AYALA LAND, INC.

GENEML CONDITIONS OF CONTRACT

IGC-1: DEFINITION OF TERMS ]

The following terms shall have the meanings respectively set opposite them
whenever used in the Contract and these General Conditions (whether used in their
singular or plural form):
..
'Act of Bankruptcy" shall refer to (i) the filing of a petition in any
bankruptcy, reorganization, winding up or liquidation proceeding analogous
in purpose or effect; (ii) an application for or consent to the appointment of a
receiver or trustee for the bankruptcy, reorganization, winding up or
liquidation; (iii) the making of an assignment in favor of creditors; or (iv) the
filing of an answer admitting the allegations of, or consent to, or default in
answering, a petition filed in any bankruptcy, re-organization or insolvency
proceeding or arrangement of creditors.

'Bills of Quantities" shall refer to the breakdown of the estimated quantities

of work, goods or materials and their respective unit prices which need to be
accomplished or supplied by the Contractor to complete the Works.

'Certificate of Acceptance" shall refer to the certificate signed by the Project

Director upon the completion of the Works pursuant to GC-9(G).

'Commencement Date" shall refer to the date specified in the Contract for
the turn-over of physical possession ofthe Site to the Contractor.

' ~ o m ~ l e t i &Date" shall refer to the date specified in the Contract for the
completion of the Works, or in the event that the date specified in the
Contract as the Completion Date is extended in accordance with GC-7, then
the date as modified or re-calculated in accordance thereto.

'Contract" shall mean the principal written agreement entered into between
the Owner and the Contractor for the purpose of executing and completing
the Works.

"Contract Documents" shall mean the set of agreements entered into by the
Owner and Contractor for the purpose of evidencing the terms and conditions
accepted and understood by them for the execution and completion of the
Works. The documents constituting the Contract Documents are specified in the
Contract in the order of their priority, and are intended to be read and
 construed as a single contract. Each document is intended to be complementary
to the other documents even if reference to the other documents is not made in
any one document. However, in case of any conflict in the application or
interpretation of provisions found in two or more documents, the document
which the Contract specifies as having a priority over the others will prevail.
Should there be any conflict between documents belonging to the same class,
such as a conflict between drawings, or between specifications, the Contractor
shall be deemed to have included in the Contract Price, the higher cost of
undertaking the Works.

'Contract Period" shall refer to the period specified in the Contract,

"
commencing with the Commencement Date and ending with the
Completion Date during which the Works should have been executed and
completed by the Contractor, as the same may be extended under GC- 7.

"Contract Price" shall mean the total sum of money which the Owner is
obligated t o pay the Contractor under the Contract for the execution and
completion of the Works.

"Contractor" shaU mean the party named in the Contract which shall be
principally responsible for the execution and completion of the Works.

'Final Account" shall refer to amount due to the Contractor, as certified to

by the Project Manager, approved by the Project Director and issued to
the Contractor, upon acceptance of the Works pursuant to GC-9(F).

'Force Ma-ieure" shall mean an act of nature, God or man which is beyond
the control of the Owner or Contractor. For purposes of the Contract
Documents, Force Majeure shall include (i) rebellion, armed uprising, riot,
civil commotion or any act of terrorism; (ii) a court or government order
enjoining or prohibiting the execution of the Works; (iii) natural calamities,
such as widespread flooding, typhoons for the period when typhoon signal
No. 3 is hoisted in the Metro Manila area by the Philippine Atmospheric
Geological and Astronomical Administration (PAGASA) or exceptionally
adverse weather conditions (established in relation to PAGASA7s historical
weather records over a period of not less than ten years); provided that, rain,
wind, flood or other natural phenomena of inconsequential degree for the
locality of the Site shall not be considered Force Majeure; and (iv) strikes,
lockouts, or work stoppages of a city-wide or regional scale affecting any of
the trades employed upon the Works or any of the trades engaged in the
preparation, manufacture or transportation of any of the goods or materials
required for the Works or caused by concerted mass action on the part of the
Contractor's employees which are illegal per se or later determined to be
illegal by the appropriate government agency.
'Interim Certificate" shall refer to the certificate attesting t o the portion of the
Contract Price to be due to the Contractor upon the lapse of a given period or
upon the completion of a portion of the Works prior to Completion Date, as
provided for under the Contract, signed by the Project Manager, approved by the
Project Director and issued to the Contractor pursuant to GC-9(C).

'Maintenance Certificate" shall refer to the certificate t o be issued by the

Project Director pursuant to GC-IO(D), attesting to completion by the
Contractor of the repair of or remedial measures taken in connection with
defects, deficiencies or any other form of non-compliance of the Works with
the requirements of the Contract Documents, for the purpose of making the
Works conform to the Contract Documents.

'Master Prosram" shall refer to the program prepared by the Contractor

showing the order or sequence in which the Works shall be camed out.

'Nominated Sub-contractor/Su~~Iier"shall mean a sub-contractor selected on

behalf of the Owner but employed by and under the control of the Contractor
for the purpose of having such sub-contractor/supplier undertake a specific
portion of the Works. The rights and obligations of such Nominated Sub-
contractodSupplier and the extent of the responsibility of the contractor over
such sub-contractor/supplier shall be -ovemed by GC-3.

"Owner" shall mean Ayala Land, Inc.

'Prime Cost Sums" shall refer to sums to be expended for work to be

undertaken as part of the Works by Nominated Sub-contractorslSuppliers or
other sub-contractor or suppliers under the direction, supervision or
attendance of the Contractor.

"Proiect Director" shall mean the head of the Project Management Team and
the principal representative of the Owner.

"Proiect Management Team" shall mean the group headed by the Project
Director cnmposed of the persons and entitles who will be responsible for
executing and completing the Works, either directly or through properly
authorized agents, including without limitation, the Project Manager,
architect, engineers, Quantity Surveyor, consultants and other personnel
directly reporting to the Owner, the respective obligations of whom are set
forth in Exhibit A.

"Proiect Manaeer" shall mean the person or entity chosen by the Owner to
perform the functions specified herein and as set forth in Exhibit A.
 'Provisional Sum" shall refer to a portion of the Contract Price which is so
designated in the Bills of Quantities for the execution of work, supply of goods,
materials or services or for contingencies, which may be used in whole, in part
or not at all at the direction and instruction of the Project Director.

'Retention Amount" shall refer to amount to be retained or withheld by the

Owner fiom payments to be made on the basis of Interim Certificates or the
Final Account.

'Statutes" shall mean laws, ordinances, regulations, decrees, charters,

executive orders or instructions issued, adopted or approved by the
- Government of the Philippines or any local government unit, agency or
instrumentality thereof applicable to the execution and completion of the
Works.

"Site" shall mean the place or area where the Works will be executed.

'Variation" shall mean any change in the terms of the Contract Documents for
the execution and completion of the Works (other than an increase in the cost of
supplying labor as a result of an increase in minimum wages as mandated by the
applicable Statute) which will alter the ultimate use to which the Works will be
put or the manner in which the Works will be executed and completed. A
Variation shall include (i) the addition of fbrther works, materials or goods;
(ii) omission from the Works of certain types of work, materials or goods; (iii)
demolition or removal of part of the Works; (iv) substitution of different work,
materials or goods; (v) changes in the type, standard or quality of the Works;
(vi) changes in the plans, elevations, lay-out or dimension of the Works; (vii)
changes, additions or omissions ordered in the Works by the Project Director
to be carried out by any Nominated Sub-contractor/Supplier, or other
contractor or supplier; and (viii) postponement of the execution of part of the
Works as ordered by the Owner.

'Warrantv Period" shall refer to the period of one year fiom the issuance of
the Certificate of Acceptance of the Works by the Owner during which the
Contractor warrants the Works against all defects, errors o r omissions in or
of workmanship and materials firnished by the Contractor, Nominated Sub-
contractorfSupp1ier or any other sub-contractor/supplier working under the
attendance, direction or supervision of the Contractor, and as part of such
warranty, the Contractor agrees to undertake or to commence remedial or
corrective measures to correct all defects, errors or omissions from receipt of
a written notice from the Owner pursuant to GC-lo@).

'Works" shall mean the building, structure or any other form of permanent
improvement or facility resulting fiom the execution and completion of
construction activities by the Contractor pursuant to the Contract Documents,
 including temporaty improvements or facilities required for the execution
and the maintenance of the building, structure or permanent improvement to
be constructed or installed pursuant to the Contract.

GC-2: CONTRACTOR'S GENERAL OBLTGATIONS,

RIGHTS AND WARRANTIES

A. Master Program: Following the approval of the Contractor's bid or proposal and
within the period of specified in the Contract Documents (or in the absence
- thereof, within the period of fifteen days following such acceptance), the
Contractor shall submit to the Project Director for his approval a Master
Program showing the order or sequence in which the Works will be executed
and any relevant temporary works or methods of work which may be
relevant to such sequence or order, together with a Cash Flow Forecast
which predicts the amount of interim payments payable in accordance with
the Contract Documents. The Contractor will update the Master Program
within fourteen days from any extension of time award given under GC-7.
The approval of the Master Program by the Project Director shall signify the
Owner's agreement with the proposed order or sequence in which the Works
shall be executed, and shall be taken into account in determining a
reasonable order or sequence for the Contractor to supply any outstanding
information or details to the Project Director, but shall not otherwise change
the contractual obligations of either party in relation to the Completion Date
or as to a reasonable time for giving or receiving further information. In the
event, however, that tlte Contractor incurs delay of at least thirty days in the
execution of the Works based on the Master Program for reasons that do not
entitle the Contractor to an extension of the Contract Period, then the
Contractor shall within seven days from the request of the Project Director
submit a revised Master Program to show how the Contractor intends to meet
the Completion Date pursuant to GC-I 1(A). .

B. Make-Uo of Prices: To facilitate the valuation of Variations or measurement

of the Works by the Contractor, it shall within the period specified in the
Contract Documents but nevertheless prior to the commencement of the
execution of the Works, submit to the Quantity Surveyor a breakdown of its
prices as specified in the Bills of Quantities, specifying for each rate or price
(or representative group of prices or rates) the proportionate amounts
(expressed as a percentage of the total price or rate) attributable to labor,
goods, materials, overhead, plant or other expenditures and identifying the
particular type of labor, goods, materials, overhead, plant or other
expenditures to be used or incurred.

C. Possession of the Site: In the absence of any provision in the Contract to the
contrary, free and uninterrupted possession of the whole of the Site shall be
 given to the Contractor on the Commencement Date. Upon the
commencement of such possession, the Contractor shall be deemed to have
inspected the Site and to have filly taken into account the conditions which
may affect the nature, extent and cost of executing the Works in the Site;
including the nature of the soil, any customs duties or clearance fees,
restrictions and conditions affecting the Site. Consequently, the Owner shall
in no way be responsible for any cost or expense which may develop on
account of the failure of Contractor to make an accurate examination of
present or future factors related to possession of the Site which may
adversely affect the execution and completion of the Works in accordance
with the Contract Documents. If, at any time during the execution of the
Works, the Project Director requires the Contractor to make boreholes or t o
carry out exploratory excavation on the Site, the requirement shall be
considered a Variation, unless an item or a Provisional Sum in respect of
such work is included in the Bills of Quantities.

D. Quality of Goods. Materials and Workmanship: Upon the possession of the Site
on Commencement Date, the Contractor shall then proceed to execute and
complete the Works diligently and with due expedition using methods of
construction which are in accordance with sound practice and which are not
likely to endanger any existing structure, finish, adjacent property or the safety
of members of the public. Without prejudice to the generality of the foregoing,
the Contractor shall carry out the Works in a good and workmanlike manner,
using goods, materials and labor which, unless otherwise stated in the Contract
Documents, shall be of the best of their kind and shall strictly comply with the
specifications and the purpose for which they shall be used under the Contract
Documents. The Contractor shall upon the request of the Project Director
provide the necessary evidence and information confirming that the materials,
goods, labor or workmanship used in the Works comply with this Condition.
The Contractor's failure to so provide the evidence and information required
under this-condition shall provide the Project Director with sufficient basis to
order the removal of the goods, materials or stoppage of labor at the expense of
the Contractor and to deduct the cost thereof from the Contract Price if not
fohhwith replaced by the Contractor with the kind of goods, materials and labor
which comply with the Contract Documents and adequately fulfill the
requirements of this Condition. For this purpose, the Project Director stlall have
the right to object to and require the Contractor to remove and to permanently
bar from the Site any person employed by the Contractor in the execution of the
Works who in the opinion of the Project Director is guilty of misconduct, is
incompetent or nezligent, in the proper performance of his duties or whose
employment is otherwise considered by said Project Director to be undesirable.

Unless the Contract expressly states otherwise, the Contractor shall provide
the Site with the plant, eoods and materials necessary for the due and timely
 performance of the Works in the Site, and shall not remove the same from the
Site until the completion of the Works without the prior written consent of the
Project Director. If the plant or equipment to be used in the completion of the
Works is not owned but only leased from a third person by the Contractor, then
the Project Director shall not be obliged to accept such plant or equipment
unless the Contractor is able submit a written agreement from the lessor or
owner of such plant or equipment for the use of such plant or equipment in the
Site until the completion of the Works and the assignment of such lease to the
Owner in the event that the Contract is terminated before the completion of the
Works or the Contractor defaults under the terms of the lease entered into with
such Owner.
k

E. O~eningUu And Testin?: The Contractor shall noti@ the Project Director in
writing before executed Works are covered up and shall give him at least
three working days' prior written notice to inspect executed Works. Unless
the Contractor does so, the Owner shall not be liable for the cost to the
Contractor of opening up, inspecting or testing executed Works, nor will any
extension of time be granted to the Contractor for any delay caused thereby.
The Contractor shall comply with instructions from the Project Director
made at any time after the 3-day period herein specified for the opening up
or inspection of any executed Works or for carrying out tests or
investigations of any goods, materials or finished Works, and for the
postponement of the execution of firther Works until such tests are
completed. If such opening up, inspection or investigation is the reasonable
and prudent consequence of defective work by the Contractor or by reason of
its negligence or omission, such investigation, inspection or opening up shall
be done at the expense of the Contractor and shall not be used as basis for
any extension of time. In all other cases where there is no breach, omission
or fault of the Contractor, the opening up, tests or investigations conducted at
the request of the Project Director shall be done at the expense of the Owner
and shall entitle the Contractor to an extension of the Completion Date, if
appropriate, unless and to the extent that defective work or any of the
Contract Documents is disclosed thereby.

