General Conditions of the Contract
Business details
QUESTION: In a contract for the construction of
the major engineering work, why are the
“General Conditions” necessary?
 The construction of any extensive
project of the engineering-works type is
a major undertaking with complex
organizational problems and with many
parties involved. The General
Conditions must define the relations of
all these parties with one another and
with the general public as represented
by the various laws, codes, and
regulations which are applicable
because of possible effect on public
health, welfare, or safety.
Material in the General Condition
Nine types of subject matter:
1. A statement of the intent of the
contract documents and the relation of
the individual documents to the whole
group.
2. Definition of special words used and of
any ordinary words which are used in a
special sense.
3. A listing and defining of the rights
reserved by or assigned to the owner,
engineer, architect, and contractor.
4. A listing and defining of the
responsibilities assigned to the owner,
engineer, architect, and contractor.
5. A listing and defining of the authority
assigned to the owner, engineer,
architect, and contractor.
General conditions could be divided by into:
1. Intent of the contract documents
2. Definitions
3. Bond requirements and financial
protection
4. Reports and payments
5. Modifications of contractual relations
6.
7. Conduct of the work
8. Completion and acceptance
Outline of the General Conditions (75 articles)
1. Intent of the contract documents
2. Definitions
3. Contract security
4. Contractor’s insurance
5. Owner’s insurance
6. Fire insurance
7. Unemployment compensation and
social security
8. Patents and royalties
9. Payment for permits
10. Damages
11. Liens
12. Construction reports
13. Partial payments
14. Application for payment
15. Certificates of payments due
ARTICLE 1 – Intent of the contract documents
ARTICLE 2 – Definitions
ARTICLE 3-11 – Bond requirements and financial
protection
ARTICLE 12-23 – Reports and payments
ARTICLE 24-32 – Modification of contractual
relations
ARTICLE 33-44 – Business details
ARTICLE 45-69 – Conduct of the work
ARTICLE 70-75 – Completion and acceptance
INTENT OF THE CONTRACT DOCUMENTS – is to
include in the contract price the cost of all labor
and materials, water, fuel, tools, plant,
equipment, light, transportation and all other
expense as may be necessary for the proper
execution of the work.
DEFINITIONS – desired to give them precise
meanings for the purpose of the contract.
Types of words for which definitions are given:  Owner’s insurance
1. Owner
2. Bidder a.) Owner’s protective liability – will
3. Contractor protect him from contingent liability for
4. Subcontractor damages.
5. Seller b.) Builder’s risk insurance – will effect and
6. Project maintain for the benefit of the parties
7. The Work to the contract.
8. Work on the project
9. Furnish UNEMPLOYMENT COMPENSATION AND
10. Chief engineer SOCIAL SECURITY – the contractor shall satisfy
the company within the terms of
Sample Definitions below: Unemployment Compensation Act.

1. General contractor – The person, firm,
or corporation to whom the within
contract is awarded.
2. Subcontractor of construction –
furnishing labor and materials
performing work under supervision of
GenCon.
3. Project – The entire delivery proposed
by the company.
4. The Work – interpreted to mean the
work, including all materials, labor,
tools, etc.
5. Work on the Project – work to be
performed.
6. Surety – performance bond securing
the performance within the contract.
7. Order – written order addressed to the
General contractor.
8. Section – specification section
CONTRACT SECURITY – usually furnished in the
form of a bond.
DAMAGES – wrongful act or neglect of the
other party.
LIENS – final payment for any part of the
retained percentage.
CONSTRUCTION REPORTS – required because
the owner must know if the project is
progressing.
Two records for construction reports:
1. Detailed Estimate
2. Periodical estimate for partial payment
PARTIAL PAYMENTS PROCEDURES
1. Not later than 15th day of each calendar
month the Owner will make partial
payments for the Contractor.
2. The Contractor shall pay for all transpo
and utility not later than the 20th day.

INSURANCE

 Contractor’s insurance – the contractor

shall not commence work under this
contract until he has obtained all
insurance required.

Proof of Carriage of Insurance – certificates of

insurance.