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Construction Agreement Between Owner and Contractor - Homeslibro

A construction contract is an agreement between a client and a contractor that specifies the details of a construction project. The details in the construction contract should cover all aspects of the project including payment, type of work to be done, contractor's legal rights and so on.

Construction Contract Agreement 





This Construction Agreement executed at Chennai on … ……MM/YYYY…



“M/s……Builder Company Name…….”  having its office at …………………..Address……………, represented by its Partner……………., S/o.Mr …………., aged about ….. years residing at ………………………………. hereinafter called as “BUILDER”.




Mr………………., S/o. ………………., aged about ….. years, residing at …………………………………. hereinafter called the “OWNER”.


The Builder and the Owner are collectively referred as “Parties”.


1. Description of Work:


Construction of the Residential Project as per the specifications (more particularly described in Appendix I of this Agreement) and according to the approved plans and designs as per the drawings annexed as Appendix IV of this agreement.


2. Scope and Specifications of Work:


The scope of work is described as per Appendix III and specification of work is described as per Appendix I. Any change in the specifications as necessitated due to site conditions will be mutually agreed upon in writing between the Parties. The BUILDER has accepted and agreed to use the Preferred makes (as and when informed by the OWNERS at each stage of the construction) for the construction of the above facility.


3. Contract Price:


The total construction price is Rs. 62,04,900 /- (Rupees Sixty Two Lakhs four Thousand and nine hundred only) plus GST @ 18% agreed by parties. The contractor agrees to share the GST input credit benefit with the owner at the end of the project as a discount.

The cost of Construction tractions is agreed as under:

G.Floor-1053 Sft, F.Floor-1046 Sft & S.Floor- 960 Sft, Terrace- 123 Sft

3182 Sft. x Rs.1950/-




Goods service Tax  18%






ADDITIONAL WORK at extra cost are as follows:

1. Terrace Tile work per Sq.ft. Rs.130/-(Approx 1,50,000/-)

2. Main gate work as per Architecture design. (Approx 2,00,000/-)

3. Set back soil filling as per measurement at the site. (Approx 30,000/-)

4. Elevation and Glass work as per architecture design extra cost. (2,00,000/-)

5. Interior and wood work.

6. Approval charges, Patta charges etc (1,25,000/-)

7. Borewell charges  (1,25,000/-)

8. EB charges for the construction

9. Compound wall 90Rft @ Rs.1900 per RFT ( Approx 1,71,000/-)

10. RCC Water sump 12k L @ Rs.28 per Liters (Approx 3,36,000/-)

11. RCC septic tank 5k L @ Rs.22 per Liters (Approx 1,10,000/-)

12. Overhead tank 5k L @ 25 per liters (Approx 1,25,000/-)


4. Project Timelines

4.1 The BUILDER hereby acknowledged that time is the essence of the Contract and that it shall complete all the works specified in Appendix  2 within 12 -15 months from the date of this Agreement subject to force majeure conditions.  To this end,  the BUILDER agrees to conform to the timelines specified in Appendix 2 herein below.


5. Payments Schedule:

The PARTIES agree to the following payment schedule.


The OWNER shall pay the total amount Rs.62,04,900.00/- (Rupees Sixty  Two  Lakhs four Thousand and nine hundred only) in 5 instalments in the following manner:


1. A sum of Rs.15,51,225/- (Rupees Fifteen Lakhs Fifty One Thousand Two hundred twenty-five only) plus GST a sum equivalent to 25% of the total estimate as the initial amount to be paid by the owner on the signing of the contracting agreement.


2. A sum of Rs.11,63,419/- (Rupees Eleven Lakhs sixty-three thousand four hundred and nineteen only) plus GST a sum equivalent to 18.75% of total estimate as running bill payment to be paid by the Owner on completion of Ground Floor Roof slab.


3. A sum of Rs.11,63,419/- (Rupees Eleven Lakhs sixty-three thousand four hundred and nineteen only) plus GST a sum equivalent to 18.75% of total estimate as running bill payment to be paid by the Owner on completion of First Floor & Second Roof slab.


4. A sum of Rs.11,63,419/- (Rupees Eleven Lakhs sixty-three thousand four hundred and nineteen only) plus GST a sum equivalent to 18.75% of total estimate as running bill payment to be paid by the Owner on completion of Brickwork & Plastering works.


5. A sum of Rs.11,63,419/- (Rupees Eleven Lakhs sixty-three thousand four hundred and nineteen only) plus GST a sum equivalent to 18.75% total estimate as advance to be paid by the owner for Ground Floor, First floor & Second Floor Tile, Electrical & Painting work.

