Contracts

Contracts

1. Essentials of a valid contract

   • 1. Intention to create legal relations
   • 2. Consideration
   • 3. Agreement = offer + acceptance

2. Types of Contract

   • Traditional
     • 1. Fixed price/lump sum
       • Simple projects
       • Traditional methods of tendering
       • Client requires total control of costs
     • 2. Measurement
       • Approximate BoQ used then remeasured at completion
     • 3. Cost reimbursement
       • Work goes ahead on basis of labour and materials and a target cost is aimed for
     • Kidderminster and LMH
   • Design and Build
     • Contractor designs and builds, designer is often novated to the contractor
     • Disadvantages
       • Quality of design can be sacrificed
       • Cost reductions
       • Employer's Requirements need to be sturdy
       • Landscape design can be done by sub-contractors!
     • Advantages
       • Single point of responsibility
       • Final cost virtually guaranteed
       • Fewer claims
     • CUBRIC
   • Management
     • Client needs speedy completion of project
     • Management contractor works alongside design team but does not carry out the work
     • Works are let to specialist sub-contractors
   • Partnering
     • Large multidisciplinary projects
     • Joint venture, consortia, alliance, project/strategic partnering, PPP, PFI, D+B finance + operate
     • All parties collaborate
     • Grangegorman
     • Commitment to cost reduction
     • Can begin earlier than tender stage or at construction stage
     • Team works for contractor or developer
     • Client seeks tenders through OJEU and usually selects three teams to bid for the contract

3. Contract Documents

   • 1. Agreement
     • Parties
     • Recitals
     • Articles
     • Witnesses
   • 2. Specification (qualitative)
   • 3. Schedules or Bills of Quantities (quantative)
   • 4. Drawings (illustrative)
   • 5. Conditions of Contract

4. Forms of Agreement

   • JCLI
     • Works
     • Maintenance Works
     • Home Owners and Occupiers
     • Works and Maintenance combined
     • Works with Contractor's Design
   • JCT (Joint Council of Tribunals)
     • Standard Building Contract (SBC)
     • Design and Build
     • Intermediate (IC)
     • Minor Works (MW)
     • Major Projects (MP)
     • Framework Agreements (FA)
     • Measured Term Contract (MTC) - Maintenance
   • GC Works (Government Contracts)
     • Government/Local authorities now prefer NEC
   • NEC (New Engineering Contract)
     • Non-adversarial approach to contracts
     • Encourages the team to work together
   • Infrastructure Conditions of Contract 2011 (ICC formerly ICE)
     • Predominantly used for civil engineering projects
   • Engineering and Construction Short Contract (ECSS)

5. Why are standard forms important?

   • 1. Certainty: required performance is known and clearly stated
   • 2. Standardisation: enables contractors and professionals to be familiar with the rules laid down and therefore saves time and avoids confusion
   • 3. Suited for Purpose: each form of agreement has been designed for particular types of project