OCCPATIONAL TITLLE: CONSTRUCTION MANAGEMENT Level- V

Unit of competency: Administer Legal Obligations of Construction Contract

Module title: Administering Legal Obligations of Construction Contract. Module CODE: CON BCM5
M01 0910

Nominal duration 80 hrs

Leaning Outcomes Covered:

1. Comply with the laws relating to establishing and licensing a construction contractor

2. Engage personnel for the project

3. Administer the regulations relating to OHS, welfare, workers compensation, noise abatement and working

hours

4. Implement rehabilitation arrangements

5. Comply with taxation and insurance requirements of government

6. Administer all obligations and observe fair trading practice

7. Comply with environmental legislation and its intent

INFORMATION SHEET # 1
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ADMINISTERING LEGAL OBLIGATIONS OF CONSTRUCTION CONTRACT

Introduction
CONTRACT ADMINISTRATION
Contract administration is one of the most important jobs related to construction projects and involves numerous
tasks occurring before and after contract execution and work order issuance. All work must be administered in
accordance with the contract specifications, terms and conditions, state and federal laws and regulations, and
department policy.
Proper contract administration includes:

 developing proper and accurate bid and contract documents

 complying with contract documents and specifications
 enforcing state and federal regulations
 ensuring quality control by overseeing, inspecting and reviewing sampling and testing of all materials and
work
 keeping and maintaining accurate project records
 Recording, verifying and preparing monthly pay estimates
 Negotiating and processing of change orders, supplemental agreements and other contract modifications in
a timely manner
 promoting good public relations and
 Setting and maintaining high professional standards
Construction Contract Administration includes the services necessary to assure that proper management of
construction inspection, surveying, materials testing and contract administration activities are completed in
accordance with the Project TOR (Terms of reference), the Contract, Workplace Safety and Health requirements
and all other applicable laws and regulations. This may include some or all of the following:
• Ensure the Contractor performs all Work in accordance with the Contract;
• Maintain complete and accurate records of the activities and events relating to the project;
• Obtain necessary approvals and document significant changes to the project;
• Interpret Drawings, Specifications (Construction and material) and Special Provisions for the project;
• Resolve disputes which may arise in relation to the Contract;
• Resolve field problems as quickly as possible, including situations such as: out-of-place piling, out-of-tolerance
Work, out-of-specification materials, structural defects, accidental damage, underground obstructions, etc. These
problems may have a significant impact on the execution, progress and/or overall cost of the project. It is, therefore,
extremely important to resolve Issues as expeditiously as possible. Generally, field problems require some degree
of Engineering evaluation and decision.
• Prepare and participate in dispute resolution or litigation regarding the project. With respect to contract
administration, ESP (Engineering service provider) to administer and manage contracts, with the exception of:
• Tendering and awarding of all construction contracts;

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• Administering holdback and contract security; and
• Resolving Extra Work, construction contract related disputes and/or claims.
LO1: Comply with the laws relating to establishing and licensing a construction contractor

 Business Registration
Business registration provides more prominent visibility on your domain names who is listening by letting you add
a logo, business links, images, business hours, coupons, and even a local map that high lights. You can add business
registration to domain names registered in your account with us. However you can associated a business profile with
any valid domain names, regardless of where it is registered.
Registering a business name
You may be required register your chosen business name with an official government body, although this will
depend on whether you operate as sole trader, partner ship or limited company.
Depending on what country you are registered your business in will make a difference as to what hoops you will
need to jump through.
Your business name should:-
 Be unique to your business (at least in the particular area where you do business).
 Include any relevant legal information (for example, limited companies must include the word ‘limited’ at
the end of the business name).
Your business name should not:-
 Use illegal offensive words
 Use restricted or prohibited words (unless proper authority has been obtained).
A good business name should also:-
 Be easy to remember- easy to promote something that is easy to remember
 Reflected your business character- words like ‘funky’ can describe the ethos of your company
 Be easy for customers to find in directories and listing
And business name should not:-
 Be complicated- if you have to explain your business name every time, it’s going to be hard
work promoting it.
 Be confusing- if the name implies you sale a different product, you will confuse your
potential customer.
 Use slang or jargon that will date quickly- words can go out of fashion.
 Be obscure- again what can be head line news can quickly mean nothing in five years time when every one
has forgotten about that once great fad!

Construction contract Registration with DLI

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 Effective September 15, 2012 most contractors who provide building construction or improvement service are required to
register with DLI through the construction contract registration pilot program. This law replaces the independent
contractor exemption certificate (ICEC) program with a simplified two year pilot project for registration of
construction contractors.
Do I have registered?
An individual or business entity that performs commercial or residential building construction or improvement services
must register with DLI unless they:

 Have a current license certificate or registration issued by DLI

 Have a current independent contractor exemption certificate
 Are an employee of a business performing construction service; or
 Hold a current residential building contractor or remodeler certificate of exemption issued by DLI;
Contractors who hire unregistered subcontractors; misclassify worker and fail to register are in violation of the
law, which can result in civil penalties.
REGISTRATION Fee
For new business, the first year’s registration fee is based on the tax due on its estimated annual payroll
expense are reported on the application for business registration. Businesses that hire employee to perform
work or render services with in San Francisco pay registration fee based upon their total payroll expense
attributable to San Francisco. The tax rate on payroll expenses is 1.5%.

Contractor’s registration
Which contractors must registered with the state?
All individual contractors and business performing constriction work with in lowa must be registered with the
division of labor if they earn at least $2,000 a year.
What if I operate more than one business?
You must register each construction business that has a separated federal identification number.

Do sub contractors have to be registered?

