CONSTRUCTION CONTRACT AGREEMENT

This Construction Contract (hereinafter referred to as a “Contract”) made and entered into this
th
15 day of November, 2021 by and between,

OTMAR JOSEF DEUBENDORFE and ELAINE A. DEUBENDORFER, (hereinafter referred to as

“Owner”) and

Capstone Construction & Consultancy, represented by ENGR. JONATHAN V. SILAYA

(hereinafter referred to as “Contractor”); and

WHEREAS the Owner desires to construct his residence at the address known as Matangad,
Gitagum, Misamis Oriental.

WHEREAS the Contractor warrants being qualified to perform the work specified herein.

NOW THERERFORE, in consideration of the mutual promises and premises herein contained, the
Owner and Contractor agree to meet and satisfy all terms and general conditions of this contract as
follows.

I. DESCRIPTION OF THE WORK

A. The Contractor does hereby covenant and agree to furnish all labor, material and
equipment, and to faithfully perform the work within the time period of Two
Hundred Forty Calendar days (240) or as established by the Notice to Proceed for
this contract, in strict accordance with the detailed description of work (hereinafter
referred to as the “work write-up”), and subject to, and in strict conformance with
all of the conditions, covenants, stipulations, terms and provisions contained in this
contract. All of the representations, rights, and obligations of the Owner and
Contractor are embodied in the Contract and any prior oral or written agreement
not included herein shall not be binding upon or inure to the benefit of any of the
parties.

B. This contract includes the work write-up, Contractor’s proposal, and, if applicable,
drawings and amendments to the Contract, which are incorporated by reference
and specifically identified below and hereby made part of this Contract:

(1) Work Write-up and or specifications

(2) Contractor’s Proposal or Bill of Materials or Cost Estimate
(3) Working Drawings
(4) Minutes of Meeting (if applicable)

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II. COMPENSATION AND METHOD OF PAYMENT

A. Upon execution of the Contract, the Owner will obligate the necessary funds to pay
the contract sum in accordance with the Contract. The Owner agrees to pay the
Contractor for the full and faithful performance of the work pursuant to this
Contract at a sum equal to the aggregate cost of the work, labor, materials and
supplies done and furnished at the price and rates set forth in the Contractor’s
proposal, said sum being Ten Million Five Hundred Thousand Pesos
(PhP10,500,000.00). Contractor covenants and agrees to faithfully comply with and
perform each and every obligation imposed upon the Contractor by the Contract
and the terms of the proposal, as accepted by the Owner.

B. Advance payment shall be 30% of the total project cost equivalent to Three Million
One Hundred Fifty Thousand Pesos (PhP3,150,000.00).

C. FIRST & PARTIAL BILLING: First & Partial Billing shall be equivalent to 30% of the
total project cost or equivalent to Three Million One Hundred Fifty Thousand Pesos
(PhP3,150,000.00). This amount shall be released upon Thirty Percent (30%) project
completion.

A. SECOND & PARTIAL BILLING: Second & Partial Billing shall be equivalent to 25% of
the total project cost or equivalent to Two Million Six Hundred Twenty-Five
Thousand Pesos (PhP2,625,000.00). This amount shall be released upon Sixty
Percent (60%) project completion.

D. THIRD & PARTIAL BILLING: Third & Partial Billing shall be equivalent to 10% of the
total project cost or equivalent to One Million Fifty Thousand Pesos
(PhP1,050,000.00). This amount shall be released upon Eighty-Five Percent (85%)
project completion.

E. FOURTH & FINAL BILLING: Fourth & Final Billing shall be equivalent to 5% of the
total project cost or equivalent to Five Hundred Twenty-Five Thousand Pesos
(PhP525,000.00). This amount shall be released upon One Hundred Percent (100%)
project completion.

III. GENERAL CONDITIONS

A. Proposal. This contract which includes the Contractor’s proposal, has been properly
signed and dated by the Contractor, and the Owner by signing this Contract, accepts
the said Contractor’s proposal which becomes part of this Contract.

B. Project Cost is a lump sum amount to complete the construction of 1-unit Three
storey residential building with 138 linear meter road tracing and riprapping .
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 Quantities per Item of the Bill of Materials (BOM) shall not be considered actual and
shall not be the basis of the contract. Bill of Materials is attached just to show the
scope of works, item specifications and the lump sum cost of the project.

C. All materials and consumables shall be supplied by the Contractor. Ordering of

materials shall be taken progressively as the need arises.

D. Excess materials, scraps, scaffolds, forms, tools, equipment and other temporary
structures being delivered, installed, deployed, and constructed on site by the
Contractor are properties of the Contractor.

E. Cost of labor, equipment & supervision will change with respect to any changes of
the scope of works. Cost of additive works shall be computed by employing the
material unit costs indicated in the Bill of Materials (BOM) plus 45% of MC to cover
for the labor cost and 20% of MC for the cost of overhead, tax, contingencies, and
contractor's fee.

