Construction Agreement Checklist

A well-drafted construction agreement is essential for protecting your interests and ensuring a smooth construction process. Before signing any contract with a contractor or builder, review this checklist to make sure all important terms are covered.

Scope of Work: The agreement should clearly define what is included and excluded in the construction. This includes the built-up area, number of floors, type of construction, materials to be used, finishing standards, and any additional works such as compound walls, borewells, or interiors.

Timeline and Milestones: The agreement should specify the total project duration, start date, and completion date. It should also include milestone dates for key stages such as foundation completion, slab casting, brickwork, plastering, and finishing. Include clauses for delay penalties and extensions.

Payment Schedule: The payment terms should be linked to construction milestones, not to calendar dates. Typically, payments are made in stages: advance, foundation completion, slab casting, brickwork, plastering, flooring, and final handover. Specify the percentage and amount for each stage.

Material Specifications: The agreement should list the brands and grades of key materials such as cement, steel, sand, aggregates, tiles, paint, and fixtures. This prevents substitution with inferior materials during construction.

Quality Standards: Include clauses specifying that construction will follow IS code standards, with regular quality inspections and material testing. Specify who is responsible for quality control and what happens if quality standards are not met.

Warranty and Defect Liability: The agreement should include a defect liability period (typically 1 to 5 years) during which the contractor is responsible for repairing any construction defects at no cost to the owner.

Changes and Variations: Include a process for handling changes to the original scope, including how changes are priced, approved, and documented. This prevents disputes over extra costs during construction.

Termination Clause: Specify the conditions under which either party can terminate the agreement and the consequences of termination, including payment for work completed up to that point.