Owner-Contractor Agreement
Owner-Contractor Agreement
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AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual
covenant and stipulations hereinafter set forth, the parties hereto mutually agree, stipulate and
covenant as follows:
ARTICLE 1
ARTICLE 2
THE WORK
The Contractor shall perform all the Work required by Owner for the contract amount; within the
contract time and other related contract documents herein stipulated. For this purpose, the
CONTRACTOR shall furnish and provide for its own account all labor, tools and equipment,
technical supervision, and all other incidentals necessary to satisfactorily complete the PROJECT
in accordance with the Contract Documents as supplied by the ARCHITECT
ARTICLE 3
CONTRACT SUM
The Owner shall pay the Contractor in current funds for the performance of the Work, subject to
additions and deductions by Change Orders as provided in the Contract Documents, the Contract
Sum of PESOS: (PhP _____________) Philippine Currency (the TOTAL CONTRACT
AMOUNT), the manner of payment which shall be in accordance with Article 6 hereof. The
Contract Sum is determined as follows
The Contract Price is subject to escalation stipulated in Section D of Article 9 and due to
work addition (approved by the Owner). All costs and expenses over and above the Contract
Price, except as provided above and in Article 5 hereof, shall be for the account of the
CONTRACTOR.
ARTICLE 5
The Owner may, without invalidating this Agreement or the Contract Documents, order at
any time in writing additional work or alterations by correcting, altering or deducting from the work
to be undertaken or being undertaken by the CONTRACTOR. All such work shall be executed
under the conditions hereof.
No claims for additions or deductions to the Contract Price herein stipulated because of
extra work or alteration shall be valid unless ordered in writing by the Owner. The value of any
extra work or alteration shall be as may be separately agreed upon by the parties in writing.
The value of Change Order approved would be considered as part of the Contract and to
be included in progress billing.
ARTICLE 6
TERMS OF PAYMENT
6.1 Based upon Billing Statements submitted to the Owner by the Contractor, the Owner
shall make progress payments because of the Total Contract Price to the Contractor as provided
below, as follows:
6.1.1 Upon signing of this Contract the Owner shall release to the Contractor down
payment equivalent to Fifty Percent (50%) of the Total Contract Amount in the
sum of Pesos: (PhP____________________).
6.1.2 A weekly Billing statement shall be made by the Contractor on the Tuesday of
every week and submitted to the Architect for inspection. The Architect shall
issue a certificate for Payment to be paid by the Owner on the following Friday,
total to an equivalent of Forty Percent (40%) of the Contract Amount within the
next Three months in the sum of PhP ______________________________
(PhP ________________)
6.1.3 The Owner shall pay final payment, constituting the entire unpaid balance of the
Contract Sum of Ten Percent (10%), to the Contractor when the Work has been
completed, the Contract fully performed, and the Architect has issued a final
Certificate of Payment. Final Payment shall be equal to PhP
____________________________(PhP________________)
ARTICLE 7
RESPONSIBILITIES OF THE OWNER
7.1 The Owner shall furnish the Contractor all surveys and legal descriptions of the site.
7.2 The Owner shall secure and pay for necessary approval, easements, assessments and
charge required for the renovation use or occupancy of permanent structures or
permanent changes to existing facilities.
7.3 If the Contractor fails to correct defective Work or persistently fails to carry out the Work,
the Owner, by written order, may stop the Contractor from continuing the Work or any
portion thereof, until the cause of such order has been eliminated. However, this right of
the Owner to stop Work shall not give rise to any duty on the part of the Owner to
exercise this right for the benefit of the Contractor or any other person or entity.
ARTICLE 8
WARRANTIES AND RESPONSIBILITIES OF THE CONTRACTOR
8.1 By this Agreement, the Contractor acknowledges and accepts the trust and confidence
reposed upon him by the Owner and in return, warrants and guarantees to the Owner the
execution of the terms, conditions, and provisions of this agreement to the best of his
skills, ability, and judgement. The Contractor guarantees the performance and
completion of the construction works to the satisfaction of the Owner in conformity with
this Contract and with the pertinent provisions of the Civil Code of the Philippines.
In case of any defect or defects in workmanship which may become apparent in the
course of the construction, the Contractor upon the request of the Owner, shall, at the
Contractor’s expense, tear down and replace such portion of the work done that, an in
the Owner’s reasonable opinion, are unsound or defective, or not in accordance with the
plans and specifications provided herein.
8.2 The Contractor guarantees and shall maintain the stability and fitness of all works under
this agreement keep the same in good repair and condition for a period of one (1) year
after the issuance of final acceptance of the work by the Owner. Defects, excluding
those arising from force majeure, appearing during this period or any damages resulting
from such defects shall be corrected without expense to the Owner. If the Contractor
fails to correct or repair the defects within fifteen (15) days from receipt of written notice
thereof from the Owner, the Owner may have the work repaired by another contractor at
the expense of the Contractor, AS STIPULATED IN Section 9.2 of Article 9.