F. First day of construction shall be considered Seven (7) days after the receipt of the
advance payment.

G. Project Time extension shall be granted to the Contractor for the accumulated
unworkable days due to force-majeure and other adversities beyond the control of
the Contractor e.g. bad weather. Time extension shall be based on the actual
unworkable days as indicated in the “Daily Record Sheets” or log book.

H. Liquidated Damages. The cost of liquidated damages shall be computed as One

Tenth (1/10) of One Percent (1%) per day of delay from the unfinished and or
undelivered pay items or scope of works of the project.

I. Permits & Licenses- Preparation of complete drawings, estimate, specifications,

structural analysis and other technical documents shall be under the Contractor.
However, corresponding fees such as but not limited to building permit fees, zone
clearance, barangay clearance, fire safety certificates and other documents
pertaining to the securing of building permit shall be under the account of the
Owner.

J. Utilities. Cost of utilities such as power and water needed to complete this project is
under the account of the Contractor.

K. Damages/ Repairs. The Contractor must take every reasonable effort to protect the
possessions of the Owner that remain in the work area from loss or damage. Any
portion of the property damaged by the Contractor or subcontractor during the
course of the work must be repaired at no additional cost to the Owner. The term
“damages” shall include, but not limited to, any damage caused by the contract
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 operation or workers during construction to adjoining properties or to public spaces.
When “repair of existing work” is called for in the work write-up, the finished work
shall match adjacent work in design and dimension to blend with existing work so
that the patch or replacement will be inconspicuous.

L. Temporary Work Stoppage- The Contractor may call a “Temporary Work Stoppage”
if any of the payment request or billing is not yet settled within Seven (7) calendar
days from the date of submission of the payment request or billing. Work shall be
remobilized or recommence within Three (3) calendar days from the date of receipt
of the payment from the Owner.

M. Supervision. The supervision of all work, including coordination of all portions of the
work under the Contract must be provided by the Contractor. The Contractor shall
ensure discipline and order among all employees of Contractor and subcontractors.
Workers shall be competent and capable of performing the work assigned to them.
Helpers and apprentices shall work under the supervision of a skilled tradesperson
or other supervisory personnel.

N. Change Orders. This Contract may be amended by change order at any time
provided that the change order makes specific reference to this Contract and is
executed in writing by both the Contractor and the Owner. The change order will
not invalidate this Contract, nor relieve or release the Contractor or the Owner from
their respective obligations under this Contract. The change order may take changes
in the time allowed for completion of the work of changes to the work write-up. The
work thereunder shall not start until the Contractor has been notified in writing that
the change has been approved by the Owner. Any work performed by the
Contractor without written authorization of the Owner is at the Contractor’s own
risk. If the Contractor’s proposal fails to specify a unit price, the Owner shall
calculate the change based on the Contractor’s costed work write-up. The cost of
additional work and materials under any change order shall be the responsibility of
the Owner.

O. Inspection and Final Payments. Periodic inspection shall be performed by the Owner
or his authorized representative. Upon completion of work pertaining to this
contract, the Contractor shall notify and arrange for an inspection of the work by
the Owner or his authorized representative. If all work is satisfactorily completed, in
the reasonable judgment of the Owner, the Owner shall prepare a completion or
acceptance certificate. Should an inspection reveal that the work is not completed
and/or is not satisfactory; the Owner shall notify the Contractor of the deficiencies
through a “Final Punch list” and will request that Contractor indicated what action
will be under taken to complete the work. No final payment shall be authorized by
the Owner until the work is completed, and a re-inspection by the Owner.

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P. Standard of Work and Codes. The Contractor shall perform all work in a good and
workmanlike manner and in conformance with all applicable government code
provisions, whether or not specifically mentioned in the work write-up and drawings
for the work.

Q. Clean-Up. On a daily basis, the Property must be kept free from the accumulation of
waste materials and rubbish. All tools, construction equipment, machinery and
surplus materials stored at the property must be neat and orderly. Upon the
completion of work, all glass surfaces shall be cleaned and the work left “broom
clean” or its equivalent, except as otherwise specified. All debris, trash, waste and
surplus material shall be removed from the job site and disposed of by legal means.
Final payment shall not be authorized until the Contractor has cleaned the property
as required by this section.

R. Guarantees and Warranties. The Contractor warrants and guarantees to the Owner
that all Contractor supplied materials used are of good quality, free from faults and
defects except for the Owner supplied materials and salvaged materials as listed in
Item III-C of this Contract. All work not conforming to these standards and not in
conformance with the work write-up shall be considered defective. The work
performed by the Contactor is to be guaranteed for a period of one (1) year from
the date of final acceptance of all the work required by the Contractor.

S. Separate Contracts. Owner reserves the right to perform construction or other

operations related to the project and to award separate contract in connection with
other portions of the project. Contractor shall participate with other separate
contractors and Owner in coordinating their construction schedule.

T. Restriction. The Owner shall not be allowed to use or occupy the building or
structure and parts thereof not until the following shall be accomplished and or
resolved.
(1) Termination of Work and acceptance thereof by the Owner is executed
stating that the said building is constructed in accordance with the plans
and specifications.
(2) Release of the Final Payment and Retention Money.
(3) Resolved dispute between the Contractor and the Owner as here below
stated.