F. Care and Maintenance of the Works: The Contractor will be &lly responsible
for the care and maintenance of the Works from the Commencement Date
until the Works are completed and accepted by the Owner. The Contractor
will be filly responsible for the care of and safekeeping of all temporary
buildings, plant, goods, materials and things brought to Site in connection
with, or for the purpose of executing and completing the Works. Unless the
Contract should provide otherwise, the Contractor shall be filly responsible
for the adequacy, design, stability and safety of all Site operations, temporary
works and methods of construction.
G. No Desisn Resaonsibilities: Except when the Contract provides to yhe
contrary or leaves the design, specifications or choice of materials to be used
in the Works to the Contractor or Nominated Sub-contractor/Supplier, the
design and/or specifications of the Works shall be provided to the Contractor
for the account of the Owner. The Contractor shall not be responsible for the
design or specifications of the Works, or for the suitability of such design or
specifications to the purpose for which the Works shall be used or occupied,
provided that in this case, the Contractor shall have complied with all the
requirements imposed upon it under the Contract Documents for the proper
and due execution and completion ofthe Works. Notwithstanding the absence
of responsibility of the Contractor with respect to the design or specificat~ons
- of the Works (unless the Contract provides otherwise), the Contractor shall
have the duty to warn the Project Director if any insufficiency in the design
or specifications is discovered as the Works are being executed.

H. Divergence: The Contractor shall within thirty days after the Contract has
become effective carehlly check the Contract Documents for any discrepancy or
divergence between or among the said documents and verify all dimensions
shown on the contract drawings before use. The Contractor will immediately
issue a written notice to the Project Director if any discrepancy or divergence
should be found between or among the Contract Documents, or between any
Contract Document or Statute, or between any of the Contract Documents and
any instructions issued to the contractor. Forthwith upon the receipt of such
written notice, the Project Director shall issue instructions to the Contractor to
verify the divergence or inconsistency. If a portion of the finished Works needs
to be rectified or any of the Works needs to be aborted following the verification
of such divergence or discrepancy, then the work to be done in rectifying or
aborting the Works shall be deemed a Variation and covered under GC-4 and an
appropriate valuation thereof andlor extension of the Completion Date shall be
made in accordance with GC-7; provided that, in the event that the divergence
or discrepancy could have been discovered earlier by the Contractor using due
skill and care, then the cost to be incurred in rectifying or aborting the Works
shall be for the account of the Contractor.

-Com~liancewith Statutes; The Contractor shall comply with and give all
notices required or which shall become required by Statutes t o the extent
applicable to the Works, including without limitation, all restrictions imposed on
the execution of the Works in connection with pollution (including noise
pollution) and the use of hazardous materials In case the Site is within any of its
Owner's controlled commercial or residential develop~nentsor subdivisions, the
Contractor shall in addition comply with the construction guidelines drawn up
by the Owner for such development or subdivision, including the payment of
the necessary fees and charges covering security and janitorial services for the
perimeter of the Site as required under such guidelines. When particular
requirements are set out in the Bills of Quantities, the Contractor shall be
 deemed to have allowed for compliance with these requirements as well.
The Contractor shall only carry out noisy or vibratory operations during
working hours and shall execute the Works on non-working days as may be
designated or approved by the relevant authority and without complaint
from the neighboring properties.

When compliance with this ~bnditionrequires a Variation from the Contract

Documents, the Contractor, before complying, shall immediately give
written notice to the Project Director specifying the reasons for the Variation.
Should the Contractor fail to receive any order or direction From the Project
Director regarding such Variation within a period of fourteen days from the
Project Director's receipt of such written notice, the Contractor may proceed
with the execution of the Works in conformity with the applicable Statute as
if the Variation shall have been approved by the Project Director and shall be
entitled to claim compensation of such work and/or extension of the
Completion Date to the extent allowed under GC-7.

J. Taxes. Permits and Fees: The Contractor shall pay for all taxes (including
income and value-added taxes), fees and assessments imposed or t o be
imposed by the national, provincial, city, municipality or barangay
government in connection with the performance of the Works and all taxes,
benefits, Social Security contributions, levies or fees that the Statutes require
t o be paid in connection with the employment of the Contractor's personnel,
consultants or agents. The Contractor shall secure all necessary permits and
pay any fees or charges legally demandable, or which shall become legally
demandable under the Statutes. Unless the Contract Documents provide
otherwise, such fees, or charges are deemed to have been included in the
Contract Price even if not specifically set out in the Bills of Quantities.

The Contractor shall, upon demand by the Owner, produce and make available
for inspect&, examination and/or reproduction its payrolls, vouchers and other
papers in order to ascertain that the Contractor has fully complied, or is hlly
complying, with its obligations under this Condition, including official receipts
of payments of the required contributions and fees to the Social Security
System, Medical Care Commission and State Insurance Fund, as well as
payments for taxes due to the govenunent by reason of the Works.

K. Owner's Access: The Contractor shall permit the Project Director, Project
Manager, Quantity Surveyor or any member of the Project Management Team,
as the Project Director may require, access to the Works and to the workshops or
other places of the Contractor where work is being prepared for the Contract.
When work is to be so prepared in workshops o r other places of a sub-
contractor, the Contractor shall by a term in the sub-contract secure a similar
right of access to those workshops or places for the Project Director, Project
Manager, Quantity Surveyor or other members of the Project

AUOENCON
10119/95
 Management Team, and shall do all things reasonably 'necessary to make
such access effective. The Contractor shall provide the necessary facilities at
the Site to enable the Project Director and the other representatives of the
Owner and their respective staff to hold ofice and conduct periodic
inspections of the Works in progress.

Without prejudice to the generality of the foregoing, it is agreed and

acknowledged that the Owner may require access to the Works for the purpose
of promoting the sale or lease of units therein. The Contractor will do all things
necessary to facilitate such access as the Owner may require from time

- to time. It is specifically acknowledged and agreed that the exercise by the Owner of its
rights pursuant to this Condition shall not constitute taking possession of the whole or
any part of the Works.

L. Contractor's On-site Team: The Contractor shall have a competent English

speaking person-in-charge of its operations in the Site who shall be known
as the Contractor's Manager, and shall also maintain a complement of
competent supervisors and registered engineers in the Site. The Contractor's
Manager and supervisors and engineers shall be in attendance at all times
required by the Project Director or Project Manager from the
Commencement Date until the acceptance of the Works by the Owner. Any
instructions issued to the Contractor's Manager by the Project Director shall
be deemed to have been issued to the Contractor.

M. Nominated Sub-contractors/Suppliers and other contractors: The Contractor

shall coordinate, supervise and provide attendance to Nominated Sub-
contractors/Suppliers in the manner contemplated under GC-3. The
Contractor shall permit the execution of work not forming part of this
Contract by other contractors/suppliers directly employed by the Owner
during the Contract Period, and shall do all that is reasonably required not to
hinder the progress of work to be executed by such contractors/suppliers.
Except as othenvise provided for in the Contract, the Contractor shall not be
responsible for providing contractors/suppliers directly employed by the
Owner with temporary offices in the Site, but shall provide them with
tapping points for utilities upon their request. The collection of charges for
the utilities consumption of these contractor/suppliers shall be the
responsibility of the Contractor.

N. Assignment and Sub-contracting: The execution and completion of the Works

by the Contractor under the terms and conditions of the Contract Documents
constitute an essential consideration of the Contract. Thus, the Contractor shall
not, without the prior written consent of the Owner, assign the Contract or any
rights thereunder (including the right to receive the Contract Price or any part
thereof) or enter into any other arrangement whereby the hnctions and duties of
the Contractor as specified in the Contract Documents will be
 performed by persons other than its own employees. Neither shall the Contractor
sub-contract any part of the Works without the prior written approval of the
Owner. The Contractor shall not assign, transfer, pledge, subcontract or make
any other disposition of the Contract or any part thereof or any interest therein
without the prior written consent and approval of the Owner. Such consent and
approval, if given, shall not in any way relieve the Contractor from any liability,
obligation or responsibility under the Contract and it shall be as hlly responsible
to the Owner for the acts or omissions of its subcontractors/suppliers as it is for
the acts or omissions of its own employees. It is expressly understood that nothing
herein shall create any contractual relation between any sub-contractor of the
Contractor and the Owner.
-
The Project Director shall be entitled to request and receive details of the
proposed sub-contractor prior to responding to the Contractor's request for
approval. The approval by the Owner of the sub-contractor chosen by the
Contractor for a portion of the Works shall not relieve the Contractor from any
liability or obligation under the Contract Documents and the Contractor shall be
fully responsible for any and all acts, omissions, defaults and neglects of any
such sub-contractor or its employees, servants or agents. It shall be a condition
for the Owner's approval of such sub-contractor, among other conditions which
the Owner may see fit to impose, that the employment of such -sub-contractor
shall immediately terminate upon the termination (for any reason) of the
Contractor's employment under the Contract. With respect however to material
purchases to be used in the execution of the Works, the Contractor will be
allowed to assign and sub-contract such purchases, without the Owner's prior
approval, unless the Contract provides to the contrary.

0. Drawings: The Contractor shall be entitled to receive from the Project Director
two copies of the contract drawings, one copy of whjch shall always be kept in
the Site for use by the Project Director or Project Manager, and copies of such
fbrther drawings, schedules or details as necessary to explain, clarifjl or amplif4r
the contract drawings and enable the contractor to carry out and complete the
Works in accordance with the Contract Documents. At the request of the Project
Director, the Contractor shall submit working drawings at such times as to
prevent delay in the execution of the Works or the work being undertaken by
Owner's design team. These working drawings may be rejected, approved or
amended by the Project Director. If the working drawings are rejected, the
Contractor shall revise them as necessary and re-submit the revised working
drawings for approval of the Project Director. No claims for extra payment or
extension of time will be accepted in connection with the disapproval of work
drawings or their subsequent amendment. On the other hand, the submission to
and approval by the Project Director of such working drawings (and any revision
thereof if applicable) shall not relieve the Contractor of any of its duties or
responsibilities under the Contract Documents. The Contractor shall make
accurate records of parts of the Works
 which will become hidden from view as the execution df the Works
progresses, as may be directed by the Project Director. Such records shall be
checked and verified by the Project Director while the affected part o f the
Works is open for inspection, and the print of such records shall be
submitted to the Project Director as soon as practicable.

P. Establishing Levels and set tin^ Out Data: The Contractor shall determine a
datum level with the Project Director which may be required for the
execution of the Works based on accurately dimensioned drawings and such
information to be supplied by the Project Director as shall enable the
Contractor to set out the Works at ground level. Any errors arising fiom
inaccurate setting out by the Contl-actor shall be amended by the Contractor
at its own cost, or with the Owner's consent, accepted without amendment;
provided that in the latter case, t1,c Contract Price shall be reduced to take
into account any loss of value suffered by the Owner as a result of such error
o r the reduced cost to the Contractor resulting from the error, whichever is
determined to be greater. The checking of any setting out or of any line or
level by the Project Manager shall n o t in any way relieve the Contractor of
its responsibility for the correc~ic,;?~thereof

Q. -Onsite.... . S:ii'ctv..--- and Cleanliness: The Contractor shall appoint an officer to be

resporisiti,: for the safety of the Site and shall provide measures necessary to
prevent injury to those on Site, including but not limited to, the provision of
safety rails, safety helmets, warning signs, adequate lighting and Site,security.
The C<:lii.i-nct~rwill also maintain the Site and adjoining roads and pavements
in a clc;.rl 2nd tidy condition, repairing any damage caused by or consequential
to the cxccution of the Works and free from accumulation of waste materials
or i l . caused by its employees. Upon completion of the Works, the Contracr rr-
shall, as directed by the Owner, remove from the Site all temporary structures,
rubbish, tools, scaffoldings and waste materials and shall leave the Site i n ;i
illcan state. In case the Contractor fails to d o so, the Owner may under!:,: . ~ i i
cleaning and charge the expenses incurred to the Contractor.

All o!)c!:..!i:olis necessary for the execution and completion of the Works and
the rc:ii.- :.:;i~lgof any defects therein shall, so far as compliance with the requir
.:ii.-.ilts of the Contract permits, be carried on so as not to interfere unnecess;!rilv
or improperly with the convenience of the public, access to, use and
oici~l~ationof public or private roads and footpaths to or of properties
whetlic. lii i l ~ epossession of the Owner or of any other person. For this
purpose:, ;he Contractor shall save harmless and indemnify the Owner in
respe-.! ..i all claims, proceedings, damages, costs, charges and expenses
what:;;,^. ,. ;:rising out of, or in relation to, any such matters insofar as the
Cont i.2 -:, . ,i. is responsible therefor.

-.

12 ‘ NJG ENCON
10/19/95
 The Contractor shall use every reasonable means to prevent any of the roads
or bridges communicating with or on the routes to the Site from being
damaged or injured by any traffic of the Contractor or. any of their sub-
contractors. In particular, the Contractor shall select routes, choose and use
vehicles and restrict and distribute loads so that any such extraordinary
traffic as will inevitably arise fiom the moving of materials, plant,
Contractor's equipment or temporary works from and to the Site shall be
limited, as far as reasonably possible, and so that no unnecessary damage or
injury may be occasioned to such roads and bridges.

R. Services or Facilities To Be Provided bv the Contractor to Nominated Sub-

contractors/SuvvlierS Proiect Manager And Ouantitv Survevor: The
Contractor shall provide the following services or facilities, free of charge, to
the Nominated Sub-contractors/Suppliers, Project Manaser and Quantity
Surveyor:
(i) space in the building under construction or on the Site to allow them
to erect their own offices, amenities and warehouses with provisions for
adequate security for the Site;
(ii) use of roads and working space on the Site for access to their respective
work with due regard to the nature of such work;
(iii) use of such ladders or scaffolding as may have been provided or erected by
the Contractor; provided that, such use shall be at the convenience
of the Contractor and subject to its prior agreement; provided .firther that,
the Contractor shall be under no obligation to retain such ladders or
scaffolding for a period longer than is necessary for its own use;
(iv) use of mess rooms, latrines and the other usual facilities of a building
site;
(v) tapping points for power and water; provided that, the consumption of the
same shall be paid for by them directly to the Contractor;
(vi) facilities for unloading, hoisting and storing materials, returning
packing materials and placing in position of materials; provided that, if the
load of the materials to be hoisted exceeds the lifting capacity of the
Contractor's hoisting facilities, the Contractor will not be required to provide
for additional facilities specifically for such materials, and may be required
to either disassemble the materials to be hoisted to reduce their load at any
one time or provide their own equipment to handle the special load
requirements of the materials to be hoisted;
(vii) coordination with respect to provision for necessary facilities for
cutting away, making good, covering up and protecting their work for the
entire duration of such work, including the necessary removal and disposal
of rubbish and debris; and thorough cleaning of affected areas within the Site
up to the completion of the Works; and
(viii) use of the personnel elevator by their workers.
 The Contractor shall make available the same facilities under this Condition
[other than the facilities under GC-2(R)(i)] to other sub-contractors/suppliers
employed by the Owner. The Contractor shall not be required to provide such
sub-contractors/suppliers with a temporary oflice in the Site, but will provide
them with tapping points for utilities upon their request, and shall be responsible
for assessing and collecting the pro-rata share of such sub-contractors/suppliers,
agents and servants in such utility charges.

