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.
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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
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
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
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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