turnkey contract


Definition of turnkey contract

turnkey contract Turnkey Contract

Turnkey contract is typically a construction contract under which a contractor is employed to plan, design, build, commissioning a facility and do any other necessary to make it ‘ready to use’ at an agreed price and by a fixed date.

The concept is contractor shall hand over the fully functional facility to the employer according to the primary design provided by the employer.

The term is more or less synonymous with ‘design and build’, ‘package contact’ and ‘design contractor’. It is interchangeably used with the term EPC contract, sometimes a little change in design part.

The important clauses of a turnkey contract are:

  • Design of the facility or project
  • Completion time
  • Price
  • Payment terms & conditions
  • Performance guarantee and
  • Defect liability etc.

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