S. Compliance with Instructions: The Contractor shall forthwith comply with all
instructions issued by the Project Director in regard to those matters where the
Project Director is expressly empowered by these General Conditions to issue
- instructions, which shall include the following:
(i) the Project Director may require the Contractor to open up for
inspection any work covered up or to arrange for or carry out any test of any
materials or goods (whether or not already incorporated in the Works) or of
any executed work;
(ii) the Project Director may require the rectification or removal from
the Site of any work, materials or goods which in the Project Director's
opinion are not in accordance with the Contract Documents;
(iii) the Project Director may require the acceleration of the construction
of the Works, or the alteration of the sequence of timing of any part of the
Works; provided that, before commencing any work in connection
with the same, the Contractor shall, within ten days of receiving the
instruction issued under this clause (iii), submit a detailed account of the time
and cost implications of complying with the instruction, including all direct,
indirect and consequential costs. Upon receipt of the detailed account
required under clause (iii) from the Contractor, the Project Director may in
writing either (1) accept the detailed account, in which case it will be binding
on both parties as regards time and money; (2) reject the detailed account and
withdraw the instruction, and in which case, no adjustment to the Contract
Price or Contract Period will be allowed; (3) reject the detailed account and
allow the instructions to stand, in which case, the valuation of such
instruction will then be made in accordance with GC-4(C), GC-4(D) and GC-
9(F). In no case shall the Contractor be required to accelerate when, within
seven days of receiving the instruction from the Project Director, the
Contractor makes representations in writing that such acceleration is, under
the circumstances, unreasonable or totally impractical and the Project
Director agrees with the representation made.

If the Contractor does not comply with any instruction issued in writing by
the Project Director, when the Contractor is required to do so by these
General Conditions, then not less than three (3) days from the Contractor
receipt of such the instruction, the Project Director may (but not vexatiously)
issue a written notice requiring immediate compliance. If within seven days
after receipt of such notice, the Contractor has still not complied, the Project
 Director, without prejudice to the exercise of the remedies o f the Owner under
GC-I l(C), may employ and pay other persons t o execute any work which may
be necessary to give effect to such instruction. All costs incurred in connection
with such employment may be deducted by the Owner from any monies due or
to become due to the Contractor under the Contract or may be recoverable from
the Contractor by the Owner as a debt.

T. Representations: The Contractor represents and warrants in favor of the Owner

that:
(i) it has sufficient operating capital to perform and complete the Works
without relying upon advances or payments from the Owner, sufficient and
adequate equipment, tools and other materials that may be needed in the
- execution and completion of the Works, and the required knowledge, experience
and professional competence to undertake the Works. There is no
petition, action or proceeding, whether judicial or extrajudicial, seeking to
declare the Contractor insolvent or suspending payments to its creditors.
(ii) it is a corporation, partnership or single proprietorship (as the case
may be) duly registered and in good standing with the Securities and Exchange
Commission or the appropriate governmental agency exercising regulatory
jurisdiction over it. Its franchise or license to exist as such and to engage in the
business of a contractor has not been terminated, cancelled or suspended, nor the
subject of any investigation by competent government authority for the purpose
of terminating, cancelling or suspending such franchise or which may lead to the
termination, cancellation or suspension of such franchise. All the
necessary approvals required for the due execution and performance by the
Contractor of the terms of the Contract Documents have been obtained and are
in full force and effect.
(iii) it has and will regularly pay the salaries and wages or the other
money claims of its laborers, workers, employees, sub-contractors and suppliers
and provide them with the benefits required under the law. All such laborers,
workers and employers shall be deemed laborers, workers or employees of-the
Contractor, not the Owner, and the Contractor shall not provide any legal
ground for them to be considered as laborers, workers or
employees of the Owner.

These representations and warranties shall survive the execution of the Contract
Documents and shall subsist and be filly effective during the entire Contract
Period.

GC-3: NOMINATED SUB-CONTRACTORS AND SUPPLIERS

A. Nomination by the Owner: The Owner shall have the discretion to choose sub-
contractors to perform specific work or supply materials or goods for the Works
in the following instances:
 (i) Where a certain item of work or specific goods or materials ire
identified in the Contract Documents as a Prime Cost Sum, or where the work to
be performed by a particular sub-contractor or suppIier cannot be sufficiently
precisely described for pricing purposes at the time of the bidding or
negotiation, the Owner shall have the right to select a sub-contractor to carry out
work or supply any goods or materials so described.
(ii) Where work, materials or goods are identified as 'Provisional" or
'Provisional Sum" in the Contract Documents, the Owner shall be entitled to
either select sub-contractors or suppliers to carry out or supply some or all of the
work or materials or goods so described or shall instruct the Contractor to
carry out or supply some or all of such work or materials or goods itself.
. Where an amount is stipulated in the
(iii)
Contract Documents as a 'Contingency", 'Contin~encyItem"
or 'Contingency Sum'', the Owner may, but shall not be bound to, give instructions
for the carrying out of work under such items.

Acceptance bv the Contractor:, In the event that the Owner elects to designate
certain sub-contractors and suppliers to undertake specific items of work or to
supply specific goods or materials under GC-3(A), and the Contractor accepts
and approves of the nomination of these sub-contractors or suppliers, the
Contractor shall become hlly responsible for all Nominated Sub-
ContractorslSuppliers, and for any default or breach of contract on their part in
the same way and to the same extent that the Contractor is liable for its
performance of the Works or those of other sub-contractors selected and
engaged by the Contractor. In this case, the Owner shall in no circumstance be
liable to the Contractor for the default of any Nominated Sub-
Contractor/Supplier. Without prejudice to the generality of the foregoing, the
Contractor shall be deemed to have accepted as its own responsibility under the
Contract Documents all the obligations expressly or impliedly undertaken by
Nominated Sub-Contractors/Suppliers under their respective sub-contracts,
including any obligations as to the design, suitability, quality or performance of
their work, materials or goods, or in regard to providing d e s i ~ nservices and
whether or not such obligations are espressly mentioned or repeated in the
Contract Documents. In particular, in cases where the Owner relies, and having
regard to all the circun~stancesmay be reasonably expected by the Contractor to
have relied, upon the skill and judgment of a Nominated Sub-
ContractorISupplier for the design or suitability of the latter's work or materials,
the Owner shall for the purposes of the Contract Documents be deemed to have
so relied upon the skll and judgment of the Contractor.

C. Terms of Sub-contractlSupplv Contract: Upon the acceptance of the designation

of the Nominated Sub-contractor/Supplier by the Contractor, the latter shall
forthwith enter into a sub-contractlsupply contract with the Nominated Sub-
contractor/Supplier in accordance with the terms (if any)
 agreed upon among the Owner, Contractor and Nominated Sub-
contractor/Supplier, which shall include the following:
(i) The Nominated Sub-contractor/Supplier shall
carry out and complete the sub-contract work in every respect to the
reasonable satisfaction of the Contractor and the Owner.
(ii) The Nominated Sub-contractor/SuppIier shall
observe, perform and comply with all the provisions of the Contract
Documents as far as they relate and apply to the sub-contract work.
(iii) The Nominated Sub-contractor/Supplier shall
indemniQ the Contractor against the same liabilities in respect of the sub-
contract work which the contractor is liable for under the Contract
%
Documents.
(iv) The Nominated Sub-contractor/Supplier shall
indemnif) the Contractor against claims arising fiom any negligence,
omission or fault of such Nominated Sub-contractor/Supplier.
(v) The work of the Nominated Sub-
contractor/Supplier shall be completed within the period required under its
agreement with the Contractor, and any delay in the completion of the sub-
contract work arising from the negligence, fault or omission of the
Nominated Sub-contractor/Supplier shall result in liquidated damages
proportionate to the contract price of the sub-contract work. Payment of
liquidated damages by the Nominated Sub-contractor/Supplier shall not
prejudice the right of the Contractor to claim for other damages caused by
the Nominated Sub-contractor/Supplier's failure to perform its work.
(vi) The Nominated Sub-contractor/Supplier shall submit the bonds and
insurance required under GC-3(K).

Obiections to Nomination: The Contractor shall be entitled to object to the

nomination by the Owner of a particular sub-contractor/supplier on the
following grounds:
(i) the terms of sub-contract offered by the selected sub-contractor or
supplier are 'unsatisfactory in that: (1) the sub-contractor/supplier is not prepared
to accept equivalent responsibilities or obligations in the sub-contract consistent
with obligations or responsibilities undertaken by the Contractor in the Contract
Documents; (2) the sub-contractor/supplier is not prepared to indemnify the
Contractor against liabilities, claims and damages arising out of the negligence,
breach of contract or default in the carrying out of the sub-contract work in the
same terms as the contractor is required to indemnif) the Owner under the
Contract Documents; (3) the sub-contractor or supplier is not prepared to offer
firm completion or delivery dates consistent with the Contractor's completion
dates under the Contract Documents or a reasonable program having regard to
those dates; (4) the sub-contractor or supplier is not prepared to accept liability
for liquidated or other damages for delay under the same terms as the Contractor
has agreed to under the Contract Documents and to the extent to which the sub-
contractor's or supplier's progress or delivery or
 completion dates are or may be critical to the Contractor's progress and
productivity; (5) the sub-contractor or supplier is not prepared to accept
terms for payment similar to the terms of payment accepted by the
Contractor under the Contract Documents, and that such sums shall be
subject to retention and to any defense, set-off or counterclaim of the
Contractor in the same manner provided for under the Contract Documents;
(6) the supplier of goods or materials is not prepared to accept liability for
making good or replacing defective work or materials and for reimbursing
the Contractor for any expenditure or damage it would have incurred or
suffered in consequence of such defects; or (7) the sub-contractor or supplier
is imposing any other unreasonable exclusion of liability having regard to the
Contractor's obligations under the Contract Documents; or
- there are reasonable grounds for supposing
(ii)
that the financial standing, solvency, technical competence or reliability
of the selected sub-contractor/supplier is not such that a prudent contractor having regard
to the extent and nature of the sub-contract work, materials or goods and their possible
effect on the remainder of the Works would be justified in engaging such sub-
contractor/supplierto carry out or supply such work or materials.

For the purposes of this GC-3(D), a valid objection shall, in a case to which
paragraph (ii) applies, mean an objection justified on the available known
facts at the time of the Owner's designation of the sub-contractor/supplier, and
a valid objection in a case which falls under paragraph (i) shall be one which
was made prior to entering into the relevant sub-contract.

E. -Options of the Owner in the Event of Obiections under GC-3(D)(ii): Where

the Contractor raises a valid objection to a sub-contractor/supplier chosen by
the Owner for the reasons under GC-3(D)(ii), the Owner (in all cases acting
through the Project Director) may as an alternative to making a new
designation either (i) instruct the Contractor itself to carry out or make
arrangements for carrying out the work and/or supplying the goods or
materials in -question, and in this case, payment for such work, materials or
goods will be on the same basis as provided for under GC-3(H); or (ii)
instruct the Contractor to enter into the sub-contract notwithstanding such
valid objection, and guarantee the Contractor against any loss, damage, claim
or expense incurred by the Contractor, subject to the condition that such loss,
damage or claim arises as a direct result of the matters validly objected to by
the Contractor, and the Contractor is unable to recover any amount from the
sub-contractor or supplier by reason of such loss, damage or claim.
Whenever circumstances warrant, the Owner shall also extend the
Completion Date for the Works or affected portion thereof.

Options of the Owner in the Event of Obiections under GC-3(D)(i): Where the
Contractor raises a valid objection to a sub-contractor/supplier chosen by the
Owner for the reasons under GC-3(D)(i), the Owner may, as an alternative to

ALIGENCON
10/19/9J
 making a further designation either (i) instruct the Contractor itself to carry out
or arrange to carry out or supply the work or materials o r goods as in CC-3(E),
and payment for such work, materials or goods will be on the same basis as
provided for under GC-3O.I);or (ii) instruct the Contractor to enter into the sub-
contract notwithstanding any term validly objected to by the Contractor. In such
event no liability shall be imposed under the Contract Documents upon the
Contractor in respect of the work, goods or materials of the Nominated Sub-
ContractorISupplier to the extent that the Contractor, by reason of the terms of
the sub-contract it objects to, is unable to impose a corresponding liability upon
the Nominated Sub-ContractorlSupplier, and the Owner will to the same extent
indemnify the Contractor against any damage, loss, expenditure or claim arising
as a consequence of the term it objects to. Whenever circumstances warrant, the
Owner shall also extend the Completion Date for the Works or affected portion
thereof.

G. Remedies of the Contractor in the Event of Breach bv Nominated Sub-

contractor/Su~plier: In the event of repudiation or abandonment of the sub-
contract/supply contract by the Nominated Sub-ContractorISupplier, or such
contract's termination by the Contractor, or its disclaimer by the liquidator or
trustee in bankruptcy or receiver of the Nominated Sub-ContractorISupplier,
the Contractor shall with the consent of the Project Director, such consent not to
be unreasonably withheld, select another competent sub-contractor or supplier to
complete the sub-contract, or itself undertake to do so, in either event being paid
therefor the same sum as would have been payable had the
original Nominated Sub-contractor/Supplier completed the sub-contract/supply
contract without any default on the latter's part, without prejudice to . the
Contractor's exercise of any other remedy or entitlement to damages under the
relevant sub-contractlsupply contract.

H. Pavment for Work by the Contractor: In the event that the Owner exercises its
option under.GC-3(E) and 3(F) to instruct the Contractor to do some or all of the
work or supply some or all of the goods or materials which was intended for a
specific sub-contractor/supplier, or the Contractor elects to do the work
intended for the Nominated Sub-contractor/Supplier under GC-3(G), the sum
due to the Contractor for the said work or materials or goods shall be valued in
accordance with the provisions for valuing Variations under GC-4, except in
cases where the Contract Period and any preliminary items of expenditure i n the
Bills of Quantities shall be deemed to be inclusive of such work or materials as
are described in or to be inferred from the relevant Prime Cost Sum or
Provisional Sum items (unless materially altered in kind or extent so as to
constitute a Variation).

