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Construction Payment Contract

Construction Payment Contract Template for Philippines

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Key Requirements PROMPT example:

Construction Payment Contract

"I need a Construction Payment Contract for a 20-story commercial building project in Manila, with monthly progress payments and 10% retention, including provisions for foreign currency payments as we're working with an international contractor starting March 2025."

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Document background
The Construction Payment Contract serves as a crucial document in Philippine construction projects, establishing the financial framework between project owners and contractors. This contract type is essential when implementing construction projects in the Philippines, whether for commercial, residential, or infrastructure developments. It must comply with Philippine laws, including the Civil Code, Contractors' License Law, and relevant tax regulations. The document typically includes detailed payment schedules, progress payment mechanisms, retention provisions, and dispute resolution procedures. It's particularly important for protecting both parties' interests in construction projects and ensuring clear financial obligations while maintaining compliance with local construction industry standards and practices.
Suggested Sections

1. Parties: Identification of the parties: the payor (client/owner) and payee (contractor/builder), including their complete legal names, addresses, and registration details

2. Background: Context of the construction project and the reason for this payment contract

3. Definitions: Key terms used throughout the contract, including technical construction terms and payment-related terminology

4. Contract Price: Total amount payable, including base price, taxes, and any adjustments

5. Payment Terms: Schedule of payments, payment milestones, and payment methods

6. Payment Conditions: Conditions that must be met before payments are released, including documentation requirements

7. Progress Payments: Structure and timing of progress payments, including the process for progress certification

8. Retention: Details of retention money, when it will be held and released

9. Variations: Process for handling and paying for variations to the original scope

10. Default and Remedies: Consequences of payment defaults and available remedies for both parties

11. Dispute Resolution: Process for resolving payment-related disputes

12. Governing Law: Specification of Philippine law as governing law and relevant jurisdictional matters

13. Execution: Signature blocks and execution formalities

Optional Sections

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

2. Advance Payment: Include when there is an agreement for mobilization or advance payments

3. Price Escalation: Necessary for long-term projects subject to material price fluctuations

4. Foreign Currency Provisions: Required when payments involve multiple currencies

5. Tax Provisions: Detailed section needed when special tax arrangements apply

6. Insurance Requirements: Detailed insurance provisions when specific coverage is required for payment releases

7. Step-in Rights: Include for large projects where the payor may need rights to take over payment obligations

8. Force Majeure: Include specific payment provisions related to force majeure events

Suggested Schedules

1. Payment Schedule: Detailed breakdown of payment milestones and amounts

2. Bill of Quantities: Itemized list of works and their corresponding prices

3. Progress Payment Certificate Template: Standard form for progress payment applications

4. Required Payment Documentation: List of documents required for payment processing

5. Performance Standards: Metrics and standards that must be met for payment release

6. Bank Account Details: Banking information for payment transfers

7. Tax Computation Schedule: Breakdown of applicable taxes and calculations

8. Variation Rate Schedule: Pre-agreed rates for potential variations to the work

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 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

Construction

Real Estate Development

Infrastructure

Commercial Property

Residential Development

Industrial Construction

Public Works

Engineering

Architecture

Project Finance

Relevant Teams

Legal

Finance

Construction

Project Management

Commercial

Procurement

Operations

Risk Management

Compliance

Accounts Payable

Relevant Roles

Project Manager

Construction Manager

Finance Director

Contracts Administrator

Quantity Surveyor

Chief Financial Officer

Legal Counsel

Construction Director

Project Director

Site Manager

Financial Controller

Commercial Manager

Procurement Manager

Construction Supervisor

Project Accountant

Industries








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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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