Construction Agreement Generator (India)

About the Construction Agreement Generator (India)

A construction agreement settles, before the first brick is laid, what the contractor builds, for how much, by when, and what happens when something changes or goes wrong. Enter the owner, the contractor and the site, choose the scope — labour only, material and labour or turnkey — and how the work is priced: a lump sum, item rates on a bill of quantities, or a rate per sq ft of built-up area. The generator writes the agreement for building a house or a small commercial job in India, with the site schedule, the drawings, the specifications and the bill of quantities as annexures and a stage-wise payment schedule.

The stages follow the work — plinth, each roof slab, brickwork, plastering, flooring, services and finishing — or the stage list of the Construction Cost Calculator, with a mobilisation advance recovered stage by stage and retention money held back for the defects liability period. The agreement covers the time for completion with extensions for hindrances recorded in a joint register, liquidated damages worked out from the owner’s likely loss as a genuine pre-estimate, price adjustment by an index formula or by base rates of cement and steel (or none), safety and labour-law duties, insurance, change orders, termination and arbitration. The checks say what to fix and link the State’s stamp department. The free preview shows every page with your details and the first part of the wording; a Premium pass unlocks the DOCX, the PDF, copying and printing.

Common uses

• Owners building a house who want the contractor’s promises, the payment stages and the remedies in writing before work starts.
• Contractors and builders who need a clear agreement for a house, an extension or a small shop or office building.
• Architects and engineers drafting the owner–contractor agreement for a client, with the drawings and specifications annexed.

What the agreement contains

• The parties, the site and the work, with recitals.
• Definitions and the order in which the documents apply.
• The scope (labour only, material and labour, or turnkey), exclusions and allowances.
• The owner’s obligations: the site, the permissions, timely drawings and decisions, payment.
• The contract price (lump sum, item rates or a rate per unit of built-up area), GST and tax deducted at source.
• Payment: the advance, stage payments or running bills, the days to pay, interest on late payment and the final bill.
• Retention money and its release.
• Time for completion; extension of time for hindrances recorded in a joint register; liquidated damages.
• Price adjustment, changes by change order, quality and tests.
• The site, safety and neighbours; workers, labour laws and the building workers’ cess; insurance.
• Completion and handover, the defects liability period, termination, notices, disputes and general terms.
• The site schedule and the annexures: drawings, specifications, the bill of quantities, the payment schedule, the owner’s materials and the base rates of materials.

Labour only, material and labour, or turnkey

• Labour only: the contractor provides labour, supervision, tools and (if agreed) scaffolding and shuttering; the owner buys the materials. The agreement lists the owner’s materials, asks for a daily account of them and recovers wastage beyond the allowance you set.
• Material and labour: the contractor provides everything to build as the drawings and specifications say, except what is excluded.
• Turnkey: the contractor completes the building ready for use — civil, finishing, electrical and plumbing work — and hands it over with the keys, the warranties and drawings of the services as built.

Allowances (for tiles or fittings the owner will choose) keep the price fair: the price includes only the allowance, and a dearer or cheaper choice is added or deducted.

How the payment schedule is worked out

• Stage amount = contract price × the stage’s share. The shares must add up to 100%.
• Advance recovered at a stage = the advance × the stage’s share.
• Retention = the stage amount × the retention percentage.
• Payable at the stage = stage amount − advance recovered − retention.

Amounts are rounded to the paisa on the running total, so the stages add up exactly to the price and the recoveries to the advance. GST is shown separately when it is charged on top. For item-rate and area-rate contracts the stages are worked out on the estimated price, and the final bill settles the difference.

Delay damages as a genuine pre-estimate

Under section 73 of the Indian Contract Act, 1872 the party hurt by a breach gets compensation for the loss that naturally arises from it, or that the parties knew was likely, but not for remote or indirect loss. Under section 74, when the contract names a sum to be paid for the breach, the party complaining gets reasonable compensation not exceeding that sum, whether or not actual loss is proved. So the agreement records the weekly amount, the heads of loss it pre-estimates and a maximum.

The tool works out the owner’s likely loss: (rent for other accommodation + interest on the loan + other costs, a month) × 12 ÷ 52 for a week. A figure far above it may be cut down to what is reasonable. For comparison, the CPWD General Conditions of Contract (clause 2) charge compensation for delay at 1.5% of the tendered value for each month, worked out by the day, and at most 10% of it.