I. Payment for Work bv Nominated Sub-contractor/Supplier: The sums due to

the Contractor in respect of work performed by Nominated Sub-
contractors1Suppliers (in respect of which the contractor has not raised any
objections) shall be determined by deducting the relevant Prime Cost Sum or
Provisional Sum fiom the Contract Price and by substituting therefor the
amount of the relevant accounts of the Nominated Sub-Contractors/Suppliers
showing the value of the work performed under their respective sub-
contracts/supply contracts, together with any sums by way of profit or
attendance that may have been priced by the Contractor in the Bills of
Quantities or elsewhere in the Contract Documents, but not any sums due to
the Nominated Sub-contractor/Supplier by way of damages or compensation
in respect of any negligence, default or breach of the sub-contractlsupply
contract by the Contractor, unless and to the extent that the same shall for any
reason be recoverable by the Contractor from the Owner under or by virtue of
any provision of the Contract Documents.

Insolvency of the Nominated Sub-contractor/Supplier: The Contractor shall

have no liability to the Owner in case any Nominated Sub-
contractor/Supplier fails to perform its work due to insolvency or due to the
pedormance of an Act of Bankruptcy; provided that, the Contractor shall
have taken the necessary measures at the time it has knowledge of the actual
or threatened insolvency of a Nominated Sub-contractor/Supplier to prevent
any delay in the work to be performed by such Nominated Sub-
contractor/Supplier, including without limitation, taking over the balance of
the work to be performed by such Nominated Sub-contractor/Supplier.
Subject to the foregoing condition, the insolvency of any Nominated Sub-
contractor/Supplier shall entitle the Owner to exercise its rights under the
performance bond issued in favor of the Owner and Contractor.

Bonds and Insurance Required: Unless otherwise specified in the Contract,

each Nominated Sub-contractor/Supplier shall submit the bonds and
insurance policies with the coverage indicated and as specified in GC-5(A)
and GC-5(C) to the Contractor, and each bond shall contain provisions
authorizing the release of the proceeds of the bond to the Owner and/or
Contractor and shall have the coverage approved by the Owner. In the event
of any default in the performance of the scope of work by the Nominated
Sub-contractor/Supplier, whether such default occurs by itself or in
combination with the default of the Contractor, the Owner shall have the
option of seeking satisfaction from either of the bonds submitted by the
Contractor or Nominated Sub-contractor/Supplier, or from both such bonds.
The Owner shall give the Contractor prior written notice of its intention to
call upon the bond of the Contractor to answer for the default of a Nominated
Sub-contractor/Supplier, and shall indicate in such notice its reasonable basis
for believing that, in light of the recommendations of the Project Manager
and Quantity Surveyor, the Nominated Sub-contractor/Supplier has defaulted
in the performance of its scope of work, whether or not such default is
accompanied by a default of the Contractor.
IGC-4: VARIATIONS 1
A. Instructions to Effect or Sanction Variations: The Project Director may issue
instructions requiring a Variation and may sanction in writing any Variation
made by the Contractor otherwise than pursuant to the Project Director's
instructions. No Variation required by the Project Director or subsequently
sanctioned by him shall vitiate the Contract. The subsequent sanction of a
Variation carried out without authority from the Project Director shall not
entitle the Contractor to an increase in the Contract Price nor to an extension
of the Contract Period, unless such Variation was due to the negligence,
- omission or default of the Owner's representatives or contractors directly
employed by the Owner or was carried out in an emergency when it was not
practicable to obtain prior instructions fiom the Project Director. However, the
subsequent sanction of such Variation shall relieve the Contractor from any
liability for a breach of the requirements of the Contract Documents, and
whenever proper, may result in a reduction in the Contract Price if the value of
the Works is reduced as a result of the Variation.

B. Detailed Account: Before issuing a Variation instruction or sanctioning a

Variation, the Project Director may require the Contractor to submit within
fourteen days a detailed account of the time and cost implications of
complying with the proposed Variation instruction or of sanctioning a
Variation which should include all direct, indirect and consequential costs.
The Project Director may upon receipt of such detailed account either (i)
accept the detailed account, and issue the necessary instruction to effect or
sanction tlle Variation, in which case such instruction and the detailed
account to accomplish it will be binding on both parties; or (ii) reject the
detailed account and decide against issuing the Variation instruction or
sanctioning the Variation, in which case, no adjustment to the Contract Price
or extension of the Contract Period will be allowed; or (iii) reject the detailed
account but nevertheless i'ssue the Variation instruction or sanction the
Variation, in which case, the valuation of the Variation will be made in
accordance with the provisions of GC- 4(D).

Measurement of Variations: All Variations required by the Project Director or

subsequently sanctioned by him shall be valued. by measurement or calculation
by the Quantity Surveyor. The Quantity Surveyor shall allow the Contractor to
be present during the time physical measurement is being carried out. Should
the Contractor fail to be present at such time, or having been present fails to
dispute the findings of the Quantity Surveyor within fourteen days from receipt
of the written findings of Quantity Surveyor, the quantities measured by the
Quantity Surveyor shall be binding on the Contractor. The Owner shall not be
liable for any expense incurred by the Contractor in connection with any
 arrangements it may make concerning the measurement of Variations or the
adjustment and settlement of the Final Account.

D. Valuation of Variations: The value of Variations required or sanctioned by the

Project Director shall, subject to the acceptance of a detailed account under
GC-5@), be valued as closely as possible on the basis of the Contractor's
prices as set out in the Bills of Quantities, without regard t o any alleged
element of high or law profitability in these prices, and in accordance with
the following rules:
(i) the prices in the Bills of Quantities for a piece of work shall be the
basis for detemining the valuation of work of similar character executed
under similar conditions;
*

(ii) where the work to be effected under a Variation is not of a similar

character or executed under similar conditions as the work covered by the
Bills of Quantities, the Variation shall be valued at prices extrapolated from
the prices and rates specified in the Bills of Quantities for work which is the
most comparable to the work to be executed under the Variation based on the
breakdown of the Contractor's prices submitted under GC-2(B);
(iii) where there are comparable prices for work to be performed to effect
a Variation but by reason of certain factors (which include material increases or
decreases in quantity, sequence in ordering, location, postponement, resultant
dislocation, or any other special physical or technical circumstance) the work to
be performed under a Variation will significantly differ in cost, commercial
profitability or working methods, from the cost to be
incurred in performing comparable work, then the Quantity Surveyor shall
use as basis for the valuation of the Variation the prices and rates of such
comparable work, and will make allowances either as an addition or
reduction from such prices to take into account the effect of any such factors
on the Contractor's profitability; provided however, that such valuation shall
not take into account any increase or decrease in building costs unless the
Variation is to be executed at a time different from that contemplated by the
Contract ~ocuments ;
(iv) where the work to be effected under a Variation cannot properly be
measured and valued in accordance with the foregoing rules, the Contractor
shall be allowed daywork rates at the rates specified by the Contractor in the
Bills of Quantities, or when no such rates have been specified, at the actual cost
to the Contractor plus a margin of % , which percentage shall already include the
use of ordinary plant, tools, existing scaffolding and tools, and for supervision,
overhead and profit; provided that, daywork sheets specifying the time daily
spent in executing the Variation, including the workmen's names, profession and
the materials employed, shall be delivered for verification to the Project
Manager not later than seven days after the execution of the Variation;
(v) where a schedule of rates (upon which a lump sum price for a section of the
work was based) has been submitted by the Contractor and
 accepted by the Owner, the prices in the schedule of rates shall be used in the
valuation of Variations to such section of the work;
(vi) subject to any provision to the contrary contained in the Bills of
Quantities or any instruction of the Project Director, the quantity of work for any
'X'rovisional" item included in the Bills of Quantities shall at the time of
measurement and valuation of the Works be omitted and in its place shall be
added any such work as may have been required by the Project Director;
provided that the work to be omitted and added shall both be valued at the rates
contained in the Bills of Quantities for such 'Provisional"item, unless the
remeasured quantity is 20% higher or lower than the quantity used in the Bills of
Quantities, in which case a fair valuation shall be made; and
L (vii) Preliminary Items shall not be adjusted save where there is a demonstrable
increase or decrease in resources used.

GC-5: BONDS, INSURANCE, LIQUIDATED DAMAGES

AND OTHER INDEMNITIES

A. Bonds and Other Forms of Insurance to be Provided bv the Contractor: Unless

otherwise specifically provided in the Contract, the Contractor shall obtain the
bonds and insurance policy coverage from FGU Insurance Corporation as
specified below:
(i) Deposit/Downpayment Guaranty Bond: The Contractor
shall present and deliver to the Owner the Deposit/Downpayment Guaranty
Bond for the purpose of guaranteeing the return of the unliquidated portion of
any deposit, downpayment, mobilization fee and/or advance payment given by
the Owner in an amount equivalent to the amount received. This bond should be
sub~nittedwithin ten days from the date of effectivity of the Contract, and the
same shall remain in force until said deposit, downpayment, mobilization fee
and/or advance payment is fully liquidated or paid for by the Contractor.
(ii) Ferformn~zcePayment Bond: The Contractor shall submit and
deliver to the Owner a performance payment bond in the form attached hereto
as Exhibit B and in an amount equivalent to twenty (20%) percent of the
Contract Price to guarantee the following: (1) the faithhl and satisfactory
performance of the Works and all other undertakings and obligations of the
Contractor under the Contract Documents; (2) the payment of salaries and
wages of employees employed in the Works; and (3) the payment of materials
supplied by third persons used in the execution of the Works and the payment of
liquidated damages and other claims due and payable to the Owner under the
Contract Documents. The Contractor shall present and deliver the Performance
Bond to the Owner within ten days from the date of effectivity of the Contract,
and the same shall remain in force until the Works are satisfactorily completed
and accepted by the Owner. The effectivity of the performance payment bond
shall be extended at the Contractor's expense if the Contract Period is extended
for reasons other than delay through causes that
 give rise to an extension of time under GC-7. The insurer shall be released
from its obligations under the performance payment bond only after the
completion of the Works in accordance with the Contract Documents, the
issuance by the Owner of the Certificate of Acceptance for the whole o f the
Works and the delivery by the Contractor of the guarantee bond under GC-
S(A)(iii); provided that, if the Contract allows the Owner t o issue an Interim
Certificate for a section of the Works, then subject to the Owner's agreement,
the amount of the performance payment bond may be reduced by a sum to be
determined by the Project Director and Contractor when the guarantee bond
for the relevant part of the Works whjch has been completed has been
satisfactorily krnished by the Contractor to the Owner.
- (iii) Guarantee Bond The Contractor shall submit and deliver to the Owner
a guarantee bond in an amount equivalent to the Retention Amount (or
portion thereof to be released to the Contractor prior to the expiry of the
Warranty Period) to guarantee the performance of the warranty obligations of
the Contractor under GC-10 and for guaranteeing that the quality o f all
materials and workmanship installed under the Contract are in accordance
with the Contract Documents. The guarantee bond shall remain valid until
the expiration of the Warranty Period or the issuance of the Maintenance
Certificate, whichever occurs later. The terms of the guarantee bond shall be
in accordance with Exhibit C. The delivery of this bond shall be a
prerequisite to the release of the Retention Amount.
(iv) Contractor's All-Risk Insurance: The Contractor shall
subrnjt and deliver this bond in an amount equivalent to the Contract Price
for the purpose of insuring against loss and damage caused by fire, storm,
typhoon, tempest, lightning, floods, earthquake, aircraft or anything dropped
therefrom, aerial objects, riot and civil commotion for at least the full
reinstatement value thereof of all work executed and all unfixed materials
and goods intended for, delivered to, and placed on or adjacent to the Works,
but excluding temporary buildings, plant, tools and equipment owned or
hired by the Contractor or any sub-contractor, and shall keep such work,
materials and goods insured until the Works are completed and accepted by
the Owner. The insurance coverage shall include a Third Party Liability
coverage of at least PESOS FIVE MILLION (P 5,000,000.00), single limit,
for death, bodily injury and property damages. The Contractor shall present
and deliver the all-risk insurance policy to the Owner within ten days from
the date of effectivity of the Contract, and the same shall remain in force
until the Works are satisfactorily completed and accepted by the Owner.
(v) Comprehensive GeneraI Liability htsurance: The Contractor shall
obtain and deliver comprehensive general liability insurance in the amount of at
least PESOS FIFTY MILLION (P 50,000,000.00) ONLY, for the purpose of
holding the Owner free and harmless from any claims by third persons for
bodily injury or damage to property resulting from the perils specified in the
covering policy and which are normally insured against in transactions of this
character (including Vibration Peril when applicable). The Contractor shall
 present and deliver to the Owner the covering insurance policy within ten days
from the date of effectivity of the Contract, and the same shall remain in force
until the Works are satisfactorily completed and accepted by the Owner.
(vi) Other Forms of htsurance: The Contractor shall obtain and keep in
force during the Contract Period adequate insurance coverage against loss or
damage to its materials, supplies, tools, equipment and vehicles, and against
injury or death to its workmen employed in the execution of the Works for the
purpose of holding the Owner free and harmless against any liability and
responsibility for any such loss, damage, injury or death. In case materials
provided by the Owner are turned over to the custody, safekeeping and/or use of
the Contractor, or in case the Owner the allows Contractor to use Owner-
- provided tools and equipment or materials for the purpose of executing the
Works or any part thereof, and the Owner-provided tools and equipment or
materials, or any part thereof, are lost or damaged due to circumstances not
directly attributable to the Owner, the cost or value of the materials, tools or
equipment lost or damaged shall be reimbursed by the Contractor. Any
damage to or loss of property sustained by the Contractor, and any injury or
death suffered by its employees or workers, in the performance of the Works
shall be the sole responsibility and liability of the Contractor, except where
the same is entirely and exclusively due to the fault and negligence of the
Owner. It shall be the Contractor's duty to protect itself at its own expense
with adequate insurance coverage for such responsibility and liability until
the Works are satisfactorily completed and accepted by the Owner.

