Building Contract

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BUILDING CONTRACT

KNOW ALL MEN BY THESE

This Contract made and entered into by and between: ABC MANUFACTURING COM-
PANY, a corpor ation duly organized under and by v irtue of the laws of the Republic of the
Philippines, wtth principal office at represented
herein by its president and General Manager, Mr. mar-
ried , Filipino citizen, of legal age, hereinafter referred to as the OWNER;

- and -

- ------ - -------- apartnership doing business in the Philippines

under this firm name in accordance with provisions of existing laws, with principal office at
- - -- -- - -- - -- - -- - represented herein by its managing partner,
Engr. , Filipino citizen, of legal age, married, hereinafter
referred to as the CONTRACTOR;

WITNESSETH

OWNER owns a Lot i.n .. . __ _ _ situated at and

identified as lot No. 2-0 Naguilian Road, Res. Sec. "K' ',
WHEREAS, the OWNER desires to construct a Residential house on the said lot;
WHEREAS, the OWNER invited bidders to undertake Construction of certain works to be used
in connection with this project;
WHEREAS, CONTRACTOR represented himself/itself as being/ having an organization finan-
cially sound and efficiently established, into the necessary experience, personnel and
equipment for the performance of this Agreement;
WHEREAS, OWNER has awarded bid to CONTRACTOR, Contractor's bid being most ad-
vantageous to OWNER on the basis of bid price as well as on other considerations;
the is willing to undertake the construction. in accordance with
the plans and specifications, marked as Annexes "A" and " 8 " all of which are made
integral parts of this Contract;
NOW, THEREFORE . the parties hereto have agreed to the following terms and conditions;
covenants, agreement and stipulation set forth, do hereby agree as follows:
ARTICLE 1 SCOPE OF THE WORK
1.01 The CONTRACTOR in consideration of the payment to be made by the OWNER to
the CONTRACTOR of the sum of money hereinafter names. ·agreet to furnish all
the necessary materials, labor and equipment for the satisfactory, faithful perfor-
mance necessary to complete the project including painting, drainage, p1umbing
and electrical installation therein In accordance with the accompanying plan• and
specifications and other related doCUf'l&nts as prepared by the ARCHITECT and
approved by the Boildlng l)fficlal. ·
*(Indicate If the Contract is LABOR only)

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ARTICLE 2 TIME OF COMPLETION AND LIQUIDATED DAMAGES
2.01 The CONTRACTOR shall commence the Construction not later. than five (5) days
after the execution of this contract upon receipt of the initial advance payment, and
shall regularly proceed. and complete the construction within ONE HUNDRED FIF·
TY (150) working days counted from the commencement of the work, unless
prevented by fortuitous events, In which case the OWNER mav extend the time ac·
cordingly.
2.02 In the event that the construction is not completed within the aforesaid period of
time, the OWNER is entitled and shall have the right to deduct from any sum to
become due the contractor the sum of EIGHT HUNDRED FIFTY PESOS or ten
percent of one percent of the contract price for every day of delay as LIOUIDATED
DAMAGES, and not by way of penalty.

ARTICLE 3 THE CONTRACT AMOUNT

3.01 The OWNER agrees that for and in consideration of the faithful performance by the
CONTRACTOR of this Contract, he shall pay to the Contractor, in a manner provid·
ed hereinafter, the amount of EIGHT HUNDRED FIFTY THOUSAND
(1"850,000.00) PESOS segregated as per accomplishment and shown in the
"Bteakdown Work" Annex "D" of this Contract.
3. 02 It is eqxessly llflreed by both parties that no change shall be made in the above
mentioned contract amount as a result of any FLUCTUATION in the cost of
and/or labor, except those conditions as enumerated in Article 4
----(note in some contrBCts, Bn escalation clause is included wherein the contract
amount is adjusted accordingly as per materials cost incresse in percentage}
3.03 Any payment due end payable to the Contractor may be offset against any fi.
quidsted dsmsges payable to the Owner under this Contract.

