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Structure of the General Contract on Work and Labour

Order a general contract on work and labour

In the following we will examine sample enlistment of the articles and give their brief review.

Preamble

Following data should be indicated in this section:

number of the contract on work and labour;
place and date of its conclusion;
title and corporate form of the legal entity and name of the person authorized to sign the documents.

1. Terms and Definitions

Optimum number of definitions which will be used further in the text of the contract should be introduced in this section.

2. Subject of the Agreement (contract)

This section should contain definition of the works and terms of the execution. It is recommended to include reference to the supplement which would contain detailed list of the works. The same should be done with the terms of works execution.

3. Price

The following should be determined:

currency to which prices are fixed;
price with separation of the VAT;
procedure of the price alteration;
possibility of price breakdown;
whether the price is fixed and whether it is possible to update the price.

4. Schedule and Conditions of the Payments

The following should be indicated:

currency of the settlements and payments;
mechanism or instruction on the conversion of the foreign currency into Ukrainian hryvnya (if necessary);
procedure of advance payments;
grounds on basis of which payments for the completed works will be executed. If this payments are carried out on the basis of acts or schedules forms of these acts (schedules) should be attached as supplements;
indemnity payments or bank guarantees (form of the guarantee should be attached as supplement);
sum of the indemnity payment (retention) and term after expiry of which guarantee is to be refunded.

5. Terms of the Works Execution

Commencement and completion of the works is carried out in accordance with the Schedule of the works execution (Schedule is to be attached as supplement). Procedure of the amendment of the Schedule shall be determined as well.

6. Obligations of the Contractor

Contractor is obliged:

to abide strictly by the program of the execution of works;
to accept building site in accordance with the Act (form of this Act is to be attached as supplement);
to determine order of installation of all temporary constructions on the building site, connection of the active communications, acceptance, discharge and storage of the materials and manufacturing equipment (schedule, materials delivery terms, existence of the certificates as well as the name of the party which carries out deliveries should be indicated);
to establish the latest date of the delivery of acts of completed works to the customer;
to determine the order of transfer of completed works to the customer, form of the documents confirming this transfer and terms within which the transfer has to be carried out;
to take measures with regard to the fire and explosion safety, operational safety and environmental protection on the building site;
to insure its personnel against the accidents;
to determine the order of documentation maintenance;
to present all necessary licenses and permissions for the execution of certain works to the customer;
after completion of the construction to deliver complete set of as-constructed documentation;
to agree with the project owner (customer) possibility of use of subcontract agencies;
in case of delayed payments to the subcontract agencies to provide possibility for the project owner (customer) to extract certain works out of the volume of contractor’s works and to conclude contracts directly with subcontractors.

7. Obligations of the Customer (project owner)

Customer is obliged:

to transfer building site to the contractor in accordance with the Act;
to carry out timely delivery (if this is foreseen) of the materials and manufacturing equipment;
to establish the latest date of acceptance of monthly volume of works and signing of the act of completed works as well as to establish terms of the settlement of accounts for completed works;
to determine procedure, terms and periodicity of engineering inspections;
to provide the contractor with working project, necessary technical and other documentation.

8. Working Project (project documentation)

Working projects (execution plan) is developed by the customer and is passed to the contractor. It is necessary to indicate number of passed copies. Schedule and volume of works should be enclosed as supplements.

It should be as well indicated who is responsible for the possible mistakes in the project and to establish mechanisms of its correction. The parties also have to agree the procedure of amendment of the working project.

9. Construction (execution of works)

Parties shall exchange list of the persons authorized to represent them at the building site. The customer shall appoint the person responsible for its representation during the conduct of engineering supervision and inspection.

The contractor shall foresee the following:

periodic obligatory inspection and inspection of the quality of supplied materials and equipment;
interim inspection of certain types of the constructions and systems results of which are reflected in corresponding acts;
drafting of the Acts of the possible inaccessible works;
daily journalization of the completed works (formal of the journal shall be enclosed as supplement).

Works which do not correspond to the working project and which were revealed during the inspection are to be eliminated.

The customer shall provide the possibility to give written instructions to the contractor to extend or reduce volumes of the works, to cancel any works, to change the nature or quality of any part of the works, to change subsequence of the works, to carry out additional works. All the alterations should be done exclusively within the frameworks of the project, are to be realizable and in compliance with the character of future project. Detailed information on the procedure of amendments shall be contained in separate supplement.

10. Personnel

The contractor shall engage (employ) qualified personnel as well as to prepare the schedule of the personnel movement with due regard to the working project.

11. Inspections and Examinations

The contractor undertakes to conduct periodically examination of the materials and equipment as well as to carry out inspection of the quality of the completed works.

The customer is entitled to conduct additional (independent) inspections or examinations of the works or materials.

12. Security and Safety

The contractor is obliged:

from the moment of the commencement of the works till the date of signing of the Act by State Acceptance Committee to take necessary security measures and bears full material responsibility for the building site, all the materials and equipment as well as completed works;
to observe norms and rules of safety code;
to provide fencing, illumination and security of the building site.

13. Insurance

The contractor insures its own personnel, all construction equipment, machines and aggregates as well as works against all risks.

14. Guarantees

The contractor guarantees high quality and timely execution of the works in strict compliance with the working project and application of exclusively high quality materials.