- Yes
What are the purposes of contractor registration?
- To ensure compliance with unemployment insurance laws.
- To ensure compliance with workers compensation law.
- To ensure payments owned to state agencies by out-of-state contractors are collected.
- To make information about contractor available to the general public.
 License
Definitions
1. A permit from an authority to own or use something, does a particular thing, or carries on a trade (especially in
alcoholic liquor). Formal or official permission
2. A writer’s or artist’s conventional freedom to deviate from facts or accepted rules
3. Freedoms to behave without restraint

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4. recoverable written or implied agreement by authority or proprietor (the licensor) not to be assert his or her right
(for specific period and under specific conditions) to prevent another party 9 the licensor) from engaging in certain
activity that is normally forbidden (such as selling liquor or making copies of copy right work).
Intellectual property licenses generally mean that the licensor will not invoke owner ship protection laws if the
licensor property (art, design, patent etc ) is copied, sold or used by the licensee. A license is not right, because the
licensor my not have legal power to give all necessary permission that constitute a legal right. It is also not a lease,
and also not assignable by the licensee.
Terms: - many licenses are valid for a particular length of time. This protects the licensor should the value of
license increase, or market condition change. It also preserves enforceability by insuring that no license extends
beyond the term of the agreement.
Territory: - a license may stipulate what territory the right pertain to. Example, a license with a territory limited to
“north America” would not permit a license any protection for use in Japan.

 The four Stages of Documentation

1. Recognition, collection and recordation: This is the most vital step in the entire process. Without it, the
other steps are moot (subjected to debate). It requires that field superintendents and/or project engineers
evaluate all real-time events, selecting those that appear to be of future value, and committing them to a
permanent record. Many contractors have reported that their field personnel do not adequately evaluate the
real-time events until after they have experienced a major claim on one of their projects. It is a shame to pay
the costs for an undocumented claim to ensure better documentation in the future. For that reason, I have
given numerous workshops and presentations on documentation and "real litigation" examples to
demonstrate the importance of documentation.
2. Reporting, distribution and transmission: This is a matter of communicating the documents or
information to another party. Modern software is available to help with the reporting, distribution and
transmission.
3. Initial utilization: Initial utilization of field documentation is important. Contractor management must
know what is going on in the field so that adjustments can be made. It is similar to football coaches
reviewing real true photographs of plays during a game and then making adjustments to their plan. The
documentations that are not reviewed may be routed directly to storage.
4. Storage and retrieval: Storage typically involves filing the information so that it can be retrieved (find and
bring back) at a later point. Once again, storage by use of computer software makes retrieval at a later date
an easier task.

Five Simple Things You Should Document

(1) Document Your Agreement - Get a written contract and document any and all change orders. This is so
vitally important. You don’t have to have a 15 page agreement to have a contract, even a simple work order
with the terms of your arrangement will be better than nothing. Change orders are the subject of a lot of
disputes. Get permission to do the work – in writing – then proceed.
(2) Document & Save Your Conversations – Contractors tend to agree to things on a whim, over a beer, or
during a phone call. You aren’t being crafty by confirming your conversation in an e-mail – you are being

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 smart. This ensures consistency and clarity. Everyone is on the same page and your lawyer will know that,
as soon as they read the e-mail.
(3) Keep Job Records – So many contractors think that someone else (supervisor, etc.) is keeping their time.
Every contractor should find a notebook, or a and track all labor. Also, keep a daily notebook of what
happened on the job. It won’t take much time and will ensure that your pay requests are backed up with
suitable data.
(4) Keep Receipts, Invoices & Lading Records – So many contractors toss out receipts, invoices and other
records of payment and delivery, because they believe they are unnecessary in a “lump sum” job. They often
forget that the issue of delivery, payment, or procurement of materials might arise. Keep them all and sort
them by the contract or change order that they coincide with.
(5) Keep Copies of Insurance, Bonds & Taxes on Hand – Lawyers like to see insurance policies, and
guaranty contacts, and bonds right off the bat. Furthermore, they often seek copies of payroll taxes, workers
compensation submissions and other governmental records to confirm payment of labor. Keep copies on
record at all times. Sort them by date, so that they are easily accessible for each project.
Five Simple Ways to Maintain Your Documents
(1) Create Individual Project Files - Open a new folder on your computer for each project. Within that
folder, use sub-folders to manage different types of documents. Inside each folder, name and date each
document so that they are readily recognizable. Simple as that Have everything in one place that is easily
shared with your counsel.
(2) Scan All Records – We live in a great age where paper can be tossed and data can live on forever.
Contractors should greatly consider keeping an entirely electronic file. Its easy to share, rids your office of
clutter, and can be accessed from anywhere. If you have separation anxiety from the paper, keep it around.
But, scan it in each time you receive something new and keep it in your folders.
(3) Maintain an Electronic File – This goes along with the above. But, I would advise to keep everything
electronic. Communicate by e-mail and save copies in your project file. Request electronic copies of
documents from your customers and other parties. This ensures that you have the original, un-tampered files.
Having a purely electronic file allows you to easily share files with consultants, engineers, and attorneys.
(4) Document what you do - Keep a record of what you do on a project and what you do with documents.
Using a software program like you can keep consistent and easily shareable records of what you and your
team do on the job, in the office and when managing records. You can even use or other billing software, to
track tasks that your team performs on each project.
(5) Create a Policy & Communicate It - Another common problem is that companies typically have 5
different people, doing 5 different things. Call a meeting, establish a procedure and enforce it. Perform
monthly checks on whether or not your file is complete. Your procedure could be as simple as creating a
folder and a Google Sites page for each project, scanning all records, naming them and placing them in the
files. Even this procedure will put you above many of the contractors out there.
Summary: Document as much as possible; keep it in one place; Save yourself the headache and cost of a
messy discovery process.
 Contract Documents
Construction Contract Must Have Items
The documents are one of the most important pieces that will guarantee of a successful project. This list
contains the most common documents that must form part of every construction
1. Agreement
The agreement to be used by the contracting officer (owner) and the contractor. The most essential part of the
contract documents.
2. General Conditions
This contract document will define the obligations and rights on how to execute the project.

