EPC Agreement

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EPC Agreement

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Created by:



Prepared for:



Project Location: (Project..Name)

Project Address: (Project..Street) (Project..City) (Project..State) (Project..Zip)

The Agreement and Its Term

This EPC agreement (Engineering, Procurement, Construction), dated (Begin.Date) (“Effective Date”) is concluded between [Owner.FirstName][Owner.LastName] (“Owner”) and [Contractor.FirstName][Contractor.LastName] (“Contractor”). The Owner is represented by (Owner.Proxy), while the Contractor is represented by (Contractor.Proxy).

Both Parties acknowledge and agree that they have the right to sign this document and legally finalize this agreement. Individually, this document refers to the Owner and Contractor as a Party, while it refers to the entities collectively as Parties.


  1. The Contractor has a mandate to (Project.Scope) (“Project Operations”), and will undertake this engineering, procurement, and construction project with the private entity.

  2. The Contractor aims to complete the Project Operations by the prospective date of (Date) (“Operation Date”), but the Owner acknowledges that unforeseen complications might delay the Project Schedule.

  3. The Contractor is an experienced company in developing, constructing, and operating a (Project..Name). The Contractor agrees that they can design and build the facilities described above.

  4. The Parties have therefore entered into this agreement to set up the terms and conditions of the arrangement.

Defined Terms and Interpretation

  1. “Assets” refers to the Project construction, facility, materials, and tools, which includes any installations on the premises and any relevant documents required to manage and maintain the facility.

  2. “Change Order” is when a Party requests a change in the specified Project Operations, which the other Party must review and approve.

  3. “Contractor” as the developer and constructor of the facility, located at [Contractor.StreetAddress][Contractor.City][Contractor.State][Contractor.PostalCode].

  4. “Force Majeure Event” is an event neither Party can control, predict, or avoid, making it impossible to execute this EPC agreement in whole or in part.

  5. “Performance Tests” means any testing either Party does to check whether the facility is working as it should and ready for commissioning as per the terms of this agreement.

  6. “Project Operations” is when the Contractor i) finished the construction, maintenance, and repairs of the facility and Project.

  7. “Project Operation Date” is when the facility is fully functioning and ready for the Owner to use.

  8. “Owner” is the entity that owns the Project or sponsors its construction and is located at [Owner.StreetAddress][Owner.City][Owner.State][Owner.PostalCode].

  9. “Site” refers to the geographical land area where the facility will be and is located.

Purpose and Scope of Work

The purpose of this agreement relates to the design, construction, operations, and maintenance of (Project.Name). This facility is built with the purpose of generating (Number) kW over a period of (Number) days/weeks/months.

The Contractor performs the duties of designing, constructing, testing, and maintaining the facility on behalf of the Owner. Following the completion of the facility and the effective Project Operation Date, the Owner will own the facility, with the Contractor operating and maintaining it.

The EPC agreement will enter into force on the (Begin.Date) (“Effective Date”) upon (Entry.Process). It will remain in force for (Number) years and will automatically terminate on (End.Date) (“Termination date”), unless both Parties agree to extend the agreement.

The Contractor shall provide or perform the following work as per the terms of this agreement:


(Enter value)


(Enter value)


(Enter value)


(Enter value)


(Enter value)


(Enter value)


(Enter value)

Rights and Obligations of Parties

The below rights apply to the affected Party, as per the terms of this agreement:

The rights of the Contractor:

  • To receive monetary compensation as set out in this agreement for the engineering, procurement, and construction of the facility;

  • The exclusive right to design and construct the facility;

  • To terminate the agreement in the event of default while still receiving the associated Termination Compensation.

The rights of the Owner:

  • To receive regular reports and updates on the progress of the Project operation;

  • Receiving a fully-functional facility, as per the terms of this agreement;

  • Monitor the Project Operations;

  • Upon reasonable prior notice, access the Site and the books and records the Contractor holds of this Project.

The Obligations of the Contractor:

  • Act as the sole Contractor for the Project Operations and carry the responsibility of completing it;

  • Undertake all the required work to design, procure, and construct this facility according to the specifications of this agreement;

  • Keep updated records and inventory of the Assets;

  • Dispose of hazardous materials according to the laws of (State).

The Obligations of the Owner:

  • Procure and hold any permits or approvals allowing the Contractor to work on the Site and construct the facilities;

  • Make payments for the work as per the agreement;

  • Promptly respond to notices or inquiries, and make available an appropriate authority with the right to make decisions regarding these facilities.

Representations and Warranties

The Parties agree that they are duly organized under the laws of (State) and have the full authority and power to perform their duties and other obligations specified in the agreement. The Parties also agree that they have the financial ability to perform the required tasks and comply with all applicable laws.