8.3 The Contractor shall, at all times, furnish and maintain an adequate and sufficient supply
of tools and skilled and/or unskilled workmen at the job site. The Contractor shall
diligently supervise the construction until completion. He shall have, on full time, a
competent General Foreman. Said General Foreman shall be experienced in and
qualified for the particular works herein specified. The General Foreman will be
designated to act as the Contractor’s Project Supervisor and who will be present at all
times at the construction site during hours of work to personally supervise and direct the
work under this agreement.
The Owner reserves the right to reject, for reasonable cause, any person or persons
employed by the Contractor in the Construction work. Omission of the Owner to
exercise such right, shall not in any way, relieve the Contractor from his responsibility to
fulfill his undertaking
8.4 The Contractor will not supervise work of other trade or trades in direct contact with the
Owner. However, the Contractor shall not work independently. Rather, the Contractor
shall coordinate closely with the other trade contractor/s, if any, to avoid delay in the
completion of the Construction Work.
8.5 The Contractor shall be responsible for the storage and safekeeping of Owner-supplied
materials duly turned over to him by the Owner. Any damages losses and pilferage to
these materials shall be for the account of the Contractor.
8.6 SAFETY FACILITIES: The Contractor, at the Owner’s expense shall provide safety
facilities for access and inspection of the Owner. The Contractor shall erect and properly
maintain, at all times, such barriers, lights, danger signs and necessary safeguards as
will protect workmen and the public, including neighboring buildings.
8.7 The Contractor shall also comply with the laws, rules and regulations promulgated by the
government of the Republic of the Philippines or any of its branches, subdivision and
instrumentality thereof. He shall be personally responsible for any violation of the same,
holding the Owner; it’s officers, agents and employees free and harmless therefrom.
The Contractor’s responsibilities include the payment of penalties imposed by the
entities.
8.8 The Contractor shall hold the Owner, it’s officers, agents, and employees free and
harmless against any claim or losses, damages, or injuries of whatever kind or nature
that may be filed or claimed against the Owner by any third person, firm or entity arising
out of or in connection with the Construction undertaken by the Contractor under this
agreement or by the neglect of the Contractor, it’s agents, servants, and employees.
8.9 The Contractor shall be responsible for maintaining the general cleanliness and
sanitation of the site and it’s surroundings and shall undertake clearing of the site and
removal of construction debris during the entire contract period. After the final
completion, the Contractor shall forthwith remove all tools, equipment, and surplus
materials belonging to, furnished or supplied by him. He shall remove all debris and
leave the work free and clean of all obstruction and hindrances. However, such activities
must come before the acceptance of the work and final settlement of the parties.
8.10 The Owner shall not, in any way, be liable or responsible for any personal injury or
damages including death sustained or caused by any employees or laborers of the
Contractor during the lawful performance of their duty.
All provision, with respect to warranties contained in Article 8 are cumulative and not
alternative, and are, in addition, to such warranties as may be provided by law or
contained in the other provisions of this agreement.
ARTICLE 9
BONDS
9.1 PERFORMANCE BOND
Upon the issuance of the Notice of Award of the Owner to the Contractor, the Contractor
shall secure, at his own expense, and deliver to the Owner a Performance Bond. Said
Performance bond shall be equivalent to Twenty Percent (20%) of the Total Contract
Price in the form of a surety bond posted by a domestic bonding company, duly licensed
in the Philippines, conditioned upon the full and faithful performance of the work under
this agreement. Such bond shall contain, among others, a clause or condition
answering for the liability of the Contractor for delays as provided for in the Contract.
Such bond shall also extend its guarantee to include contract changes that may be made
during the progress of the construction even without the knowledge and consent of the
bonding company. Such bond shall further guarantee payment for both labor and
materials used in the work under this contract. The bonding company executing the said
surety shall be acceptable to the Owner and should the Owner feel, at any time, that the
bonding company has become unacceptable, the Contractor shall furnish either
additional securities or any other surety as may be required by the Owner. The bonding
company shall be liable to the Owner to the extent of the performance of any of the
obligation under this Contract. The said bond shall remain in effect until replaced by the
Contractor’s Warranty Bond.
ARTICLE 10
SUBCONTRACTS
10.1 A Subcontractor is a person or entity who has direct contract with the contractor to
perform any work of the Project.
10.2 The contractor shall not employ any subcontractor to whom the owner may have a
reasonable objection. The Contractor shall not be required to contract with anyone
whom he has reasonable objection. Contractor between the Contractor and the
Subcontractor shall:
10.2.1 Require each subcontractor to extent of the Work to be performed by the Subcontractor,
to be bound to the Contractor by the terms of this agreement and to assume toward the
Contractor all obligations and responsibilities which the Contractor assumes towards the
Owner.
10.2.2 Allow to the Subcontractor the benefit of all rights, remedies and redress afforded to the
Contractor.
