Design and Build Agreement (India)
DESIGN AND BUILD AGREEMENT
Indian Contract Act 1872 | Architects Act 1972
This Design and Build Agreement is entered into on [Agreement Date] between [Employer Name], having its registered office at [Employer Address] (CIN: [Employer CIN], GSTIN: [Employer GSTIN]) (the "Employer"), and [Contractor Name], having its registered office at [Contractor Address] (CIN: [Contractor CIN], GSTIN: [Contractor GSTIN]) (the "Contractor").
1. PROJECT
1.1 The Employer wishes to develop [Project Name] at [Project Location] (the "Project").
1.2 The Employer engages the Contractor to design and build the Project in accordance with the Employer's Requirements document and this Agreement.
1.3 The Contractor accepts full responsibility for the design and construction of the Project and shall engage a registered architect under the Architects Act 1972 for all drawings requiring professional certification.
2. DESIGN OBLIGATIONS
2.1 The Contractor shall complete the design and obtain all necessary approvals within [Design Period].
2.2 The Contractor shall submit all design documents to the Employer for review. The Employer's review shall not relieve the Contractor of design liability.
2.3 The Contractor shall comply with the National Building Code of India 2016 and all applicable local building bye-laws.
3. CONTRACT PRICE AND PAYMENT
3.1 The lump sum contract price is [Contract Price], exclusive of GST. GST shall be charged at the applicable rate under the CGST Act 2017.
3.2 Payment shall be made against certified milestone applications submitted by the Contractor and certified by the Employer's Representative within 21 days.
3.3 TDS under Section 194C of the Income Tax Act 1961 shall be deducted by the Employer from each payment at the applicable rate.
4. CONSTRUCTION AND PROGRAMME
4.1 The Contractor shall complete construction within [Construction Period] from design approval.
4.2 If the Contractor fails to complete on time due to reasons within its control, liquidated damages of [Liquidated Damages] shall apply under Section 74 of the Indian Contract Act 1872.
4.3 The Contractor shall comply with all BOCW Act 1996 requirements and shall maintain BOCW registration for all workers employed at the Project site.
5. INSURANCE
5.1 The Contractor shall maintain Professional Indemnity insurance of not less than [PI Insurance Amount] for the duration of the design phase and for a period of 6 years thereafter.
5.2 The Contractor shall maintain Contractor's All Risk insurance of not less than [CAR Insurance Amount], Public Liability insurance, and Workmen's Compensation insurance throughout the construction period.
6. DEFECTS LIABILITY
6.1 The Contractor shall rectify any defects notified by the Employer within the Defects Liability Period of [Defects Liability Period] from practical completion at the Contractor's cost.
6.2 For residential projects registered under RERA 2016, the Contractor acknowledges the Employer's statutory obligation under Section 14(3) of RERA 2016 to rectify structural defects for 5 years from possession and shall provide corresponding back-to-back coverage.
7. GOVERNING LAW AND DISPUTES
7.1 This Agreement is governed by the Indian Contract Act 1872 and the laws of India.
7.2 Disputes shall be resolved by arbitration under the Arbitration and Conciliation Act 1996. The seat of arbitration shall be the city where the Project is located.
Employer (Authorised Signatory)
________________
Signature
Contractor (Authorised Signatory)
________________
Signature
Witness
________________
Signature
What Is a Design and Build Agreement (India)?
An India Design and Build Agreement is a procurement contract under the Indian Contract Act 1872 under which a single D&B contractor assumes combined responsibility for both the design and construction of a project for an employer (owner). Unlike a traditional build-only contract (where the employer provides the design), a D&B contract requires the contractor to produce a compliant design (meeting the Employer's Requirements) and to construct to that design, delivering a completed facility.
Design and build procurement is increasingly used in India for commercial office buildings, IT parks, warehouses, hospitals, hotels, and large residential complexes. The D&B model offers the employer a single point of responsibility, price certainty (usually a lump sum), and the ability to fast-track construction (since design and construction can overlap). The contractor bears both design risk and construction risk.
The Architects Act 1972 requires that all architectural drawings submitted for building permits bear the seal and signature of a registered architect. The D&B contractor must engage a registered architect (as design subcontractor or employee) for the preparation of sanctioned plans. Under RERA 2016, real estate projects subject to RERA registration must disclose the architect and structural engineer to the state regulatory authority.
