CONSTRUCTION CONTRACT

THIS DEED OF CONSTRUCTION CONTRACT

(Hereinafter referred to as the “Agreement” or “Contract”)

Contract Reference No.:  ________________________

Date of Execution:  ________________________

Place of Execution:  ________________________

PARTIES TO THIS AGREEMENT

THIS DEED OF CONSTRUCTION CONTRACT is made and entered into on the date stated above, at the place stated above, by and between the following parties:

THE OWNER / EMPLOYER

(Hereinafter individually and collectively referred to as the “Owner” or “Employer”, which expression shall, unless repugnant to the context, include its legal heirs, successors in interest, administrators, executors, assigns, and legal representatives.)

THE CONTRACTOR

(Hereinafter individually and collectively referred to as the “Contractor”, which expression shall, unless repugnant to the context, include its legal heirs, successors in interest, administrators, executors, assigns, legal representatives, and permitted sub-contractors.)

RECITALS

WHEREAS, the Owner is the absolute and lawful owner of the land and property described in Schedule I hereto and is desirous of undertaking the construction of a [describe structure — e.g., residential building / commercial complex / industrial structure] at the Project Site;

AND WHEREAS, the Contractor is a duly licensed and registered construction contractor possessing the requisite skill, expertise, resources, and legal capacity to execute and complete the said construction works;

AND WHEREAS, the Owner has, upon due evaluation of the Contractor’s technical and financial credentials, agreed to engage the Contractor on the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, undertakings, and obligations herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. DEFINITIONS AND INTERPRETATION

1.1  In this Agreement, unless the context otherwise requires, the following words and expressions shall have the meanings assigned to them:

“Agreement”  This Deed of Construction Contract, together with all Schedules, Annexures, Drawings, Specifications, and Variation Orders forming part hereof.

“Contract Price”  The total sum payable by the Owner to the Contractor for the complete execution and delivery of the Works as specified in Clause 4 hereof.

“Works”  All construction, installation, finishing, and ancillary activities required to be executed pursuant to this Agreement, as described in Schedule II hereto.

“Commencement Date” The date on which the Contractor shall mobilise and commence execution of the Works pursuant to Clause 3 hereof.

“Completion Date” The date by which the Contractor shall achieve Practical Completion of the Works pursuant to Clause 3 hereof.

“Practical Completion” The stage at which the Works are completed in all material respects per this Agreement, save for minor defects not prejudicing beneficial use of the structure.

“Defect Liability Period” A period of twelve (12) months from the date of Practical Completion during which the Contractor shall remedy defects at its own cost.

“Variation Order” A written instruction duly signed by both Parties authorising any addition to, omission from, or alteration of the Works.

“Force Majeure Event” Any event beyond a Party’s reasonable control, including acts of God, war, civil unrest, epidemic, pandemic, natural disaster, or governmental action.

“Applicable Law” All statutes, regulations, by-laws, ordinances, codes, and judicial or administrative orders applicable to the Works and this Agreement.

1.2  References to any statute shall be construed as references to such statute as amended, re-enacted, or consolidated from time to time. Words importing the singular include the plural and vice versa. Clause headings are for convenience only and shall not affect the interpretation of this Agreement.

2. PROJECT DETAILS AND DESCRIPTION OF WORKS

2.1  The Owner hereby engages the Contractor, and the Contractor hereby accepts the engagement, to execute, complete, and deliver the Works described in Schedule II, in strict accordance with the terms of this Agreement.

2.2  The Works shall be executed strictly in accordance with the approved architectural and structural drawings, specifications, and Schedule of Quantities forming part of Schedule II. Any deviation therefrom shall require the prior written approval of the Owner through a duly executed Variation Order.

2.3  The Contractor shall not sub-contract the whole or any substantial portion of the Works without the prior written consent of the Owner. Notwithstanding any sub-contracting, the Contractor shall remain fully and primarily liable to the Owner for all works executed by approved sub-contractors.

3. DURATION OF CONTRACT — COMMENCEMENT AND COMPLETION

3.1  The Contractor shall commence the Works on the Commencement Date: ________________________ and shall diligently prosecute the Works to Practical Completion without interruption or suspension, save as expressly permitted herein.

3.2  The Contractor shall achieve Practical Completion on or before the Completion Date: ________________________, representing a total contract period of __________ (____) calendar days from the Commencement Date.

3.3  TIME IS OF THE ESSENCE of this Agreement. The Contractor expressly acknowledges that any delay in achieving Practical Completion shall cause the Owner to suffer loss, damage, and inconvenience.

3.4  In the event of delay in achieving Practical Completion attributable solely to the Contractor, the Contractor shall be liable to pay the Owner Liquidated Damages (and not by way of penalty) at the rate of Rupees / USD ________________________ per calendar day of delay, subject to a maximum aggregate liability of ______% of the Contract Price.

3.5  Any claim for extension of time must be submitted in writing within seven (7) days of the occurrence of the delaying event, supported by documentary evidence. Extensions shall only be granted by mutual written agreement formalised by a written Amendment to this Agreement.

