Building Agreement between the Owners and The Contractor on Fee Plus Cost of Labour and Materials
BUILDING AGREEMENT BETWEEN THE OWNER AND THE CONTRACTOR ON FEE PLUS COST OF LABOUR AND MATERIALS
This Agreement made at ____________ on this ______ day of ____________, 20____,
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 the 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.
WHEREAS 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, 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:
1. 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 have been annexed hereto and marked as Annexure A, with material of the best quality, and in the most substantial and workmanlike 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 to 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 the specifications and conditions as are set out in Annexure A hereunder written.
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About this template
What is this template?
This is a construction services contract between a private owner and a registered partnership firm. It contains a specific architect-led certification process for all payments and a detailed arbitration mechanism involving a three-person panel. It is not a fixed-price lump sum contract, as it relies on weekly material cost reimbursements.
When should you use it?
Use this document when the construction costs will be paid based on actual labour and material expenses plus a contractor fee. If you prefer a pre-agreed total price regardless of material cost fluctuations, use a Lump Sum Building Contract instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Construction and Standards | The Builders must construct the building using materials of the best quality to the satisfaction of the appointed architect. |
| 2 | Time for Completion | Construction must commence within fifteen days and be completed within a specified number of months from the execution date. |
| 3 | Liquidated Damages | Failure to complete work on time triggers daily damages capped at 2% of the total contract amount. |
| 4 | Payment and Retention Money | The Owner pays weekly expenses for materials and retains 5% of the total contract amount for 12 months post-completion. |
| 6 | Indemnity | The Builders indemnify the Owner for injuries to employees and damage to adjacent buildings or public infrastructure. |
| 7 | Termination and Possession | The Owner may terminate the licence and seize materials if the Builders suspend work for 14 days without excuse. |
| 11 | Arbitration | Disputes are referred to two arbitrators and an umpire under the Arbitration and Conciliation Act 1996. |
Who it's for
- a landowner hiring a partnership firm for residential construction on a specific Khasra number plot
- parties requiring architect certification for weekly material cost disbursements and milestone payments
- owners seeking a 12-month retention period to ensure rectification of construction defects
How long it runs and how it's signed
Law it's drafted under
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