B. Essential Provisions: The bonds or insurance policies required to be obtained

and submitted by the Contractor shall include the following essential
provisions:
(i) the bonds and insurance policies shall continue to be in f i l l force
and effect notwithstanding the happening of one or more or all of the following
events: (1) the novation of the Contract; (2) the change o r extension of the
Contract Period; (3) the modification, increase or decrease in the Contract Price;
(4) the cancellation or rescission of the Contract if the continuation of the life of
the bond or policy is necessary to enforce any liability or obligation of the
Contractor; and (5) any other event similar to any of the foregoing, it being
understood that as long as the Contractor has an obligation to or incurred a
liability in favor of the Owner, the bonding company or insurer shall be
solidarily liable t o the Owner with the Contractor;
(ii) the bond and insurance policy coverage shall become effective
upon approval by the Owner, which approval shall not be withheld if such
bonds and insurance policies contain the express, unequivocal acceptance by
the bonding or insurance company of the obligation and liability
respectively insured against thereunder;
(iii) the bond or insurance policy coverage shall be issued in the joint
names of the Owner and the Contractor to the extent o f their respective interest
in the Works; and

ALIGENCON -
10/19/95
 (iv) bonds or insurance policies required to be submitted hereunder
shall'be issued by companies acceptable to the Owner, and unless otherwise
stated in the Contract, the cost of obtaining such bonds and insurance
policies and maintaining the same throughout the period required under GC-
5(A) shall be borne by the Contractor.

C. Bonds and Insurance Required of Sub-contractors/Suppliers: Without

prejudice to its liability to indemnify the Owner under the Contract
Documents, the Contractor shall cause a Nominated Sub-contractor/Supplier
and a sub-contractor/supplier working under the contractor's responsibility
and supervision to maintain such bonds or insurance:
(i) as necessary to cover the liability of the Contraktor, or, as the case
k

may be, of such sub-contractor/supplier in respect of personal injuries or

deaths arising out of or in the course of or caused by the carrying out of the
Works; and
(ii) as necessary to cover the liability of the Contractor or, as the case
may be, such sub-contractor/supplier, in respect of injury or damage to real
or personal property arising out of or in the course of or by reason of the
carrying out of the Works.

The Contractor shall produce or cause all such sub-contractors or suppliers to

produce for inspection the relevant bond or policy of insurance together with
the receipts in respect of premiums paid under such bond or policy as and
when required to do so by the Project Director. These bonds and insurance
policies shall contain the essential provisions specified in GC-5(B). The
Contractor shall, in case of work performed by its own sub-contractors or
where required for specialized works, secure warranties from the sub-
contractors or specialists and deliver copies of the same to the Owner upon
completion of the Work. The warranties shall be issued in favor of the
Owner, but will in no way diminish the sole responsibility the Contractor has
for the Works.

D. Failure To Insure: Should the Contractor or any sub-contractor or supplier

default in insuring or in continuing to insure as required by GC-5(A), GC-
5(C) and the Contract Documents, the Owner may itself insure against any
risk as may be customary in transactions like this and deduct a sum equivalent
to the amount paid in respect of premiums from any amounts due or t o
become due to the Contractor. In the event that the limit of indemnity as
specified in GC-5(A) for any one accident or the amount of the bond or
insurance policy coverage is inadequate to cover the loss, damage, claim,
expense or contractual obligation indemnified against, the Contractor shall
continue to be liable for the excess.

E. Restoration or Reconstmction: Upon settlement of any claims made under the

bonds and insurance policies specified in GC-5(A), the Contractor shall, with
 due diligence, restore the damaged work and replace or repair any unfixed
materials or goods which have been destroyed or injured and remove and
dispose of any debris and proceed with the carrying out and completion of
the Works. All amounts paid to the Owner under such bonds and policies
shall be released to the Contractor on the basis of Interim Certificates, and
the Contractor shall not be entitled to any payment for damages or other than
the insurance proceeds.

F. k u i d a t e d Damages: Notwithstanding the delivery by the Contractor of the

bonds and insurance policies required under GC-S(A), the Contractor shall be
liable for the payment of liquidated damages for each day of delay (Saturdays, _ Sundays
and holidays included) incurred in the completion of the Works after the lapse of the
Contract Period (as the same may be extended with the consent of the Owner). Unless the
Contract shall otherwise provide, liquidated damages due from the Contractor shall be in
the amount of 1/10 of 1% of the
Contract Price for each day of delay but not to exceed in any event % of the
total Contract Price. The provision requiring the payment of liquidated
damages by the Contractor shall not in any way relieve the Contractor of its
other responsibilities and obligations under the Contract Documents.
Liquidated damages shall be automatically deductible from any amount due
and payable to the Contractor under the Contract or from any other contracts
and transactions entered into by the Contractor with the Owner and/or with
any of its subsidiaries or affiliates.

G. Other Indemnities: The Contractor shall take all necessary precautions and
exercise due care and diligence in the execution of the Works so as not .to
cause injury, damage or loss to any person and property. The Contractor shall
hold the Owner free and harmless from all claims for injuries, damages or
losses to persons and property, and shall indemnifjr it for whatever
payments, fines or damages it is made to pay or suffer by reason of any act,
accident or occurrence caused by or attributable to the fault, negligence or
deliberate act of the Contractor who shall obtain and keep in force during the
lifetime of the Contract adequate insurance coverage therefor, including
third-party liability and all-risk insurance coverage.

Save insofar as the Contract otherwise provides, the Contractor shall be

responsible for and shall pay the cost of strengthening any bridge or altering or
improving any road communicating with or on the routes to the Site to facilitate
the movement of Contractor's equipment or temporary works. The Contractor
shall indemnify and keep indemnified the Owner against all claims and damages
caused to any such road or bridge by such movement, including such claims as
may be made directly against the Owner, and shall negotiate and pay all claims
arising solely out of such damage. Should any bridge or road communicating
with or on the routes to the Site be damaged due to the transport of materials or
plant, the Contractor shall send the Project Director
 written notice thereof, as soon as the Contractor becomes aware of sdch
damage or as soon as it receives any claim fiom the authority entitled to
make such claim. Where under Statutes, the hauler of such materials or
plant is required to indemnify the road authority against such damage, the
Owner shall not be liable for any costs, charges or expenses in respect
thereof or in relation thereto.

IGC-6: BILLS OF QUANTITIES I

A. Preparation: The Bills of Quantities shall be prepared in accordance with the
- Hong Kong Standard Method of Measurement of Building Works (as
published by The Royal Institute of Chartered Surveyors Hong Kong
Branch and the Building Contractors Association of Hong Kong) in effect
as of the Commencement Date.

B. Errors or Omissions in the Bills of Quantities: The quantity and quality of the
Works included in the Contract Price shall be deemed to be that which is set out
in the Bills of Quantities and as shown in the drawings and as described in the
specifications. Any error or omission in either description or quantity in the Bills
of Quantities shall not vitiate the Contract or release the Contractor from any
obligations, duties, responsibilities or liabilities under the Contract. Such errors
will be corrected and treated as if they were a Variation instruction issued by the
Project Director under GC-4; provided that, no adjustment in the Contract Price
or Completion Date will be made due to any errors in rates, calculations or
computations made by the Contractor.

Provisional Sums and Prime Cost Sums: The payment of the portion of the
Contract Price which is described in the Bills of Quantities as Provisional Sums
and Prime Cost Sums shall be made to the Contractor subject to the condition
that the Project Director shall have approved and issued instructions in regard to
the expenditure of such sums and to the execution of work or use of materials
corresponding thereto in the Bills of Quantities. If required by the Project
Director, the Contractor shall, within seven days of the Project Director's written
request, submit a detailed estimate of the value of work for which a Provisional
Sum is included in the Bills of Quantities. A11 quantities marked provisional or
approximate in the Bills of Quantities will be subject to remeasurement and the
I

I
final quantities at the rate specified in the Bills of Quantities shall be deducted
from the Contract Price and the value added to the Contract Price for the i
purpose of computing the Final Account [in
accorhnce with GC-4(C)1.

28 - ALIGENCON
10119/95
i
IGC-7: EXTENSION OF CONTRACT PERlOD I
Justified Extension of Completion: Upon it becoming reasonably apparent that
the progress of the Works is delayed or is likely to be delayed, the Contractor
shall immediately give written notice thereof to the Project Director, together
with fully substantiated details of the cause of the delay and estimated length of
delay. If the Project Director is of the opinion that the completion of the Works
is likely to be, or has been delayed beyond the Completion Date or beyond any
extended time previously fixed under this GC-7 by reason o f
(i) Force Majeure directly affecting the Site;
(ii) issuance by the Project Director of instructions authorizing a
Variation;
(iii) the failure by the Contractor to receive In due time all the necessary
instructions, drawings, details or levels from the Project Director or Project
Manager which were specifically applied for in writing by the Contractor on a
date which having regard to the then Completion Date was neitl~er
unreasonably distant from nor i~nreasonablyclose to the date on which it was
necessary for the Contractor to receive the same; provided that, the delay was
not due to any delay by the Contractor in providing information or working
drawings as required under GC-'(0);
(iv) delay on the part of artists, tradesman or others engaged by the Owner
in executing work not forming part of the Contract;
(v) opening up for inspection of any work covered up or of the testing of
any of the work, materials or goods in accordance with GC-2(E), unless the
inspection or test showed that the work. materials or zoods were not. in
accordance with the Contract Documents, or was as a result of the Contractor
covering up work before giving notice for inspection;
(vi) compliance with the provisions of GC-14(A) or with Project
Director's instructions issued thereunder;
(vii) any delay caused by prevention or suspension ordered by the
Owner;
(vii) existence of physical obstructions or physical conditions, other than
climatic conditions on the Site, which could not have been foreseeable by an
experienced contractor; or
(viii) any delay or prevention on the part of the Owner;

then the Project Director shall request the Project Manager to assess the length
of the extension of the Completion Date which is required to complete the
Works. Such assessment shall be presented to the Owner for approval. A request
From the Contractor for an extension of the Completion Date due to the
occurrence of an event other than those specified in the preceding sub-paragraph
will be denied, it being understood that the contractor shall do all that may
reasonably be required to proceed with the completion of the Works within the
Contract Period specified in the Contract.
B. Contractor's Obligation to Prevent Delay. In the event that the Owner
approves an extension of the Completion Date, and upon written notice, the
Contractor shall provide the Project Director within twenty-eight days from
the occurrence of such event with full details of the effect of the event on the
progress of the Works, on other trades or activities including the works of
Nominated Sub-Contractors/Suppliers or other sub-contractors/suppliers,
on the Site and the steps to be taken by the Contractor t o comply with its
obligation to prevent the delay.

Within six months fiom the issuance of the Certificate of Acceptance from the
whole Works, the Project Director shall fix the Completion Date having due
- regard to all matters notified by the Contractor under GC-7(A).

-- -- - I
PC-8:CONTRACTPRICE

A. Fixed Lumu Sum: Unless the Contract provides otherwise, the Contract Price
shall be deemed to be a fixed lump sum price which constitutes the complete
consideration or payment for the quantity and quality of work specified in the
Contract Documents and shall not be subject to any adjustment except to the
extent allowed under GC-9(B). The quality and quantity of the Works included
in the Contract Price shall be deemed to be that which is set out in the Bills of
Quantities and as shown in the drawings and as described in the specifications.
The Contract Price shall be deemed to include all costs to the Contractor for
materials, tools, equipment, labor, overhead and profits and specifically shall
include but not limited to, insurance premiums, escalation costs of materials,
contingencies other than Force Majeure, overtime or extra work, Site delivery
charges, warehouse and purchasing costs, local and national income, personal
and corporate taxes. The currency of the Contract is Philippine Pesos. No
adjustment shall be made to the Contract Price for any fluctuation in exchange
rate against any other currency. The Contractor represents that in proposing or
agreeing to the Contract Price specified in the Contract that it has taken into
account any possible escalation in the cost of Contractor-supplied materials or in
the cost of the use of Contractor-provided tools and equipment or the escalation
in the foregoing costs by reason of any delay, whatever may be the period, in
completing the Works due to causes directly o r indirectly attributable to or
caused by the national, provincial, city or municipal government or any agency,
entity or official of the government, or any firm, company or person. The
Contractor also confirms that the rates and sums included in the Bills of
Quantities are adequate and provide for all matters and things necessary to
achieve the proper and timely completion of the Works.

B. Adiustment Due to Increase in Minimum Wage: In -the event that the

appropriate governmental authority increases the minimum wage at any time

ALIGENCON
10119/95
 within the Contract Period, the Owner agrees to adjust the Contract Price to
take into account the increase in minimum wages required to be given by the
Contractor to the persons employed by or under contract with the Contractor
for the execution of the Works who will be affected by such increase in
minimum wage, subject to the condition that all work activities of the
Contractor are on schedule on the date the increase in minimum wage takes
effect. Any additional cost to be incurred by the Contractor arising from the
increase in minimum wages shall be subject to evaluation by the Quantity
Surveyor and Contractor. The actual amount of the increase in the Contract
Price arising by reason of an increase in minimum wages shall be subject to
the mutual agreement of the Owner and Contractor.
.
C. Lumw Sum Price for a Section of the Works: Where the price for a section of the
Works is a lump sum price based on the drawings and/or specifications and not
based on rates specified in the Bills of Quantities, the quality and quantity of the
work for such section included in the Contract Price shall be deemed to be that
which is shown by the drawings and/or described in the specifications; provided
that: (j) if any discrepancy or divergence is found between the working drawings
and the specifications, the specifications shall take precedence over the working
drawings, unless otherwise specifically stated to the contrary in the
specifications; and (ii) any error in the description, quantity or omission of items
from the drawings and/or the specifications shall not vitiate the Contract but
shall be corrected and shall be deemed to be a Variation required by the Project
Director and subject to GC-4.

D. Provisional Sums and Prime Cost Sums: The Contractor shall be deemed .to
have made due allowance in the Preliminaries section of the Bills of
Quantities for Provisional Sum and Prime Cost Sum work. If Provisional
Sums or Prime Cost Sums are not expended in accordance herewith, the
portion of the Contract Price corresponding to Preliminaries will be reduced
and such reduction shall be taken into account in the computation of the
amount due under an interim Certificate and the Final Account, and the
saving in time will be considered against any extension of the Contract
Period granted irnder GC-7.