6. Additional works payment (as listed in List 3) to be made as and when the particular works commenced.


6. Facilities at Site:


The OWNERS agree to provide sufficient space for construction of labour shed to accommodate the labourers at site, the water at one point and electricity required for construction to be provided by Owners. The cost of construction of labour shed shall be borne by the BUILDER.


7. Mobilization and Material Advance:


The OWNERS agree to release a lump sum amount of Rs.15,51,225/- (Rupees Fifteen Lakhs Fifty One Thousand Two hundred twenty-five only) plus GST as agreed in Clause

5.1 above towards mobilization advance and advance for procurement of steel required for this project to the BUILDER on the signing of this Contract agreement.


8. No assignment or subletting of Contract:


The Builder shall not without the written consent of the OWNERS assign or sublet this contract.


9. Indemnity by Builder:


The BUILDER shall be liable for, and shall indemnify the OWNERS against any liability, loss, claim or proceedings whatsoever arising under any statute or at common law in respect of any damage to any property or in respect of personal injury to or the death of any person whomsoever arising out of or in the course of or caused by the carrying out of the works.


11. Insurance:


The BUILDER agrees to provide insurance cover to the workmen deployed by it for the purposes of this Agreement, under the Workmen Compensation Policy from the effective date of work until the project completion. The costs for the same shall be borne exclusively by the BUILDER.


12. Safety & Preventive Measures:


All safety norms/standards and preventive measures for the works shall be strictly followed by the BUILDER. The BUILDER shall provide his workers with the necessary safety equipment to avoid any accident during the contract period.


13. Right to appoint sub-contractors:


Notwithstanding anything contained hereinbefore the BUILDER will be entitled to appoint one or more sub-contractors either for supplying labour or buying material or for construction of any work but the contracts entered by the BUILDER with subcontractors will be subject to this contract and there will be no privacy between the


OWNERS and Sub-Contractor and the BUILDER will be liable and responsible for the acts of omission or commission of the sub-contractor as if they are their own acts.


14. Event of Default and Termination:


Any of the following shall constitute an event of default by the Developer:


1. BUILDER has been or is in the process of being liquidated, dissolved, wound-up, amalgamated or reconstituted in the manner that would in the opinion of the OWNERS have a material adverse effect on the Project;


2. If any representation made or warranties given by BUILDER under this Agreement is found to be false or misleading.


3. If BUILDER breaches any terms and conditions of this Agreement.


4. If BUILDER has abandoned any part of its scope of work.


5. The progress of work by BUILDER is so slow that it will not be able to meet the timeline specified in the Agreement, including the grace period mentioned. herein, for completion of the Project; and


6. Notwithstanding anything contained anywhere, it is explicitly agreed between the Parties that this Agreement cannot be terminated unilaterally by the BUILDER at any point of time.



15. Consequences of Termination:


In the event of termination,


1. the BUILDER shall vacate the OWNERS Land and hand over the same on an as is where is basis and shall, at the discretion of the OWNERS, remove any building materials from the premises of the Owner Land.


2. the BUILDER shall settle any and all claims, dues or other charges of the employees, workmen or Sub-Contractors.


3 If construction not completed, the BUILDER shall be solely responsible in respect of the settlement of dues and any claims by the Sub-Contracts or other persons employed herein, the Purchasers or any other persons.



16. Miscellaneous:


16.1 Arbitration:

16.1.1 Any dispute(s) arising between the Parties under this Construction Agreement shall be settled in accordance with Arbitration & Conciliation Amendment Act, 2015 of India.


16.1.2 The Parties agree that the arbitral tribunal shall comprise of a  single arbitrator to be appointed by the Parties.


16.1.3 The place of arbitration shall be at Chennai and the Parties agree that only the courts of competent jurisdiction located in Chennai may be approached as regards any and all aspects of this Construction Agreement.


16.2 The Appendices annexed to this agreement form an integral part of this Construction Agreement and the terms and conditions specified therein shall be read as part and parcel of this Construction Agreement.



IN WITNESS WHEREOF the parties have put their hands the day and year first hereinabove written.









Appendix 1 – Description of the Work:


Name of Work: Proposed construction of residential building Ground, First & Second Floor at Plot ……………………………….