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3. Special Conditions
This is usually an extension of the contract and to the general conditions. This part must specify specific conditions
and clauses to each particular project or job.

4. Bill of Quantities
This is formed by the list of diverse trades, and materials included that form part of the construction. Sometimes
this document is not required by the contracting officer.
5. Drawings
All set of that form part of the job to be performed. These drawings are usually the latest drawings and must be
received by the contractor prior to the date of commencement. It must include all drawings from consultants, and
will constitute the entire project being contracted.
6. Specifications
The technical requirement to complete, execute and/or perform every little task or material being incorporated in the
construction projects. It will add intelligence to the construction drawings; specify common standards, deviations
accepted, materials accepted and the required testing for all materials. Usually, specifications are composed by
referencing construction standards and codes.
7. Schedules
The is an important piece of the document. In this part, the contracting office will know how and when the project
will be completed. Sometimes, construction contracts will require updated schedules throughout the construction
progress, and might form part of the monthly, or agreed term, application for payments.
8. Pricing Schedules
Breakdown of all items being incorporated in the construction project. This is usually the base of the application for
It can be detailed per item or in a lump sum form, not specifying individual items.
9. Insurances
This part will be an essential part to the contracting officer, since, it will provide the guarantee to the owner that the
contractor has the means and the economic backup to the construction contract. It will include specific types of
coverage’s, required bonding, and all protections to the owner, the contractor and third parties.
RECORD
Construction Contractor shall maintain at the Project site, originals or copies of, on a current basis, all Project files
and records, including, but not limited to, the following administrative records:

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1. Subcontracts and Purchase Orders
2. Subcontractor Licenses
3. Shop Drawing Submittal/Approval Logs
4. Equipment Purchase/Delivery Logs
5. Contract Drawings and Specifications
with Addenda
6. Warranties and Guarantees
7. Cost Accounting Records
8. Labor Costs
9. Material Costs
10. Equipment Costs
11. Cost Proposal Request
12. Payment Request Records
13. Meeting Minutes
14. Cost-Estimates
15. Bulletin Quotations
16. Lab Test Reports
17. Insurance Certificates and Bonds
18. Contract Changes
19. Permits
20. Material Purchase Delivery Logs
21. Technical Standards
22. Design Handbooks
23. “As-Built” Marked Prints
24. Operating & Maintenance Instruction
25. Daily Progress Reports
26. Monthly Progress Reports
27. Correspondence Files
28. Transmittal Records
29. Inspection Reports
30. Bid/Award Information
31. Bid Analysis and Negotiations
32. Punch Lists
33. PMIS Schedule and Updates
34. Suspense (Tickler) Files of Outstanding
Requirements
35. Policy and Procedure Manual the Project
files and records shall be available at all
times to Owner and Design Professional
or their designees for reference, review
or copying

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 LO2: Engage personnel for the project

A. EMPLOYEE RIGHTS ON GOVERNMENT CONTRACTS

The United States department of labor or staff wage (remuneration) and hour division
This establishment is performing Government contract work subject to (check one)
 Service contract act (SCA) or
 Public contracts act (PCA)
Your rate must be no less than the Federal minimum wage established by the Fair Labor
Standards Act (FLSA).
A higher rate may be required for SCA contracts if a wage determination applies. Such wage
determination will be posted as an attachment to this Notice.
SCA wage determinations may require fringe benefit payments (or a cash equivalent). PCA
contracts do not require fringe benefits.
You must be paid 1.5 times your basic rate of pay for all hours worked over 40 in a week.
There are some exceptions. No person under 16 years of age may be employed on a PCA
contract.
Work must be performed under conditions that are sanitary, and not hazardous or dangerous
to employees' health and safety.

B. CONSTRUCTTION CONTRACT
In the Contract the following words and expressions shall have the meanings hereby
assigned to them, except where the context otherwise requires
 "Employer" means the person named as such in Part II of these Conditions and the
legal successors in title to such person, but not (except with the consent of the
Contractor) any assignee of such person.
 Contractor" means the person whose tender has been accepted by the Employer and
the legal successors in title to such person, but not (except with the consent of the
Employer) any assignee of such person
 "Subcontractor" means any person named in the Contract as a Subcontractor for a
part of the Works or any person to whom a part of the Works has been subcontracted
with the consent of the Engineer and the legal successors in title to such person, but
not any assignee of any such person.
 Engineer" means the person appointed by the Employer to act as Engineer for the
purposes of the Contract
 "Engineer's Representative" means a person appointed from time to time by the
Engineer under Sub-Clause.
 "Contract" means these Conditions (Parts I and II), the Specification, the Drawings,
the Bill of Quantities, the Tender, the Letter of Acceptance, the Contract Agreement