U. Dispute Resolution. Should any dispute arise concerning (a) the intent or meaning of
the work described in the work write-up or any change order, (b) the quality of
workmanship or materials, (c) the value of any work, (d) payment for work, or (e) for
other reasons pertaining to the terms and conditions of the Contract, the parties
agree that except for disputes and claims that may be brought in the Court of
Cagayan de Oro City and for which a party is not entitled to a trial by jury, and
except as necessary to enforce the mediation and arbitration obligations of this
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 Section, all disputes or claims arising out of this Contract shall be resolved through
mediation or arbitration as specified in this section as the exclusive remedy for
resolving such disputes or claims.
(1) ARBITRATION: All claims, disputes and other matters on questions arising
out of this Contract or the breach thereof shall be decided by arbitration in
accordance with the Construction Industry Arbitration Law (Executive Order
No. 1008) under the Construction Industry Arbitration Commission (CIAC).
The award rendered by the arbitrators shall be final, and judgment may be
entered upon in accordance with applicable laws in any court of competent
jurisdiction.

(2) The parties agree that any mediation or arbitration brought pursuant to this
section shall be confidential and no details, descriptions, settlements or
other facts concerning such mediation or arbitration shall be disclosed or
released to any third party without specific written consent of the other
party or parties unless required by law or court order in connection with
enforcement of any decision on such arbitration.

V. Hold Harmless. It is expressly understood that the Contractor shall indemnify and
hold the Owner harmless from any claims, suits, action, damages and costs of every
name and description arising out of, or resulting from, the Contractor’s acts or
omissions in its performance of the work to be rendered by the Contractor under
this Contract.

W. Miscellaneous. This Contract becomes effective and binding when signed by the
Contractor and the Owner.

IV. OWNER’S RESPONSIBILITIES

A. Owner shall permit the Contractor to construct, install temporary facilities, such as
but not limited to, labor barracks, site office, and storage area, as reasonably
necessary to carry out and complete the work.

B. The Owner may employ an owner’s representative to work full-time on site to check
and assure the quality of materials and workmanship of every scope of works.

V. TERMINATION BY OWNER FOR CAUSE

A. The owner shall have the right to terminate this Contract without process or action
at law, by notice to the Contractor in writing sent registered or certified mail to the
Contractor’s last known address, should the Contractor (a) become insolvent or
declare bankruptcy, (b) fail to start or make satisfactory progress on the work to be
performed under this Contract, (c) fail to comply with written orders of the owner
which are consistent with the terms of the Contract, (d) perform a new
unsatisfactorily such work as has been rejected by the owner, (e) carry on the work
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 in a manner contrary to this contract, or (f) otherwise fail to perform its obligations
under this Contract.

B. The mailing of such notice shall constitute notice to the Contractor under the terms
of the Contract. Upon receiving said notice, the Contractor shall vacate the premises
and quit any work in progress or any parts specified in said notice. The Owner may
complete the work by awarding another contract with the funds remaining in the
Owner’s account. The Contractor shall be entitled to payment by the Owner for
work performed only to the extent of the difference between the Contract price and
the cost to complete the work by another contractor after the Contract is
terminated.

VI. NOTICES

Notices to the parties shall be in writing and directed as follows:

CONTRACTOR: ENGR. JONATHAN V. SILAYA

General Manager- Capstone Construction & Consultancy

OWNER: OTMAR JOSEF DEUBENDORFER

ELAINE A. DEUBENDORFER (SPOUSE)

IN WITNESS WHEREOFF, the parties have caused this Contract to be signed and duly
attested to by witnesses.

Name of Contractor:

ENGR. JONATHAN V. SILAYA

General Manager- Capstone Construction & Consultancy
Signature of Contractor:
Date:______________________
Address of Contractor: Igpit, Opol, Misamis Oriental

Name of Owner: OTMAR JOSEF DEUBENDORFER

Signature of Owner/ Authorized Representative:
Date:______________________
Address of Owner: ZONE 1, MATANGAD, GITAGUM, MISAMIS ORIENTAL

ELAINE A. DEUBENDORFER (SPOUSE)

Signature of Owner/ Authorized Representative:
Date:______________________
Address of Owner: ZONE 1, MATANGAD, GITAGUM, MISAMIS ORIENTAL

SIGNED IN THE PRESENCE OF:

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_______________________________________ ____________________________________

ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES }

City of Cagayan de Oro }S.S.

BEFORE ME, this _____ day of ________________2021, personally appeared be known to be

the same person who executed the foregoing instruments consisting of Eight (8) pages whereon the
acknowledgement is written and acknowledged to me that the same is their free will and deed,
exhibiting to me their Community Tax Certificate as follows:

NAME CTC No. Place Issued Date Issued

JONATHAN V. SILAYA __________ ____________ ___________

OTMAR JOSEF DEUBENDORFER __________ _____________ ___________

ELAINE A. DEUBENDORFER __________ _____________ ___________

WITNESS MY HAND AND NOTARIAL SEAL on the date of the place first above written.

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