ARTICLE XI
COMPLETION AND FINAL ACCEPTANCE
11.1 When the work called for under this agreement is fully completed, the Contractor shall
notify the Owner in writing and request for final inspection and notice. The owner
together with the architect and the Contractor shall within three (3) days make an
inspection of the work covered by this agreement. When the work is acceptable and
fully performed, he shall issue a certificate stating the terms and conditions thereof. If
the work done by the Contractor is fully complete and in accordance with this Agreement,
the Owner shall within three (3) days then issue a written certificate of acceptance
thereof. Upon issuance by the Owner of such certificate of acceptance, the balance
found to be due the Contractor should become payable, subject to Article 6.
ARTICLE 12
DEFAULT OF THE CONTRACTOR
12.1 If the Contractor shall become bankrupt or have received an order made against him or
shall present his petition in bankruptcy/insolvency/receivership, or shall make an
arrangement with or assignment in favor of his creditors, or shall agree to carry out the
Contract under a committee of inspection of his creditors, or being a corporation, shall go
into dissolution and/or eventual liquidation (other than voluntary liquidation for the
purpose of amalgamation or reconstruction), or if the Contractor shall assign the
Contract, without the consent in writing to the Owner first obtained or shall have an
execution levied on his goods, or other properties, or if in the Owner’s opinion. the
Contractor:
ARTICLE 13
ARBITRATION CLAUSE
13.1 Any dispute arising from the execution and performance of this agreement by reason of
difference in the interpretation of the Contract Documents set forth in Article 1 which the
Owner and the Contractor are unable to resolve amicably between themselves, shall be
admitted to, by either party to a Board of Arbitrators coming from a listing provided by the
Philippine Construction Authority/CLAP composed of three members chosen as follows:
13.1.1 One (1) to be chosen by the Owner and
13.1.2 One (1) member to be chosen by the Contractor
13.1.3 The said two (2) members, in turn, shall select a third party-member
acceptable to both of them. The decision of the Board of Arbitrator shall
be rendered within the (10) days from the first meeting of the Board. The
decision, when reached through the affirmative vote of at least two
members of the Board, shall be final and binding upon the Owner and
the Contractor unless the decision is patently illegal or unjust. Matters
not otherwise provided for in this agreement or by special agreement of
the parties shall be governed by the Provisions of the Arbitration law,
Republic Act No. 876. Expenses and other fees for arbitration shall be
borne equally by the Owner and the Contractor.
13.2 It is, hereby, agreed that arbitration or the process hereof shall not be a reason for the
Contractor to suspend work as contemplated by this agreement nor affect the Time of
Completion set forth in Article 8.
ARTICLE 14
MISCELLANEOUS
14.1 In the event the Owner institutes a judicial proceeding in order to enforce any term or
condition of this Agreement, the Contractor should it be adjudged liable in whole or in
part, shall pay the Owner reasonable attorney’s fees in the amount equivalent to at least
Twenty Percent (20%) of the total amount claimed in addition to all expenses of litigation
and cost of the suit.
14.1.1 The venue of any action arising hereunder shall be at General Trias.
14.1.2 The failure of the Owner at any time to require performance by the Contractor for
any provision hereof shall in no way affect the Owner’s right thereafter to enforce
the same; nor shall the waiver by the Owner of any breach of any provision
hereof be taken or held to be a waiver of any succeeding breach of any such
provision itself.
14.1.3 All rights of the parties hereunder are separate and cumulative and no right
whether or not exercised shall be deemed to be an exclusion of any right and
shall not limit or prejudice any legal or equitable right, which the parties may
have.
ARTICLE 15
OTHER CONDITIONS AND PROVISIONS
15.1 The Owner shall secure and pay all necessary work permits, if any.
15.2 The Owner shall shoulder payments for water and electric consumption during the
duration of the Work.
15.3 All external works to be done are weather dependent. The contractor is entitled to
adjustments in the Completion Time.
15.4 This above-quoted proposal is based on the Peso-Dollar exchange rate of December
2001. In cases of any steep escalation in the exchange rate, the undersigned is entitled
to change order in prices, to be negotiated by both parties.
15.5 If the work is abandoned or suspended by the Owner, in whole or in part, the undersigned
is to be paid by the Owner for the services rendered corresponding to the fees due at the
stage of suspension or abandonment of the work. Otherwise, the corresponding fees for
the services rendered shall be paid pro-rata.
IN WITNESS WHEREOF, the parties have hereunto affixed their signature to this
agreement on this ___________________of December, _____ at the City of
______________, Metro Manila, Philippines.
By:
OWNERS
CONTRACTOR
Witnessed By:
_____________________________________
_____________________________
_____________________________________
_____________________________
_____________________________________
_____________________________
_____________________________________
_____________________________
_____________________________________
_____________________________
_____________________________________
_____________________________
ACKNOWLEDGEMENT
At City of Makati, this _____ day of _______, _________, appeared the parties whose signatures appear above with their
respective Community Tax Certificates, known to me and to me known as the persons who executed the foregoing contract and
they acknowledge to me that the same are their free and voluntary act and deed.
______________________
Notary Public
Until _____________________
PTR No. __________________
Doc. No.______________
Page No.______________
Book No._____________
Series of _____________