BUILDING CONTRACTS
1. Meaning: A building contract means a contracts for the building of anything – not necessarily a
house, but any other physical construction. Building contracts are always considered in law as
entire and indivisible contracts in the sense that the complete fulfilment of the promise by one
party is a condition precedent to the right of the other to call for fulfilment of any part of the
promise by the other and there is no element of sale of the material in a building contract and the
contract is one entire and indivisible.
2. Tender: The Owner of a land with a view to get construction made of a multi-storeyed building
on the land may invite tenders form contractors. The tenderer in h is tender will give general
description of the proposed work, plans, drawings, specifications and other documents as may be
necessary. The tenderer will also give an estimate of the quantity and cost of materials, labour
charges and other costs and the terms of payment.
3. Written Agreement: The agreement between the parties is required to be in writing. The terms
of the written document may be varied, rescinded, modified or altered by another written
instrument but not by an oral agreement, Normally the agreement of construction entered into
between the parties will contain details of work to be done and the rights and obligations of the
owner and the contractor and the part that the architect will play in completion of work. The
terms of payment shall be specifically provided for. The time limit for completion of the work, the
execution there of and compensation payable for delayed work and escalation costs should be
specified. Any other special requirement including the mode of settlement of disputes are to be
included in the agreement. Mode From of Building Construction Agreement is given in ANNEXURE
3.1.
4. Sanction : The responsibility to obtain necessary sanction and the certificates for the
construction, water and electricity connections should be on the contractor who shall be required
to obtain the completion certificate from the Municipality concerned. Until the contractor
completes the construction and completion certificate is obtained, the contractor shall not be
entitled to payment of final bills.
5. Liablity : The Owner should be exempted from the liability to third parties due to any accident
during the execution of the work by the contractor and the sole responsibility for that would lie
with the contractor who shall take precautionary measures.
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This CONSTRUCTION AGREEMENT is made at ............. on this ................. day of 20.... between Mr. ñ
AB, s/o ............................ r/o .......................... (hereinafter referred to as the OWNER) of the £
First Part and Mr.XY, s/o ............................ r/o ................................ thereinafter referred to as ù
Š
the CONTRACTOR) of the Second Part.
AGREEMENT FOR CONSTRUCTION BUILDING
WHEREAS the party of the First Part is the Owner of the plot of land measuring .................... ªð
£
situated at .................. more fully described in the Schedule hereunder.
P
AND WHEREAS the Owner is desirous of erecting a building on the said plot and has approached the ò
Contractor and the Contractor has satisfied himself about suitability of the site including soil £
÷
condition.
AND WHEREAS the Contractor at the request of the Owner has prepared planes, designs, drawings,
etc. of the said proposed building which has been sanctioned by the authorities concerned and
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