Guarantee term which should be calculated from the moment of signing of the Act by the State Acceptance Committee shall be determined. Guarantee term shall be prolonged for the period of elimination of the revealed defects.

The order of removal of the defective materials shall be established. Parties should establish the form of the Damage Statement and procedure of fixing of revealed defects or failures. Form of the Statement shall be enclosed in supplement.

15. Transportation

Transportation of the materials and equipment is carried out by the supplier.

16. Completed Works Acceptance Certificate

Completed constructed objects prepared to the operation are accepted by the State Acceptance Committee. Working commissions members of which are appointed by the customer are created for the presentation of the project before the State Acceptance Committee.

The parties shall provide mechanisms of the acceptance of each stage of the works.

During the period from the signing of Act of putting into operation of the completed constructed projects till the moment of the signing of the Act by the State Acceptance Committee the contractor is released from the risks of damage and injuries of completed buildings and constructions. The Act signed by the State Acceptance Committee is a confirmation of transfer of executed works to the customer by the contractor in full.

After expiry of the guarantee term (indemnity period) parties sign Final Act of the Works Acceptance. Form of the Act shall be enclosed in supplements.

17. Removal of the Damages

Beforehand on the basis of mutual consent the parties shall establish the form and size of the compensation for the damages.

For instance, in case of the schedule delay by the contractor from the Act of the completed works certain percentage of the difference between the factual volume of monthly Act of completed works and volume of the works determined by the schedule which is attached as supplement is retained. Retention is carried out by the customer on the basis of the monthly payments which are due under the Act of the completed works. Such mechanism does not release the contractor from the analogous retentions in following months provided there will be schedule delay.

If the contractor will be able to recover the calendar schedule during the following months and compensate delay in response to which the customer had already carried out retentions the latter returns all the sums retained earlier. If the contractor will not be able to accomplish the works by set deadline all the sums which were retained and indicated above may be considered as penalty and may remain uncompensated by the contractor.

Except for specified retentions the parties may determine size of the fine expressed in the per cent of the cost of the agreement (contract) for each day of delay for instance during first 30 or 40 days. In case of further delay new per cent of fine is established. At the same time maximum amount of the penalty should be established.

Penalty sum is paid by the contractor to the customer according to separate bill. It is necessary to indicate in the agreement (contract) that percentage of the penalty may not be altered by the decision of the commercial courts. Payment of the penalty does not release the contractor from the obligation to accomplish construction works.

In case of untimely fulfillment of the contractual obligations the customer undertakes to carry out 100% compensation of the contractor’s expenses related to the delay of the works execution if such delays took place due to the customer’s fault and were fixed in the journal of works execution.

Analogous pattern should be followed by the parties in case of the untimely payments by the customer.

18. Force-majeur

Apart from the known natural phenomena the parties may include into this section following: explosions, weapons located in the land, diggings of the remains and other historical values, labour conflicts, decision of the authorities to deny issuance of certain documents, abolition of the permissions, etc.

19. Arbitration

Parties shall determine the period during which measures for the settlement of the dispute or conflict take place. In case it is impossible to settle the dispute by the negotiations it is submitted to adjudication of the commercial court.

20. Termination and Suspension

Parties shall determine conditions when the agreement (contract) can be terminated (avoided).

Parties shall establish procedure of the termination (avoidance) of the agreement (contract).

21. Designer Supervision

Parties shall refer to the mechanisms of the protection of author’s rights, patents which are used or may be used during the execution of works.

22. Confidentiality

Parties shall agree on the confidentiality character of the agreement (contract) and shall indicate specific information which cannot be published or disclosed without written consent of the parties.

23. Remains and Archeological Explorations

Parties shall acknowledge that all the ancient values, period pieces, remains and others found at the building site are considered state property as well as to take all the measures to prevent injury of the mentioned values.

24. Notification and Communication

The parties shall envisage that all the information is passed exclusively in the written form, is delivered by the courier service against receipt.

25. Commencement of Works

The parties shall determine the date of the commencement of the works which may be, for instance, date of the receipt of the prepayment or date of the passing of the building site.

26. Entry into Force

The parties shall determine date of the entry into force of the agreement (contract). This can be as well determined by the written notification of the customer.

27. Miscellaneous Provisions

The parties shall agree:

procedure of the amendment, alteration or addition of the agreement (contract);
possibility of assignment of the rights to third parties;
number of copies of the agreement (contract);
language of the correspondence;
term of the validity of the agreement (contract).

28. List of the Supplements

Subject of the agreement (contract) and stages of works.
Works execution schedule.
Enlistment of the documents.
Cost of the agreement (contract).
Payment conditions.
Model Act of acceptance of building site.
List of the materials supplied by the customer.
List of the materials supplied by the contractor.
Form of the Journal of building site.
Model Act of completed works.
Model Act of inaccessible works.
Model Act of the acceptance for the guarantee term (indemnity period).
Model Act of final acceptance of the works.
Works Execution Plan.
Model Damage Statement.
Procedure of the Issuance of the Alteration Instruction.

29. Signatures of the Parties

This section should contain juridical (factual) addresses of the parties, financial details, signatures of the persons and stamps of the organizations.

Part I. “Peculiarities of the General Contract on Work and Labour”

Order a general contract on work and labour

[ "Commercial Property" # 12 2005 ]

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