The Contractor agrees that they have visited and inspected the Site and identified no complications. The Contractor or representatives agree that they are familiar with the topography, access rights, roads, and soil condition of the Site.

Both Parties agree not to subcontract or assign any obligation, interest, right, or benefit to a third party without the written consent of both Owner and Contractor.

Payment for Work and Change Orders

The total payment expected for the Project Operations prescribed in this document is $(Payment.Total). However, this payment is broken down according to the schedule below:

Invoice Number



#1 (Invoice1.Reference)



#2 (Invoice2.Reference)



#3 (Invoice3.Reference)



Should any of the following events occur which increases the costs of work, the Owner is obliged to pay all expenses above the total amount:

  • Uninsured Force Majeure Event;

  • Governmental requirements;

  • Change Order;

  • The Owner is uncooperative with the Contractor.

The Owner will pay the total amount upon the Contractor completing the facilities on the Project Operation Date. The Contractor shall prepare and submit an invoice and a final report of the work. The Owner must review this invoice and report and settle the outstanding balance of the total amount within (Number) days of the receipt of the invoice.

If the Owner fails to make payment by the specified date, an interest rate of (Number)% will apply until the Owner pays the outstanding amount and owed interest.

Both Parties understand that a Change Order might delay the specified project period and incur additional costs. The Owner must carry any expenses of a Change Order due to an uninsured Force Majeure Event or by the request of the Owner.

Any costs resulting from a Change Order that the Contractor requests and the Owner approves will be borne equally by both Parties. Should the pricing change due to a Change Order arising from an error or commission from a Party, that Party will carry the costs.

Ownership and Intellectual Property

Once the Contractor completes the Project Operations and testing, the Contractor will hand over the facility and all its materials, tools, and installations into the ownership of the Owner. While the Contractor has the legal rights to use all patents, copyrights, and other intellectual property during the construction of this facility, they will hand it over to the Owner upon completion.

Performance Testing and Commissioning

At the completion of the Project Operations, the Contractor will compile a report on any unfinished work, along with sending a status report to the Owner. Once the Owner has reviewed the information, they can initiate performance testing by an Independent auditor to ensure everything works as it should. Once this is confirmed, the Contractor can complete any unfinished work and hand over a final report once it is finished.

Limitations of Liabilities

The Contractor shall not be held liable for any defects, deficiencies, or costs arising from a Force Majeure Event, everyday wear and tear, or misuse and negligence by the Owner.

Default and Termination Dispute

Any breach of the terms of this agreement by either Party is considered a default and gives the other Party the right to terminate the contract. However, written notice of the breach, either by Force Majeure or Default, must be sent within (Number) days, and the defaulting Party has (Number) days to correct the default.

A default event is of either Party:

  • Fails to obtain the necessary licenses, approvals, and permits

  • Violates any terms and faults in making payment

  • Doesn’t complete the work and obligations as set out in the contract

  • Becomes insolvent, or the subject of a bankruptcy

Resolution and Arbitration

In the case of any dispute arising from this EPC agreement, Parties shall first strive to use amicable discussion to resolve any disputes. Should the dispute not be resolved within (Number) days, then an arbitration procedure will be used to determine it.

Following [Owner.State]​ laws, the Parties shall nominate an Arbitrator should arbitration be needed. The place of the arbitration shall be (Location), using (Language). Both Parties shall bear their expenses for the arbitration procedure.

Operations and Maintenance

Once the Project Operations are completed, the Contractor will continue to operate the facility and maintain it in excellent condition. The Contractor may be required to collect user tariff payments as the Owner specifies and transfer them to the Owner. The Contractor may request a commission or an estimated fee of $(Amount) for this maintenance and operating services.


From the Effective Date until the Termination Date of this contract, both Parties agree to indemnify the other against losses, costs, obligations, penalties, damages, and demands incurred by the other Party. This term includes if it results in an injury or death of a third party or damages to the facilities.

However, this indemnity will not hold should the above occur due to the following:

  • Negligent act, misconduct, or omission of the other Party

  • Breach of representation, warranty, or failure to perform duties as stated in the agreement

  • Violation of any laws by one of the Parties

Should a Party not complete their obligations, the other Party has the right to waive the performance of those obligations, provided it is allowed under (State) laws. The waiver is only effective if it is in writing and both Parties sign it. Waivers are only valid for the action it describes and not for any other obligations a Party holds under this agreement.


Both Parties understand and agree to the terms of this contract, being held accountable under its conditions.

This EPC agreement document is the entire agreement, with no other addendums except (Addendums). Any previous written or verbal promises, concessions, or agreements are invalid in a court of law. Any additional amendments must be in writing and signed by both Parties.

The laws of (State) govern and enforce all rights and obligations of this EPC. In Witness Whereof, the Parties execute this agreement on the date, month, and year mentioned below.







EPC Agreement

Used 4,872 times

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