Delta Builders Inc. has secured a $12 million contract with DixieFood Franchise. They will be building three restaurants for the company. The estimated total costs for the project are $10 million, meaning that Delta Builders Inc. will have $2 million in gross profit. The project will take three years, and is starting March 1, 2020. Had each of these projects been stand-alone, Delta Builders Inc. would have estimated the costs as $3 million, $4 million, and $4 million, respectively.

After reading through the contract between Delta Builders Inc. and Dixie Food Franchise, Analyze the contract sample to determine what is missing and verify the transaction price, and what information stands out, what suggestions would you have for calculating transaction pricing

This Construction Contract Agreement (this "Agreement") is made as of the _13___ day of __February___by and between __Delta Builders Inc_____(Contractor)___, and __Dixie Food Franchise___(Customer). Contractor and Customer may each be referred to in this Agreement individually as a "Party" and collectively as the "Parties."
WHEREAS, Contractor is a duly licensed general contractor in good standing, with contractor's license number _121212AL__________; and
WHEREAS, Customer owns the properties located at _55 South H. St. and 65 Broadway Ave. and 112 Grace Rd.___ (the "Properties") and desires to have certain work performed by Contractor at the Properties.

NOW THEREFORE, in consideration of the mutual promises and for other good and valuable consideration exchanged by the Parties as set forth in this Agreement, the Parties, intending to be legally bound, hereby mutually agrees as follows:

1. Description of Work. Contractor shall perform the building of three Dixie Food Restaurants, one at each of the above listed properties, according to the specifications designated by the customer.  

2. Contract Price and Payments. Customer agrees to pay Contractor for the Work the total amount of $___12 million_______ (the "Contract Price"). Payment of this amount is subject to additions or deductions in accordance with any mutually agreed to changes and/or modifications in the Work, and the other documents to which this Agreement is subject. Payment for the Work will be by electronic funds transfer yearly. Revenue will be based on Contractor's percentage of the completion, which will be determined based by comparing costs incurred to the estimated total costs of $10 million.

3. Certificate of Completion. Upon completion of the Work, Contractor shall notify Customer that the Work is ready for final inspection and acceptance. When Customer finds the Work acceptable and this Agreement fully performed, Contractor shall issue Customer a "Certificate of Completion" stating that the Work has been completed in accordance with the Contract Documents and the entire balance of the Contract Price is due and payable. Customer shall make the final payment within _10___ days after receiving a Certificate of Completion. Customer by making final payment waives all claims except those rising out of: (a) any faulty Work appearing after completion; (b) any Work that does not comply with the Contract Documents; and (c) outstanding claims or liens. Contractor, by accepting final payment, waives all claims except those previously made in writing, and which remain unsettled at the time of acceptance.

4. Materials and Labor. Contractor shall provide and pay for all labor and equipment, including tools, construction equipment, machinery, transportation and all other facilities and services, and all materials as described in Exhibit C necessary for the completion of the Work. All materials shall be good quality and new, unless the Contract Documents require or permit otherwise. Contractor may substitute materials only with the prior written approval of Customer.

5. Starting and Completion Dates. The Work under this Agreement shall begin on __March 1, 2020______, and shall be completed by __March 1, 2023________.

6. Instructions. Customer shall give all instructions to Contractor, and shall furnish all necessary surveys for the Work. Unless otherwise provided in the Contract Documents, Customer shall secure and pay for all necessary easements, assessments or other approvals necessary for permanent structures or permanent changes in existing structures or facilities which are necessary to complete the Work.

7. Licenses and Permits. Contractor shall obtain all licenses and permits necessary for proper completion of the Work. Contractor is responsible for the cost of any necessary permits or licenses.

8. Laws and Regulations. Contractor shall perform the Work in a workmanlike manner. Contractor shall comply with all applicable federal, state, and local laws, regulations and ordinances, and any safety requirements of Customer (the "Applicable Laws") in the performance of the Work. Contractor shall promptly notify Customer upon discovery of any variance between the Applicable Laws and the Construction Documents.

9. Supervision of Construction. Contractor shall be solely responsible for and shall supervise and direct all construction under this Agreement. Contractor shall provide competent and suitable personnel to perform the Work and shall at all times maintain good discipline and order at the Property. Contractor will at all times take all reasonable precautions for the safety of its employees and the public at the Property. Contractor agrees to assume full responsibility for the acts, negligence, and/or omissions of its employees and any subcontractors and their employees.