Appendix 2 – Stages of Work and Time Lines:

1) Foundation 30 days;

2) Foundation and basement up to Roof Level column 30 days;

3) Ground Floor Roof slab 30 days;

4) First Floor Roof slab 30 days;

5) Second floor Roof slab 30 Days;

6) Ground Floor, First Floor & Second-floor Brickwork 75 days;

7) Ground Floor, First Floor & Second-floor Plastering work 75 days ;

8) Ground Floor & First Floor Tile, Electrical & Painting work 60 days;




Appendix 3 – Scope and Specification of the work



Nature of Work

File Foundation



Isolated footing Foundation

M-20 Minimum

Car Parking

1’-6” height from road level.


Basement height

3’-0” height from road level. For additional basement, height will be charged.


RCC Column

M-20 Minimum



Roof slab height 10’-6” Roof thickness 5”


Brand Name of Cement

Coromandel (or) Chettinad Cement



TMT Bars FE 500/Ars brand refer-structural drawing by architect.



Nature of Work

Brick & Plastering work


Nature of Material

Locally available chamber bricks

1:5 & 1:4 (Ratio)

Wall thickness

9” outer wall & 4½” Partition wall.


Ratio of Cement / Sand

Cement plastering - 1:4

Inner wall plastering - 1:5

Outer wall plastering - 1:6

River Sand


Nature of Work



Flooring (Living / Bedroom)

Flooring vitrified tiles 2 x 2 (Rs.50/- per Sq.ft.). Skirting of 4” height will be provided.


Base Mortar

Cement & Sand Ratio of 1:6


Bathroom flooring

Flooring and wall tiles Rs.40/- per Sq.ft. (12” x 12”)


Height of application

7’-0” from floor level.


Wash area

3” height (Rs.40/- per Sq.ft.)



Granite slab – colour,  pattern and size as specified by Architect for risers and treads (basic Rate 100/Sft.) with stainless steel handrail.



Nature of Work

Wood & Grill work


Main Door & Lock

1st Quality Gana Teak (5”x3”) size with fixed (Basic rate Rs.4000/Cft.).

Godrej cylinder lock approx. Rs.3,000/-


Bedroom Door & Lock

Flush door maximum Rs.140/- per Sft. & Godrej lock approx. Rs.1,500/-


Bathroom door

Waterproof door Flush door maximum Rs.140/per Sft.



2nd     Quality           Gana teak Rs.1,800/Cft.

Frame Size- 3” x 4”

Shutter Size- 3” x 1.5”


Place of application



Type of Material

Square rods (12 mm)


Nature of Painting

Enamel (Asian Paint)



Nature of Work

Water Line Pipes


Place of application

Bathroom, Water Tank, Wash Basin, Well to O.H.T.


Type of Material

C.P.V.C. ISI (Ashirwad, Prince)


Nature of Painting

Enamel (Asian Paint)


Kitchen Sink (SS)

Rate 2,500/-



Nature of Work

Sewage Pipes


Place of application

Waste line from bath & E.W.C. Wash Basin. (Rs.1,000/-)


Type of Material



CP Tap

3 Nos. (Parryware brand continental)


Shower (2 in 1)

1 No. (Parryware brand continental)


Wash Basin

1 No. (Parryware brand continental)


Wall Mixer

1 No. (Parryware brand continental)



Parryware (White)



Nature of Work

Electrical & Wire & Switches


Type of conduit



Size of Pipe

1” & ¾”


Switch Box

Metal box for junction





Wire & Cables

Finolex & Kundan & Orbit



Nature of Work

Painting & Colour Washing


Exterior wall

One coat of white wash & one coat Primer, 2 coat ACE Paint.


Front side

Asian ACE Emulsion Paint two coat, one coat primer.


Interior Wall

2 coat Asian wall putty one coat wall primer & 2 coat Premier emulsion.


Frames & Grills

One coat Primer two coat of enamel.


Nature of Brand

Asian Paints



Nature of Work



Platform counters slab

Kitchen – G20 Black Granite counter slab. (Rs.130/-per Sq.ft.)

20mm thickness

Kitchen wall Tile

Tiles will be provided upto 2’- 0” height above kitchen level top (Rs.50/- per sq.ft)





The following are the basic prices of materials considered in this agreement, any escalation in the prices would be charged extra on the differential amount

xxxxxx cement:

xxxxxx cement:


River sand:


20mm blue material:

Filling Soil:

Steel/Tmt bar:






Appendix 4 – Plans and Designs per the drawings of the Architect:




[To be annexed once the same is made ready]



The amount used in the article is for example purposes. it will vary according the zones of the country and the timeline 

What Is a Construction Contract Agreement? 4 Common Types of Construction Contracts

Construction Contract Agreement

4 Common Types of Construction Contracts

4 Common Types of Construction Contracts


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