Works Contract Template for Philippines

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Works Contract

"I need a Works Contract for the construction of a commercial warehouse in Manila, with a project value of 50M PHP and completion deadline of March 2025, including specific provisions for phased completion and local authority approvals."

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What is a Works Contract?

The Works Contract is a fundamental document in the Philippine construction industry, essential for any project involving construction, renovation, or infrastructure development. This contract type is specifically designed to comply with Philippine legal requirements, including the Civil Code, National Building Code, and Construction Industry Authority of the Philippines (CIAP) regulations. It is typically used when engaging contractors for construction projects, ranging from building developments to infrastructure works, and includes comprehensive provisions for scope definition, payment structures, timelines, quality standards, and regulatory compliance. The document addresses unique aspects of Philippine construction law, including local permitting requirements, workers' rights under Philippine labor law, and environmental regulations. It serves as a crucial tool for project owners and contractors to establish clear terms, allocate risks, and ensure smooth project execution while maintaining compliance with local legal frameworks.

What sections should be included in a Works Contract?

1. Parties: Identification of the Employer and the Contractor, including their complete legal names, addresses, and registration details

2. Background: Context of the agreement, including brief project overview and basis for entering into the contract

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

4. Scope of Works: Detailed description of the construction works to be performed, including specific deliverables and objectives

5. Contract Price and Payment Terms: Amount payable for the works, payment schedule, method of payment, and conditions for payment

6. Timeline and Completion: Project schedule, completion dates, milestones, and provisions for extensions of time

7. Contractor's Obligations: Key responsibilities including workforce, materials, equipment, safety standards, and compliance with laws

8. Employer's Obligations: Responsibilities including site access, permits, approvals, and provision of necessary information

9. Quality and Standards: Required quality standards, inspection procedures, and acceptance criteria

10. Variations: Process for handling changes to scope, pricing, or timeline of works

11. Health, Safety and Environment: Requirements for workplace safety, environmental protection, and compliance with regulations

12. Insurance and Indemnity: Required insurance coverage and indemnification obligations of both parties

13. Defects Liability: Duration of defects liability period and obligations for rectifying defects

14. Termination: Grounds and procedures for contract termination by either party

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

16. General Provisions: Standard clauses including notices, governing law, entire agreement, and amendments

What sections are optional to include in a Works Contract?

1. Performance Security: Required when the project value exceeds certain thresholds or when specifically requested by the Employer

2. Advance Payment: Included when advance payments are to be made, specifying terms and security requirements

3. Subcontracting: Required when subcontracting is permitted, specifying conditions and approval requirements

4. Equipment and Materials Supply: Included when specific arrangements exist for supply of materials or equipment by the Employer

5. Force Majeure: Detailed provisions for force majeure events, particularly relevant in areas prone to natural disasters

6. Intellectual Property Rights: Required when the works involve design elements or proprietary technology

7. Site Conditions: Included when there are specific site-related risks or conditions that need addressing

8. Testing and Commissioning: Required for projects involving mechanical or electrical installations

What schedules should be included in a Works Contract?

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

2. Schedule 2 - Project Timeline: Detailed project schedule, milestones, and completion dates

3. Schedule 3 - Bill of Quantities: Itemized list of quantities, unit rates, and prices

4. Schedule 4 - Payment Schedule: Detailed breakdown of payment terms, milestones, and amounts

5. Schedule 5 - Technical Specifications: Detailed technical requirements and standards for materials and workmanship

6. Schedule 6 - Site Information: Site details, access points, existing conditions, and restrictions

7. Schedule 7 - Forms and Certificates: Standard forms for variations, completion certificates, and other project documents

8. Schedule 8 - Insurance Requirements: Detailed insurance requirements including types, coverage amounts, and special conditions

9. Appendix A - Required Permits and Licenses: List of required regulatory approvals and permits

10. Appendix B - Health and Safety Requirements: Detailed safety procedures and requirements

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

Relevant legal definitions
Clauses
Relevant Industries

Construction

Infrastructure

Real Estate Development

Mining

Manufacturing

Energy

Telecommunications

Transportation

Industrial Development

Public Works

Commercial Development

Residential Development

Relevant Teams

Legal

Operations

Procurement

Construction

Project Management

Commercial

Risk and Compliance

Finance

Technical Services

Business Development

Property Development

Relevant Roles

Project Manager

Construction Manager

Contract Administrator

Legal Counsel

Chief Executive Officer

Operations Director

Procurement Manager

Site Engineer

Quantity Surveyor

Risk Manager

Commercial Director

Development Manager

Technical Director

Compliance Officer

Finance Director

Industries
Civil Code of the Philippines (Republic Act No. 386): Provides the fundamental legal framework for contracts, including provisions on obligations and contracts, damages, and warranties
National Building Code of the Philippines (PD 1096): Establishes standards and requirements for building design, construction, use, occupancy and maintenance
Construction Industry Authority of the Philippines (CIAP) Law: Regulates construction industry practices, licensing requirements, and standards for contractors
Labor Code of the Philippines (PD 442): Governs employment relationships, working conditions, safety standards, and workers' rights in construction projects
Republic Act 9184 (Government Procurement Reform Act): Relevant for public works contracts, establishing procurement procedures and requirements
Environmental Impact Assessment Law (PD 1586): Requires environmental impact assessments for construction projects that may affect the environment
Local Government Code (Republic Act 7160): Provides framework for local government permits, licenses, and approvals needed for construction works
National Internal Revenue Code: Covers tax obligations and requirements related to construction contracts, including VAT and contractor's tax
Contractor's License Law (RA 4566): Regulates licensing of contractors and sets requirements for undertaking construction projects
Occupational Safety and Health Standards Law (RA 11058): Establishes mandatory occupational safety and health standards in all workplaces including construction sites
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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