Extension of time and the hindrance register

Hindrances the contractor cannot control — changes, the owner’s delays in giving the site, drawings, decisions or payments, an authority’s stop order, floods, fire or abnormal rain — extend the Completion Date by the delay they actually cause; overlapping days count once. The contractor notifies each one within the days you set (the CPWD conditions use fourteen days, clause 5.3), both sides sign it in a hindrance register at the site, and the extension is applied for and given in writing. The Hindrance Register & EOT Calculator keeps the register and works out the overlaps.

Price adjustment (escalation)

• None: the price is firm, which suits a short lump-sum job.
• Index formula: each payment is adjusted by V = W × [materials % × (Mi − M0) ÷ M0 + labour % × (Li − L0) ÷ L0], where W is the value of the work done in the period, M and L are the official indices you name (for example the wholesale price index and the consumer price index for industrial workers) for the period and for the base month, and the rest of the value is fixed. Work late through the contractor’s fault is adjusted at the indices of the Completion Date. The Price Escalation Calculator works out each period.
• Base rates of materials: for cement, steel or other named materials, the difference between the invoice price and the base rate beyond the margin you set is added or deducted for the quantity used in the work.

Arbitration under the 1996 Act

The disputes clause sends a dispute first to discussion (and mediation, if you tick it), then to a sole arbitrator appointed by agreement or, failing agreement, under section 11 of the Arbitration and Conciliation Act, 1996. Under section 12(5) and the Seventh Schedule an employee, consultant or adviser of a party cannot be the arbitrator, so the owner’s architect or engineer cannot decide disputes about the work they certify. The award is due within twelve months of the completion of the pleadings (section 29A); the fast track option (section 29B) decides on written submissions. The clause names the seat, whose courts supervise the arbitration.

Stamp duty and registration

Stamp duty is set by the State: its stamp act or schedule says what an agreement or a works contract pays. Buy the e-stamp or stamp paper before or when the parties sign. An instrument that is not duly stamped cannot be admitted in evidence until the duty and a penalty are paid (Indian Stamp Act, 1899, section 35). The checks link the stamp and registration department of the State you choose, where it was checked.

The agreement does not create, transfer or extinguish a right in the land or the building, so it is not among the documents that section 17 of the Registration Act, 1908 requires to be registered; the parties may still register it (section 18).

Labour laws and the building workers’ cess

The contractor employs the workers and undertakes the duties of the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 as they apply to the work, with the site safety measures the agreement lists. Work for an individual’s own residence whose total cost does not exceed ₹50 lakh (or a higher limit the government notifies) is outside "building or other construction work" in the Code on Social Security (section 2(6)); above it, the building workers’ cess is levied at 1% to 2% of the cost of construction as notified (section 100). The agreement says who pays it.

Sources

• Indian Contract Act, 1872 — sections 73 and 74
• Arbitration and Conciliation Act, 1996 — sections 10, 11, 12(5) with the Seventh Schedule, 29A and 29B
• Code on Social Security, 2020 — sections 2(6) and 100
• Occupational Safety, Health and Working Conditions Code, 2020
• Indian Stamp Act, 1899 — section 35
• Registration Act, 1908 — sections 17 and 18
• CPWD General Conditions of Contract — clauses 2, 5, 10CC and 12, for comparison

Limitations

• A generic template for building a house or a small commercial job in India, not legal advice: have a lawyer review it against your facts before you sign.
• Stamp duty is set by each State; the tool does not work out the duty. The checks link the State’s department where it was checked.
• Every figure — the price, the stage shares, the damages, the retention — comes from your entries; the tool does not check market rates or whether the price is right.
• A development agreement that gives the builder a share of the land or the flats, a builder–buyer agreement for a flat and a government tender are different documents.
• Indian-script names print in the DOCX and in Print; the PDF engine draws Latin and the Indian scripts it has fonts for, and the checks say if a character cannot be drawn.

Privacy

The agreement is made in this browser; nothing you type is sent to MySmartCoPilot or anyone else. A draft is kept on this device only if you tick “Keep a draft in this browser”.