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Construction Contract for a Residential Property

This Construction Contract ("Contract") is made and entered into on this [Date] day of [Month], [Year], by and between:

[Your Full Name] residing at [Your Address], hereinafter referred to as "Owner," and

[Contractor Full Name] residing at [Contractor Address], hereinafter referred to as "Contractor."

WHEREAS, Owner desires to have certain construction work performed on the property located at [Property Address] ("Property"), and Contractor desires to perform such work;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. Scope of Work

1.1. Contractor agrees to perform all the work necessary to construct a [Type of Residential Property] on the Property, in accordance with the plans and specifications attached hereto as Exhibit A ("Plans and Specifications").

1.2. The Scope of Work includes, but is not limited to, the following:

[List of Construction Work]

1.3. The Scope of Work does not include the following:

[List of Excluded Work]

2. Time of Completion

2.1. Contractor agrees to commence work on the Property on [Start Date] and to complete all work in accordance with the Plans and Specifications within [Number] days from the commencement date.

2.2. The time for completion of the work is of the essence.

3. Payment

3.1. Owner agrees to pay Contractor the sum of [Amount] (Ksh. [Amount in Kenyan Shillings]) for the performance of the work in accordance with the Plans and Specifications.

3.2. Payment shall be made in the following installments:

[Percentage] upon execution of this Contract;
[Percentage] upon completion of [Milestone];
[Percentage] upon completion of [Milestone];
[Percentage] upon completion of [Milestone];
[Percentage] upon final completion of the work and issuance of a Certificate of Completion by the Architect.

3.3. All payments shall be made by Owner to Contractor within [Number] days of the issuance of a written invoice by Contractor.

3.4. Owner shall be entitled to withhold payment for any work that is not performed in accordance with the Plans and Specifications.

4. Materials

4.1. Contractor shall provide all materials necessary for the performance of the work in accordance with the Plans and Specifications.

4.2. All materials shall be of good quality and shall be approved by Owner prior to their use.

4.3. Contractor shall be responsible for the proper storage and handling of all materials on the Property.

5. Labor

5.1. Contractor shall provide all labor necessary for the performance of the work in accordance with the Plans and Specifications.

5.2. All labor shall be skilled and experienced in the performance of the work.

5.3. Contractor shall be responsible for the safety of all workers on the Property.

6. Permits and Licenses

6.1. Contractor shall be responsible for obtaining all necessary permits and licenses for the performance of the work.

6.2. Contractor shall provide Owner with copies of all permits and licenses obtained.

7. Insurance

7.1. Contractor shall maintain the following insurance policies during the performance of the work:

Workers' Compensation Insurance;
General Liability Insurance with a minimum limit of [Amount] (Ksh. [Amount in Kenyan Shillings]);
Property Damage Insurance with a minimum limit of [Amount] (Ksh. [Amount in Kenyan Shillings]).

7.2. Contractor shall provide Owner with certificates of insurance evidencing the coverage required by this Section.

8. Warranties

8.1. Contractor warrants that all work performed under this Contract shall be free from defects in materials and workmanship for a period of [Number] years from the date of completion of the work.

8.2. Contractor shall be responsible for repairing or replacing any defective work within a reasonable time after notification by Owner.

9. Changes to the Work

9.1. Owner may request changes to the work, provided that such changes are in writing and are approved by Contractor.

9.2. Any changes to the work shall be subject to a change order, which shall be signed by both parties.

9.3. The change order shall specify the nature of the change, the cost of the change, and the time for completion of the change.

10. Termination

10.1. This Contract may be terminated by either party for any of the following reasons:

Material breach of this Contract by the other party;
Failure of the other party to perform its obligations under this Contract;
Bankruptcy or insolvency of the other party.

10.2. Upon termination of this Contract, Owner shall be entitled to recover all costs incurred in completing the work, including any costs incurred in hiring a replacement contractor.

10.3. Contractor shall be entitled to recover all costs incurred in performing the work up to the date of termination, including any costs incurred in mobilizing to the Property.

