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Construction Agreement

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Introduction
Description
Use
Table of Contents

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Introduction

The construction of a building usually involves prior negotiation, between the entrepreneur having offered the best proposal and the client requiring the construction of the building, in order to enter into an agreement for the full performance of the work required to construct such building.

This agreement is the last step of the long process, which usually includes three steps, required for the attribution of a construction contract to a contractor. The three steps are: the request for proposal, the opening and analysis of the proposals received, and the final award of the contract to the proponent selected by the client. This document establishes the legal and financial framework of such transaction.

Description

The Construction Agreement is the legal instrument by which a person, the entrepreneur, who has the required expertise and permits, undertakes toward a second person, the client, to complete, for the latter, a building project.

This construction agreement differs from the specialized contractor (subcontractor) agreement, which is limited to a portion of the work required, as it covers the entire work.

Use

When a person undertakes the construction of a building, it must choose whether to coordinate the work itself or entrust the work to a person who has the required expertise and permits to do so. If the person chooses the second choice, it must enter into an agreement for such purpose with the entrepreneur or, alternatively, accept that their relationship will be governed specifically by sections 2098 to 2129 CCQ.

Although the preliminary work for the conclusion of such a contract may require significant documentation, requests for proposals, technical specifications, general conditions, offers, etc.., we believe it is preferable to use this type of contract to establish a framework for the emerging relationship in order to avoid problems resulting from this large contractual framework.

Table of Contents

0.00 INTERPRETATION
0.01 Terminology
0.01.01 Agreement
0.01.02 Best Effort
0.01.03 Breach
0.01.04 Change in Control
0.01.05 Complete Execution
0.01.06 Confidential Information
0.01.07 Encumber or Encumbrance
0.01.08 Event of Default
0.01.09 Force Majeure
0.01.10 Fundamental Provisions
0.01.11 Law
0.01.12 Legal Representatives
0.01.13 Material
0.01.14 Other Entrepreneurs
0.01.15 PARTY
0.01.16 Person
0.01.17 Prime Rate
0.01.18 Project
0.01.19 Related Person
0.01.20 Schedule
0.01.21 Specifications
0.01.22 Sub-Contractor
0.01.23 Subsidiary
0.01.24 Substantial Execution
0.01.25 Work
0.02 Precedence
0.03 Jurisdiction
0.03.01 Governing Law
0.03.02 Non-compliance
0.04 Miscellaneous
0.04.01 Cumulative Rights
0.04.02 Time and Dates
0.04.03 Financial References
0.04.04 References within Agreement
0.04.05 Gender and Number
0.04.06 Headings
0.04.07 Presumptions
0.04.08 Knowledge
0.04.09 Approval
0.04.10 GAAP
0.04.11 Technical Terms
1.00 PURPOSE
1.01 Work Fulfilment
1.02 Conditions
1.02.01 Required by CLIENT
1.02.02 Required by ENTREPRENEUR
1.02.03 Choice
2.00 CONSIDERATION
2.01 Contractual Work
2.02 Adjustments
2.02.01 Cost Increase
2.02.02 Cost Decrease
2.02.03 Multiple Modifications
2.03 Schedule
2.03.01 Bonus
2.03.02 Penalty
3.00 TERMS OF PAYMENT
3.01 Contractual Work
3.01.01 Initial Payment
3.01.02 Subsequent Payments
3.01.03 Retainer
3.02 Work Outside The Agreement
3.03 Schedule
3.04 Interest
3.05 Loss of Term
4.00 SECURITY
4.01 In favour of CLIENT
4.02 In favour of ENTREPRENEUR
4.03 Performance Bond
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Status
5.02 Authority
5.03 Binding Agreement
5.04 Canadian Resident
5.05 Commission
5.06 Insurance
5.07 Nominee
5.08 Fundamental Provisions
5.09 Disclosure
6.00 REPRESENTATIONS AND WARRANTIES OF CLIENT
7.00 REPRESENTATIONS AND WARRANTIES OF ENTREPRENEUR
8.00 MUTUAL DUTIES AND OBLIGATIONS
8.01 Confidential Information
8.01.01 Undertaking
8.01.02 End of Agreement
8.02 Insurance
8.02.01 Insured Risks
8.02.02 Amount of Coverage
8.02.03 Issuer
8.02.04 Co-insured
8.02.05 No Limitation
8.03 Indemnification
8.03.01 “Loss”
8.03.02 Scope
8.03.03 Procedure
8.03.04 Deductible
8.03.05 Limitation on Claims
8.04 Disclosure of Agreement
9.00 DUTIES AND OBLIGATIONS OF CLIENT
9.01 Access to the Site
9.02 Disposal of the Property
9.03 Indemnity
9.04 Modifications to the Work
9.05 Permits and Fees
9.06 Insurance
10.00 DUTIES AND OBLIGATIONS OF ENTREPRENEUR
10.01 Work
10.02 Schedule
10.03 Best Effort
10.04 Inspection of the Work
10.05 Supervision of the Work
10.06 Guarantee
10.07 Responsibility as to the Neighbouring Immoveables
10.08 Respect of the Legislation and Standards
10.09 Execution of the Work
10.10 Work Accidents
10.11 Environment
10.12 Insurance
10.13 Taxes
11.00 SPECIAL PROVISIONS
11.01 Assignment
11.01.01 Prohibition
11.01.02 Effect of Breach
11.01.03 Exception
11.02 Force Majeure
11.02.01 No Default
11.02.02 Duty
11.02.03 Rights of Other PARTY
11.03 Relationship
11.03.01 Independent Contractors
11.03.02 No Control over Performance
11.03.03 No Authority to Bind
11.04 Further Assurances
11.05 Other Remedies
11.05.01 Choices
11.05.02 No Limitations
11.06 Prescription
11.07 Sub-Contractors
11.08 Other Entrepreneurs
11.09 Time Limits
11.09.01 Caused by CLIENT
11.09.02 Ordinance
11.09.03 Notice
12.00 GENERAL PROVISIONS
12.01 Notice
12.02 Dispute Resolution
12.02.01 Good Faith Negotiations
12.02.02 Mediation
12.02.03 Arbitration
12.03 Election
12.04 Counterparts
12.05 Amendment
12.06 Waiver of Rights
12.07 Electronic Transmission
12.08 Language
13.00 TERMINATION
13.01 Mutual Consent
13.02 Unilateral Termination
13.02.01 Notice
13.02.02 Payment
13.03 Prior Notice
13.04 Change of Control
14.00 EFFECTIVE DATE
14.01 Retroactivity
14.02 Execution
14.03 Deferral
15.00 DURATION
15.01 Initial Term
15.02 Survival
16.00 SCOPE

SCHEDULE A - EXCERPT OF A RESOLUTION OF ENTREPRENEUR
SCHEDULE B - EXCERPT OF A RESOLUTION OF CLIENT
SCHEDULE 0.01.20 - SCHEDULE
SCHEDULE 0.01.21 – SPECIFICATIONS
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Civil Law Version
Updated 14-02-2009
Québec
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