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Sub Contractor Agreement - Draft

This document is a subcontractor agreement between a general contractor and subcontractor for work on a proposed 4 unit, 2 story apartment project located at 12 Santol St. in Quezon City, Philippines. The subcontractor agrees to complete all work for a total cost of ₱x,xxx,xxx.xx according to the project specifications and by December 16, 2023. If work is delayed, the subcontractor will pay liquidated damages of ₱1,500 per day. The general contractor will make payments totaling over 100% of the estimated work value in phases, with an initial 30% downpayment and subsequent payments upon project progress and valid invoices.

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0% found this document useful (0 votes)
342 views10 pages

Sub Contractor Agreement - Draft

This document is a subcontractor agreement between a general contractor and subcontractor for work on a proposed 4 unit, 2 story apartment project located at 12 Santol St. in Quezon City, Philippines. The subcontractor agrees to complete all work for a total cost of ₱x,xxx,xxx.xx according to the project specifications and by December 16, 2023. If work is delayed, the subcontractor will pay liquidated damages of ₱1,500 per day. The general contractor will make payments totaling over 100% of the estimated work value in phases, with an initial 30% downpayment and subsequent payments upon project progress and valid invoices.

Uploaded by

sandigan.dominic
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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SUB-CONTRACTOR AGREEMENT

PROJECT : PROPOSED SANTOL STREET 4 UNIT, 2 STOREY APARTMENT PROJECT

LOCATION : 12 Santol St. Quezon City, Metro Manila

This Construction Subcontract Agreement (the "Agreement"), made and entered into this 2nd day of October 2023
by and between:

General Contractor:

[Your Company Name]

[Your Address]

[City, State, Zip Code]

[Contact Information]

And

Subcontractor:

Mr. Cris James Gatacilo

Block 5 lot 11 J. Garcia St. Youngstown

Brgy. San Juan, Cainta Rizal, 1900

Mobile: 0920 805 3732

WITNESSETH,

That the Contractor and the Sub Contractor, for and in consideration of the covenants, agreement and stipulation set
forth, do hereby agree as follows:

ARTICLE 1. SCOPE OF THE WORK

1. Definition:

a. The Sub Contractor, in consideration of the payment to be made by the General Contractor to
the Sub Contractor of the sum of money hereinafter named, agrees to furnish all labor,
equipment, tools and other facilities and the satisfactory and faithful performance of all the
work necessary to commence and complete the Project, ready for use (except the works to be
done by other parties as are specifically excluded here from by agreement of the parties
hereto) as shown on the Drawings and described in the Specifications, instructions and other
related documents, as prepared by Engr. Aljun Langitan acting as and in these Contract
Documents entitled the Project Engineer.
2. Scope Of Works

4.0 LABOR COST

4.1 Structural (Layout, Pavement, Sidewalk, Concreting) 1 Lot

Parking Pavement Concreting

Backyard Pavement Concreting

Parking CHB Laying and Roofing

Tile Works

Plastering Work

Painting Works

Roofing Repairs

Doors

Septic Tank

Metal works (Gate)

4.3 Electrical works 1 Lot

4.4 Plumbing works 1 Lot

4.5 Equipment/consumables 1 Lot

ARTICLE 2. THE CONTRACT AMOUNT

1. Contract Amount:

a. The General Contractor agrees that, in consideration of the Subcontractor's faithful


performance under this contract, they shall pay the Subcontractor the sum of
(₱x,xxx,xxx.xx) in accordance with the terms outlined herein.

2. Agreement:

a. It is expressly agreed by both parties that no change shall be made in the above-
mentioned contract amount as a result of any fluctuation in the cost of materials and/or
labor, except those conditions as enumerated in Article 3, item 3.
3. Additional Work / Change Order:

a. Should the General Contractor require the Sub Contractor to perform work over and
above that required by this Agreement the additional cost shall be added to the Contract
Amount and, likewise, should be ordered to omit work as required by this Agreement, the
cost of work omitted shall be deducted from the Contract Amount. In either case, the cost
of additions or reductions shall previously be mutually agreed upon in writing by both
Owner and Constructor upon recommendation of the Project Engineer before execution.

4. Damages:

a. Any payment due and payable to the Sub Contractor may be offset against any liquidated
damage payable to the General Contractor under this Contract.

ARTICLE 3. CONSTRUCTION PERFORMANCE / CONTRACTOR DEFAULT

1. Performance Obligation:

a. The Subcontractor shall diligently perform the work outlined in this agreement in accordance
with the project schedule and specifications.
b. The Subcontractor shall provide regular progress reports to the General Contractor as
specified in Exhibit A (Project Schedule) of this agreement.

