The Contract Agreement For Construction Work is a fundamental legal document used in Indonesia when engaging contractors for construction projects. It is essential for any construction work ranging from commercial buildings to infrastructure projects, ensuring compliance with Indonesian construction laws, particularly Law No. 2 of 2017 on Construction Services. This agreement typically includes detailed specifications of the work, pricing structures, timelines, quality standards, and risk allocation mechanisms. It serves as the primary reference document throughout the construction phase and subsequent defect liability period, incorporating necessary provisions for permits, safety requirements, and environmental compliance under Indonesian regulations. The document is structured to protect both parties' interests while ensuring alignment with local construction practices and regulatory requirements, making it suitable for both domestic and international contractors operating in Indonesia.
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1. Parties: Identification and details of the contracting parties (Owner/Employer and Contractor)
2. Background: Context of the agreement and brief description of the construction project
3. Definitions: Definitions of key terms used throughout the agreement
4. Scope of Work: Detailed description of the construction work to be performed
5. Contract Price and Payment Terms: Agreement on pricing, payment schedule, and payment methods
6. Timeline and Completion: Project schedule, milestones, and completion requirements
7. Contractor's Obligations: Detailed responsibilities and obligations of the contractor
8. Owner's Obligations: Detailed responsibilities and obligations of the owner
9. Materials and Workmanship: Standards for materials and quality of work
10. Health, Safety and Environment: Requirements for workplace safety and environmental protection
11. Permits and Compliance: Responsibility for obtaining necessary permits and regulatory compliance
12. Insurance and Securities: Required insurance coverage and performance securities
13. Variations and Changes: Procedures for handling changes to scope or specifications
14. Inspections and Testing: Requirements for quality control and acceptance
15. Defects Liability: Obligations regarding defects and warranty period
16. Force Majeure: Provisions for unforeseen circumstances and their handling
17. Termination: Conditions and procedures for contract termination
18. Dispute Resolution: Procedures for resolving disputes
19. Governing Law: Specification of Indonesian law as governing law
20. Notices: Requirements for formal communications between parties
21. Execution: Signature blocks and execution requirements
1. Subcontracting: Rules and conditions for subcontracting - include when subcontracting is anticipated
2. Intellectual Property: IP rights and obligations - include for projects involving design or technical solutions
3. Confidentiality: Confidentiality obligations - include for projects involving sensitive information or proprietary technology
4. Site Conditions: Provisions regarding site conditions and associated risks - include for greenfield projects or complex site conditions
5. Equipment and Facilities: Provisions regarding construction equipment and temporary facilities - include for large-scale projects
6. Local Content Requirements: Requirements for local content and resources - include when required by regulations or project specifications
7. Performance Bonds: Requirements for performance bonds - include for high-value projects
8. Currency and Exchange Rates: Provisions for handling multiple currencies - include for international contracts
9. Environmental Management Plan: Detailed environmental management requirements - include for environmentally sensitive projects
1. Schedule 1 - Scope of Work: Detailed technical specifications and drawings
2. Schedule 2 - Bill of Quantities: Detailed breakdown of quantities and prices
3. Schedule 3 - Project Timeline: Detailed project schedule and milestones
4. Schedule 4 - Payment Schedule: Detailed payment terms and milestone payments
5. Schedule 5 - Site Information: Site details, access information, and existing conditions
6. Schedule 6 - Quality Standards: Specific quality requirements and standards
7. Schedule 7 - Forms of Securities: Templates for required bonds and guarantees
8. Schedule 8 - HSE Requirements: Detailed health, safety, and environmental requirements
9. Schedule 9 - Key Personnel: List of key personnel and their roles
10. Appendix A - Technical Drawings: Complete set of construction drawings
11. Appendix B - Permits and Licenses: Copies of relevant permits and licenses
12. Appendix C - Insurance Certificates: Copies of required insurance certificates
Relevant legal definitions
Clauses
Relevant Industries
Construction
Real Estate Development
Infrastructure
Industrial Development
Commercial Property
Residential Development
Mining
Oil and Gas
Manufacturing
Hospitality
Healthcare
Education
Retail
Transportation
Energy
Relevant Teams
Legal
Construction
Project Management
Procurement
Finance
Operations
Risk Management
Commercial
Technical Services
Quality Assurance
Health and Safety
Compliance
Engineering
Contract Administration
Relevant Roles
Chief Executive Officer
Managing Director
Construction Manager
Project Director
Legal Counsel
Contract Manager
Procurement Manager
Site Manager
Chief Financial Officer
Risk Manager
Operations Director
Technical Director
Quantity Surveyor
Project Engineer
Commercial Manager
Compliance Officer
Health and Safety Manager
Quality Assurance Manager
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