for which the subcontractor is responsible. A phrase commonly used to describe the subcontractor and its sub-subcontractors is ‘subcontractors of any tier’.


A party engaged by the owner to design and construct the project. A design-builder takes responsibility for both the design and construction functions, either with respect to the entire project or a portion of the project.


A party engaged by the owner, architect, engineer or contractor to render professional assistance regarding a particular aspect of the work. For example, an architect might hire a specialty engineer; a contractor might hire a remediation consultant; a design-builder might hire an MEP (mechanical-electrical-plumbing) engineer; an owner might hire a construction manager to oversee the entire project or a professional to provide expertise regarding a specialized project, such as a water park, golf course, or manufacturing facility. Several consultants may render professional services on a single project, each engaged by and responsible to a different party.


An entity from whom materials are obtained that will become part of the project; for example, those who supply the steel, cement, wood, glass, tiles, and electrical and plumbing fixtures.

While not parties to the design or construction contract or any subcontract, the following are key parties in the process:


An entity providing funds to the owner for the project, which funds the owner must repay. Depending on the size of the project, a single bank or a syndicate of banks could loan the owner funds.

Legal counsel

The lawyers assisting each of the parties above with the negotiation and drafting of the contracts. In order to avoid a conflict of interest, a lawyer may only provide advice to one of the parties. Legal advice also may be provided for legal issues arising while the project is being constructed, such as delays, labour issues, or defective work. Finally, legal counsel may assist a party should dispute resolution become necessary, for example, by negotiating with the other party or parties to the dispute or assisting with mediation, arbitration, or litigation.


The insurers who provide insurance for the project in order to assist in managing risk. Contractors generally obtain coverage such as commercial general liability insurance, workers’ compensation, employers’ liability, and vehicle insurance. Owners may obtain property insurance, referred to as builder’s risk or all risk insurance.


A guarantor of the obligations of the principal – in this case, the contractor – in the event the construction contract requires the contractor to obtain performance or payment bonds. Subject to the terms of the bond, the surety guarantees to the owner that the contractor will perform and complete the project and pay for the labour, material, and other items the contractor is obligated to pay for under the contract. In the event the contractor fails to perform its obligations, the surety becomes responsible for the losses incurred by the owner to the extent those losses are covered by the bond. The surety then is entitled to obtain reimbursement from the contractor.