4. CONTRACT PRICE, SCHEDULE OF PAYMENT AND RETENTION

4.1  The total Contract Price agreed between the Parties for the complete and satisfactory execution of the Works shall be:

4.2  The Contract Price is a firm and fixed lump-sum price unless varied pursuant to a duly executed Variation Order. The Contractor shall have no entitlement to claim for escalation in costs of materials, labour, or overheads during the currency of this Agreement.

4.3  The Contractor shall submit Running Account Bills after each milestone set out in the Payment Milestone Schedule in Schedule III. The Owner’s Representative shall certify each bill within fourteen (14) calendar days of submission. The Owner shall release the certified amount within seven (7) calendar days of certification.

4.4  In the event of delayed payment by the Owner beyond the stipulated period, the Contractor shall be entitled to claim simple interest at ______% per annum on the unpaid certified amount from the due date of payment to the actual date of receipt.

4.5  The final payment (balance Contract Price less retention) shall be released only upon: (i) issuance of the Completion Certificate by the Owner’s Representative; (ii) submission of all statutory completion certificates; and (iii) handover of the Project Site in a clean and orderly condition.

5. OBLIGATIONS, REPRESENTATIONS AND WARRANTIES

5.1  Obligations of the Contractor

The Contractor hereby represents, warrants, and undertakes throughout the duration of this Agreement as follows:

(i)   To execute the Works in a sound, diligent, and workmanlike manner using materials of the quality and specification set out in Schedule II;

(ii)  To deploy sufficient, qualified, and experienced personnel on site and to designate a competent Site Manager as the Contractor’s authorised on-site representative;

(iii) To procure, supply, and transport all materials, equipment, plant, tools, and machinery required for execution of the Works, unless otherwise expressly specified herein;

(iv)  To obtain, at its own cost, all permits, licences, and statutory approvals required specifically for the execution of the Works at the Project Site;

(v)   To comply strictly with all Applicable Laws including the Building and Other Construction Workers Act, 1996, the Contract Labour (Regulation and Abolition) Act, 1970, and all applicable environmental and safety regulations;

(vi)  To maintain a safe and orderly worksite at all times and to indemnify and hold harmless the Owner against all third-party claims, losses, and liabilities arising from the Contractor’s acts, omissions, or negligence;

(vii) To maintain detailed daily progress records and submit weekly written progress reports to the Owner’s Representative.

5.2  Obligations of the Owner / Employer

(i)   To grant the Contractor vacant possession and unobstructed access to the Project Site on or before the Commencement Date;

(ii)  To provide approved drawings, designs, specifications, and instructions in a timely manner so as not to impede progress of the Works;

(iii) To make all payments strictly in accordance with the provisions of Clause 4 hereof;

(iv)  To appoint and designate an Owner’s Representative empowered to inspect works, approve variations, certify bills, and issue instructions on behalf of the Owner;

(v)   To obtain, at its own cost, the building plan sanction and all primary statutory approvals necessary for the lawful commencement of construction.

6. INSURANCE OBLIGATIONS

6.1  The Contractor shall, before commencement of the Works and at its sole cost, procure and maintain throughout the duration of this Agreement the following policies with reputable insurers:

(i)   Contractor’s All Risk (CAR) Policy — covering the full reinstatement value of the Works and all temporary structures on site;

(ii)  Workmen’s Compensation and Employer’s Liability Insurance — as required under the Workmen’s Compensation Act, 1923 and the Employees’ State Insurance Act, 1948;

(iii) Public / Third-Party Liability Insurance — with a minimum indemnity of Rs. / USD ________________________ per occurrence;

(iv)  Any other policy required under Applicable Law or directed in writing by the Owner.

6.2  Certified copies of all insurance policies shall be delivered to the Owner before mobilisation and upon every renewal. Failure to maintain adequate insurance shall constitute a material breach of this Agreement, entitling the Owner to procure such insurance at the Contractor’s cost.

7. DEFECT LIABILITY, RECTIFICATION AND WARRANTY

7.1  The Contractor warrants to the Owner that all Works executed hereunder shall be free from defects in workmanship, materials, structural integrity, and design for the Defect Liability Period of twelve (12) months from the date of Practical Completion.

7.2  Upon receipt of written notice from the Owner specifying any defect arising within the Defect Liability Period, the Contractor shall attend the Project Site and remedy such defect at its own cost within fourteen (14) calendar days of receipt of such notice.

7.3  If the Contractor fails to rectify notified defects within the stipulated period, the Owner shall be entitled to engage a third-party contractor to carry out such rectification and to recover all reasonable costs so incurred from the Contractor or from the Retention Amount held.

7.4  The Retention Amount shall be released to the Contractor only upon the satisfactory completion of all defect rectifications and issuance of the Defect Liability Release Certificate by the Owner’s Representative.

8. VARIATIONS AND MODIFICATIONS TO SCOPE OF WORK

8.1  The Owner’s Representative may, by written Variation Order, instruct additions to, omissions from, or alterations of the Works. No variation shall be executed by the Contractor without a prior written and duly signed Variation Order.