2. Performance Evaluation:

a. In the event that the Subcontractor fails to provide on-site progress, progress reports and other
documentation as required by this agreement or if the General Contractor determines, in its
sole discretion, that the Subcontractor's progress is unsatisfactory, the following steps shall be
taken:
i. Written Warning:
 On the 5th calendar day after the General Contractor identifies the lack of
progress or unsatisfactory performance, the General Contractor shall issue a
written warning to the Subcontractor detailing the concerns and specifying
the corrective actions required.
ii. Final Written Warning:
 If the Subcontractor's performance issues persist and are not adequately
addressed within 10 calendar days of receiving the initial written warning,
the General Contractor shall issue a final written warning outlining the
continued concerns and the necessity for immediate corrective action.
iii. Termination of Contract:
 If, after 15 calendar days from the issuance of the initial written warning,
the Subcontractor's performance issues remain unresolved, the General
Contractor reserves the right to terminate this subcontractor agreement with
immediate effect.
 In the event of termination under this provision, the General Contractor
shall not release any outstanding payments to the Subcontractor until all
project-related matters are satisfactorily resolved, which may include the
completion of outstanding work or rectification of performance issues.
3. Notice:

b. The Subcontractor acknowledges that the General Contractor's decision to issue warnings
and, if necessary, terminate the contract under this clause shall be final and binding.

ARTICLE 4. TIME OF COMPLETION AND DAMAGES

1. Timeline

a. The work stipulated in this Contract must be completed on or before December 16, 2023,
which constitutes a 75-day construction time frame starting October 2, 2023.

2. Liquidated Damage

a. As timeliness is of paramount importance under this Contract, the Subcontractor


unconditionally commits to remit to the General Contractor the sum of ₱1,500.00 for
every consecutive calendar day of delay, including Sundays and holidays, in the event the
Subcontractor fails to achieve project completion beyond the specified deadline of
December 16, 2023. This agreed-upon payment shall be unequivocally classified as
Liquidated Damages and will be non-negotiable.

ARTICLE 5. PAYMENT

1. Payment Term:

a. The General Contractor will issue payments in accordance with the Subcontractor's progress,
amounting to more than 100 percent (100%) of the estimated work value per billing phase.
This value will be calculated by the Operations team, referencing to the “Agreed
Construction Scope of Work and Schedule” mutually established and agreed to by the
Project in Charge (Engr. Aljun Langitan) and the Subcontractor before commencing
construction.

2. Payment Schedule:

a. Payment to the Subcontractor will be initiated upon the execution of this contract, with an
initial downpayment of 30%. Subsequent payments, corresponding to the progress of the
project, will be disbursed upon submission of valid invoices accompanied by evidence of on-
site progress.
i. Downpayment (30% of Total Contract Price) – ₱xxx,xxx.xx
ii. First Billing (Accomplished 40%) – ₱xxx,xxx.xx.
iii. Second Billing (Accomplished 70 %) –₱xxx,xxx.xx
iv. Final Billing (Accomplished 90%) – ₱xxx,xxx.xx.
v. Retention (10% of total cost released after retention date expired) – ₱xxx,xxx.xx.

3. Conditions:

a. Final and full payment for the consideration mentioned above shall be made by the General
Contractor to the Sub Contractor upon fulfilling the conditions set forth in the general
Conditions of Article 5, Item 1.
ARTICLE 6. THE CONTRACT DOCUMENTS

1. Documents

a. The following documents prepared shall constitute and integral part of this contract as fully
as if hereto attached or herein stated, except as otherwise modified by mutual agreement of
parties:

i. General Conditions
ii. General Specifications
iii. Project General Scope of Works
iv. Construction Schedule

ARTICLE 7. TAXES, LICENSES, PERMITS AND FEES

1. All taxes, licenses, permits, and fees which may be due to the local and/or national government on
account of performance and completion of the work stipulated herein and fees for testing of materials
and samples shall be paid for, and obtained by the Sub Contractor.

ARTICLE 8. FORCE MAJEURE

1. Definition:

a. Neither party shall be held responsible for any delay or failure in the performance of their
respective obligations under this Agreement if such delay or failure is due to a Force Majeure
Event. A "Force Majeure Event" shall be defined as any event or circumstance beyond the
reasonable control of the affected party, which may include, but is not limited to, acts of God,
natural disasters, war, terrorism, riots, strikes, labor disputes, government actions or
regulations, and any other unforeseeable events that prevent or delay the performance of this
Agreement.

2. Notice:

a. In the event of a Force Majeure Event affecting either party's ability to perform their
obligations under this Agreement, that party shall promptly notify the other party in writing,
providing details of the Force Majeure Event and its expected impact on the performance of
this Agreement.