The National Building Code of India 2016 (NBC 2016) sets the minimum technical standards for structural design, fire safety, accessibility, and building services. All designs produced under a D&B contract must comply with NBC 2016 and applicable local building bye-laws.
The legal framework governing the Design and Build Agreement (India) in India draws on several key statutes and regulatory bodies. Under Indian law, the Indian Contract Act 1872 governs contractual obligations, with Section 10 setting essential requirements for valid agreements. The Companies Act 2013 regulates corporate entities through the Registrar of Companies (ROC) and Ministry of Corporate Affairs (MCA). The Industrial Disputes Act 1947 and state labour commissioners govern employment disputes. The Information Technology Act 2000 and IT (Reasonable Security Practices) Rules 2011 protect personal data. The Income Tax Act 1961 and Goods and Services Tax Act 2017 govern tax obligations through the Central Board of Direct Taxes (CBDT) and GST Council. Parties executing a Design and Build Agreement (India) in India should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Indian Contract Act, 1872 sets the foundational requirements.
When Do You Need a Design and Build Agreement (India)?
A Design and Build Agreement is needed when an employer wishes to appoint a single entity to take full responsibility for both designing and constructing a project, transferring design risk to the contractor and obtaining price certainty at an earlier stage than traditional procurement.
D&B procurement is particularly suited to: industrial and warehouse buildings where the design is relatively standard; IT parks, data centres, and commercial fit-outs where the employer has detailed performance requirements; healthcare and education projects where specialist contractors have design expertise; and turnkey build-to-suit projects for commercial tenants.
A D&B Agreement is also used in EPC (Engineering, Procurement and Construction) contracts for power plants, water treatment facilities, and infrastructure projects, typically combining design, equipment procurement, civil construction, and commissioning under one contract.
Parties in India should prepare a Design and Build Agreement (India) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Indian law, the Indian Contract Act 1872 governs contractual obligations, with Section 10 setting essential requirements for valid agreements. The Companies Act 2013 regulates corporate entities through the Registrar of Companies (ROC) and Ministry of Corporate Affairs (MCA). The Industrial Disputes Act 1947 and state labour commissioners govern employment disputes. The Information Technology Act 2000 and IT (Reasonable Security Practices) Rules 2011 protect personal data. The Income Tax Act 1961 and Goods and Services Tax Act 2017 govern tax obligations through the Central Board of Direct Taxes (CBDT) and GST Council. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Design and Build Agreement (India)
A thorough India Design and Build Agreement should include: employer's requirements (functional brief, performance specifications, programme); design submission and approval process; design liability and professional indemnity insurance obligation; construction programme and milestone dates; lump sum or remeasured contract price; payment mechanism and milestone payments; variations and change order procedure; quality assurance and inspection provisions; BOCW and safety compliance; insurance (CAR, PI, PL, WC); defects liability period (minimum 12 months, RERA-aligned 5 years for residential projects); RERA compliance obligations; termination rights; and arbitration under the Arbitration and Conciliation Act 1996.
Additional compliance elements for a Design and Build Agreement (India) used in India include: Under Indian law, the Indian Contract Act 1872 governs contractual obligations, with Section 10 setting essential requirements for valid agreements. The Companies Act 2013 regulates corporate entities through the Registrar of Companies (ROC) and Ministry of Corporate Affairs (MCA). The Industrial Disputes Act 1947 and state labour commissioners govern employment disputes. The Information Technology Act 2000 and IT (Reasonable Security Practices) Rules 2011 protect personal data. The Income Tax Act 1961 and Goods and Services Tax Act 2017 govern tax obligations through the Central Board of Direct Taxes (CBDT) and GST Council. Forms-legal.com provides this template as a starting point for India-compliant documentation.
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Forms Legal. (2026). Design and Build Agreement (India) (India) [Legal document template]. Forms Legal. https://forms-legal.com/india/business/construction/design-and-build-agreement-india
"Design and Build Agreement (India) (India)." Forms Legal, 2026, https://forms-legal.com/india/business/construction/design-and-build-agreement-india.