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 (if completed) and such further documents as may be expressly incorporated in the
Letter of Acceptance.
 "Specification" means the specification of the Works included in the Contract and
any modification thereof or addition thereto made under Clause 51 or submitted by
the Contractor and approved by the Engineer.
 "Drawings" means all drawings, calculations and technical information of a like
nature provided by the Engineer to the Contractor under the Contract and all
drawings, calculations, samples, patterns, models, operation and maintenance manuals
and other technical information of a like nature submitted by the Contractor and
approved by the Engineer.
 "Bill of Quantities" means the priced and completed bill of quantities forming part of
the Tender.
 "Tender" means the Contractor's priced offer to the Employer for the execution and
completion of the Works and the remedying of any defects therein in accordance with
the provisions of the Contract, as accepted by the Letter of Acceptance.
 "Letter of Acceptance" means the formal acceptance by the Employer of the Tender.
 "Contract Agreement" means the contract agreement (if any) referred to in Sub-
Clause 9.1.
 "Appendix to Tender" means the appendix comprised in the form of Tender annexed
to these Conditions.
 "Commencement Date" means the date upon which the Contractor receives the
notice to commence issued by the Engineer pursuant to Clause 41.
 "Time for Completion" means the time for completing the execution of and passing
the Tests on Completion of the Works or any Section or part thereof as stated in the
Contract (or as extended under Clause 44) calculated from the Commencement Date.
© FIDIC 1987 1
 "Taking-Over Certificate" means a certificate issued pursuant to Clause 48.
 "Contract Price" means the sum stated in the Letter of Acceptance as payable to the
Contractor for the execution and completion of the Works and the remedying of any
defects therein in accordance with the provisions of the Contract.
 "Retention Money" means the aggregate of all monies retained by the Employer
pursuant to Sub-Clause 60.2(a).
 "Interim Payment Certificate" means any certificate of payment issued by
theEngineer other than the Final Payment Certificate.
 "Final Payment Certificate" means the certificate of payment issued by the Engineer
pursuant to Sub-Clause 60.8.
 "Works" means the Permanent Works and the Temporary Works or either of them as
appropriate.

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  "Permanent Works" means the permanent works to be executed (including Plant) in
accordance with the Contract.
 "Temporary Works" means all temporary works of every kind (other than
Contractor's Equipment) required in or about the execution and completion of the
Works and the remedying of any defects therein.
 "Plant" means machinery, apparatus and the like intended to form or forming part of
the Permanent Works.
 "Contractor's Equipment" means all appliances and things of whatsoever nature
(other than Temporary Works) required for the execution and completion of the
Works and the remedying of any defects therein, but does not include Plant, materials
or other things intended to form or forming part of the Permanent Works.
 "Section" means a part of the Works specifically identified in the Contract as a
Section.
 "Site" means the places provided by the Employer where the Works are to be
executed and any other places as may be specifically designated in the Contract as
forming part of the Site.
 "cost" means all expenditure properly incurred or to be incurred, whether on or off the
Site, including overhead and other charges properly allocable thereto but does not
include any allowance for profit.
 "Day" means calendar day.
 "Foreign currency" means a currency of a country other than that in which the
Works are to be located.
 "Writing" means any hand-written, type-written, or printed communication,
including telex, cable and facsimile transmission.
 WHAT IS A CONTRACT?
Definitions:-
 An agreement between two or more persons to do or to refrain from doing a particular
thing in exchange for something of value.
 contract as an agreement enforceable by law
 Agreement as “every promise and every set of promises forming consideration for
each other.”
 Promise in these words: “When the person to whom the proposal is made signifies
his assent thereto, the proposal is said to be accepted. A proposal when accepted
becomes a promise.”
From the above definition of promise, it is obvious that an agreement is an accepted proposal.
The two elements of an agreement are:
(I) Offer or a proposal; that includes quality, cost & schedule issues, the identification of
both parties to the contract & the certainty of the terms;

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(II) An Acceptance of that offer or proposal. Indicating the serious intent by both parties to
be bound by the formal agreement including the formal communication of acceptance of the
offer;
(III) The Consideration, indicating the capacity of both offeror and offeree, the lawful
purpose of the contract, the genuine intention of both parties placed in the form;
What agreements are contracts? All agreements are not studied under the Contract
Act, as some of them are not contracts. Only those agreements which are enforceable at law
are contracts. The Contract Act is the law of those agreements which create obligations, and
in case of a breach of a promise by one party to the agreement, the other has a legal remedy.
Thus, a contract consists of two elements:
(I) an agreement; and
(II) Legal obligation, i.e., it should be enforceable at law.
However, there are some agreements which are not enforceable in a law court. Such
agreements do not give rise to contractual obligations and are not contracts.
Examples
(1)” A” invites |”B” for dinner in a restaurant. B accepts the invitation. On the appointed day,
B goes to the restaurant. To his utter surprise A is not there. Or A is there but refuses to
entertain B. B has no remedy against A. In case A is present in the restaurant but B fails to
turn-up, then A has no remedy against B. but refuses to entertain B. B has no remedy against
A. In case A is present in the restaurant but B fails to turn-up, then A has no remedy against
B.
(2) A gives a promise to his son to give him a pocket allowance of one hundred birr every
month. In case A fails or refuses to give his son the promised amount, his son has no remedy
against A.
In the above examples promises are not enforceable at law as there was no intention to create
legal obligations. Such agreements are social agreements which do not give rise to legal
consequences. This shows that an agreement is a broader term than a contract. And, therefore,
a contract is an agreement but an agreement is not necessarily a contract.
What obligations are contractual in nature? We have seen above that the law of contracts is
not the whole law of agreements. Similarly, all legal obligations are not contractual in nature.
A legal obligation having its source in an agreement only will give rise to a contract.
ESSENTIAL ELEMENTS OF A VALID CONTRACT
We have seen above that the two elements of a contract are: (1) an agreement; (2) legal
obligation. The Act provides for some more elements which are essential in order to
constitute a valid contract. It reads as follows:
“All agreements are contracts if they are made by free consent of parties, competent to
contract, for a lawful consideration and with a lawful object and are not hereby expressly
declared to be void.”
Thus, the essential elements of a valid contract can be summed up as follows
1. Agreement
2. Intention to create legal relationship

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 3. Free and genuine consent
4. Parties competent to contract
5. Lawful consideration
6. Lawful object
7. Agreements not declared void or illegal
8. Certainty of meaning
9. Possibility of performance
10. Necessary Legal Formalities

 These essential elements are explained briefly.

