Turnkey Project Agreement Sample
- Posted on October 12, 2021
- in Uncategorized
- by admin
Although there are many types of construction contracts (1) used in project financing, the majority of project sponsors and all project promoters prefer turnkey contracts. Turnkey contracts are based on the idea that when construction is complete, all you need to do is the key, and the project will work as expected, which induces the nature of the business and is therefore a preferred type of contract for big budget long-term projects. The main conditions to be included in a turnkey contract are listed below: this template contains certain general conditions of the contract that are normally applied in the vast majority of turnkey contracts, although there are other conditions that must be modified to take into account the circumstances of each contract and which are called special conditions; The Annex to the Treaty contains a guide for the elaboration of these special conditions which modify the general conditions. In addition to this guide, several documents are included in the annexes: tender letters, contractual agreement and model dispute resolution agreements. All these documents are part of the documentation that must be submitted by companies applying for a turnkey project, especially when it is carried out in an international environment. EPC contracts are also called turnkey contracts, because the concept is that, once the project is finalized and ready to be handed over to the user, only the “key rotation” is necessary for the user`s operation. Normally, the EPC contractor must execute and deliver the project within an agreed time and budget, generally known as a flat-rate turn key contract. This standard turnkey project contract must be suitable for all industrial and industrial projects, large and small, especially for E&M (Electrical and Mechanical) and other process plant projects implemented worldwide by all types of employers who wish to implement their turnkey projects at a fixed price and with a strict two-party approach. In accordance with the usual approach of turnkey contracts, the contractor carries out all engineering, purchasing management and construction (EPC – Engineering, Procurement and Construction) and provides a fully equipped and operational (“turnkey”) installation. Turnkey construction and engineering contracts are contracts signed for engineering, acquisition and construction.
This is a form of procurement that is often used for major international infrastructure or energy projects, mainly when it comes to project financing. Its popularity is attributed to the fact that, under a turnkey contract, the risk of design and construction in the project lies with the contractor. A key contract essentially contains provisions relating to the transfer of risk, the contractors` commissions and the rights and obligations of the project owner and the contractor. In addition to technical and operational terms, standard platform clauses such as party names, effective date, waivers, remedies, modifications, communications, dispute resolution, choice of law, and salvatorial clauses should be included. A turnkey engineering and construction contract template can be downloaded below. The following guidelines should be followed when designing a turnkey contract: the purpose of a turnkey contract is to transfer, as far as possible by contract, all design, engineering and construction risk from the project company that owns the project to the EPC contractor that builds the project. An EPC contract reduces and controls risk in the form of written business terms.. . .