3. Mitigation:

a. The affected party shall take all reasonable steps to mitigate the effects of the Force Majeure
Event and to resume its performance under this Agreement as soon as practicable.

4. Extension of Time:

a. If a Force Majeure Event occurs and substantially impacts the performance of this Agreement,
the parties shall negotiate in good faith to determine a reasonable extension of time for the
performance of the affected obligations. During the period of Force Majeure, the parties shall
be excused from their respective obligations affected by the Force Majeure Event.

5. Termination:

a. If a Force Majeure Event continues for an extended period (60 days), either party may have
the right to terminate this Agreement upon written notice to the other party, without any
liability for breach of contract.

6. Compensation:

a. In the event of a Force Majeure Event, the Subcontractor shall be entitled to compensation for
work performed up to the date of the Force Majeure Event but shall not be entitled to any
additional compensation for loss of anticipated profits or for work not performed due to the
Force Majeure Event.

ARTICLE 9. ACCESS TO PROJECT SITE

1. Workdays and Hours

a. Standard working: Standard working hours are set from 8:00 AM to 5:00 PM, Monday to
Saturday. Workers have the option to operate at reduced capacity during the periods of 6:00 AM
to 8:00 AM and 5:00 PM to 7:00 PM.
b. Limited / Reduced capacity in compliance with noise restriction: Encompasses non-noisy
activities that have the potential to disrupt nearby residents outside of regular working hours shall
be enforced strictly.
c. Multiple complaints from clients and non-compliance with these provisions may lead to contract
termination without the release of outstanding payments.

2. Sub-Contractor Site Access

a. The Subcontractor is granted access to the site during the specified working hours, provided prior
notification to the General Contractor has been made.
b. Any activities occurring on the site outside of the standard working hours must be disclosed and
reported to the General Contractor.
c. The General Contractor's designated representative or on-site security personnel reserve the right
to conduct searches of all workers as they enter or exit the site.
d. Non-compliance with these provisions may lead to contract termination without the release of
outstanding payments.

ARTICLE 10. SAFETY AND COMPLIANCE

1. Safety Responsibility:

a. The Subcontractor acknowledges and agrees that it is solely responsible for ensuring the safety of
its personnel, equipment, and operations on the construction site.
b. The Subcontractor shall adhere to all applicable safety regulations, standards, and guidelines
established by local, state, and federal authorities, as well as any additional safety requirements
imposed by the General Contractor or the project owner.
2. No Liability for Hazards:

a. The General Contractor shall not be held liable for any injuries, accidents, losses, or damages that
may occur on the construction site due to hazards, unsafe conditions, or non-compliance with
safety regulations, unless such hazards, unsafe conditions, or non-compliance are directly
attributable to the actions or negligence of the General Contractor.
b. The Subcontractor shall indemnify and hold the General Contractor harmless from any claims,
demands, suits, or liabilities arising from or related to injuries, accidents, losses, or damages
resulting from the Subcontractor's operations, personnel, or equipment on the construction site.

3. Insurance Requirement:
a. The Subcontractor shall maintain comprehensive liability insurance coverage, including but not
limited to general liability insurance, workers' compensation insurance, and any other relevant
insurance policies. The coverage shall name the General Contractor as an additional insured party
and shall provide adequate protection against potential liabilities arising from the Subcontractor's
work on the construction site.

4. Compliance and Inspections:

a. The Subcontractor agrees to cooperate with any safety inspections or audits conducted by the
General Contractor, project owner, or regulatory authorities.
b. Failure to comply with safety regulations, correct identified hazards promptly, or address safety
concerns raised during inspections may result in the termination of this subcontractor agreement.

5. Termination for Non-Compliance:

a. In the event of repeated non-compliance with safety regulations or failure to address identified
hazards promptly, the General Contractor reserves the right to terminate this subcontractor
agreement with immediate effect.

ARTICLE 11. WARRANTY AND RETENTION

1. Warranty Period:

a. The Subcontractor hereby provides a warranty for the completed construction work (the
"Work") for a period of one (1) year from the date of substantial completion.
b. During the warranty period, the Subcontractor shall promptly address and remedy any defects,
deficiencies, or issues in the Work that arise due to faulty materials, workmanship, or non-
compliance with the contract specifications.

2. Retention Amount:

a. The General Contractor shall withhold a retention amount equal to ten percent (10%) of the
total contract value, which is equivalent to $100,000 (the "Retention").
b. The Retention shall be retained by the General Contractor from the Subcontractor's progress
payments and shall be held in a separate account until the expiration of the warranty period.

