Professional Documents
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Contracts
Contracts
Contracts
& Tenders
What is a Contract?
⦿ An agreement enforceable by a law is called a
contract.
⦿ It follows a proposal from one party and its
acceptance by the other.
⦿ In the absence of any of the above elements of a
contract it becomes a void i.e., without a legal effect
or voidable.
⦿ The term contract means a written undertaking for
execution of works or supply of material or the
performance of any service.
⦿ It is duly accepted and registered by the competent
authority on behalf of union or state govt.
Essentials of contracts:
⦿ Essentials of contract are the following particulars by
which all agreements must be made in order to constitute
a valid contract.
1. That the contract shall be made by the parties competent
to contract.
2. That the contract shall be made by free consent of the
parties.
3. That there shall be a definite proposal and its acceptance
4. That the contract shall be made so that the
considerations and objectives are lawful.
5. That the meaning shall be certain.
1. Parties competent to contract
⦿ He is of the age of majority according to the law to
which he is a subject.
⦿ He is of sound mind : he should be capable of
understanding it and forming a rational judgement
⦿ He is not disqualified from contracting by any law to
which he is subject.
2. Free consent of parties
⦿ It is not caused under influence
⦿ It is not caused by threatening
⦿ It is not caused by fraud.
⦿ It is not caused by misrepresentation.
⦿ It is not caused by mistake.
Types of contract
⦿ Item rate contract
⦿ Percentage rate contract
⦿ Lump- Sum contract.
⦿ Labour contract.
⦿ Materials supply contract.
⦿ Piece work agreement
⦿ Cost plus percentage rate contract
⦿ Cost plus fixed fee contract
⦿ Cost plus sliding or fluctuating fee-scale contract
⦿ Target contract
Item rate contract
⦿ Also known as unit price contract or schedule contract.
⦿ Contractors are required to quote rates for individual items of
work on the basis of schedule of quantities
⦿ This schedule indicates full nomenclature of items, estimated
quantities and units.
⦿ Amount should be expressed in figures and words.
⦿ The final total of the amount tendered for work is drawn up
by them.
⦿ Followed by railway department.
Percentage rate contract
⦿ Litigation documents
⦿ What Is a Notice to Proceed
⦿ A Notice to Proceed is a notification letter indicating that
performance should begin under a construction contract.
⦿ Any party that has hired another party on the project (be it an owner
hiring a contractor, a contractor hiring a subcontractor, etc.) might
utilize a Notice to Proceed to indicate the recipient should start their
work.
⦿ That party’s performance time starts ticking from the date indicated
in the Notice to Proceed document.
⦿ There are a few options when deciding how to
determine when the project starts. The
project commencement date will often be one of the
following (or some combination):
⦿ Contract date
⦿ Date set forth in a Notice to Proceed
⦿ Date a Notice of Commencement is filed
⦿ Some other specified date
⦿ Calculated based on some other detail described in the
project contract or agreement
Rights of Parties to a Contract:
⦿ The most fundamental contract right is that of having the other party deal fairly and
⦿ It is inferred in every contract, and is called the "good faith and fair dealing"
requirement.
⦿ It requires that both parties maintain a reasonable effort to work honestly with the
other party and provide honesty and disclosure of matters pertaining to the
agreement.
⦿ Most often, contract rights involve business matters, such as the exchange of
products, services, and compensation. However, other kinds of subject matter may
also be involved.
Typical kinds of contract rights include:
⦿ The right to buy a specific service or product.
⦿ The disputants can negotiate virtually any aspect of the arbitration process,
including whether lawyers will be present at the time and which standards
of evidence will be used.
⦿ Arbitrators hand down decisions that are usually confidential and that
cannot be appealed.