Agreement between the Owners and the Contractor on Fee Plus Cost of Labour and

AGREEMENT made at……………………. on this……………. day
of…………… 2000, between A Co. Ltd., a company incorporated under the Companies
Act, 1956 and having its registered office at……………….. (Hereinafter
called the “owners”, which expression shall, unless repugnant to the
context or meaning thereof, be deemed to include its successors and assigns) of
the ONE PART and Z Co. Ltd., a company incorporated under the Companies Act,
1956, and having its registered office at……………………. (Hereinafter
called the “Contractors”, which expression shall unless repugnant to
the context or meaning thereof, be deemed to include its successors and
assigns) of the OTHER PART.

the owners are absolutely seized and possessed of the plot of land or otherwise
well and sufficiently entitled to the plot of land bearing No…….. City
Survey No…………. Village No………….. Tehsil and
District………………………, which land, is more particularly described
in the First Schedule hereunder written and referred to as “the said

WHEREAS the owners are desirous of constructing flats for its executives to as
per site plans prepared by………………………. the architects and
approved by the Municipal Corporation of…………………………….true
copies whereof are annexed hereto, and marked as Annexure A for the purpose of

WHEREAS the contractors have offered to construct the said flats according to
the said plan (hereinafter referred to as the said works) on the fee plus cost
system and on the terms and conditions mentioned hereafter.


1.     That the contractors
agree to construct the flats in accordance with the site plans annexed hereto
and marked as Annexure A, strictly in accordance with the specifications and
conditions of contract set out in Second and Third Schedules hereunder written;
provided that the owners shall be entitled to require such changes or
alterations in the said plans, as they may deem necessary to suit their
requirements and the contractors agree to undertake to get the said alterations
or changes approved by the Municipal Corporation of……………. and execute
the said alterations or changes.

2.     The contractors will
abide by the directions of…………. Architects, during the progress of the
said works and will complete the said works agreed to be done on or before the
expiry of…………….. Months from the date of execution of these presents.
The contractors undertake that they will execute the said works in the best and
soundest way and in the most economical manner keeping the interest of the
owners in view.

3.     The owners agree to
pay to the contractors the remuneration of Rs…………. and shall reimburse
them the expenses incurred by them in connection with the completion of the
said works such costs to include the following items:

for construction such as cement, steel, lime, wood, plumbing materials, etc.

paid to the workmen labor and employees employed for the execution of the

of artisans, overseers and engineers employed for the execution of the works.

incurred by staff, overseers and engineers for travelling, transporting and
hotel bills in discharge of duties in connection with the construction.

of permission and approvals from all the authorities concerned for the
construction, supply of power, drainage and other services for the said works.

of tools not owned by the workmen, canvas and plank, etc., consumed or rendered
unfit during the execution of the said work.

incidental expenses relating to the execution of the said works.

cost of the above items shall not be higher than the market rates paid in the
locality of the work. The cost reimbursable to the contractors shall not
include the salary of the regular employees of the contractors or interest on
capital employed by the contractors for the execution of the said work.

4.     The contractors shall
keep full and regular account of all materials brought on the site, consumed
and balance lying on the site. The said account books shall be open to
inspection to the owners or their representatives at all reasonable times, who
shall be entitled to take the copy of any document, register, correspondence or
account maintained by the contractors.

5.     The contractors shall
submit a bill on 10th of each month to the architect showing in detail the
moneys paid by them on account of the cost of the work during the previous
month for which they have to be reimbursed under the agreement, with original
receipted bills and original rolls for labour checked and certified by the
contractor’s Chartered Accountants.

6.     The architect will
certify the reasonableness of each bill supported by the vouchers of expenses
and the certificate of architect as to the reasonableness or otherwise shall be
final on the contractors. If the architect certifies that any bill submitted by
the contractors is on higher side, then he (the architect) shall certify the
market rate of the items of the said bill, (which shall be based on quotations
from three reputed dealers) and the owners shall make payment of that bill in
terms of the architect’s certificate.

