Read Microsoft Word - Project Bridge Construction Contract 1 text version



08 JANUARY 2009

This Agreement is made on the ............................... 2010 between Pearl Construction Ltd (the Contractor) and the Employer whereas:

1. The Employer is/are the following individuals jointly and severably: Surname: ID number: Signature:



The Employer requires the Contractor to construct and complete the Project Bridge-the-Gap house of the size and specification as selected in the Contract Documents. The Employer has fully considered the house lay-out drawings, elevation drawings and the applicable specification for the house selected. The Employer has raised all the questions to clarify the house lay-out, specification and related information and is deemed to have visited the show house on the Dewetsdorp Rd to familiarize him/her/themselves with the house. The Contractor has designed the house and will construct the house in accordance with the Contract Documents comprising but limited to the following documents that will take priority in descending order: a. b. c. d. e. f. This Agreement The Schedule The Specification The Drawings The JBCC Principle Building Agreement's Conditions as amended and The Employer's Mortgage Application.





The Contractor with company registration number 2008/026151/07 has duly authorized the Philip Richard Smith as director to enter into this construction contract. PR Smith ...................................................................................

Witnessed: ............................................

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08 JANUARY 2009


1. The Employer's address and contact information is as contained in the Mortgage Application and the Employer will advise the Contractor in writing within 7 days should this change. The Contractor's address is Chris Botha Street 14, Westdene, Bloemfontein, 9301. The Contractor's VAT number is 4580251793, Income Tax number is 9355658163 and NHBRC number is 1/38218191. The accepted Contract Sum is R..................... inclusive of VAT and this amount in words is as follows: .................................................................................................................................................................... 5. The Works description is a residential house to the type, Specifications and Drawings contained in this Contract. The design was undertaken by the Contractor and its consultants. The Site description is as outlined in the Mortgage Application and/or the Drawings. Contract works and public liability insurance will be maintained by the Contractor up to and including Practical Completion and the Employer will maintain house insurance thereafter as part of the mortgage insofar available and, if not with a reputable insurer. The Principle Agent will be an individual appointed by Agattu-Pearl to act independently and fair without bias towards to neither the Employer nor the Contractor. There is no provision for the Employer to interfere or replace the Principle Agent. The defects liability will be 3 months or the minimum period required by the NHBRC. The Contractor shall repair defects within this period as covered by the statutory regulations. Interim payment will be made to the contractor for completion of the foundation and wall plate. The second interim payment will be made once the roof and the finishes are substantially completed and a third final payment will be made upon completion and occupation of the house. These interim payments will be in accordance with the mortgage provider's valuation and provided that the same has been signed of by the engineer. The composition of the Contract Sum will be as outlined in the Schedule, equating to the Mortgage Application. The Contract Price can be reduced with adjustment for the Provisional Sums, but cannot be increased. The Contract Price will comprise the 1) construction price, 2) the NHBRC, 3) land (if applicable), 4) geotech (if required) and the 5) mortgage related bank admin fee, conveyancing and ITC cost. Where these costs are unknown it will be included in the Contract Price as a Provisional Sum and, if not utilized, it will be returned to the Employer as down payment against the mortgage payment.

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14. 08 JANUARY 2009 Possession of site will be upon mortgage and deed registration. The construction period will exclude the annual 4 week construction holiday period and public holidays. The works will be completed by the Contractor at its discretion once a sufficient number of houses have been secured within the surrounding area that provides economies of scale for the construction process, but no later than 4 months from possession of site after which the Employer and/or the mortgage provider may elect to terminate this contract. The Employer will not move into the house unless all the necessary documentation has been signed in respect of the mortgage, the inspection certificates, the NHBRC and a "happy letter" from the Employer to the Contractor in the standard format determined by the Contractor. The contract price is a lump sum, there is no retention, no clause 30.1 penalty, no sectional completion and no requirement for waiver of contractor's lien. There is requirement for Employer payment guarantee, construction guarantee, security or advance payment. There is no provision for direct, nominated or selected subcontractors by the Employer. The following clauses are deleted from the JBCC contract conditions: Entire Clauses deleted 19 / 20 / 21 / 22 / 28 / 30 / 31 / 32 / 33 / 34 / 35 / 37 / 38 / 41. The following clauses are deleted from the JBCC contract conditions: Clauses 3.1 / 3.2 / 4.1-4.3 / 5.2 / 5.3 / 5.4 / 8.6 / 9.2.3 / 9.2.1 / 11.2 / 12.3 / 12.4 / 14.1 / 15.1 / 15.2.2&3 / 17.1.11&12&17 / 17.4.1&5 / 18.1 / 24.6 / 25.3 / 29.2 / 29.4.3 / 29.5. The following clauses are amended and/or deleted from the JBCC contract conditions: Clause 29.2.111 will fall under 29.1, 18.2 contractor replace principle agent, termination under clause 36 will be limited to material breaches, the final account process under clause 34 will be undertaken by the Principle Agent and provisional sums will be the amount as stated in the schedule without any additional mark-up. The Employer cannot instruct variations unless authorized and accepted in writing by the Contractor. The applicable law is that of South Africa and dispute resolution will be limited to adjudication and arbitration (not litigation).







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Mortgage Cost Bank administration cost (Provisional Sum) Conveyance attorney cost (Provisional Sum) ITC assistance fee ­ optional (Provisional Sum) Land Land cost plus commission Construction Eo Geotechnical requirements (Provisional Sum) Eo Specification enhancements Ddt: Reduction on Escom subsidy Eo Material Escalation - After June 2010 Eo Escom paycard box NHBRC cost (1.3%of above) SUB-TOTAL (excl VAT) VAT

08 JANUARY 2009

none none existing on land parcel


Less: FLISP Subsidy (Provisional estimate) TOTAL ESTIMATED FINAL MORTGAGE

Geotechnical requirements refer to the type of soil - heavy clay may require an enhanced foundation design costing approximately R2 500-00. All the units will be uniform to enable a cost effective construction process - individual specification enhancements are not currently available. If Escom grants a subsidy for the solar geysers, the net saving will be passed on to the house buyer. Prices fixed for escalation till mid 2010, prices may be reviewed at any time. If savings can be generated on the NHBRC, banking or VAT, the net saving will be passed on as a price reduction. Construction prices subject to minimum number of units secured in the same location, subject to contract and for most Mangaung locations. The subsidy amounts above are indicative only and will be determined on an individual basis for each application.

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Microsoft Word - Project Bridge Construction Contract 1

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