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year = {2026},
howpublished = {\url{https://forms-legal.com/india/business/construction/design-and-build-agreement-india}},
note = {Free legal document template. Based on Indian Contract Act, 1872}
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Frequently Asked Questions
A design and build (D&B) contract — also known as an Engineering, Procurement and Construction (EPC) contract in the context of large infrastructure projects — is a procurement arrangement under which a single contractor assumes responsibility for both the design and the construction of a project. Under the Indian Contract Act 1872, a D&B contract is a works contract (or lump-sum contract) where the contractor's obligation is to produce a completed facility that meets the employer's requirements, rather than to construct in accordance with designs prepared by the employer's consultant. The key legal characteristic of a D&B contract is that design liability rests with the contractor, not the employer. The employer defines what they want (the 'Employer's Requirements' document — scope, performance standards, programme, and budget), and the contractor undertakes both to produce a compliant design (typically through in-house designers or specialist design subcontractors) and to construct to that design. The employer's approval of the design does not transfer design liability back to the employer unless there is an explicit contractual provision to that effect. Under the Architects Act 1972, only a registered architect (registered with the Council of Architecture under Section 25 of the Architects Act 1972) can prepare and sign architectural drawings for building permits.
In a design and build project in India, design liability is primarily borne by the D&B contractor as against the employer (project owner), and by the architect or structural engineer as against their professional obligations under applicable statutes. As between the employer and the D&B contractor: the D&B contractor's primary obligation is to deliver a completed project that meets the Employer's Requirements. If the design is defective — resulting in structural failure, non-compliance with building codes (National Building Code 2016), or failure to achieve the specified performance standards — the contractor is liable in damages under Section 73 of the Indian Contract Act 1872. The contractor's liability for design defects may extend beyond the defects liability period if the defect is latent (not discoverable on reasonable inspection at completion), and the general law of contract and tort (Section 2 of the Limitation Act 1963 provides a three-year limitation period for contract claims from the date the breach becomes known). As between the contractor and the design subcontractor (architect/structural engineer): if the contractor engages a specialist design subcontractor, the contractor can claim against the subcontractor for design defects causing loss. However, the contractor's liability to the employer is not reduced by the fact that the defect originated with a design subcontractor — the employer looks only to the contractor under the main D&B contract.
The Real Estate (Regulation and Development) Act 2016 (RERA 2016) has significant implications for design and build agreements used in the real estate sector in India, particularly for residential and commercial projects that are required to be registered with the state Real Estate Regulatory Authority. Registration obligation: Under Section 3 of RERA 2016, a promoter (real estate developer) who proposes to sell plots, apartments, or buildings in a real estate project with more than 8 apartments or a plot area exceeding 500 square metres must register the project with the state RERA authority before advertising or selling any unit. The registration application must include the approved building plans, layout plans, schedule of development works, the promoter's legal title to the land, and details of the architect, structural engineer, and main contractor. Impact on D&B contracts: When a promoter engages a D&B contractor to design and build a registered RERA project, the promoter remains the 'promoter' under RERA and retains all RERA obligations vis-à-vis the allottees. The promoter cannot contractually delegate RERA liabilities to the D&B contractor as against buyers.
A Design and Build Agreement (India) does not legally require a lawyer in India, and individuals and businesses may draft and execute the document independently. The Indian Contract Act, 1872 does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified India lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Supreme Court of India has jurisdiction over disputes arising from this type of document, and Registrar of Companies (ROC) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
A Design and Build Agreement (India) does not legally require a lawyer in India, though legal advice is recommended. Under Indian law, the Indian Contract Act 1872 governs agreements. The Companies Act 2013 and Registrar of Companies (ROC) regulate corporate documents. The Information Technology Act 2000 governs electronic contracts and data protection. The Consumer Protection Act 2019 provides consumer rights. The Income Tax Act 1961 requires tax compliance. Forms-legal.com provides this template as a starting point — always review with a qualified Indian advocate for significant transactions. Under India law, Indian Contract Act, 1872, parties should seek independent legal advice from a qualified lawyer to confirm compliance with all applicable requirements. Under Indian law, the Indian Contract Act 1872 governs contractual obligations, with Section 10 setting essential requirements for valid agreements. The Companies Act 2013 regulates corporate entities through the Registrar of Companies (ROC) and Ministry of Corporate Affairs (MCA). Forms-legal.com provides this template as a starting point for India-compliant documentation.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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