E. Conversion of Provisional Sums to Prime Cost Sums: In the event that

Provisional Sums in the Bills of Quantities are changed to Prime Cost Sums, the
percentages for profit and the amounts for attendance will be assessed in
accordance with GC-4, taking account of the percentages and amounts inserted
in respect of Prime Cost Sums which were included in the Bills of Quantities.
he sums allowed by the Contractor for the item of profit on any Prime Cost
Sum in the Bills of Quantities shall be on percentage basis and will be adjusted
according to the actual cost of the material, equipment or work. The sum
allowed by the Contractor for the itern of attendance on any Prime Cost Sum in
the Bills of Quantities shall not be s~lbjectto adjustment unless the
 nature of work described has been changed. No hrther payment whatsoever
will be made to the Contractor on changing the Provisional Sums to Prime
Cost Sums. In determining the actual amount due to the Contractor, the total
amount of all Prime Cost Sums will be deducted from the Contract Price and
in lieu thereof shall be added to the Contract Price (i) sums intended as
payment to suppliers for the supply of materials or goods including any
adjustment made in accordance with the terms of the relevant supply
contract; and (ii) the sums specified in the Bills of Quantities as accruing to
sub-contractors (including Nominated Sub-contractors/Suppliers) together
with any adjustments made in accordance with the amounts due t o them.

- The valuation of Provisional Sums hereunder shall be included in Interim

Certificates and shall be added or deducted from the Contract Price. Delay
by the Contractor in submission of the detailed calculations referred to in
GC-6(C) may delay the inclusion of the respective values i n the Interim
Certificates.

I GC-9: TEIZMS OF PAYMENT AND ACCEPTANCE )

A. Installment Payments: Unless the Contract provides otherwise, the Contract
Price shall be paid in installments as follows: (i) the first installment being in
the nature of an advance downpayment, shall be released to the Contractor in
the amount specified in the Contract upon the submission of the bonds
required under GC-5(A)(i) and GC-S(A)(iv), and shall be liquidated
pursuant to GC-9(B)(vii), and (ii) the balance of the Contract Price shall be
paid for on the basis of progress billings as provided under GC-9(B).

B. Progress Billings: Not later than fourteen days from each of the dates (or in
the event that the Contract specifies periods, fourteen days from the end of
each such period) specified in the Contract for the submission of progress
billings, the Contractor shall deliver to the Project Manager and Quantity
Surveyor a progress billing statement as of the relevant date or period then
ending, indicating the following:
(i) the estimated value of the completed portion of the Works and of the
materials and goods delivered in connection with such completed portion;
(ii) in case of Variations, a valuation thereof using the principles established in
GC-4;
(iii) the value of unfixed goods and materials delivered to the Site and properly
protected against damage or deterioration, it being understood that
such unfixed goods and materials shall not be removed except for use upon
the Works unless the Project Director has consented in writing to such
removal, which consent shall not be unreasonably withheld;
(iv) in case of work valued in the Bills of Quantities as Provisional Sums, a
valuation thereof using the principles under GC-6(C);
 (v) in case of work done by a Nominated Sub-contractor/Supplier, a
valuation of all work properly done and materials or goods delivered but subject to
the terms of payment under the relevant ~ u b - c o n t r a c t / s u ~ ~ ( ~ contract
and to GC-8@);
(vi) any other additional amounts due to the Contractor under the
terms of the Contract Documents, other than damages or penalties arising
from a breach of the Contract Documents as perceived by the Contractor
which should be settled in accordance with GC-14;
(vii) the amount to be deducted from the aggregate value of the
foregoing items as a liquidation of the advance downpayment which should
be in the same proportion that the estimated value of the completed portion
of the Work under sub-clause (i) bears to the Contract Price; and
(viii)the amount to be retained by the Owner as the Retention Amount.

Each progress billing shall be supported by (i) test results (to the extent
applicable) demonstrating that the items of work so accomplished have passed
the requirements of the Contract Documents, (ii) an affidavit of the Contractor
to the effect that all costs of labor, materials, services, equipment and supplies
used in the accomplishment of such items have been paid for by the Contractor,
and (iii) other supporting documents required by the Owner

C. Issuance of Interim Certificate: Each progress billins of the Contractor shall

be submitted to the Project Manage: for evaluation. Upon the submission of
the billing, the Project Manager and the Quantity Surveyor shall evaluate and
verify the quantity and value of the work covered by such billing For this
purpose, the Project Manager may require that such work be the subject of a
joint inspection by the Project Manager, Quantity Surveyor and the
Contractor. Within seven days from the completion of the joint inspection
and evaluation, the Project Manager shall issue an Interim Certificate to
which such progress billing should be attached, certifying the amount due to
the Contractor: and shall forward the Interim Certificate and progress billing
(as approved for payment b y the Project Manager and Quantity Surveyor) to
the Project Director for approval and payment.

The issuance or payment of an Interim Certificate shall not be held as

acceptance of the quantity, quality or standard of work included therein, or
as admission by the Owner that the Contractor has satisfactorily performed
or is satisfactorily performing the Works in accordance with the Contract
Documents; or that the work covered by such Interim Certificate is free from
defects of any kind, hidden or otherwise; or that the Contractor is not guilty
of violating, or is not complying or has not complied with the provisions,
terms and conditions of the Contract Documents.
 Upon receipt of the Interim Certificate and progress billing, the Owner shall
then pay the amount specified in Interim Certificate to the Contractor within
a period of fourteen days.

Nominated Sub-contractorslSu~uliers: The Contractor's progress billing shall

state separately the amounts due to each Nominated Sub-contractor or
Supplier (or to sub-contractors or suppliers whose work or materials or goods
are the subject of a Prime Cost Sum item) as the value o f their work, goods or
materials camed out or delivered as of the date of the progress billing which
amounts shall be paid by the Contractor to such Nominated Sub-
contractors/Suppliers or sub-contractors and suppliers, net of the amounts
deductible therefrom under the relevant sub-contract/supply contract. In
verifLing and evaluating such items of work, the Project Manager may (but
shall not be obliged to) take into account in the Interim Certificate to be issued
in respect of the progress billing covering such items, after receivin~
representations and inquiring into the matter, any dispute, claim, set-off;
defense or counterclaim as between the Contractor and the Nominated Sub-
contractor/Supplier or other sub-contractorlsupplier arising out of their sub-
contractlsupply co~ltract. If so, the Interim Certificate to be issued shall
separately state any sum so deducted or taken into account or allowed (or? if i
t be the case, disallowed) by the Project Manager when issuing its certificate.
In which event, the Contractor and Nominated Sub-contractor/Supplier or
other sub-contractor/supplier shall be bound by such deduction or takjny into
account or allowance or disallowance until final judgment or award in any
dispute between them and, if relevant, the Owner and Contractor shall
likewise be bound in any dispute between them, as the case may be; provided
that, the Project M a n a ~ e shallr disregard and not take account of any sum
arising out of any dispute, claim, set-off, defenses or counterclaims as
between the Nominated Sub-contractor/Supplier (or any other sub-
contractor/supplier) and the Contractor, unless any such sum shall also be in
principle recoverable by the Contractor from the Owner or by the Owner from
the Contractor under or by virtue'of any provision of the Contract.

E. Direct Pavment: Without prejudice to the powers of the Project Manager and
the Owner under GC-8(D), the Owner may, but shall not be bound to, pay
some or all of any sums which would have been due to the Nominated Sub-
contractor/Supplier (or other sub-contractor/suppIier) but which were not
certified to for payment by the Project Manager under the Interim
Certificate, directly to such Nominated Sub contractor/Supplier (or other
sub-contractor/supplier). Having done so, the Owner may at any time
thereafter but before the issuance of the Final Account deduct the sums so
paid from any sums due or subsequently becoming due to the Contractor
under the Contract, or otherwise recove: the same from the Contractor,
subject to the terms of the final judgment or award in the dispute between
such Nominated Sub contractor between the Owner and Contractor.
F. Final Account: Upon the completion of the Works, the Contractor shall give
written notice to the Project Director to that effect, together with a request that
the Works be inspected (and where necessary, be subjected to final testing) and a
final claim for the balance of the Contract Price due to it, specitjrlng in detail the
quantities, rates and prices of the completed Works, any adjustments to the
Contract Price which it believes to be entitled to and any additional
compensation claimed by the Contractor under the terms of the Contract
Documents, together with explanations, supporting vouchers and all documents
(including detailed calculations and measurements) necessary for
the purposes of the computation of the Final Account. The Project Manazer,
Quantity Surveyor and Project Director shall conduct a final inspection and
testing of the Works within ten days from receipt of such written notice.
+.

In the event that the Works are found after such inspection and testing to
conform to the Contract Documents, then the Project Manager shall issue a
Certificate of Completion to the Contractor and certifL to the payment of the
balance of the Contract Price under a Final Account. Notwithstanding anything
contained in these Conditions, the Project Manager shall not be obliged to issue
a Certificate of Completion until a stage of constnlction has been reached at
which the Works are, apart from merely trivial deficiencies. ready for
occupancy and use for their intended purpose and are free from known
omissions or deficiencies including but not limited to omissions or deficiencies
which would be an impediment to the issuance of an occupancy permit from the
governmental agency.

The balance of the Contract price which shall be stated in the Final Accoilnt as
due to the Contractor shall be based on:
(i) the sum of all amounts previously paid under the Interim
Certificates;
(ii) the Contract Price adjusted as necessary. in accordance with the
terms of the Contract Documents to take into account any deductions from or
set-off against any amounts due to the Contractor under the Contract, or any
other contract entered into between the Owner and the Contractor, and
deductions from the Contract Price representing sums to be directly paid to any
Nominated Sub-contractor/Supplier (or any other sub-contractor/supplier) under
the relevant sub-contract/supply contract, and any other deductions allowed
under the Contract Documents.

The difference (if any) between the amounts specified above shall be expressed
in the Final Account as a balance due to the Contractor from the Owner, or to
the Obvnes from the Contractor, as the case may be. However, in the event that
the Contractor within seven days frorrl the daic tl~;.:Fnal Account is issued
objects to the Final Account only insofar as the arnounis to be directly paid to
any Nominated Sub-contractor/Supplier (or any other sub-contractorlsupplier)
 and hrnishes the Owner with satisfactory evidence of the reason why such
amounts should not be paid to such sub-contractor/supplier, then the Owner shall
have the option (but not the obligation) to withhold the payment of such amount
to the Nominated Sub-contractor/Supplier and await the release of a final
judgment on the dispute between such sub-contractor/supplier and the
Contractor, or consign the amounts in question to a local court and request the
court to release the consigned amount subject to a final determination of the
rights and obligations of such sub-contractor/supplier and the Contractor. In this
case, the Owner may proceed to effect the release of the unaffected portion of
the balance of the Contract Price to the Contractor.

G. Certificate of Acceptance: Unless the Contractor objects to the other items in the
Final Account and submits such objection to arbitration under GC-14, the
Owner shall issue a Certificate of Acceptance of the Works and effect the
payment of the Final Account within fourteen days after the submission by the
Project Manager of the Final Account t o the Owner, subject to the
Contractor's submission of or compliance with the following requirements:
(i) original and three copies of all required
governmental permits (including occupancy permit);
(ii) one reproducible and three sets of prints of "AS-
BUILT" drawings;
(iii) original and three copies of Operating Manuals, S~~pplier's
Warranties, Preventive Maintenance Manual and Spare P a m List of
machineries and equipment supplied and installed by the Contractor,
Nominated Sub-contractors/Suppliers; and
(iv) release of all liens arising out of or in connection with the
Contract Documents, provided that, in the event that a Nominated Sub-
contractor/Supplier (or any other sub-contractor/supplier) refuses to furnish a
release or receipt in full, the Contractor may fbrnish the Owner with a bond
satisfactory to the latter, to indemnify it against any such lien; provided
hrther that if any lien remains unsatisfied after all payments are made, the
Contractor shall refun'd to the Owner all monies that the latter may be
compelled to pay in discharging such lien, including all costs and reasonable
allowance for legal and professional fees.

The Certificate of Acceptance shall be conclusive evidence in any proceedings

arising out of the Contact that the Works have been properly carried out and
completed in accordance with the terms of the Contract Documents and that
every necessary effect has been given to all the terms of the Contract which
require an adjustment to be made to Contract Price, except and in so far as any
sum mentioned in the said certificate is incorrect by reason of:
(i) fraud, dishonesty or fraudulent concealment relating to the Works, or
any part thereof, or to any matter dealt with in the said certificate;
(ii) any defect (including any omission) in the Works, or any part thereof
which reasonable inspection or examination at any reasonable time

36 ALIGENCON
10113195
1
 during the carrying out of the Works or before the issue of the said certificate
would not have disclosed;
(iii) any defect of the Works developed within the Warranty Period;
(iv) any accidental inclusion or exclusion of any work, materials, goods
or figures in any computation or any arithmetical errors in any computation; and
(v) any lien which remains unsatisfied which the Owner is compelled to pay as
a condition for the discharge of such lien.

Certificate of Partial Acceptance: If at any time prior to the completion of the

Works and whenever permitted by the Contract, the Owner takes possession o f

.. or occupies any section of the Works, the completion of which conforms to

the terms and specifications of the Contract Documents, then the Project
Director shall issue a Certificate of Partial Acceptance stating the
approximate total value of the portion of the Works so occupied, the relevant
terms of any agreement relating to the use, possession and access of or to
such section and any outstanding work still to be done in respect of such
section. The Certificate of Partial Acceptance shall have the same effect as
the Certificate of Acceptance under GC-9(G) with respect to the completed
section of the Works. Within fourteen days from the issuance of the
Certificate of Partial Acceptance, and upon recommendation of the Project
Manager and the submission of the documentary requirements specified in
GC-9(G) for the re!ease of the Contract Price (to the extent that such
requirements are applicable to the completed section), the portion of the
Contract Price corresponding to the completed section as specified in the
Contract Documents shall be released to the Contractor. Thereafter:
(i) the Warranty Period with respect to such completed section shall
commence upon the issuance of the Certificate of Partial Acceptance but
shall lapse only upon the expiration of the Warranty Period for the whole of
the Works;
(ii) the amount of liquidated damages for the whole of the Works
shall be adjusted ~roportionallyby the established value of the section so
occupied and the anticipated final Contract Price;
(iii) unless the Contract specifies otherwise, GC-10 shall continue to
apply to the completed section and there shall be no partial release of the
Retention Amount or diminution of the value of any bond or insurance
policy required of the Contractor under ( 3 2 - 5 ; and
(iv) the legal effec? of a Certificate of Partial Acceptance shall be
identical to the legal effect of a Certificate of Acceptance as provided for under
GC-9(G), with respect to the completed section of the Works.