10. Warranty. Contractor warrants that the Work shall be in accordance with the Contract Documents and free from material structural defects. Contractor shall redo or repair any Work not in accordance with the Contract Documents or any defects caused by faulty materials, equipment or workmanship for a period of ____ (_5_) year(s) from the date of completion of the Work.

11. Inspection. Customer shall have a right to inspect the Work at any time and request that Contractor promptly correct any Work that is defective or does not conform to the Contract Documents. If required, the Work shall be inspected and certified by the appropriate state or local agency or health officer at each necessary stage.

12. Right to Stop Work. If Contractor fails to correct any defective Work or repeatedly fails to perform the Work in accordance with the Contract Documents, Customer shall have the right to order Contractor to stop performing the Work, or any portion thereof, until the cause for such order is eliminated.

13. Work Changes. Customer reserves the right to order changes to the Work in the nature of additions, deletions or modifications, without invalidating this Agreement, and agrees to make corresponding adjustments in the Contract Price and time of termination if applicable. All changes will be authorized in a written "Change Order" signed by Customer and Contractor, which shall be incorporated by reference herein.

14. Indemnification. Contractor agrees to defend, indemnify and hold harmless Customer and its agents and employees, from and against all claims, actions, liabilities, suits, demands, injuries, obligations, damages, losses, settlements, judgments, fines, penalties, costs and expenses, including reasonable attorneys' fees, arising out of any negligent act or omission by Contractor, a subcontractor or anyone directly or indirectly employed by them in the performance of the Work resulting in bodily injury, illness or death, or for property damage, including loss of use, unless caused by the sole negligence or willful misconduct of Customer.

15. Contractor's Insurance. Contractor agrees to maintain at its own expense during the entire period of construction at the Property:

A. General Liability Insurance. Such general liability insurance as will protect Contractor from claims for property damage and bodily injury, with limits of liability not less than $_1,000,000________ [minimum amount of general liability insurance] for each occurrence.
B. Workers' Compensation Insurance. Such workers' compensation and employee insurance as required by law.
C. Automobile Liability Insurance. Such automobile liability insurance with limits of liability not less than $ _1,000,000______________
Contractor shall name Customer as an additional insured. Proof of such insurance shall be filed by Contractor with Customer within a reasonable time after execution of this Agreement.

16. Time of Essence. All times stated in this Agreement or in the Contract Documents are of the essence. Contractor agrees that such times are reasonable for performing and completing the Work.

17. Extension of Time. The times stated in this Agreement may be extended for such reasonable time as Contractor may determine when performance of the Work by Contractor is delayed by a Change Order, labor disputes, fire, unusual delay in deliveries, abnormal adverse weather conditions, unavoidable casualties, or other causes beyond Contractor's control or which justify the delay.

18. Early Termination for Breach of Contract.
A. Contractor's Termination. Contractor may, on _30___ days' written notice to Customer, terminate this Agreement before the completion of the Work when for a period of _30__ days after a progress payment is due, through no fault of Contractor, Customer fails to make the payment. On such termination Contractor may recover from Customer payment for all Work completed and for any loss sustained by Contractor for materials, equipment, tools or machinery to the extent of actual loss thereon, plus loss of a reasonable profit.

B. Customer's Termination. Customer may, on _30__ days' notice to Contractor, terminate this Agreement before the completion of the Work, and without prejudice to any other remedy Customer may have when Contractor defaults in the performance of any provision of this Agreement, or fails to carry out performance of the Work in accordance with the provisions of the Contract Documents.

19. Binding Effect. This Agreement shall be binding and enure to the benefit of the Parties and their respective legal representatives, heirs, administrators, executors, successors and permitted assigns.

20. Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in whole or in part, the remaining provisions shall not be affected and shall continue to be valid, legal and enforceable as though the invalid, illegal or unenforceable part had not been included in this Agreement.

21. Entire Agreement. This Agreement contains the entire agreement between the Parties hereto with respect to the subject matter hereof, and supersedes all prior negotiations, understandings and agreements.

22. Amendments. This Agreement may not be amended or modified except by a written agreement signed by the all of the Parties.

23. Waiver. No Party shall be deemed to have waived any provision of this Agreement or the exercise of any rights held under this Agreement unless such waiver is made expressly and in writing. Waiver by any Party of a breach or violation of any provision of this Agreement shall not constitute a waiver of any other subsequent breach or violation.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

Answer rating: 100% (QA)

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