For interior work signing a formal contract agreement is very important. There have been many instances where the client is displeased with the service provided and finds that because he or she did not sign a tight agreement with the interior designer. There is not much the client can do, even if he or she decides to sue for a breach of contract. Some of the important points to be included in an interior work contract are Detailed Specifications, Scope of Work, Drawings, Consultants and Contractors, Design Fees, Price Guarantees (or Not), Purchasing and Procurement, Refunds, Cancellations, Reimbursable Costs, Payment Terms, Insurance, Photographing Completed Works.
Sample Format of Contract to do interior work by contractor for Company is given below. Please modify and include necessary points above as per the type of contract.
THIS AGREEMENT is made at New Delhi on this ____________________ day of ___ 20__
_________________ Pvt Ltd a company registered under the Indian Companies Act and having its registered office at _________________ _________________ _________________ and having Branch office at _________________ through its Director / Authorised signatory Mr. ________________________ (hereinafter referred to as the "Company" which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the one part
M/s _________________ Private Limited a company incorporated under the Indian Companies Act, having its registered office at _________________ _________________ _________________ through its Director / Authorised Person _________________ (hereinafter referred to as the "Contractor" which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the other part.
WHEREAS the Company is desirous of getting the Interior design and Execution for their proposed office (Approx. Super Area ______ Sft.) at _________________ _________________.
AND WHEREAS the second party is a Design and Build Contractor and is having vast experience in interior turnkey works of office and has agreed to do the interior work in the said office of the Company.
NOW IT IS AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:
1. That the Company shall carry out, Design, Built & complete the work of interior furnishing as Turnkey Solution of the proposed branch of M/s. _________________ Pvt Ltd at _________________ _________________ _________________, for the Company on the terms and conditions herein contained and Schedule of rates and plan, and instructions to be given by and under the supervision of and to the entire satisfaction of the Company's authorized representative at New Delhi. The description of the work and terms of contract are as under:
2. Description of Work, Quantity, Rate and Contract Value: The contract is for Interior Works for office at _________________ _________________ _________________ of _____ sft carpet area for contract amount of Rs. ___/- per square feet. The total contract value of the work is Rs. _________________/- (Rupees _________________ _________________ only) inclusive of all taxes. Detailed description of work is place as Annexure - A.
3. Period for Completion of Work: The contractor agreed to complete
total interior works as described in the agreement and annexure within a period
of __ days starting on the next day of issuance of purchase order along with the
advance amount. The contractor also agreed to complete the interior work of
Operations area as described in the annexure within a period of __ to __ days.
4. Inspection of Site: The Contractor confirms that he/they has/have inspected the Site before submitting the proposal and has satisfied himself as to the nature of the work to be executed on the site. Any difficulties which the Contractor may come across in the course of the work shall neither in any way relieve him from fulfilling the terms of this agreement nor entitle him to claim or receive extra payment, unless the Company's authorized representative is of the opinion that such difficulties could not have been foreseen.
5. Supply of Material/ Labour: The Contractor agreed to furnish all labour, materials, equipment, tools, tackles, water, electricity & every thing necessary for the construction &completion of the interior work. The Contractor will assume all responsibility for the safety, protection & accounting of all material/equipment supplied to the Contractor & the work during construction. The details & dimensions shown on the plan shall be adhered to by the Contractor & no alteration shall be made therein by the Contractor without obtaining previous approval in writing from the authorised representative of the Company.
The Contractor shall prepare Design as per Clients brief and get due approval before commencing work. Further Contractor shall prepare own details and plans, templates, patterns and other data where required, and shall adhere to all measurements and alignments as shown on the plan. The contractor shall submit to the Office of the Company the contract periodic progress report and photographs of the work done.
All materials supplied by the Contractor shall be of the best quality and as per the list of approved material; manufacturer and make of items attached to this agreement, conforming to the required specifications and will be subject to the approval of the Company's authorized representative. All such materials as shall not be approved shall be removed at once by the Contractor at his/their own expense. The Contractor shall also arrange for and/or carry out test on all materials as per required standard. If so desired by the Company, the Contractor will frame a bank guarantee in favour of the company from any scheduled bank, for an amount equivalent to 25% of the payment received as advance with the purchase order. This bank guarantee will be for guarantee of indemnity in respect of any loss/damage to the Company, arising from any failure of the Contractor to discharge his responsibility for the safety and protection of all material/equipment supplied by the Company and of the work during execution. List of approved material and make of items for Interior, Electrical & HVAC works are placed as Annexure B.
