Agreement for Construction of Building between the Owners and The Contractors on Turnkey Basis

AGREEMENT FOR CONSTRUCTION OF BUILDING BETWEEN THE OWNER AND THE CONTRACTOR ON TURNKEY BASIS

This Agreement is made at ____________ on this ______ day of ____________, 20____,

Between A, S/o B, resident of ____________________ (hereinafter referred to as "the Employer", which expression shall, unless repugnant to the context or meaning thereof, be deemed to include his heirs, legal representatives, executors and administrators) of the ONE PART;

AND XYZ Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at ____________________ (hereinafter referred to as "the Contractors", which expression shall, unless repugnant to the context or meaning thereof, be deemed to include its successors and assigns) of the Other Part.

Whereas the Employer is desirous of constructing XYZ Bungalow on the vacant land bearing Final Plot No. ______, Survey No. ______, Khasra No. ______, situate, lying and being at ____________, Tehsil and District ____________ (hereinafter referred to as "the said property"); and the Contractors have offered to construct the same on a 'turnkey basis', and also to prepare the site layout plans, preliminary sketch designs, architectural drawings, structural drawings, service drawings and all other detailed plans and drawings as may be necessary for the proper construction and completion of the said works, and also to obtain the necessary permissions from the Municipal Corporation of ____________ and other local authorities for executing and completing the said works as hereinafter specified — upon and subject to the terms and conditions set forth herein and the conditions set forth in the special conditions hereto annexed and marked as Annexure I (all of which are collectively hereinafter referred to as "the said works") — at the rate of Rs. ______ per sq. ft. of the built-up area of the buildings (hereinafter referred to as "the said contract amount");

And whereas the Employer has agreed to appoint the Contractors for the said works;

And whereas the Contractors have requested the Employer to execute these presents, which he has agreed to do.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1. In consideration of the said contract amount, to be paid at the times and in the manner set forth in the Schedule of Payments hereto annexed, the Contractors shall, on and subject to the said conditions, execute and complete the said works — more particularly described in Schedule 1 annexed hereto and shown on the said drawings — strictly in accordance with the general specifications annexed hereto and marked as Annexure III.

2. The Employer shall pay the Contractors the said contract amount, or such other sum as shall become payable, at the times and in the manner specified in Annexure II.

3. For the purposes of this contract, "built-up area" means the total covered area of the building at floor level, out-to-out measurement of wall surface (architectural projections excepted), and shall be inclusive of staircase and balconies.

4. The Contractors shall prepare layout plans and general building plans in consultation with the Employer, and get the same approved by the Municipal Corporation of ____________.

5. It is hereby agreed that the contract amount shall be inclusive of:
a. Preparation of the layout plans, general building plans, detailed architectural drawings, sketches, structural drawings and designs for execution.
b. Technical supervision of the works.
c. Obtaining of permissions and approvals from all the authorities for the construction, and supply of power, water, drainage and other services for the said works.
d. Cost of all materials for construction.
e. Wages of labour, technical supervisors, and all other workers and staff required for execution of the said works in accordance with the general specifications in Annexure III.
f. Cost of all electrical, sanitary and plumbing fittings.
g. Cost of all other items as mentioned in the special conditions in Annexure I hereto.

6. COMMENCEMENT AND COMPLETION: The Contractors shall commence the said works within ______ days of the Employer handing over vacant possession of the said property, and shall complete the said works in all respects and hand over the completed building to the Employer within ______ months from the date of such commencement. Time shall be of the essence of this contract.

7. LIQUIDATED DAMAGES: If the Contractors fail to complete the said works within the time stipulated in Clause 6 (or any extended time granted under Clause 8), the Contractors shall pay to the Employer, as liquidated damages and not as a penalty, the sum of Rs. ______ for every ______ (day/week) of delay, subject to a maximum of ______% of the said contract amount. The Employer may deduct such damages from any moneys due or becoming due to the Contractors.

8. EXTENSION OF TIME AND FORCE MAJEURE: If the completion of the said works is delayed by reason of any variation ordered by the Employer, or by any strike, lockout, act of God, war, civil commotion, flood, fire, or other event beyond the reasonable control of the Contractors, the Contractors shall be entitled to a reasonable extension of time, provided they give the Employer written notice of the event within ______ days of its occurrence. If any such event continues for more than ______ days, either party may terminate this agreement on equitable terms to be settled between them.

8A. VARIATIONS: The Employer may, by written instruction, order any addition to, alteration in, or omission from the said works. The value of any such variation shall be added to or deducted from the contract amount, computed at the rates specified in Annexure II or, in default, at rates mutually agreed. No variation shall vitiate this contract.

9. QUALITY OF MATERIALS AND WORKMANSHIP: All materials and workmanship shall be of the best of their respective kinds, in accordance with the specifications in Annexure III and the sanctioned plans, and shall be to the satisfaction of the Employer. The Employer shall be entitled to reject any materials or work not in accordance with this agreement, and the Contractors shall, at their own cost, remove and replace the same.

10. INSPECTION AND ACCESS: The Employer, or any person authorised by him, shall at all reasonable times have access to the said property and to the works, and to the workshops or places where materials or work are being prepared, for the purpose of inspection.