1. Agreement
As already mentioned, to constitute a contract there must be an agreement. An agreement
is composed of two elements—offer and acceptance. The party making the offer is known
as the offeror, the party to whom the offer is made is known as the offeree. Thus, there
are essentially to be two parties to an agreement. They both must be thinking of the same
thing in the same sense. In other words, there must be consensus-ad-idem.
2. Intention to create legal relationship
As already mentioned there should be an intention on the part of the parties to the
agreement to create a legal relationship.
3. Free and genuine consent
The consent of the parties to the agreement must be free and genuine. The consent of the
parties should not be obtained by misrepresentation, fraud, undue influence, coercion or
mistake. If the consent is obtained by any of these flaws, then the contract is not valid.
4. Parties competent to contract
The parties to a contract should be competent to enter into a contract. According to
Section 11, every person is competent to contract if he (i) is of the age of majority, (ii) is
of sound mind and (iii) is not disqualified from contracting by any law to which he is
subject.
Thus, there may be a flaw in capacity of parties to the contract. The flaw in capacity may
be due to minority, lunacy, idiocy, drunkenness or status. If a party to a contract suffers
from any of these flaws, the contract is unenforceable except in certain exceptional
circumstances.
5. Lawful consideration
The agreement must be supported by consideration on both sides. Each party to the
agreement must give or promise something and receive something or a promise in return.
Consideration is the price for which the promise of the other is sought. However, this
price need not be in terms of money. In case the promise is not supported by
consideration, the promise will be nudum pactum (a bare promise) and is not enforceable
at law. Moreover, the consideration must be real and lawful.
6. Lawful object
The object of the agreement must be lawful and not one which the law disapproves.
7. Agreements not declared illegal or void
There are certain agreements which have been expressly declared illegal or void by the
law. In such cases, even if the agreement possesses all the elements of a valid agreement,
the agreement will not be enforceable at law.
8. Certainty of meaning
The meaning of the agreement must be certain or capable of being made certain
otherwise the agreement will not be enforceable at law. For instance, A agrees to sell 10
meters of cloth.
There is nothing whatever to show what type of cloth was intended. The agreement is not
enforceable for want of certainty of meaning. If, on the other hand, the special description of

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the cloth is expressly stated, say Terrycot (80 : 20), the agreement would be enforceable as
there is no uncertainly as to its meaning.
However, an agreement to agree is not a concluded contract [Punit Beriwala v. Suva Sanyal
AIR 1998 Cal. 44].
9. Possibility of performance
The terms of the agreement should be capable of performance. An agreement to do an act
impossible in itself cannot be enforced. For instance, A agrees with B to discover treasure by
magic. The agreement cannot be enforced.
10. Necessary legal formalities
A contract may be oral or in writing. If, however, a particular type of contract is required by
law to be in writing, it must comply with the necessary formalities as to writing, registration
and attestation, if necessary. If these legal formalities are not carried out, then the contract is
not enforceable at law.
 Types of contract
1. Lump Sum Contracting
2. Lump Sum plus Unit Rates
3. Unit Rate Only
4. Reimbursable Cost Contracts Where Necessary
5. Cost Plus a Percentage Fee
6. Start Cost Reimbursable with Later
7. Provisional Contract Price Agreement
8. Target Cost (Shared Overrun or under run)

1. Lump Sum Contracting

Lump sum contracting is normally the preferred contract format when it can be properly
used. Competitive bidding is used to select a technically and financially qualified contractor
whose bid represents the least overall cost to the client. Negotiated contracting is only used in
exceptional circumstances involving exceptional skills or equipment that would otherwise be
unobtainable.
Lump sum contracting is normally the preferred contract format when it can be properly
used.
Competitive bidding is used to select a technically and financially qualified contractor whose
bid represents the least overall cost to the client.
Negotiated contracting is only used in exceptional circumstances involving exceptional skills
or equipment that would otherwise be unobtainable.
Lump sum, unit prices, day rates, and reimbursable cost fixed fees that are quoted under
competitive conditions for defined work are not normally negotiated.
There may be exceptions to this policy where:
(a) The contractor selected is the only one capable of performing the
(b) The selection of any other contractor would result in substantial
(c) The contractor selected possesses special expertise or other expertise work within the
project schedule. Additional costs to the client. Once that would cause its work performance
to be superior to that of other potential bidders.
Lump Sum Advantages
(a) The client is able to define the work and prepare drawings and specifications before going
out to bid.
(b) In view of (a), the client may also prepare an “in-house” fair price estimate for bid
comparison and know in advance its budget commitment.
(c) Close competition between bidders may be realized.
(d) The contractor has an incentive to adhere to schedule and budget.
(e) Responsibility for the project is with the contractor.

