Building Agreement Between Owners and Contractor on Fee Plus Cost of Labour and Materials (India) by OLL
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Building Agreement between the Owners and The Contractor on Fee Plus Cost of Labour and Materials
This Agreement made at ....................... on this ............. day of
..................2000,
between
Shri........................ S/o .......................
resident of ..............................
(hereinafter called 'the owner' 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 M/s ABC Builders & Contractors, a partnership firm registered under Partnership Act, 1932 and having its registered office at .................. (hereinafter referred to as 'the builders' which expression shall unless repugnant to the context or meaning thereof, be deemed to include every partner for the time being of the said firm, the survivor or survivors or the legal representatives, executors or administrators of the last survivor of the Other Part.
Where as the first party is the owner of the plot of land admeasuring .................... sq. meters bearing plot No. ........... city survey No. ...................... Khasra No. ..................... situate, lying and being at ...................... Tahsil and District ...................... (hereinafter referred to as the "said plot of land") and is desirous of getting a house constructed on the said plot of land.
and Whereas the first party has appointed Shri ................. as the architect and the said architect has prepared the plans, drawings and elevations of the said intended house and the specification of the works to be done and of the materials.
AND WHEREAS the second party is a big contractor and is having vast experience in construction of big buildings and has agreed to construct the house on the said plot of land.
Now it is Agreed by and Between The Parties as Follows:
The builders will construct the building on the said plot of land in conformity with the plans, drawings, specifications and elevations as prepared by the architect which has been annexed hereto and marked as Annexure A, with the material of best quality and in the most substantial and workman like manner and to the satisfaction of the architect.
2. The builders hereby undertake to commence the construction within fifteen days of execution of these presents and complete the construction on or before the expiry of ................... months from the date of execution of these presents in accordance with the plans duly approved and sanctioned by the Municipal Corporation of .................................. and specifications and conditions as are set out in Annexure A hereunder written.
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This template is a formal construction agreement between a property owner and a contractor for building a house on a 'fee plus cost' basis. It outlines detailed responsibilities regarding construction timelines, payment schedules based on architectural certification, liquidated damages for delays, and a twelve-month defect liability period.
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About this template
What is this template?
This document is a construction contract for residential property that utilizes an architect-led certification process for progress payments. It is not a fixed-price lump sum contract; rather, it provides for reimbursement of expenses for materials and weekly labour costs. It contains specific provisions for liquidated damages capped at 2% and a mandatory two-arbitrator dispute resolution mechanism.
When should you use it?
Use this when a project requires an architect to supervise quality and certify completion stages before funds are released to a builder. If you prefer a fixed total price regardless of fluctuating material costs, use a standard Lump Sum Building Contract instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Construction and Specifications | The builders must construct the building according to Annexure A plans and specifications to the satisfaction of the named architect. |
| 2 | Time for Completion | Construction must commence within 15 days of execution and reach completion before the specified expiry of months. |
| 3 | Liquidated Damages | Failure to complete work within the stipulated period triggers daily damages capped at 2% of the total contract amount. |
| 4 | Payment and Retention Money | The owner retains 5 per cent of the total contract amount for 12 months to ensure rectification of detected defects. |
| 6 | Indemnity by Builders | The builders indemnify the owner against claims for injuries to employees or workmen occurring upon the premises during construction. |
| 7 | Termination of Contract | The owner may terminate the licence if builders abandon work or suspend progress for 14 days without lawful excuse. |
| 11 | Arbitration | All disputes relating to workmanship or materials are referred to two arbitrators under the Arbitration and Conciliation Act, 1996. |
Who it's for
- a landowner in India appointing a partnership firm for residential house construction
- a contractor agreeing to construction work where materials and labour costs are reimbursed weekly
- an owner requiring a 12-month defect liability period backed by a 5% retention sum
How long it runs and how it's signed
Law it's drafted under
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