The definition of a contract is 'a promise or set of promises which the law will enforce. That is to say, the contract can be defined as a legally binding agreement between two parties or exchange of promises whereby one party undertakes to provide something in return for something else from another party. In contract, the rights and obligations are created by the acts of agreement between the parties to the contractual arrangement. Contract conditions are to set out the principal legal relationship between the parties to a construction project, determining the allocation of risk, price and consequently. There is a need of contract in between the parties of construction industry to make sure the construction carry out smoothly and standardized. In the procurement of construction, contracts are including standard form, modified form and bespoke form. Modified form of contract is developed based on standard form of contract …show more content…
The BQ is a document prepared by the consultant team that provides project specific measured quantities of the items of work identified by the drawing and specification in the tender documentation. The quantities may be measured in number, length, area, volume, weight or time. Preparing a BQ requires that the design is complete and a specification have been prepared. The BQ is issued to tenders for them to calculate a total cost for carrying out the construction works and as it means all tendering contractors will be pricing the same quantities rather than taking-off quantities themselves, it also provides a fair and accurate system for tendering. The different form of contract will different of parties who involves in payment obligation. An example, in the PAM 2006 parties involves to pay are employer, architect, quantity surveyor and contractor butin the PWD 203A parties involves to pay are employer, contractor and superintending officer(SO) or SO’s
The purpose of the construction contract is to distribute the duties between the different parties involved, distinguish and allocate the risk to the different parties, reduce the uncertainty surrounding the project and finally allow the parties to plan for the project and the future (Fortney, 2009). A contract is ultimately an agreement between two or more parties in which they agree to provide a specific task in exchange for something in return. The type of contract is simply the format in which the owner pays the contractor for the services.
Most if not all managers will likely find themselves working with contracts on a consistent basis. Oftentimes a manager will be presented with contracts that they have to sign or review for the purpose of employing an applicant. Contracts are also used when in the procurement merchandises for the business or other purposes. Whatever is the case, managers and others have to comprehend the process of contract law.
By eliminating uncertainty and ambiguity between the contractor and the contracting officers, the government could get rid of the divergent interpretations that inflate the cost. Realizing it is to the contractor’s advantage to pass on all expenses it can to the buyer in order to maximize profits every opportunity to clarify criteria for cost, reduce disagreement, and set clear limits are necessary. The difficulty in writing a contract to get rid of all unexpected cost is evident but doing it will cut down on the confusion over the life of the agreement. Defining costs allowed and which are not along with potential penalties for delayed service delivery will yield a better
In the British construction industry, the term ‘procurement’ show a series of activities and processes undertaken by the developer or client to secure the construction or refurbishment of a building. The Government Procurement Service define procurement as the ‘whole process of acquisition from the third parties and covers goods, services and construction projects. This process spans the whole life cycle from initial concept and definition of business needs through to the end of the useful life of an asset or end of a service contract.’ ( Arun District Council, 2011)
There are various standard forms of contract being used in the construction work, namely JCT (Joint Contract Tribunals), NEC (New engineering Contract), FIDIC (International Federation of Consulting Engineers). In which, Contract Administrator plays a key role as a referee between the Employer and Contractor.
A contract is an agreement between two parties in which one party agrees to perform some actions in return of some consideration. These promises are legally binding. The contract can be for exchange of goods, services, property and so on. A contract can be oral as well as written and also it can be part oral and part written but it is useful to have written contract otherwise issues can be created in future. But both the written as well as oral contract is legally enforceable. Also if there is a breach of contract, there are certain remedies for that which are discussed later in the assignment. There are certain elements which need to be present in a contract. These elements are discussed in the detail in the assignment. (Clarke,
Quantity takeoff is an essential task in the construction process as it provides the basis for other construction tasks that follows. The building elements are measured and these quantities are then used to estimate the cost and the relevant workload involved. This information is then assembled in a Bill of Quantities (BQ). The BQ structures and organizes the information about measurements, productivities and costs, according to the construction task and considers the actual order of the construction process. For example, the foundational elements are under the same section in the BQ while the roof elements are under the same section in the BQ.
Generally, identifying how conflicts arise to disputes and introducing proactive proceduresis critical for all parties involved in construction projects. Also introducing the conflict and dispute avoidance procedures in Standard Forms of Contracts could prevent disputes and avoid directly engaging an arbitrator. Comprehensive interaction and open discussions among building parties for a common objectives could avoid conflict and would also maintain the project aims on schedule without hiccups. Standard Forms of Contract should incorporate early warning system that will alleviate time delays and cost overruns in projects.
Contracts are exchange of promises or obligations between two or more organizations, is the key aspect of any encompassing critical business functions. In this case Bharthi Airtel and IBM, both these organisations agree on aspects like terms, pricing , service level agreements, human resources management, dispute resolution procedure , acceptance strategy and procedures ,Exit strategy, Non dis-closure agreements. As a procedure, Bharthi Airtel went through contract management process for finalizing contractual terms with IBM during sourcing lifecycle.
All construction work carried out is under the contractor's responsibility and contractor necessary, satisfy the condition that stated in the contract. Contractors that completing construction work will get consideration or profit that is shaped payment from a client or owner of the building. Payment imposed, this is in return for contractor's service and it was upheld approval from both parties. The agreement will exist with condition particular condition between contractor, employer and a few other parties which involved under construction.
The Tender and Contract division of the project would also be taken upon. The contract is a mutual assent by two or more firms/persons, one making an offer and other accepting it. The details which go inside the formulation of a contract would be studied alongside the clauses which bind the parties involved from doing things correctly or to refrain them from doing things
Indian contract act and tender act T S RAMASWAMY IYER 10TH EDITION GOGIA AND COMPANY PUBLICATION
The construction contracts are governed by the general elements and rules of contract involving performance and discharge of duties and the Contract Act 1950. Construction contracts include carrying out construction operations, managing others during project implementation and providing manpower for the operation of construction projects. The principle of offer and acceptance supported by consideration to make a legally binding contract applies as the construction contracts are governed by the Contracts Act 1950.
Conventional Construction Contract mainly works on “design bid build”. Owner/Client have to appoint consultants to prepare details, tender documents, drawings, BOQ’s. Then contracts have to submit the tenders. Conventional contracts are also called traditional contracts. Contractors are not responsible for the design and other structural works.
Specifications are written instruction concerning project requirements. The specification is one of the contract documents consisting of the written requirements for materials, equipment, construction systems, standards and workmanship for the work, as well as performance of related services. Construction specifications will usually provide a number of lists as well, including the materials that are to be used, where they are to be used, and how much should be used. Construction specifications will also usually provide a time by which the project should be completed or at least finish by the deadline. This will likely be the major factor in determining whether an interested contractor bids on a project. Those without the staff to handle the time constraints, or who have other conflicting projects, may decide they cannot do the job.