3. Release of Retention:

a. Upon the successful completion of the one-year warranty period and the Subcontractor's
fulfillment of all warranty obligations, the Retention shall be released to the Subcontractor.
b. Release of the Retention shall not relieve the Subcontractor of its ongoing warranty
obligations, and the Subcontractor shall continue to be liable for any defects or issues covered
by the warranty.

4. Warranty Claims:

a. The General Contractor may notify the Subcontractor of any warranty claims during the
warranty period.
b. The Subcontractor shall promptly investigate and address such claims and perform any
necessary remedial work at its own expense.

5. Failure to Perform Warranty Work:

a. In the event the Subcontractor fails to perform the required warranty work within a reasonable
timeframe or in a satisfactory manner, the General Contractor may remedy the issues and
recover the costs from the Retention.

6. Extension of Warranty:

a. In the event that the Subcontractor performs remedial work during the warranty period, the
warranty for the remedial work shall be extended for an additional one (1) year from the date
of completion of the remedial work.

ARTICLE 12. TERMINATION OF CONTRACT

1. Non-Performance and Non-Compliance

a. In the event that the Subcontractor fails to perform their obligations under this agreement
or is found to be in violation of any material terms, conditions, or standards set forth
herein, the General Contractor reserves the right to terminate this agreement with
immediate effect.

2. Compensation

a. Upon termination, the Subcontractor shall not be entitled to any further compensation or
damages, and any outstanding payments may be withheld by the General Contractor to
cover the cost of remedying the non-performance or non-compliance.

3. Conclusion

a. The General Contractor's decision to terminate this agreement under this provision shall
be final and binding. Termination under this clause shall not prejudice any other rights or
remedies available to the General Contractor under applicable law or other provisions of
this agreement.
ARTICLE 13. INDEMNIFICATION:

1. Indemnification for Loss:

a. The Subcontractor agrees to indemnify, defend, and hold harmless the General Contractor, its
officers, directors, employees, and agents from any and all claims, liabilities, losses, damages,
costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with
any of the following:
i. Losses or damages to property, including the project site, materials, or equipment,
that result from the Subcontractor's work or actions.
ii. Personal injuries, including death, to any person, including employees of the
Subcontractor, the General Contractor, or third parties, arising from the
Subcontractor's work, actions, or omissions.
iii. Breach of contract, non-performance, or any failure to meet the Subcontractor's
obligations under this agreement.

2. Scope of Indemnification:

a. The Subcontractor's obligation to indemnify the General Contractor extends to any claims,
losses, or damages arising from the Subcontractor's sole negligence or willful misconduct.

3. Defense and Settlement:

a. The General Contractor shall have the right to select legal counsel and to participate in the
defense of any claim that may give rise to indemnification under this clause.
b. The Subcontractor shall not settle any claim without the prior written consent of the General
Contractor, which consent shall not be unreasonably withheld.

4. Notice and Cooperation:

a. In the event of any claim or potential claim, the General Contractor shall promptly notify the
Subcontractor in writing, and the Subcontractor shall cooperate fully with the General
Contractor in the defense of such claim.

5. Insurance:

a. The Subcontractor shall maintain comprehensive liability insurance, including but not limited
to general liability insurance, to cover its indemnification obligations under this clause. The
coverage shall name the General Contractor as an additional insured party.

6. No Limitation:

a. The indemnification provided by the Subcontractor under this clause shall not be limited by
any liability insurance maintained by the Subcontractor.

ARTICLE 14. GOVERNING LAW

This contract shall be governed by and construed in accordance with the laws of the Republic of the Philippines.
Any disputes arising from or related to this contract shall be subject to the exclusive jurisdiction of the courts of the
Republic of the Philippines.
ARTICLE 15. ENTIRE AGREEMENT

This Agreement constitutes the entire understanding and agreement between the parties with respect to the subject
matter herein and supersedes all prior negotiations, understandings, and agreements, whether oral or written. No
modification, amendment, or waiver of any provision of this Agreement shall be effective unless in writing and
signed by both parties. This Agreement may only be amended by a written document executed by authorized
representatives of both parties.

The parties to this agreement hereby agree to full performance of the covenants contained herein.

IN WITNESS WHEREOF, the parties to this Agreement have on the day and year first above given, hereunto set
their hands at the bottom of this page and on the left-hand margin of all other pages of this Agreement.

By:

Mr. Karl C. Caluya Mr. Dominic A. Sandigan

GENERAL CONTRACTOR GENERAL CONTRACTOR

Engr. Aljun A. Langitan Mr. Cris James Gatacilo

Project in Charge - GENERAL CONTRACTOR SUB CONTRACTOR

SIGNED IN THE PRESENCE OF:

_____________________________________ ____________________________________

____________________________________ ___________________________________

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