6. Damage on account of incomplete work or delay in completion of work as per the schedule time period: The Contractor agreed to commence the work immediately on receiving written instructions along with the receipt of Advance to that effect. The work will be progressed in accordance with the agreed schedule and whole work shall be completed and handed over ready for use within separately agreed time period from the date of commencement of work (time being of the essence), failing which the Contractor shall pay or allow the Company to deduct amount of 1% to a maximum of 3% of the actual Contract value of Operation Area for each late day from 21st day in case of operational area and 1% to a maximum of 3% of the actual Contract value of Management Area for each late day starts from 36th day in case of management area as damages for extra time taken until the work is completed and handed over. Such damages may be deducted by the Company from any money due to the Contractor. The client shall allow a grace period of maximum 05 days before he levy's penalty.
7. Terminations of Contract: The contractor agreed that in the event of the Contractor failing to keep to the agreed scheduled of work, or in the event of the Contractor failing to complete the work within the stipulated period, the Company may notwithstanding the provisions in Clause 4 above, terminate this agreement forthwith and employ at the Contractor's cost, another contractor or a sufficient number of workmen to complete the work in which event the damages specified in Clause 4 above shall not apply from the date this agreement is terminated.
8. Defective work/materials: If any part of the work done by the Contractor shall be found defective in workmanship or if bad or inferior materials have been used. The Contractor shall at his own risk and costs demolish all such defective work and rebuild the same and/or replace the bad or inferior materials used, to the satisfaction of the Company's authorized representative. The decision of the Company's authorized representative in this regard shall be final and binding on the Contractor. In case of default of the Contractor to remove the defective work and rebuild the same or replace the bad or inferior materials as aforesaid, as directed by the Company's authorized representative, the Company shall be entitled to employ anyone else to carry out the same and recover all expenses incurred in this regard from the Contractor.
9. Substitution of Contractor: If the Company finds it necessary to employ and other person(s) in terms of Clauses 5 and/or 6 above then the Company may deduct and retain from out of the sums due to the Contractor all such sums of money as may be required to pay or to reimburse themselves in respect of the expenses which they may have to pay or have incurred in getting the work so done and if such expenses be more than the amount due to the Contractor, then the difference shall be a debt recoverable from the Contractor by the Company. The Contractor shall not do or cause to be done any act, manner or thing, which would prevent the person (s) so employed by the Company from doing their work. On termination of the agreement as aforesaid, the Contractor shall at his own risk and cost remove from the work-site within the time prescribed by the Company all materials, tools, equipment which the Company considers are not useful for its requirements. If the Contractor does not remove the materials within the time prescribed, the Company may remove and sell the same holding the proceeds less the cost of storage, removal and sale, to the credit of the Contractor. Should the Company incur any loss in respect of the sale, it shall be entitled to recover the same, from the Contractor. The Company shall however be entitled to purchase the materials inspected and approved as useful for its requirements, at the prices then prevailing.
10. Inspection of work: During progress of the work, the Company Engineer or any other representative of the Company and Architect shall be entitled at all times to have access to and inspect the work.
11. Supervision: The Contractor shall provide one or more competent and technical supervisors duly and fully authorised to act on his behalf in all matters relating to the works to be carried out under or any other matter concerning this agreement and who shall at all times be present at the works when any work is in progress. Such supervisors shall be persons of known experience and be approved by the Company authorized representative before they are permitted in any way to take charge of, or superintend any operation of the works. Any directions, explanation, instructions or notices in connection with the work given by the Company's authorized representative to the supervisor or any one of them shall be deemed to have been given to the Contractor.
