Construction and work contracts
Provisions on scope, price, time, acceptance and liability in work, turnkey, design–build and EPC models.
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Provisions on scope, project and technical specification, price, lump-sum price or unit price, work schedule, site handover, progress payment (hakediş), variation order, extension of time, delivery and acceptance, defects, security, insurance, contractual penalty, termination and dispute resolution are prepared and reviewed in a manner specific to the project. Turnkey, design–build, engineering–procurement–construction (EPC) and project management models are structured according to the nature of the work.
Basic Matters to Be Regulated in Construction Contracts
A construction contract should not be created by adding the project name to a ready-made text. Depending on the nature of the work, at least the following matters should be regulated in a clear, measurable and verifiable manner:
- Identity of the parties, representation and signing authority
- Land and title deed records and existing encumbrances
- Scope of the work and works outside the scope
- Contract documents and their order of precedence
- Project, technical specification, room finish schedule and material standard
- Lump-sum price, unit price, cost-plus fee or mixed price model
- Taxes, fees, Social Security Institution (SGK), permit, utility subscription and other financial burdens
- Site handover, commencement of the work and work schedule
- Interim milestones, delivery and the obligation to obtain the occupancy permit
- Progress payment, advance payment, deductions, retention and final account
- Price adjustment (fiyat farkı), adaptation and extraordinary cost changes
- Additional work, omitted work and variation order procedure
- The project owner’s approval and payment obligations
- The contractor’s organization, personnel and subcontractor obligations
- Inspection, testing, sampling, quality and acceptance system
- Occupational health and safety and environmental obligations
- Delay, contractual penalty, loss of rent and other damages
- Apparent and latent defects, notice, remedy and warranty periods
- Insurance, letter of guarantee, suretyship, mortgage and other security
- Suspension, termination, rescission and liquidation
- Force majeure and the procedure for extension of time
- Confidentiality, intellectual property rights, data and project documents
- Notification, KEP, meeting and site correspondence arrangements
- Mediation, court or arbitration route
Even if the technical details are regulated in a separate technical specification, it should be stated expressly that this specification is an annex to the contract and a binding part of it. Where the implementation details of the project will be determined later, the decision and approval mechanism should be established in the main contract.