8.2  The valuation of each Variation Order shall be agreed in writing by the Parties prior to execution. In the absence of agreement, variations shall be valued at the rates in the Schedule of Quantities or, where not applicable, at fair and reasonable market rates.

8.3  No course of conduct, verbal instruction, implied consent, or acquiescence shall constitute a variation to this Agreement. All modifications must be in writing and signed by authorised representatives of both Parties.

9. TERMINATION OF CONTRACT

9.1  Termination by the Owner for Contractor’s Default:

The Owner shall be entitled to terminate this Agreement forthwith by written notice if the Contractor: (i) abandons or suspends the Works for a continuous period exceeding fourteen (14) days without reasonable cause; (ii) persistently fails to rectify defective work after written notice; (iii) becomes insolvent or makes an arrangement with creditors; or (iv) is guilty of fraud, corruption, or wilful misconduct in connection with the Works.

9.2  Termination by the Contractor for Owner’s Default:

The Contractor shall be entitled to terminate this Agreement upon thirty (30) days’ written notice to the Owner if the Owner: (i) fails to make any certified payment within thirty (30) days of its due date; or (ii) commits any other material breach and fails to remedy the same within twenty-one (21) days of written notice.

9.3  Termination for Convenience: The Owner may terminate this Agreement for convenience upon thirty (30) days’ written notice, subject to payment to the Contractor of all certified amounts due for work satisfactorily completed, plus reasonable and documented demobilisation costs.

9.4  Upon termination for any reason, the Contractor shall immediately vacate the Project Site and deliver to the Owner all drawings, as-built records, and materials. The Parties shall settle all accounts within thirty (30) days of the termination date.

10. DISPUTE RESOLUTION, ARBITRATION AND GOVERNING LAW

10.1  The Parties shall endeavour in good faith to resolve any dispute, controversy, or claim arising out of or in connection with this Agreement through mutual negotiation within thirty (30) days of a written notice of dispute.

10.2  If the dispute is not resolved through negotiation within the said period, either Party may refer it to arbitration in accordance with the Arbitration and Conciliation Act, 1996 (as amended). The arbitration shall be conducted by a sole arbitrator mutually appointed by the Parties, failing which by the appointing authority under the Act.

10.3  The seat and venue of arbitration shall be [City, State]. The language of arbitration shall be English. The arbitral award shall be final, binding, and enforceable in a court of competent jurisdiction.

10.4  This Agreement shall be governed by and construed exclusively in accordance with the laws of India. Subject to the arbitration clause, the courts of [City, State] shall have exclusive jurisdiction.

11. GENERAL AND MISCELLANEOUS PROVISIONS

11.1  Entire Agreement: This Agreement, together with all Schedules and Annexures, constitutes the entire agreement between the Parties and supersedes all prior negotiations, representations, and understandings, whether oral or written.

11.2  Amendments: No modification, amendment, or waiver of any provision of this Agreement shall be valid or binding unless made in writing and duly signed by authorised representatives of both Parties.

11.3  Severability: If any provision is held by a court or tribunal to be illegal, invalid, or unenforceable, such provision shall be severed and the remaining provisions shall continue in full force and effect.

11.4  Force Majeure: Neither Party shall be in default for any delay or failure caused by a Force Majeure Event, provided written notice is given within seven (7) days. Sustained Force Majeure exceeding sixty (60) days shall entitle either Party to terminate this Agreement without liability, subject to payment for work executed.

11.5  Confidentiality: Both Parties undertake to keep the terms of this Agreement and all project-related technical, financial, and proprietary information strictly confidential, except as required by Applicable Law or a court of competent jurisdiction.

11.6  Notices: All notices shall be in writing and delivered by registered post with acknowledgement due, courier, or email with read receipt to the addresses stated herein. Notices shall be deemed received on the date of delivery or, in the case of email, the day following transmission.

11.7  Waiver: Failure or delay by either Party in exercising any right or remedy shall not constitute a waiver thereof, nor shall any single or partial exercise of a right preclude any other further exercise of that right.

IN WITNESS WHEREOF

The Parties hereto have executed this Deed of Construction Contract on the date and at the place first hereinabove written, each being duly authorised to execute this Agreement and to be bound by its terms.

WITNESSES TO EXECUTION

SCHEDULE I — DESCRIPTION OF PROJECT SITE

Survey No. / Plot No.:  ______________________________

Village / Ward:  ______________________________

Mandal / Taluka:  ______________________________

District and State:  ______________________________

Total Extent of Land:  ______________________________ sq. ft. / sq. mtrs.

Boundaries

North: ______________________________

South: ______________________________

East:  ______________________________

West:  ______________________________

SCHEDULE II — SCOPE OF WORKS AND SPECIFICATIONS

(Detailed Drawings, Bill of Quantities, Technical Specifications, and Material Schedule are to be attached hereto and shall form an integral part of this Agreement.)

SCHEDULE III — PAYMENT MILESTONE SCHEDULE