12. Payment for work done: During the progress of the work, the Contractor, at the sole discretion of the Company's authorized representative may receive interim payment proportionate to the amount of work performed, after such work has been inspected and approved by such representative. Payment schedule is as under:
- 25% payment as advance with Purchase Order, being the Zero Date
- 30% at 15thday (at handing over Operation area in 05 Days)
- 10% at 22ndday
- 05% at 30th day
- 20% at 35th day (at handing over Management Area)
- 10% at 65th day (i.e. one month after hand over)
The company will release payment within 04 days of receipt of invoice after proper approval.
The Contractor must submit his final bills in duplicate based on measurements jointly recorded by Architects Engineer/ Authorised representative of the Company and with the Contractor's authorised Representative, All payment against the bill will be made by Cheque/ Pay Order or Bank Transfer and such payments shall be subject to deduction of income tax & Sales tax as may be applicable from time to time.
The Company-in consideration of the Contractor constructing and carrying out the work shall pay the Contractor at the rates given in the attached Schedule, subject to deductions, retention and abatements, if any to be made there-from. The payment in all cases will be in accordance with the actual quantities, based on the measurements as specified in Clause 11 above recorded by the Company's Authorised Representative.
13. Subletting Contract: The Contractor shall not without the prior written consent of the Company first had and obtained sublet or assign this Agreement or any part there of PROVIDED ALWAYS that any consent given by the Company for signing or subletting will not relieve the Contractor from the full and entire responsibility of his obligation sunder this Agreement and/or instructions issued to him/them.
14. Workmen's Compensation Liability: The Contractor, its successors and assigns shall hold the Company harmless and indemnified from and against all claims, costs and charge for which the Company shall be liable under the workmen's Compensation Act, and any enactment for the time being in force in that behalf and any amendments thereof and the expenses to which it shall be put there under, both in respect of personal injuries (within the meaning of the said Act) to the employees and servants of the Contractor sub-contractors, if any, and/or permitted assigns, arising out of or occasioned during the currency of this Agreement, through the acts, or omissions whether due to negligence or otherwise of the Contractor, sub-Contractor (s),permitted assigns and also in respect of the personal injuries (as understood under the said Act,) to the servants and employees of the Company arising out of or occasioned through, the acts and commissions whether due to negligence or otherwise, of the Contractor, sub- Contractor (s) permitted assigns and/or his servants and employees in carrying out any of the provisions of this Agreement. The Contractor shall further indemnify the Company against such claims from third parties in respect of injuries arising out of or occasioned through the acts and omissions, whether due to negligence or otherwise, of the Contractor, Sub-Contractors, permitted assigns and/or his servants and employees in carrying out any of the provisions of this Agreement.
15. Liability under Employees State Insurance Act: Whenever the Company is required to pay contributions in respect of the workmen or employees engaged or employed by or through the Contractor, his Sub-Contractor or permitted assigns, under the Employees State Insurance Act or the Rules and Regulations, made there under either as the Principal Employer or otherwise howsoever, the Company shall be entitled to recover from the Contractor such contributions which the Company may pay. The Contractor will discharge his responsibilities under the Employee's State Insurance Act, 1948 as any immediate employees engaged or employed by him for the execution of work or as the next immediate employer in case he has sublet or assigned the Agreement or the instructions as provided herein above. The Contractor acknowledges the rights of the Company to recover the amount of the contributions paid by it in the first instance in respect of the employees employed by or through him/them (the Contractor) or by his Sub-Contractor or permitted assigns, as well as the employees' contributions if any either by deduction from any amount payable to him by the Company under any contract or as a debt payable by him to the Company.
16. Statutory Requirements: The Contractor shall conform to provisions of Acts of Parliament or State Legislatures and to any bye-laws, rules, orders or notifications of any Government, Municipal or Local authority for the time being in force affecting the work undertaken by him and will give all necessary notices to and obtain requisite sanction and permits of and from the Municipal and any other authority in respect of the said work of the materials to be used thereat and generally will comply with building and other regulations of such authorities and will keep the Company indemnified against all claims, penalties and losses that may be incurred by it by reason of any breach by the Contractor of any statutes bye-laws, rules, regulations, notifications etc.