ARTICLE 4 CHANGES. ADDITIONS, SUBTRACTIONS

4.01 The work and construction herein agreed to be done shall be subject to the dirac·
tions of the OWNER'S Architect or Engineer or Representative who shall supervise
and certify the work hereby agreed to be done.
4.02 The CONTRACTOR guarantees the performance and completion of the construc-
tion work to the satisfaction of the OWNER in conformity with the provisions of
the Civil Code (Art. 1 7 23) which states that the Contractor is responsible for the
damages if the edifice falls within fifteen years, on account of defects in the con-
struction or the use of materials inferior quality furnished by him, or due to any
violation of the terms of the contract.
4.03 In case of any defect in workmanship or materials which may become apparent in
the course of the construction, the CONTRACTOR, upon demand of the OWNER
or his Architect, Engineer or his representative, shall at the Contractor's own ex-
pense tear down and replace such portion·of the work done by the CONTRACTOR
as in the OWNER'S or its Architect, Engineer's opinion ere unsound, incorrect or
defective, or not in accordance with the plans end specifications.
4.04 In case of default on CONTRACTOR'S part to carry out such order, the OWNER
may employ and pay other persons to carry out the same, and all expenses conse-
quent thereon or incidental thereto shall be borne by CONTRACTOR, and shall be
recoverable from him/it by the OWNER, or may be deducted by the OWNER from
anv monies due CONTRACTOR.

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 4.05 Should the OWNER require the CONTRACTOR to peform work over and above that
required by this Agreeme':'!t, cost shall _b!t to Contrl!<?t
amount and, likewise, should he be ordered to omit work as required by this Agree-
ment, the cost of work omitted shaii be deducted fromthe- Contract Amount': In -
either case, the cost of additions or reductions shall previously be mutually agreed
upon in writing by both OWNER and CONTRACTOR upon recommendation of the
Architect before execution.

ARTICLE 5. PAYMENTS
5.01 An initial advance payment of thirty percent (30%) of the Contract price or Two
Hundred Fifty Five Thousand (P255,000.00) Pesos shall be released by the
OWNER to the CONTRACTOR after the signing of the Contract papers and presen-
tation of all documents enumerated in Article 6.
5.02 Payment on account of this Contract shalt be made by OWNER every thirty days
hereof In an amount equivalent to ninety percent (90% of the value of the
estimated work as computed by the Architect using as a basis the
"BREADKOOWN OF WORK" and Corresponding " VALUE" mutually agreed upon
between the Architect and the Contractor prior to the start of construction see An-
nex "0". (see page 383 for sample of value of work)
5.03 That. prioi to and as a condition precedent to any payment to be made by the
OWNER hereunder to the CONTRACTOR, the latter shall submit an affidavit signed
by him to the effect that all materials used by him in the work as well as all wages
and sa\aries to which the Contractor's employees assigned to the work are entitled
to receive under the law had been paid by the CONTRACTOR.
5 .04 Final and full payment of the Ten Percent (10%} retention fee and all balances
herein above mentioned shall be made by the OWNER to the CONTRACTOR upon
fulfilling the conditions set forth in the General Condition .
5.05 Should the OWNER fail to pay within 30 days the sum in any certificate shall
receive in addition to the sum in the certificate, interest thereon , at the legal rate in
force.

ARTICLE 6 THE CONTRACT DOCUMENTS

6 .01 The following documents prepared by the architect shall constitute and integral
part of this contract as fully as if hereto attached or herein stated except as other-
wise modified by mutual agreement of parties.
Anne:K "A" Architectural drawings, structural drawings, electrical drawings,
mechanical drawings.
Annex "B" Approved specifications and/or its bill of materials.
Annex " C" General Conditions
Annex "0" Breakdown of work and corresponding value in percentage.
Annex "E" Bar chart and/ or CPM schedule of works with dates.
Annex "F" Performance Bond in the sum of P255,000.00 in favor of the
OWNER .
Annex "G" - Approved Building permits, including Electrical, Plumbing and
mechanical permits and other ·Licenses, as required by the
government.