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(f) Bid evaluation is easier
Lump Sum Disadvantages
(a) There may be a long period between the decision to issue the requests for quotation from
bidders and the contract award.
(b) A low-bid contractor may try to recover losses through excessive variation proposal
orders and claims.
(c) Maximum design engineering may be necessary
(d) Lack of flexibility-changes expensive.
(e) Open to claims attempts.
(f) Contingencies for risk and escalation.
(g) Importance of low bid price may result in unsatisfactory work.
2. Lump Sum plus Unit Rates
For lump sum plus unit rates, the advantages and disadvantages are the same as lump sum,
but it behooves the client to put as many unit rate offers in the request for quotation (RFQ) as
possible. Whereas, if these are not requested it suits the contractor to negotiate separately and
possibly more advantageously during the course of the contract.
3. Unit Rate Only
A unit rate contract is one in which payment for the work is made upon the basis of
completed quantities of specifically stated items of work and materials furnished and used by
the contractor, each quantity being multiplied by the contractor’s bid price for that unit.
One advantage of entering into a unit rate-type contract is that work may commence earlier
because the bidding cycle is shorter and engineering does not have to be firm at the time of
placing the contract, there by permitting construction to start sooner.
The downside is that placing contracts on unit rate may involve both the client and
Contractor, and considerable time updating, pricing, and often re measuring the work and
agreeing on quantities.
4. Reimbursable Cost Contracts Where Necessary
Reimbursable cost contracts with fixed or percentage fees for “hands-on” work are usually
the last choice for clients and will be used only where there is little or no engineering
accomplished in the time available or in any other situation that makes a “cost plus”
agreement unavoidable.
Client contract managers will explore every possibility before entering into such an
arrangement. In the late 1970s, when the oil industry was still enjoying a major boom, this
policy was partially relaxed because many contractors were reluctant to accept any other type
of contract unless the risk was minimal.
In times of recession, the contractor may have to accept lump sum as the order of the day.
Guiding principles regarding reimbursable costs arrangements are as follows:
(a) The term reimbursable costs means those costs for performing the work under the contract
for which the contractor receives direct reimbursement from the client as opposed to indirect
reimbursement using fixed rates.
(b) Reimbursable costs include only those allowed under the contract.
(c) Reimbursable costs must have been incurred after contract award and be net costs actually
incurred and paid. Items that are provided for in fixed rates.
(d) Reimbursable costs exclude the cost of materials, services, and other
(e) Reimbursable costs exclude the contractor’s general costs of doing
(f) Costs not clearly identified in the contract as reimbursable costs business and profit that
are provided for in the fee. Require the client’s approval prior to committing the expenditures
to qualify as reimbursable costs.

5. Cost plus a Percentage Fee

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Using cost plus a percentage fee has advantages and disadvantages that are much the same as
those mentioned in the preceding text with the fee based on the cost of construction.

6. Start Cost Reimbursable with Later Conversion to Lump Sum

One of the main reasons for using a cost reimbursable format is the absence of design
engineering at the time of bid. However, if this is obtainable during the progress of the
project, the contract may be converted to lump sum if agreed by both parties (or guaranteed
maximum or target price and the like). Conditions will have been drawn up previously with
the possibility of conversion in mind.
Conversion of a contract requires that the contractor shall quote alternative terms for
undertaking the work so that the client has the option of accepting these terms or continuing
on the reimbursable basis
Conversion of a contract may, of course, be negotiated at any time provided the project is
sufficiently defined by then.
If the possibility of conversion is foreseen at the original inquiry stage, it is desirable to
provide for it in some special conditions spelling out, interlaid, the nature of the
alternative tender(s) required and the performance delivery and cost responsibilities that
would apply.

7. Provisional Contract Price Agreement

Given circumstances where a lump sum contract would be unsuitable and a cost-reimbursable
arrangement would be unacceptable, there is a device that would suit most requirements and
would result in a fair deal to client and contractor. This is the provisional contract price
agreement and it works as follows:
(a) Bidders will indicate their fixed costs at a cost as described in the following text. Because
of the possibility of front-end loading with finance charges (in situations where the successful
contractor would be obliged to lay out a considerable sum of money before its first progress
invoice is submitted), a proportion of the fixed costs is paid at the beginning of the contract
and in monthly increments thereafter.
(b) Quantities relating to each unit price line item are estimated (by the client) and bidders
will quote on these including profit. The total, when added to the fixed costs, is known as the
provisional contract price. Contract would actuate a sliding scale that allows for a reduction
in the total unit price and an increase in the fixed costs or vice versa.
(d) The logic behind this arrangement is simple and fair to both the client and contractor. It is
based on the premise that the award to the contractor of extra work of the same nature and
using only limited extra labor and equipment should result in lower unit price cost, but
possibly increased fixed costs.
For example, in a contract involving the installation of one mile of pipe in a trench, the client
instructs the contractor to lay an extra 500 yards of pipe and excavate accordingly.
The contractor will use approximately the same amount of men and equipment and it would
be reasonable to expect that the contract unit rate should be reduced.
It would also be reasonable to allow the contractor more money for its fixed costs in view of
the extra time involved in keeping its organization mobilized, and so forth.
(e) In the provisional contract price arrangement, the bidders are asked to quote on a sliding
scale the relevant increases or decreases in prices for more or less work awarded during the
progress of the contract. At the end of the contract the final amount to be paid or deducted is
calculated by application of the sliding scale.

