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Cost Plus Construction Agreement

Cost Plus Construction Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Cost Plus Construction Agreement

"I need a Cost Plus Construction Agreement for a luxury hotel development project in Dubai, with a completion date of March 2025, where the contractor will be reimbursed actual costs plus 12% fee, and I need strong provisions for cost monitoring and reporting."

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Document background
The Cost Plus Construction Agreement is typically used in the United Arab Emirates for complex construction projects where the exact scope or costs cannot be accurately predetermined. This contract type is particularly valuable for urgent projects, those with significant potential for variations, or specialized construction works where detailed upfront pricing would be impractical. The agreement provides a framework for transparent cost management while protecting both parties' interests under UAE law. It includes detailed provisions for cost verification, fee calculation, quality control, and project management, all aligned with UAE Civil Code requirements and local construction regulations. The document is structured to ensure clear delineation of responsibilities, risk allocation, and dispute resolution mechanisms specifically adapted to the UAE legal environment.
Suggested Sections

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

2. Background: Context of the construction project, brief description of the works, and the basis for using a cost-plus arrangement

3. Definitions: Defined terms used throughout the agreement, including Project, Works, Cost, Fee, etc.

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

5. Contractor's Obligations: Core responsibilities including workmanship, compliance with laws, safety requirements, and project management

6. Employer's Obligations: Key responsibilities including site access, permits, approvals, and information provision

7. Cost Definition and Components: Detailed breakdown of what constitutes 'Cost' under the agreement

8. Fee Structure and Payment: Definition of the Contractor's fee (percentage or fixed) and payment mechanics

9. Cost Control and Reporting: Requirements for cost tracking, reporting, and budget management

10. Time for Completion: Project schedule, milestones, and completion requirements

11. Variations: Process for handling changes to the scope or cost of works

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

13. Defects Liability: Obligations regarding defect rectification and warranty period

14. Insurance and Indemnities: Required insurance coverage and indemnification obligations

15. Termination: Grounds and procedures for contract termination

16. Dispute Resolution: Process for resolving disputes, including UAE law requirements

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

Optional Sections

1. Performance Security: Required when the Employer needs additional financial security, specifying requirements for bonds or guarantees

2. Advance Payment: Include when advance payments are to be made, specifying amount and recovery mechanism

3. Design Obligations: Required when the Contractor has design responsibilities in addition to construction

4. Subcontracting: Include detailed provisions when significant subcontracting is anticipated

5. Environmental Requirements: Include for projects with significant environmental impacts or requirements

6. Local Content Requirements: Include when there are specific UAE local content or Emiratization requirements

7. Force Majeure: Detailed force majeure provisions for high-risk or long-term projects

8. Step-In Rights: Include for critical projects where Employer may need to step in and take control

Suggested Schedules

1. Schedule 1 - Scope of Works: Detailed technical specification and description of the works

2. Schedule 2 - Cost Components: Detailed breakdown of allowable costs and excluded costs

3. Schedule 3 - Fee Calculation: Formula and methodology for calculating the Contractor's fee

4. Schedule 4 - Project Programme: Detailed project schedule and milestones

5. Schedule 5 - Key Personnel: List of key personnel and their roles/responsibilities

6. Schedule 6 - Forms of Certificates: Templates for payment certificates, completion certificates, etc.

7. Schedule 7 - Insurance Requirements: Detailed insurance requirements and minimum coverage

8. Schedule 8 - Site Information: Site details, access points, and relevant site conditions

9. Appendix A - Form of Performance Security: Template for performance bond or guarantee

10. Appendix B - Form of Advance Payment Guarantee: Template for advance payment guarantee

11. Appendix C - Cost Control Procedures: Detailed procedures for cost reporting and control

12. Appendix D - Quality Control Plan: Quality management procedures and requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 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

Oil & Gas

Healthcare

Education

Hospitality

Industrial

Commercial Property

Renewable Energy

Relevant Teams

Legal

Construction

Commercial

Finance

Operations

Procurement

Risk Management

Compliance

Project Management

Technical

Contract Administration

Relevant Roles

Construction Manager

Project Director

Commercial Director

Contracts Manager

Legal Counsel

Chief Financial Officer

Project Manager

Quantity Surveyor

Cost Controller

Procurement Manager

Risk Manager

Operations Director

Technical Director

Finance Manager

Compliance Officer

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

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