At a glance
A construction contract is an agreement between an employer and a contractor to carry out specific work for a set time and price. On public projects, Iran's General Conditions of Contract (Publication 4311) form the basis; on private projects, the parties must define the scope, payment method, guarantees and variation procedure themselves.
Essential clauses
- A precise scope of work and technical annexes (drawings, specifications, price lists)
- Contract type: lump sum, unit-rate or cost-plus
- Advance payment, progress statements and review and payment deadlines
- Guarantees and retentions (performance and good workmanship) and when they are released
- A variation procedure requiring written instructions
- Timeline, extensions and delay penalties
- Provisional and final acceptance and the defects liability period
- Termination and dispute resolution
Costly mistakes in construction contracts
- Carrying out extra work on verbal instructions
- No clear deadline for the employer to approve progress statements
- No price-adjustment mechanism on long projects
- Unclear responsibility for materials, insurance and site safety
Frequently asked questions
A contractor is responsible for delivering a result using its own management and tools, while an employee works under the employer's direction. If the real relationship is employment, calling it a contract for services doesn't change that — see employment contracts.
First follow the deadlines and steps in the contract and keep all correspondence. Then pursue debt collection or arbitration.