"The Contractor undertakes to ensure due and complete compliance with all laws, regulations, rules etc. whether of the Central Government or the State Government or of any other competent authority applicable to the workmen employed or whose services are otherwise availed of by the Contractor whether in connection with the construction work at the site or otherwise. The Company's authorised representative shall have the right to inspect the records maintained by the Contractor concerning such workmen from time to time and the Contractor shall whenever require by the Company produce such records as the Company may call upon the Contractor to produce for the Company's inspection in order to ascertain whether or not the requirements of all such laws, regulations, rules etc. have been complied with by the Contractor. In event of any contravention of such laws, regulations, rules etc. coming to light whether as a result of such inspection or otherwise to effect such compliance within such time as the Company may prescribe in that behalf and in the event of the Contractor failing to effect such compliance within the time prescribed by the Company then the Company shall without prejudice to his rights be entitled to withhold from the amount payable to the Contractor any amount payable to the workmen under any such laws, regulations or rules to make payment thereof to the workmen. The Company shall also have in that event the right to terminate the contract with immediate effect and to exercise powers reserved to the Company under the contract as a result of termination."
17. Other Conditions:
- The contract amount is inclusive of all taxes and the company is not liable to pay any kind of tax liability arising in future
- Royalty or any securities to the Building Management to carry on work shall be borne by the Company
- Formalities related to entry pass of workers and materials shall be provided by the company
- Scope of works (inclusions and Exclusions) are listed as per annexure
- The company will issue quotation for any work beyond the scope of works and payment will be made separately. Any Extra Area/Work introduce during the work within the Office premises will be considered work beyond the scope and payment for the same will be made separately along with the review in time extension.
- Company will provide all approvals within 02 working day. Any delay in providing approvals by the Company shall be considered for extra time schedule duly conveyed.
- Company will grant additional days in the set schedule' in case of change in approved layout plan.
- Public holidays and force majeure if any are excluded from the working day schedule.
18. Clerical errors to be rectified: Neither party shall take any advantage of any clerical error or mistake which may creep in or occur in the specifications, schedule of rates, plans instructions tenders or any other papers supplied to or by the Contractor in connection with the work, but such clerical error or mistake shall be brought to the notice by the one to the other without any loss of time and same shall be rectified.
19. The parties to this agreement shall not be responsible for any failure of performance or delay in performance of their obligations hereunder if such failure or delay shall be a result of any Government directive relevant to this agreement or due to war, hostility, act of public enemy riots or civil commotion, strikes, lock-out, fire, floods, epidemic or acts of God, arrests and restraints of rulers and people, political or administrative acts of recognized or defector governments, import or export restriction compliance with orders of any governmental/local authority or any other cause or causes beyond their control.
20. Dispute Resolution: All disputes or differences relating to the specifications, designs, drawings and as to quality of workmanship or material used in the work or as to any other question arising out of or relating to the contract, design, drawings, specifications, orders or otherwise in connection with the agreement or the carrying out of the works, whether during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitrator appointed by the company. The parties would cooperate and lead evidence, etc. with the arbitrators and if the contractor or its authorised representative does not cooperate or remains absent at the reference, the arbitrator would be at liberty to proceed with the reference ex-parte. The arbitrators shall keep record of the oral evidence adduced by the parties and submit the same to the court at the time of filing of the award, along with documentary evidence produced before them or him by the parties or their witnesses. The proceeding of the arbitrator or the umpire shall be recorded in English and a carbon copy whereof shall be furnished to each party. The arbitrator or umpire shall be entitled to appoint stenographer, for recording proceedings of the arbitration, consult an expert, after previous notice to the parties to the reference, the cost whereof shall be borne equally by the parties. The fees of the arbitrator appointed shall be borne by both the parties. The arbitrators shall make the award, with reasons for the decision, within two months from the date of entering upon the reference. The award of the arbitrators, or umpire, as the case may be, shall be final, conclusive and binding on the parties and shall not be challenged on any ground except collusion, fraud or an error apparent on the face of the award. This reference to arbitration shall be deemed to be a reference within the meaning of the Arbitration and Conciliation Act, 1996 or any statutory modification thereof.
21. Jurisdiction: This agreement shall be deemed to have been made in Delhi and shall be construed according to the laws of India and the performance by the Contractor of and act on his part herein contained shall be considered due in Delhi for the purpose of Jurisdiction.
IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed by its duly authorised officers or representatives as of the date first written above in the presence of