Construction Agreement Between Owner And Contractor Template for Indonesia

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Key Requirements PROMPT example:

Construction Agreement Between Owner And Contractor

"I need a Construction Agreement Between Owner and Contractor for a 20-story commercial building project in Jakarta, with construction scheduled to commence in March 2025, including provisions for phased completion and sustainable building requirements."

Document background

The Construction Agreement Between Owner And Contractor is a fundamental document used in Indonesian construction projects to establish a legally binding relationship between the project owner and the construction contractor. This agreement is essential when engaging a contractor to perform construction works and must comply with Indonesian law, particularly Law No. 2 of 2017 on Construction Services and its implementing regulations. The document covers all aspects of the construction project, including scope, price, timeline, quality requirements, risk allocation, and dispute resolution mechanisms. It is designed to protect both parties' interests while ensuring project delivery meets local regulatory requirements and industry standards. The agreement is particularly important in the Indonesian context due to specific local content requirements, licensing regulations, and construction safety standards that must be addressed.

Suggested Sections

1. Parties: Identification and details of the Owner and Contractor, including their legal status and authority to enter into the agreement

2. Background: Context of the agreement, project overview, and basis for the construction contract

3. Definitions and Interpretation: Definitions of key terms and rules for interpreting the agreement

4. Scope of Work: Detailed description of the construction works to be performed by the Contractor

5. Contract Price and Payment: Amount payable, payment terms, method of payment, and payment milestones

6. Time for Completion: Project schedule, completion date, and provisions for extensions of time

7. Contractor Obligations: Key responsibilities including workmanship, materials, compliance with laws, and safety requirements

8. Owner Obligations: Owner's responsibilities including site access, permits, and approvals

9. Quality and Inspection: Quality standards, testing requirements, and inspection procedures

10. Variations: Process for managing changes to the scope, price, or schedule

11. Defects Liability: Contractor's responsibility for defects and remedial work during the defects liability period

12. Insurance and Indemnity: Required insurance coverage and mutual indemnification obligations

13. Force Majeure: Events beyond parties' control and their consequences

14. Suspension and Termination: Rights and procedures for suspending or terminating the contract

15. Dispute Resolution: Process for resolving disputes, including mediation and arbitration procedures

16. Governing Law: Application of Indonesian law and jurisdiction

17. General Provisions: Standard contractual provisions including notices, assignment, and entire agreement

Optional Sections

1. Design Responsibility: Include when contractor has design obligations in addition to construction

2. Performance Security: Include when contractor must provide bank guarantees or bonds

3. Project Management: Include for complex projects requiring detailed management procedures

4. Environmental Requirements: Include for projects with significant environmental impacts

5. Site Conditions: Include when there are specific site risks or conditions to address

6. Materials Supply: Include when there are special provisions for material procurement or supply

7. Subcontracting: Include when subcontracting needs specific regulation

8. Intellectual Property: Include when design or technical solutions involve IP rights

9. Local Content Requirements: Include when Indonesian local content requirements apply

10. Phasing and Milestones: Include for projects with multiple phases or critical milestones

Suggested Schedules

1. Schedule 1 - Scope of Works: Detailed technical specifications and drawings

2. Schedule 2 - Contract Price Breakdown: Detailed breakdown of contract price and bill of quantities

3. Schedule 3 - Project Schedule: Detailed construction program and milestone dates

4. Schedule 4 - Site Information: Site details, access points, and existing conditions

5. Schedule 5 - Key Personnel: List of key personnel from both parties and their roles

6. Schedule 6 - Forms of Certificates: Templates for completion certificates and other formal notices

7. Schedule 7 - Forms of Securities: Templates for bank guarantees and bonds

8. Schedule 8 - Insurance Requirements: Detailed insurance requirements and coverage limits

9. Schedule 9 - Quality Assurance Requirements: Quality standards and testing procedures

10. Schedule 10 - HSE Requirements: Health, safety, and environmental requirements

11. Appendix A - Owner Supplied Items: List of items to be supplied by the Owner

12. Appendix B - Permits and Approvals: List of required permits and responsible parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Real Estate

Infrastructure

Industrial

Commercial

Residential

Healthcare

Education

Hospitality

Retail

Energy

Manufacturing

Mining

Transportation

Public Works

Relevant Teams

Legal

Construction

Project Management

Commercial

Procurement

Finance

Operations

Risk Management

Compliance

Technical Services

Business Development

Contract Administration

Relevant Roles

Project Director

Construction Manager

Contract Manager

Legal Counsel

Project Manager

Chief Executive Officer

Chief Financial Officer

Technical Director

Procurement Manager

Risk Manager

Quantity Surveyor

Site Manager

Commercial Manager

Operations Director

Development Manager

Compliance Officer

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