8. Target Cost (Shared Overrun or under run)

The target cost is defined as the estimated total cost of the work under the contract agreement
and may be adjusted from time to time in accordance with the provisions of the contract. The

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estimated target cost may be calculated and agreed by a team of experts appointed by both
parties before the execution of the contract.
The method of payment for the works is on the basis of actual cost plus the fee but subject to
the target cost, as provided in the conditions of the contract.
(a) The target cost is $, subject to adjustment in accordance with the conditions of the
contract.
(b) The fee for the works is $, subject to adjustment in accordance with the conditions of the
contract.
(c) The contractor’s share of the difference between the actual cost and the target cost when
the actual cost is less than the target cost as provided in the conditions of the contract is -
percent.
(d) The contractor’s liability for the difference between the actual cost and the target cost
when the actual cost exceeds the target cost as provided in the conditions of the contract is -
percent.
(e) The fee for the works may be adjusted under the conditions of the contract.
(f) Actual cost means those costs incurred in the execution of the work and ascertained (find
out for certain) and admitted (allow to enter) to the actual cost less any credits received by the
contractor.
Actual cost will include, but not be limited to, salaries and wages, bonuses, allowances paid
to staff, and all similar payments relating to service in connection with the work.
Actual cost will also include purchases and hire of plant (equipment) directly connected with
the work, vehicle taxes, fuel, oils, lubricants, greases, and consumable items also used in the
conduct of the work. Construction; operation and maintenance of offices, laboratories,
workshops, stores, operatives’ camps, canteens, first aid, welfare, recreational, and sanitary
facilities; accommodation for the company’s and contractor’s staff required in connection
with the work; and operation of power and water supplies for the work.

C. Fair policies on recruitment and selection of applicants

RECRUITMENT AND SELECTION

Policy Statement
The recruitment and selection process is designed to be fair and consistent, reflecting the
ASA’s commitment to equality. We aim to achieve the best match between an individual's
knowledge, skills, experience and potential with the requirements of a role. The ASA
(American standards association) recognizes the positive value of diversity and aims at all
times to recruit the person who is most suited to the job and welcomes applications from
people of all backgrounds. This policy is intended to provide information and guidelines
about our approach to recruitment and selection. We will ensure that our recruitment and
selection process is fair and consistent, as we Endeavour to recruit the best candidate for any
given vacancy.
Recruitment Process
Line managers are responsible for recruitment with support from HR. Everyone involved in
the recruitment and selection process has a responsibility to make sure that this policy is
followed. We aim at all times to recruit the person who is most suited to the job and
welcome applications from people of all backgrounds. We also aim to give our employees

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the maximum opportunity to develop their careers within the ASA and actively encourage
internal applications.
Decision to Fill a Vacancy
The decision to create a new post or recruit into a current vacancy will be made by the line
director in consultation with the Director of Corporate Services and the Chief Executive.
Managers should discuss their requirements with their line director, and then submit their
application to HR for consideration. HR will seek final approval from the Chief Executive.
Recruitment Approval
The recruiting manager must complete a Recruitment Approval Form, outlining their
business case for recruiting. The line director in consultation with the Director of Corporate
Services and the Chief Executive will discuss the proposal and will agree the salary for the
role. Once approved, the recruiting manager must update or prepare (in the case of a new
role) a job description which should then be submitted to HR.
Advertising the Vacancy Internally
Temporary or permanent vacancies of three months or longer will be advertised internally
unless the vacancy has already been advertised within the last three months. The knock-on
effect of filling a position is often that an internal vacancy arises elsewhere, in which case the
resulting vacancy, if approved, will also be advertised, if appropriate. Vacancies will, where
appropriate, be advertised internally first as the ASA aims to encourage professional
development and career progression within the organization.
When advertising internally, an email will be sent by HR, including details on how to apply,
the deadline for applications and a copy of the job description. Vacancy details will also be
placed on the intranet. All applications should be submitted to HR.
Internal Applicants
We aim to give our employees the maximum opportunity to develop their careers within the
ASA and actively encourage internal applicants. An individual will normally have completed
their probationary period before being considered for an internal vacancy. As a matter of
courtesy and to encourage open communication within teams, applicants should let their
manager know that they have applied for or are thinking about applying for a different
internal position.
All applicants are shortlisted against the key requirements of the vacancy. Internal
applications will be judged against the key requirements of the role and are not guaranteed an
interview. If only one internal application has been received the full interview process will
still be followed.

Advertising the Vacancy Externally

Vacancies may be advertised externally alongside the internal advertisement, or afterwards if
internal recruitment has been unsuccessful. If we are advertising internally and externally at
the same time, this will be made clear on the internal advertisement.
There are two methods of external recruitment – by agency or by placing our own job
advertisement in a publication or online (direct recruitment). Directors need to approve the
method that is used in each case. As part of our commitment to equality and diversity, the
ASA encourages all applicants to complete the equality and diversity monitoring form. All
personal details are separated from the application form by HR before passing the

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applications to the recruiting manager for short listing. Therefore applicant’s details will not
be viewed by anyone involved in the decision making process. All external applicants are
required to complete an application form and submit their CV.
Agencies
HR will contact the agency with details of the vacancy. Applications will be forwarded to the
recruiting manager for short listing.