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ARTICLE 7. TAXES, UCENSES. I BBTS AND FEES
7.01 The CONTRACTOR lhll procure at his own expense all the necessary licenses,
building permits, and sanctions of the proper authorities In respect of
said wen, and geneelllly comply with the building and other regu,ations of auch
authorities, including the final permit for occupancy after the completion of the
construction to the satisfaction of the OWNER and his representative, and shell
keep the OWNER indemnified against all fines and penalties and losses incurred by
reason of any breech of this stipulat ion.

ARTICLE 8 PERFORMANCE AND PAYMENT BONDS

8 .01 The CONTRACTOR will fumish the OWNER, within five (5 ) days from the signing
of this coutaact, a performance and payment Bond, in the form of a surew bond to
be issued by a reputable bonding company acceptable to the OWNER in the sum of
EIGHTY FIVE TMOUSAND (P85,000.00) PESOS or 10% of the Contract price, equivalent
to the dawnp;ryment, conditioned for the faithful performance of the faithful perfor-
mance of the Contract and the satisfaction of obligations for materials used and labor
on the work . These bonds shaH be effective with in a period of one ( 1J year after
the acceptance of the work by the OWNER .

ARTtCLE 9. INSURANCE AND OTHER CONDITIONS

9.01 The CouiJactor shall take cognizance of the provisions of the other contract
documents especially the Contractor's responsibilit ies and liabilities on materials,
workmanship. labor and property as stipulated in the General Conditions. Within
fifteen ( 1 5) davs after signing of the contract, the Contractor shall submit cer-
tificate of insurance to protect him against claims for damages of OWNER'S pro-
perty and adpning property which may arise from operations under this contract,
subject to the approval of the OWNER as to adequacy of protection and reliability
of insurance company.
9 .02 The Contractor shall hire all workers for the Construction work and he shall be
soklly responsible for the payment of their wages. In case of any accident or injury
1ha1 may befan in the course of the construction , the CONTRACTOR shall comply
with the Workmen's Compensation Act, the Minimum W vge law, and all other
laws. ordinances and regulations. The CONTRACTOR shall likewise be responsible
for any losses or injury that the OWNER or third party may suffer as a result or in
the coune, of the construction and shall discharge and/or render harmless the
OWNER from an damages, costs, expenses and/ or compensation on account of, or
in any way resulting from or out of the construction.

ARTICLE 10. SUB-CONTRACT

10.01 tt is understood and agreed that the entire work called for by this contract shall not
be subiet or subcontracted. However for the better progress of this construction
the CONTRACTOR may sub--contract specific jobs and portions of this construc-
tion wortc after obtaining prior authorization from the OWNER or his duly authoriz-
ed r81M'U&ntative.
10.02 Any wubcontract, even if authorized, shall not be so understood as to relieve the
CONTRACTOR from his/its obligation and responsibility to the OWNER for the
satisf8ctofy completion of the work and for payment for wages of laborers and for
materials furnished for the work.
The Parties to this agreement hereby agree to full performance of the covenants herein.

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IN W ITNESS WHEREOF, the partfes to this Agreement have on the day and year first above
given, hereto set their hands at the bottom of this page and on the left-hand margin of all the
other pages of this Agreement this day of 1986, in the City of Baguio Philippines.

By :

O WNER CON T RACTOR

SIGNED IN THE PRESENCE OF:

W itness Witness

CH22-2

REPUBLIC OF THE PHILIPPINES)$ S

CITY OF BAGU\0 . . . . . . ) ..

Before me, a Notary Public in and for the City of Baguio, personally appeared
- - - - - - - - · w ith Residence Certif icate No. A . issued at
_ _ _ _ _ _ _ __ _ _ on 1986, both known to me and
t o me known to be the same person who executed the foregoing instrument and acknowledged
to me that the same is their free act and deed and the free act and deed of the Corporation
represented by him, for the purpose therein set forth.
IN WITNESS WHEREOF. I have hereunto set my hand and affixed my Notarial seal this _ _ in
day of 1986 in the City of Saguio, Philippines .

NOTARY PUBLIC

Doc. No. _ _ ;
Page No. _ _ ;
Book No. _ _ ;
Series of 1986.

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