Loss and Expense: If upon written application being made to the Project
Director by the Contractor, the Project Director determines that the Contractor
incurs a direct loss and/or expense for which it will not be reimbursed under

ALIGENCON -
10113l95
 any other provision in the Contract by reason of the regular progress of the
Works or of any part thereof having been materially affected by:
(i) a Variation required or approved by the Project Director;
(ii) the Contractor not having received in due time necessary
instructions, drawings, details or levels from the Project Director which the
Contractor specifically applied for in writing on a date which having regard
to the Completion Date was neither unreasonably distant from nor
unreasonably close to the date on which it was necessary for the Contractor
to receive the same;
(iii) delay on the part of artists, tradesmen or others engaged by the Owner in
executing work not forming part of the Contract;
(iv) the opening up for inspection of any work covered up or the testing
h
of any of the work, materials or goods in accordance with GC-2(E), (including
making good in consequence of such opening up or testing), unless the
inspection or test showed that the work, materials or goods were not in
accordance with the Contract, or was as a result of the Contractor covering
up work before giving notice of inspection; or
(v) instructions issued by the Project Director under GC-14(A);

(vi) by reason of instructions issued by the Project Director under GC-

11; or
(vii) any deiay or prevention on the part of the Owner;

then the Project Director shall ascertain the amount of such loss andfor
expense. Any amount from time to time so ascertained shall be added to the
Contract Price, and if an Interim Certificate is issued after the date of
ascertainment any such amount shall be included in such Interim Certificate.

The Contractor shall submit to the Project Director written notice of the
Contractor's intent to file a claim for such loss and expense, and shall within
two months from the occurrence of the loss or incurring of expense, submit
to the Project Director a fully detailed and substantiated claim showing the
build-up of the loss and/or expense claimed by the Contractor. Any lapse of
time longer than the periods stated above shall be deemed to be an
unreasonable distant time for the above stated purpose and the Contractor
shall be deemed to have waived its right on such claims. The provision o f
the timely submission of the notification of intention to claim and the filly
detailed and substantiated build-up of such loss and/or expense is a
prerequisite for any claim under this GC-9(I) to be accepted for
consideration. Notification only of a hture intention to submit a claim under
this heading will not be accepted as complying with the requirements of this
GC-9(I). The payment to the Contractor of the loss or expense incurred in
the prosecution of the Works pursuant to this GC-9(T) shall exclude its right
to recover damages for breach of contract under GC-7.

ALIGENCON
10/19/95
 GC-10: RETENTION AIND RELEASE OF RETENTION MONEY

Retention Amount: The Owner will retain a portion of the amount certified for
payment under each Interim Certificate and the Final Account, representing the
Retention Amount, as security for the repair or remedy of defects and
deficiencies in the Works which develop during the Warran~yPeriod. Unless the
Contract provides to the contrary, the Retention Amount shall equal 10% of face
amount of each Interim Certificate or Final ~ c c o u n t . The Owner's interest in
the Retention Amount shall be that of a trustee for the Contractor (but without
oblization to invest the said amount or pay interest thereon); provided that, the
Contractor's beneficial interest therein shall be subject to the preferred right of
the Owner to have recourse thereto from time to time for payment of any
amount to which it is entitled and to deduct therefrom any sum due or to become
due from the Contractor under the provisions of the Contract.

B. Remedv of Defects: The Project Director shall give the Contractor written
notice of any defect, shrinkage or other fault which shall appear within the
Warranty Period. If the cause of such defect, shrinkage or fault is due or found
to be due to any breach by the Contractor, Nominated Sub-contractoriSupplier,
or any other contractor or sub-contractor working under the direction or
supervision of the Contractor, of any of their obligations unde:
the Contract Documents or relevant sub-contract or supply contract, or the
performance of maintenance work is specificaIly required after the acceptance
of the Works under the Contract Docilments, then the Contractor shall be
responsible for repairing and making good the same to the Project Director's
satisfaction. Such repairs and corrective works shall be executed with the least
disturbance and without cost to the Owner and at the entire cost and expense of
the Contractor, and shall commence within three days after receipt of the
written notice to the Contractor from the Project Director and shall be
completed Githin a period agreed upon with the Project Director. In no case
shall the Contractor be required to make good at its cost any damage caused
by Force Majeure which may appear afier the acceptance of the Works, unless
the Project Manager shall certify that such damage is due to injury which took
place before acceptance.

Not later than fourteen days afier the expiration of the Warranty Period, the
Contractor shall specify in a Schedule of Defects t o be delivered to the
Contractor any remaining defect, shrinkage or fault found in the Works. Within
a reasonable time afier receipt of such Schedule, the defects, shrinkage
and other faults therein specified shall be made good by the Contractor and
entirely at its cost unless the Project Director shall otherwise instruct. After the
delivery of the Schedule of Defects, the Project Director shall cease to be
entitled to issue any instructions for the making good of any defects, shrinkage
or fault found in the Works. The Contractor shall assign to the Owner any
 guarantees or quotations for future maintenance offered by plumbing,
mechanical, electrical or other sub-contractors and suppliers if and when
such guarantees or quotations extend beyond the Warranty Period.

C. Recourse to the Retention Amount or Bonds: In case the Contractor fails to do

the work so ordered under GC-IO(B), the Owner may have the work done and
charge the cost against the Retention Amount. If the Retention Amount still
remains insufficient to remedy the defect, shrinkage or fault, then the Contractor
shall remain liable for the payment of any deficiency without prejudice to the
right of the Owner to call upon the applicable bond or insurance policy covering
such defect, shrinkage or fault and to its other rights
* under the Statutes. Neither the foregoing nor any provision in the Contract
Documents, nor any bond or insurance policy shall be held to limit the
Contractor's liability for defects and damages and the rights of the Owner
under the Statutes.

D. Maintenance Certificate: When in the opinion of the Project Director any

defects, shrinkage or other fault is required to be made good under GC- lO(B)
shall have been made good, the Project Director shall issue the Maintenance
Certificate to that effect. The Maintenance Certificate shall finally discharge the
Contractor from any fbrther physical attendance upon the Works for the purpose
of making good defects, but shall not prejudice any of the Owner's rights under
the Statutes in regard to defective work or any other breach of the Contract
Documents whether previously or subsequently discovered.

E. Release of Retention Amount: Within fourteen days fiom the issuance of the
Maintenance Certificate, the Retention Amount (or the balance thereof
remaining after deduction of amounts due from the Contractor under the
terms of the Contract Documents) shall be released to the Contractor without
interest. Unless the Contract provides to the contrary, the Project Manager
may auth~rizethe release of the Retention Amount (or portion thereof) to the
Contractor even prior to the expiry of the Warranty Period or issuance of the
Maintenance Certificate upon the submission by the Contractor of the bond
required under GC-S(A)(iii).

A. Catch-up Schedule: Time is of the essence of the Contract. In the event that the
Contractor incurs delay of at least thirty days in completing a portion of the
Works by the completion date specified therefor in the Master Program, the
Owner will require the Contractor to submit within seven days from receipt of
written notice from the Project Manager, a confirmed catch-up schediile to get
over the delay incurred. The intention of this GC-ll(A)is not to extend

ALIGENCON
10119195
 the Contract Period but to confirm the Contractor's ability to perform and
complete the balance of the Works within the Contract Period.

B. Events of Default: For purposes of the Contract, the Contractor shall be deemed
in default upon the occurrence of any o f the following events:
(i) the Contractor incurs delay of at least thirty days in
complying with the catch-up schedule required under GC-I l(A);
(ii) the Contractor fails to complete the Works in accordance
with the Contract Documents within the Contract Period or the extension period
grafited by the Owner, and the Project Manager certifies that the Works could
have been completed within the Contract Period or such extension;
(iii) the Contractor assigns t o another or permits the
-
performance by another of the Contractor's principal functions without the approval of the Owner;
(iv) the Contractor has failed to commence the Works or has
suspended the performance of the Works without justification for thirty days
after receivin~written notice from the Project Director to proceed or to
continue;
(v) the Contractor has removed plant, goods, equipment or
materials from the Sire which 2re necessary for the due and timely performance
of the Wcrks w i i h ~ u the consent of the Project Director in violation of GC-
2(D);
(vi) the Contractor becomes insolvent or bankrupt, or performs any Act of
Bankruptcy;
(vii) the Contractor unreasonably or unjustifiably refuses or fails
to comply with any written direction or instruction from the Project Manager or
Project Director; or
(viii) the Contractor has failed to remove materials from the
Site or to pull down and replace work for thirty days after receiving written
notice from the Project Manager that the said materials or work has been
condemned or rejected by the Project Director.

C. Consequences of Default: Upon the occurrence of any of the foresoing events.

the Project Director shall give the Contractor written notice of the Owner's
intent to terminate the Contract and specify in the same notice the event(s)
giving rise to the default of the Contractor. In the event that the Contractor
continues such default for fourteen days after receipt of such notice or shall at
any time thereafter repeat such default (whether previously repeated or not),
then the Owner, without prejudice to any other rights or remedies and without
acting unreasonably or vexatiously, may within ten days after such continuance
or repetition send the Contractor written notice of termination. Thereafter,
the Owner shall have the right to exercise any, some o r all of the following
remedies (as the same may be applicable):
(i) the Owner may stop the performance o f the Works by the
Contractor by _giving written notice to the Contractor to this effect, and take

--
ALIGENCON 41
10/19/35
 over the performance of the remaining Works by employing another contractor
to complete the Works or employing in-house personnel t o undertake and
complete the balance of the Works without releasing the Contractor fiorn its
obligations under the Contract Documents. In this case, the Owner o r such
other contractor will be entitled to use the plant, materials o r goods which have
been reserved exclusively for the performance of the Works, or the Owner may
at any time sell such plant, materials or goods and apply the proceeds of the sale
to the satisfaction of the sums due from the Contractor. The Project Manager
and Quantity Surveyor shall conduct an investigation of the work accomplished
by the Contractor prior to the occurrence of an event of default, and shall issue a
joint certification of the amount (if any) which the Contractor shall be deemed
k
to have reasonably earned or would have reasonably accrued to the Contractor
in respect of such work, and the value o f the unused or partially unused plant,
equipment or materials; provided that, the Owner shall not be liable to pay any
such amount until the lapse of the Warranty Period or thereafter until the costs
of execution and maintenance, damages for delay in completion and all other
expenses incurred by the Owner in taking over the Works shall have been
ascertained. The Contractor shall then be entitled to receive only such amount as
certified. However, if the costs o f execution and maintenance or damages for
delay in completion and all other expenses shall exceed value of the work so
accomplished by the Contractor prior to the occurrence of an event of default,
then the Contractor shall continue to be liable for the difference.

(ii) the Owner may require the Contractor (except when the
termination occurs by reason of the bankruptcy of the Contractor or of its
having committed an Act of Bankuptcy) to assign to the Owner without the
necessity of reimbursement, within fourteen days of the date of termination, the
benefit of any agreement for the supply of materials o r goods andlor for the
execution of any work for the purposes of the Contract. In any case, the Owner
may pay any supplier or sub-contractor for any materials or goods delivered-or
works executed for the purposes of the Contract (whether before or after the
date of termination) in so far as the price thereof has not already been paid by
the Contractor. Payments made under this GC-1l(C)(ii) may be deducted by the
Owner from any sum due or to become due to the Contractor.
(iii) the Owner may withhold the release o f all o r a portion of the
Contractor's billings to cover the amount of liquidated damages due to the
Owner under GC-5(F) and the expenses and costs to be incurred by the
Owner under GC-I l(C)(i), or apply the amount of liquidated damages and
costs and expenses against the amounts due to the Contractor from the
Owner under other contracts entered into between them, and wherever
necessary, forfeit the Retention Amount to cover the Contractor's liabilities
by virtue of such termination.
(iv) the Owner may collect liquidated damages as provided for
under GC-5(F) or seek recourse against the bonds or insurance poIicies
specified under GC-5(A).

42 ALIGENCON
10119/95
 (v) the Contractor shall pay to the Owner the amount of any direct loss
andlor damage caused to the Owner by reason o f the termination. The Owner
shall not be bound by any provision of the Contract t o make any krther
payment t o the Contractor; provided that, in the event that the Project
Manager certifies the amount of expenses properly incurred by the Owner
and the amount of any direct loss andlor damage caused to the Owner by
reason of the termination and such amounts when added to the monies paid
to the Contractor before the date of termination exceed the total amount
which would have been payable to the Contractor upon due completion, the
difference shall be a debt payable to the Owner by the Contractor. If the said
amounts when added to the said monies are less than the said total amount,
the difference shall be a debt payable by the Owner to the Contractor.
(vi) in the event that total expenditures of the Owner in completing
the Work by itself or with the help of other contractors, subcontractors or
other third persons, including all payments made to the Contractor prior to
the rescission, cancellation or termination, are less than the Contract Price,
then the Owner may use the difference to settle unpaid wages of Contractor's
laborers who have actually worked at the Site. The amount that the Owner
shall pay shall not exceed whatever is necessary to cover the unpaid balance
of such employees' basic cash wases during the time that they directly and
exclusively devoted themselves to the execution of the Works, earned after
the last payroll period as reflected in Contractor's payroll, vouchers and other
papers, but not beyond the effective date of rescission, cancellation or
termination as established in the written notice to be sent to the Contractor.
Notwithstanding any provision found in these General Conditions to the
contrary, nothing in this GC-11(C) shall be construed as an undertaking 'by
Owner to answer or otherwise be liable to pay for the unpaid claims of
laborers or the suppliers of materials. In the event that the Owner decides to
pay such claims, the Owner shall not in any event pay more than what is
established by the claimants to the f i l l and complete satisfaction of the
Owner as legitimate, subsisting and reasonable unpaid claims after the
corresponding documents and supporting papers have been executed and
delivered to the Owner, and the corresponding quitclaim, in such form and
with such contents as the Owner may determine, is executed, duly sworn and
delivered to the Owner within such period, in such copies and in such place
or places that the Owner may in its absolute discretion determine.
(vii) The Owner shall have full authority to sell, mortgage or dispose
of Contractor's equipment, tools, supplies and materials at the cost to be
determined by the Owner if the Owner shall find it necessary to do so to
complete the Works at no cost to the Owner or to pay for the unpaid claims
of laborers or of the suppliers of materials.
(viii) the Owner may decide to resume with the construction of the Works
and may choose to negotiate with the Contractor for an amendment of the
Contract. In this case, the Contractor will be under obligation to continue with
the Works and the indemnity paid by the insurer by reason of the

UIGENCO N - 43
10119/95
 occurrence of any of the fore~oingevents will totally and solely _go to the
Owner.