11. Dispute Resolution

11.1. Any dispute arising out of or relating to this Contract shall be settled by binding arbitration in accordance with the Arbitration Act, [Year].

11.2. The arbitration shall be conducted in [City, Kenya] and the language of the arbitration shall be English.

11.3. The decision of the arbitrator shall be final and binding on both parties.

12. Entire Agreement

12.1. This Contract constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.

13. Governing Law

13.1. This Contract shall be governed by and construed in accordance with the laws of the Republic of Kenya.

14. Notices

14.1. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified mail, return receipt requested, or sent by overnight courier service, addressed as follows:

If to Owner:

[Your Full Name] [Your Address]

If to Contractor:

[Contractor Full Name] [Contractor Address]

15. Severability

15.1. If any provision of this Contract is held to be invalid or unenforceable, such provision shall be struck from this Contract and the remaining provisions shall remain in full force and effect.

16. Waiver

16.1. No waiver by either party of any breach of this Contract shall be deemed to be a waiver of any subsequent breach.

17. Binding Effect

17.1. This Contract shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

IN WITNESS WHEREOF, the parties have executed this Contract as of the date first written above.

Owner:

[Your Signature]

[Your Printed Name]

Contractor:

[Contractor Signature]

[Contractor Printed Name]

Exhibit A: Plans and Specifications

[Attach Plans and Specifications]

Case Laws

Relevant Case Laws:

Mombasa Cement Ltd v. M.S. Patel & Sons Ltd (1974) EA 144: This case established the principle that a construction contract must be interpreted in a way that gives effect to the intentions of the parties. The court held that the parties' intentions should be determined from the language of the contract, the surrounding circumstances, and the conduct of the parties.
Kenya Commercial Bank Ltd v. Trust Bank Ltd (2003) 1 EA 1: This case emphasized the importance of clear and unambiguous language in construction contracts. The court held that where the language of a contract is ambiguous, it should be interpreted against the party who drafted it.
Kenya Power & Lighting Co. Ltd v. East African Power & Lighting Co. Ltd (1973) EA 1: This case highlighted the importance of adhering to the terms of a construction contract. The court held that a party who deviates from the terms of a contract without the consent of the other party may be liable for breach of contract.

Why these case laws are relevant:

These case laws provide guidance on the interpretation and enforcement of construction contracts in Kenya. They emphasize the importance of clear and unambiguous language, the need to adhere to the terms of the contract, and the principle of interpreting contracts in a way that gives effect to the intentions of the parties.

How these case laws can be applied:

Mombasa Cement Ltd v. M.S. Patel & Sons Ltd (1974) EA 144: This case can be used to interpret the terms of the construction contract in a way that reflects the intentions of the Owner and Contractor. For example, if there is a dispute about the scope of work, the court may refer to this case to determine the parties' intentions based on the language of the contract, the surrounding circumstances, and the conduct of the parties.
Kenya Commercial Bank Ltd v. Trust Bank Ltd (2003) 1 EA 1: This case can be used to ensure that the language of the construction contract is clear and unambiguous. For example, the contract should clearly define the scope of work, the payment terms, and the time for completion.
Kenya Power & Lighting Co. Ltd v. East African Power & Lighting Co. Ltd (1973) EA 1: This case can be used to emphasize the importance of adhering to the terms of the construction contract. For example, if the Contractor deviates from the Plans and Specifications without the Owner's consent, the Owner may be able to terminate the contract and seek damages.

Sources:

TLDR:

This Construction Contract outlines the agreement between the Owner and Contractor for the construction of a residential property. It covers the scope of work, time of completion, payment terms, materials, labor, permits and licenses, insurance, warranties, changes to the work, termination, dispute resolution, and other relevant provisions.

Conclusion:

This Construction Contract is a legally binding agreement between the Owner and Contractor. It is important for both parties to carefully review the terms of the contract and to ensure that they understand their rights and obligations. If there are any questions or concerns, it is advisable to seek legal advice from a qualified attorney.