The Construction Settlement Agreement is a crucial document used in the United Arab Emirates construction sector to resolve disputes between contracting parties without resorting to litigation or arbitration. It becomes relevant when parties involved in a construction project face disagreements over matters such as payment claims, delay damages, variation orders, or quality issues. The agreement must comply with UAE Civil Code requirements, particularly Articles 872-896 governing construction contracts, and local Emirates' construction regulations. This document typically includes detailed settlement terms, payment schedules, mutual releases, and provisions for any outstanding obligations. It's particularly important in the UAE construction industry where projects often involve complex contractual relationships and substantial financial implications. The agreement serves as a final resolution document that, when properly executed, is fully enforceable under UAE law.
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1. Parties: Identification of all parties to the settlement agreement, including full legal names, addresses, and registration details
2. Background/Recitals: Description of the original construction contract, project details, and nature of disputes leading to settlement
3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation
4. Settlement Sum: Clear statement of the agreed settlement amount and what it covers
5. Payment Terms: Detailed payment schedule, method of payment, and currency
6. Release and Waiver: Mutual releases from claims and disputes related to the settled matters
7. Confidentiality: Obligations regarding confidentiality of the settlement terms and disputes
8. Final Settlement and No Admission: Confirmation that this is a final settlement and not an admission of liability
9. Representations and Warranties: Basic warranties regarding authority to settle and binding nature of agreement
10. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes
11. Entire Agreement: Confirmation that this document represents the entire agreement regarding the settlement
12. Execution: Execution provisions and signature blocks compliant with UAE law requirements
1. Ongoing Warranties: Required when certain construction warranties need to survive the settlement
2. Retention Release: Used when the settlement involves release of retention monies
3. Outstanding Works: Needed when settlement includes agreement on completion of remaining works
4. Third Party Rights: Required when settlement affects rights of third parties (e.g., subcontractors)
5. Tax Provisions: Necessary when settlement has significant tax implications
6. Insurance Obligations: Required when ongoing insurance obligations need to be addressed
7. Dispute Resolution Process: Optional detailed dispute resolution process for future disputes
8. Interim Arrangements: Required when settlement involves phased implementation
1. Schedule 1 - Payment Schedule: Detailed breakdown of settlement payments, including dates and amounts
2. Schedule 2 - Settled Claims: Comprehensive list of all claims being settled under the agreement
3. Schedule 3 - Outstanding Works: Details of any remaining works to be completed
4. Schedule 4 - Release Documentation: Forms of release or discharge to be executed
5. Schedule 5 - Project Details: Details of the original project and contract
6. Appendix A - Original Contract Documents: Reference copies of relevant original contract documents
7. Appendix B - Correspondence: Key correspondence relating to the disputed matters
8. Appendix C - Technical Reports: Any relevant technical reports or assessments
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