7.     The owners will pay
the amount of each bill within a period of 15 days from the date of receipt of
the bill duly certified by the architect, in their office.

8.     The contractors shall
be responsible for injury to persons, animals or things and for all structural
damages to the property which may arise from the operation or neglect of the
contractors or their employees, nominees, sub-contractors or their employees,
whether such injury or damages arises from carelessness, accident or any other
cause whatsoever in any way connected with the carrying out of construction
pursuant to these presents.

9.     The contractors shall
indemnify and keep the owners harmless against any claims, demands, actions or
proceedings that may be made or adopted against the owners or that may be
suffered by the owners by reason of anything done by the contractors pursuant
to any work done by them in execution of the said works.

10.  The contractors shall
during the execution of the said works insure them against destruction or
damage by fire, earthquake, flood, cyclone, etc., to its full insurable value
and keep insured until the possession of the buildings complete in all respects
and fit for occupation is handed over to the owners.

11.  If the contractors
fail to commence the work or without any lawful excuse under these conditions
suspend the progress of the works for fourteen days after receiving from the
architect the notice to proceed or persistently or repeatedly refuse or fail to
supply properly skilled workmen to proper material or persistently disregard
the- regulations, instructions or directions of the local or other authority or
violate the terms of this agreement or fail to proceed the works with such due
diligence and fail to make such due progress as would enable the works to be
completed within the time agreed upon and the architect has certified that
sufficient causes exist to justify the termination of the contract, then the
owners may terminate the contract after giving the contractors seven days
notice of their intention to do so. On such termination, the owners or their
servants may enter upon and take possession of the works and tools,
scaffolding, sheds and other materials lying upon the premises and use the same
as their own property or may employ the same by means of its own servants and
workmen in carrying on and completing the works or by employing any other
contractor or other person or persons to complete the works and the contractors
shall not in any way interrupt or do any act, matter or thing to prevent or
hinder such other contractors or other person or persons employed for
completing and finishing the said works or using the materials and plant for
the said works.

case of termination of the contract, the architect shall thereafter ascertain
and certify in writing under his hand what shall be due or payable to or by the
owners, for the value of the said plant and materials so taken possession of
the owners and the expense or loss which the owners shall have been put to in
procuring the said works to be completed and the amount, if any, owing to the
contractors and the amount which shall be so certified shall thereupon be paid
by the owners to the contractors or by the contractors to the owners, as the
case may be, and the certificate of the architect shall be final and conclusive
between the parties.

12.  In case any dispute
or difference should arise between the parties, whether in respect of quality
of material used by the contractors, or work done or in respect of delay in
completion of work or any other matter arising out of or in connection with
agreement or the carrying out of works, shall be referred to and settled by the
architect, who shall state his decision in writing. If any party is
dissatisfied with the decision of the architect, either party (the owners or
the contractors) may give a written notice to the other party through the
architect that the matters in dispute be referred to the arbitration and final
decision of an arbitrator to be agreed upon and appointed by both the parties
or in case of disagreement as to the appointment of a single arbitrator to the
appointment of two arbitrators, one to be appointed by each party which
arbitrators shall before taking upon themselves the burden of reference appoint
an umpire. The submission shall be deemed to be a submission to arbitration
within the meaning of the Arbitration and Conciliation Act, 1996 or any
statutory modification thereof. The award of the arbitrator or arbitrators, as
the case may be, shall be final and binding on the parties. The fees of the
arbitrator appointed by a party shall be paid by the party so appointing and
the fees of the umpire and other arbitration expenses shall be borne half and half
by the parties. The owners and the contractors hereby also agree that
arbitration under this clause shall be, a condition precedent to any right of
action under the contract.

13.  This agreement shall
be executed in duplicate. The original shall be retained by the owners and the
duplicate by the contractors.

WITNESS WHEREOF the parties have signed these presents and a duplicate hereof,
the day and year first hereinabove written.

and delivered by A Co Ltd., the within named

by its Managing Director Mr…………….

and delivered by Z Co. Ltd., the within named

by its Managing Director Mr……………….




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