11. STATUTORY COMPLIANCE AND APPROVALS: The Contractors shall obtain and keep in force all permissions, sanctions, licences and no-objection certificates required for the construction and completion of the said works, and shall comply with all applicable laws, building bye-laws, and rules and regulations of the concerned authorities. The Contractors shall be solely responsible for any deviation from, or unauthorised or defective construction contrary to, the sanctioned plans, and for any penal action taken by any authority in respect thereof.

12. LABOUR AND WORKMEN: The Contractors shall engage all labour, technical supervisors and staff required for the said works, and shall be solely responsible for their wages, welfare and compliance with all labour and industrial laws. All such persons shall be the workmen of the Contractors and not of the Employer, and the Contractors shall be solely liable for any claim under the Employees' Compensation Act, 1923 (formerly the Workmen's Compensation Act) or any other law for the time being in force.

13. INSURANCE: The Contractors shall, at their own cost, take out and maintain, until the completion and handing over of the works, (a) a Contractors' All-Risk insurance policy covering the works, materials and plant for their full value, and (b) insurance against third-party liability and against claims by their workmen, with reputable insurers, and shall produce the policies to the Employer on demand.

14. RISK AND POSSESSION OF SITE: The Employer shall give the Contractors access to and possession of the said property for the purpose of executing the said works. Until the completed building is handed over to and accepted by the Employer, the works and all materials, plant and equipment thereon shall remain at the sole risk of the Contractors.

15. INDEMNITY: The Contractors shall keep the Employer indemnified and harmless against all claims, actions, suits, proceedings, damages, costs, charges and expenses whatsoever arising out of (a) any injury to or death of any person, or damage to any property, in connection with the execution of the said works; (b) any breach by the Contractors of any statutory provision, rule or regulation; and (c) any breach by the Contractors of any term of this agreement.

16. DEFECTS LIABILITY: The Contractors shall make good, at their own cost, any defects, shrinkage or other faults which appear in the said works within a period of ______ months (the "Defects Liability Period") from the date of handing over of the completed building, arising from materials or workmanship not in accordance with this agreement. The Employer shall be entitled to retain ______% of the contract amount as retention money until the expiry of the Defects Liability Period.

17. COMPLETION AND HANDING OVER: On completion of the said works, the Contractors shall obtain the completion cum occupation certificate from the concerned authority and hand over physical, vacant and peaceful possession of the completed building to the Employer, together with all such certificates, approvals, plans and documents relating to the said works.

18. PAYMENT: The Employer shall make payment of the contract amount to the Contractors in the instalments and in the manner set out in the Schedule of Payments (Annexure II), against the Contractors' bills duly certified as regards the value of work done. Final payment (less any retention money) shall be made on completion of the works, handing over of possession, and production of the completion cum occupation certificate.

19. ASSIGNMENT AND SUB-CONTRACTING: The Contractors shall not assign this agreement, nor sub-let the whole or any part of the said works, without the prior written consent of the Employer. Such consent shall not relieve the Contractors of any of their obligations under this agreement.

20. TERMINATION: If the Contractors (a) fail to commence or diligently proceed with the works, (b) commit a material breach of this agreement and fail to remedy it within ______ days of written notice from the Employer, or (c) become insolvent or a receiver is appointed over their assets, the Employer may, without prejudice to any other right or remedy, terminate this agreement by written notice and employ any other agency to complete the works, and recover any excess cost of completion from the Contractors.

21. ARBITRATION: All disputes and differences arising out of or in connection with this agreement shall be referred to the arbitration of a sole arbitrator appointed by mutual consent of the parties; failing agreement, the arbitrator shall be appointed in accordance with the Arbitration and Conciliation Act, 1996. The arbitration proceedings shall be governed by that Act as amended till date, the seat and venue of arbitration shall be ____________, and the language shall be English. The award of the arbitrator shall be final and binding on the parties.

22. NOTICES: Any notice under this agreement shall be in writing and shall be sent by registered post or hand delivery to the address of the party set out above, or to such other address as a party may notify in writing.

23. ENTIRE AGREEMENT: The Schedules and Annexures hereto form part of this agreement. This agreement, together with the said Schedules and Annexures, constitutes the entire agreement between the parties relating to the said works and supersedes all prior discussions and understandings.

24. GOVERNING LAW AND JURISDICTION: This agreement shall be governed by and construed in accordance with the laws of India, and, subject to Clause 21, the courts at ____________ shall have exclusive jurisdiction.

IN WITNESS WHEREOF the parties hereto have set their respective hands (and the Contractors have caused their common seal to be affixed) the day and year first hereinabove written.

Signed and delivered by A, the within-named Employer:
________________________

The Common Seal of XYZ Co. Ltd., the within-named Contractors, was affixed pursuant to the Resolution of its Board of Directors dated ____________, in the presence of:
Director: ________________________
Director/Authorised Signatory: ________________________

WITNESSES:
1. ________________________
2. ________________________

SCHEDULES AND ANNEXURES
- Schedule 1: Description of the said works
- Schedule of Payments
- Annexure I: Special conditions
- Annexure II: Contract amount — times and manner of payment
- Annexure III: General specifications