Tennination Bv Reason of Force Majeure: In the event that Force Majeure

causes the Works to be damaged to an extent that the Owner is no longer in a
position to determine whether the Works should be resumed or not without
extensive investigation and survey and the Contractor is not otherwise guilty of
any fault or negligence, the Owner shall have the risht to terminate the Contract.
In this case, the Contractor shall be entitled to receive payment for works done
prior to the occurrence of the Force Majeure in accordance with
measurement/survey which will be carried out by the Quantity Surveyor and
certified to by the Project Manager. The Contractor shall also be entitled to costs
of demobilization as will be certified to by the Project Manager. Other than the
above mentioned, the Contractor shall have no other entitlement to any other
claims for compensation.

1 GC-12: SUSPENSION AND TEFtiVINXTION BY TBE CONTRACTOR I

-4. Susuension; The Contractor shall, on receipt of written instructions from tile
Project Director, suspend the progress of the Works or any part thereof for
such time or times and in such manner as the Project Director shall consider
necessary, and shall during such suspension properly secure and protect the
Works. The extra cost incurred by the Contractor in giving effect to the
Project Director's instructions shall be borne by the Owner, unless the
suspension is (i) otherwise provided for in the Contract, (ii) necessary by
reason of the default of the Contractor; (iii) necessary by reason of the
climactic conditions on the Site; or (iv) necessary for the proper execution of
the Works or the safety of the Works or any part thereof insofar as such
necessity does not arise from any act or default by the Owner or from Force
hlajeure. The Contractor shall not be entitled to recover any such extra cost
or obtain an extension of the Completion Date as a result of its compliance
with the Project Director's instructions unless it gives the Project Director
written notice of its intention to claim for such extra cost or extension of
time within twenty-eizht days from receipt of written notice of suspension
from the Project Director.

If the Project Director does not give written instructions to proceed with the
Works within ninety days from the Contractor's receipt of written instructions to
suspend progress on the Works, unless the suspension is due to causes specified
in sub-clauses (i) to (iv) above, then the Contractor may serve wr-itten notice on
the Project Director requiring permissiorl within twenty-eight days from the
latter's receipt thereof to proceed with the Works or that part thereof which was
suspended. If the Project Director fails to give permission to proceed with the
Works within such twenty-eight day period, then tile
 Contractor may but is not bound to, elect ' o r treat th e suspension where it
affects only a portion of the Works as a Variation, or when it affects the
whole Works, as an abandonment of the Contract by the Owner.

B. Termination bv the Contractor: The Contractor shall be entitled to terminate

the Contract upon the occurrence of any of the following events:
(i) the Owner fails to pay to the Contractor the amount due on any
Interim Certificate or the Final Account, less any sums which the Owner
may be entitled to set-off or deduct therefrom, for fourteen days after the due
date of such payment;
(ii) the Owner wronghlly interferes with or obstructs the issue of any
certificate due under the Contract which by the terms of the Contract
Documents it is required to issue; or
(iii) the carrying out of the whole or substantially the whole of the
uncompleted Works is suspended for a continuous period of six months by
reason of (1) Force Majeure, except when caused by the Contractor's own act,
default or negligence; (2) issuance by the Project Director of instn~ctionsto
postpone part or all of the Works without any l e ~ ajustification;l and (3) the
Owner becomes insolvent or commits an Act of Bankruptcy.

Upon the occurrence of any of the foregoing events, the Contractor without
acting unreasonably or vexatiously may give the Owner written notice of its
intention to terminate the Contract. Such notice shall be given at least twenty
eight days prior to the intended date of termination and shall specify the
event(s) which gave rise to it. Should the event(s) specified in the notice
remain in existence at the end of the period of twenty e i ~ h tdays. then the
Contractor may forthwith send the Owner a notice of termination. Without
prejudice to the accrued rizhts or remedies of either party or to any liability
which may accrue before the Contractor, any Nominated Sub-
Contractors/Suppliers, any sub-contractor or supplier shall have removed
their temporary buildings, plant, tools, equipment, materials or goods from
the Site, the respectice rights and liabilities of the Contractor and the Owner
shall be as follows:
(i) The Contractor shall with all reasonable dispatch and in such
manner and with such precautions to prevent accidental damase or damage
to other persons or property, remove from the Site all of its own temporary
buildings, plant, tools, equipment, materials and goods (except for unfixed
goods or materials which have been paid for by the Owner or in respect of
which the Owner shall tender payment to the Contractor tosether with any
transport or other costs necessary to secure their return) and shall give
facilities to Nominated Sub-Contractors/Suppliers or any sub-contractor or
supplier to enable them to do the same.
(ii) after allowing for previous payments, the Contractor shall be paid by the
Owner (1) the contract value of all work executed before termination;
(2) the total value of work begun and executed but not completed as of the
 date of termination, the value beins ascertained in accordance with GC- 4(D) as
if such work were a Variation required by the Project Director; (3) any sum
ascertained in respect of direct loss andfor expense under GC-9(I), whether
ascertained before or after the date of termination; (4) the cost of materials or
goods properly ordered for the Works for which the Contractor shall have paid
or for which the Contractor is legally bound t o pay, and on such payment by the
Owner, any materials or goods so paid for shall become the property of the
Owner; (5) reasonable costs of removal fiom the Site (including protection and
safeguarding of the Works as aforesaid) insofar as this has not been already
included in payments made or the value of work or materials; paid; and (6) any
direct and actual loss and/or damage caused to the Contractor arising from the
termination (except where the Contract is terminated by Force Majeure).
(iv) the Contractor shall relieve the Owner from liability for any
clairns of third parties as a result of the exercise of its right to cancel, rescind
or terminate the Contract. The Owner may require the Contractor to execute
an unequivocal sworn undertaking to release the Owner fiom any and all
claims, whether judicial or extrajudicial that Contractor, its employees or
third parties may file against the Owner.

A. Outbreak Of Hostilities: If during the Contract Period, there shall be an

outbreak of hostilities (whether war is declared or not) in which the Republic
of the Philippines shall be involved on a scale involving the senera1
mobilization of the armed forces of the Republic of the Philippines and the
Contractor is able to show to the satisfaction of the Project Director that
work cannot be continued, then either the Owner or Contractor may at any
time by notice by registered post or hand delivery to the other, forthwith
terminate the Contract; provided that such a notice shall not be given (i)
before the expiration of twenty-eight days from the date on which the order
is given for general mobilization as aforesaid, or (ii) after the acceptance of
the Works. The Project Director may, within fourteen days (14) after a notice
under this Condition shall have been given or received by the Owner, issue
instructions to the Contractor requiring the execution of such protective work
as shall be specified therein and/or the continuation of the Works up to points
of stoppage to be specified therein, and the Contractor shall comply with
such instructions as if the notice of termination had not been given; provided
that, if the Contractor for reasons beyond its control shall be prevented from
completing such works to which the said instructions relate within three
months from the date on which the instructions were issued, the Contractor
may abandon such work without penalty or liability.

IJpon the expiration of fourteen days from the date by which the notice of
tennination shall have been given or received by the Owner, the Contracior
 shall be entitled to receive payment for works done prior to the occurrence of
such an event in accordance with measurementlsurvey which will be camed
out by the Quantity Surveyor. The parties hereto in the event of the outbreak
of hostilities may at any time by agreement between them make such further
or other arrangements as they may think fit to meet the circumstances.

B. War Damage: In the event that the Works or any part thereof sustains any
damage due to war, civil uprising, rebellion or act o f terrorism, then
notwithstanding anything expressed or implied elsewhere in the Contract, the
occurrence of such damage shall be disregarded in computing any amounts
payable to the Contractor under or by virtue of the Contract. The Project
Director may issue instructions requiring the Contractor t o remove andlor
- dispose of any debris and/or damaged work andlor to execute such protective work
as shall be specified. The Contractor shall reinstate or make good such damage and
shall proceed with the carrying out and completion of the Works, and the Project
Director shall grant to the Contractor a fair and reasonable extension of time for
completion of the Works. The removal and disposal of debris or damaged work, the
execution of protective works and the reinstatement and making good of such war
damage shall be deemed to be a Variation required by the Project Director.

1GC-14: ARBITRATION I
A. Basis For Arbitration: In the event that any dispute or difference arises
between the Owner and the Contractor, either during the progress or after the
completion or abandonment of the Works, in connection with the
interpretation of the Contract Documents or as t o any matter of whatsoever
nature arising thereunder or in connection therewith (including any matter
left by the Contract to the discretion of the Project Manager or Project
Director), the Owner and the Contractor hereby agree to exert all efforts to
settle their differences or-disputes amicably. Failing these efforts such
dispute or difference shall be referred to arbitration in accordance with the
rules and procedures of the Philippine Construction Arbitration Law.

B. --Procedure for Arbitration: Notice of the demand for arbitratioti shall be filed in
writing with the other party to the Contract and a copy filed with the Project
Manager. The demand for arbitration shall be made within a reasonable time
after the dispute has arisen and attempts to settle such dispute amicably have
failed. In no case, however, shall the demand be made later than the date of the
issuance of the Final Account, except as otherwise expressly stipulated in the
Contract. Reference to arbitration of questions relating to the issuance or non-
issuance of any certificate, or of any dispute or difference under these General
Conditions, shall not be made until after the acceptance of the Works, or
termination or alleged termir~ationof the Contract, or abandonment of thc
 Works, unless with the written consent of the Owner and the Contractor.
Notwithstanding any such reference to arbitration, the Contractor shall not
cause any delay to the Works during any arbitration proceedings, and shall
comply or continue compliance with any instruction o r decision given by
Project Director in regard to the subject matter of such reference unless and
until the same shall be the subject of an award given by the arbitrators
appointed in accordance with the provisions hereof

C. Constitution and Powers of the Board of Arbitrators: A board of arbitrators shall

be formed in the following manner. The Owner and the Contractor shall each
appoint one member of this board and these members shall appoint a third
member who shall act as chairman. No one with a vested interest in the subject
under arbitration will be permitted to serve on the board. This board may engage
experts to act in any advisory capacity. Minutes shall be kept of all meetings and
signed by all members of the board. Decisions of the board shall require only a
simple majority and all interested parties shall be informed thereof. Expenses of
the board shall be paid for in accordance with the agreement set forth before the
commencement of arbitration proceedings. Subject to the provisions of these
General Conditions, the board shall, without prejudice to the generality of their
powers, have power to (i) direct such measurements and/or valuations as may in
their opinion be desirable in order to terminate the rights of the parties; (ii)
ascertain and award any sum which ought to have been the subject of or
included in any certificate; and (iii) open up, review and revise any certificate,
opinion, decision, requirement or notice, and terminate all matters in dispute
which shall be submitted to them in the same manner as if no such certificate,
opinion, decision, requirement or notice had been given. The award of the such
arbitrators shall be final and binding on the parties. The decision of the
arbitrators shall be a condition precedent to any right of legal action that either
party may have against the other.

D. Governing Law: Whatever the nationality, residence o r domicile of the Owner,

Contractor,'sub-contractor, supplier or arbitrators, and wherever the Works, or
any part thereof, are situated, the Statutes of the Republic o f the Philippines
shall be proper law of the Contract and in particular to any arbitration under the
Contract wherever the same, or any part of it shall be conducted.

I GC-15:' GENERAL PROVISIONS I

A. Antiquities: Subject to the applicable Statute, all fossils, antiquities and other
objects of interest or value which may be found on the Site or in excavating the
same during the progress of the Works shall be considered the property of the
Owner. Consequently, the Contractor shall forthwith: (i) use its best endeavors
not to disturb the object and shall cease work if and in so far as the continuance
of work would endanger the objection or prevent or impede its

48 -. ALIGENCON
10/19/95
 excavation or its removal; (ii) take all steps which may be necessary to preserve
the object in the exact position and condition in which it was found; and (iii)
inform the Project Director of the discovery and precise location of the object.
The Project Director shall issue instructions in regard to what is to be done
concerning an object reported by the Contractor as an antiquity, including
requiring the Contractor to permit the examination, excavation or removal of the
object by a third party. Any such third party shall be deemed to be a person for
whom the Owner is responsible and not to be, a sub-contractor.

B. Royalties: All royalties or other sums payable in respect of the supply and
use in carrying out the Works as described by or referred t o in the Contract
- Documents of patented or copyright articles, processes or inventions shall be
deemed to have been included in the Contract Price. The Contractor shall
indemnify the Owner from and against all claims, proceedings, damages,
costs and expenses which may be brought or made against the Owner or to
which the Owner may be put by reason of being held to have infringed any
patent or copyright rights in relation to any such articles, processes and
inventions. However, should the Contractor in compliance with the Project
Director's instructions use any patented or copyright articles, processes or
inventions in carrying out the Works, the Contractor shall not be liable in
respect of any infringement or alleged infringement of any such patent or
copyright rights in relation to any such articles, processes and inventions and
all royalties damages or other monies which the Contractor may be liable to
pay to the persons entitled to such rights shall be added to the Contract Price.

Notices: Each notice, or other communication to be given under the Contract

Documents may be given by personal delivery, facsimile or by mail. Any
notice or other communication to be given or made under the Contract shall
be deemed to have been delivered: (i) in case of delivery by facsimile,
immediately following transmission (provided that confirmed answerback is
received by the sender); or (ii) in the case of personal delivery, upon receipt
thereoc (iii) in case delivery by mail, four days after having posted the
document for a recipient in the Philippines or seven days after having posted
the document in the case of an overseas recipient (irrespective of whether
standard airmail, speedpost or any other form of airmail is used).

D. Authorized Signatories: Except for the Contract, all the Contract Documents
shall be signed by the Project Director and the authorized representative(s)
designated by the Contractor. The Contract shall be signed by the attorneys-in-
fact of the Owner and the authorized representatives of the Contractor. A11
the Contract Documents, when signed as required hereunder, shall be fi~lly
binding on the parties.

E. Other Works: The Owner shall have power at any time to execute other works
(whether or not in corlnection with the Works) on the Site at the same t i n e as
 the Works'are being executed. The Contractor shall give reasonable facilities
for these works; provided that, the Contractor shall not be responsible for
damage done to other works except for damage caused by the negligence,
omission or default of its own employees, agents or sub-contractor/suppliers.
Any damage done to the Works in the execution of other works shall be
deemed to be damage which is wholly caused by the neglect or default of a
servant of thC Owner acting in the course.of their employment as such.

F. Interpretation: The use of headings and sub-heading in these General

Conditions shall not.be used for interpreting the construction of the Contract
Documents in any way, or limit, modifj. or increase the responsibilities,
A obligations, rights and benefits of the parties or their representatives under
the Contract Documents.