Direct Recruitment
Managers should draft the advertisement with support from HR. HR will contact the relevant
publication to make the arrangements for placing the advertisement. Most publications have
deadlines by which the booking and the copy must be received and therefore HR will require
at least two week’s notice prior to the date that the advertisement is requested to appear in the
publication. HR will make arrangements for the relevant details to be placed on the website
and will collate all applications that are received up to the closing date.
Selection
HR will submit the applications to the recruiting manager. Generally, all internal
applications and those received from an agency will be forwarded to the manager for
consideration. With direct recruitment, HR will conduct a sift to identify applicants who do
not have the right to work in the UK.
When making a selection, candidate’s skills and experience should be reviewed against the
job description. Valid reasons for not selecting someone should be based on whether the
candidate matches the criteria in the job description and on the strength of their application.
Interviews
Once the manager has shortlisted applicants, employees involved in the interview panel will
provide HR with preferred dates and times to arrange interviews. HR will arrange the
interview, either via the agency or directly with the individual, liaising with the relevant
manager for suitable times. All interviews must be conducted with a minimum of two
interviewers, one of which may be a member of the HR team.
When arranging external interviews, we will be as flexible as possible in terms of
accommodating times suitable to the distance that an individual has to travel. However, we
will not reimburse travel expenses for candidates coming for interview. Interviews should be
conducted using the Structured Interview Assessment forms, which can be updated by the
recruiting manager prior to interview if required. This ensures that interviews are conducted
fairly and consistently and provides us with a means of comparing candidates and justifying
our choices. It is important that we can show that we conduct interviews in a fair and
consistent manner should we need to provide evidence of why we did or did not select a
certain individual. Notes taken during the interview must be professional and relevant.
Interview forms need to be returned to HR for filing once the recruitment has been
completed.
Where appropriate, written tests may be used as part of the interview process. Managers
should discuss the content of any written test with HR before the interviews commence. A
second interview may be held if deemed necessary.
Appointment Approval Form

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Once a decision has been reached, the recruiting manager should submit an Appointment
Approval Form, including the details of the salary and start date, which will need to be signed
off by both the line Director and the Chief Executive. HR can then proceed with making the
offer.

Making the offer

With internal recruitment, the recruiting manager makes the offer, with support from HR if
necessary. This includes details of the salary and likely start date. With external recruitment
HR will make the offer, including salary and start date, either directly to the candidate or via
the agency.
If the candidate wishes to negotiate the salary HR will inform the recruiting manager who
will make the decision to offer more money or not to the candidate in line with the salary
agreed by Directors.
To comply with the provisions of the Asylum and Immigration Act 1996, successful
candidates will be asked to provide evidence of their entitlement to work in the UK before an
offer of employment can be confirmed. The ASA does not hold a sponsor license and,
therefore, cannot issue certificates of sponsorship.
Once the offer has been accepted
With internal recruitment, a formal letter, detailing any changes to the terms and conditions
of employment, will be written by HR. The start date will be decided between the recruiting
manager, the previous manager and HR.
Internal moves come with a six month (three months for Admin staff) review of
performance. An exit performance review, which will feed into the annual review, should
be completed by the previous manager. With external recruitment, once the offer has been
accepted HR will send a formal offer letter outlining the terms and conditions of employment
and will follow up on the references provided. HR will agree a start date and will advise the
relevant parties (reception, facilities, I.T.) of the date that the new starter will be joining.
Rejecting Applicants
With internal recruitment, the recruiting manager should provide constructive feedback in
person where possible, with guidance from HR. With external recruitment HR will reject
unsuccessful applicants directly (by email) or via the agency.
Maternity cover and other acting positions
When recruiting to cover a maternity position, we should aim to have filled the position with
a week’s handover period in place. Timescales for the recruitment process should be based
on the likely date that the maternity leave will begin and should also consider that the
successful candidate may not be available to begin immediately.
When filling the position internally, the offer will be for an acting position, with the
expectation that the individual will return to their original role once the maternity cover ends.
If an individual does not return at the end of her maternity leave, the role will be re-advertised
as a permanent position (if approved by directors), which the person in the acting position
will be able to apply for if they wish. This also applies to all other Acting positions in the
company.

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 When filling the position externally, the offer will be for maternity cover short-term contract
position.
In both cases the initial offer will be made for a period of up to six months, with the
possibility of being extended should a longer maternity leave be taken.

Assistance with recruitment and interviews

Employees and managers who are regularly required to interview may be required to attend
interview skills training. The HR team can also advise on some of the legislative aspects of
recruitment and selection if required.
We also aim to support individuals who are applying for an internal position. Information
about how to prepare for your interview can be obtained from the HR team.
D. Policies and procedures for employment termination and redundancy
Termination of Employment Policy

Pentreath Ltd is committed to achieving a working environment which provides equality of

opportunity and freedom from unlawful discrimination on the grounds of race, sex,
pregnancy and maternity, marital or civil partnership status, gender reassignment, disability,
religion or beliefs, age or sexual orientation.
What is meant by termination of employment?
For the purposes of this policy and procedure, termination of employment means the ending
of an employees’ contract of employment by Pentreath Ltd by giving a minimum notice
period in line with the employees’ contract of employment.
If the employee decides to leave Pentreath for any reason this policy and procedure does not
apply – instead the employee would be required to give notice as set out in their contract of
employment (a copy of which will be on their personnel file). A shorter length of notice may
be granted subject to the agreement of both parties.
This policy and procedure includes dismissals for the following reasons:
 Non – renewal of a fixed term contract
 Capability (see capability policy)
 Ill health (see management of absence policy)
 Conduct (see disciplinary policy)
 Redundancy (see redundancy policy)
The termination of any employee’s contract of employment, for whatever reason, must be
done without prejudice and with care.
This policy should be read in conjunction with the Equality and Diversity and Exit Policies of
which it forms part.
What are the key principles of this policy and procedure?
 The policy and procedure features general good practice and complies with
employment legislation. The Employment Rights Act 1996 (as amended), The Fixed
Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, The
Employment Act 2008.
 Managers must seek advice from the Human Resources Department at all stages of
the process.
 Members of staff have the right to be accompanied by a trade union representative or
a colleague not acting in a legal capacity.
 Each step and action of the procedure will be taken without reasonable delay.
 The timing and location of meetings will be reasonable.
 Both managers and members of staff will be able to explain their cases at meetings.

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What are Pentreath’s responsibilities?
 Pentreath must ensure that all dismissals are fair. The reason for dismissal must be
one allowed by law. These reasons are:
a. Capability or qualifications of the employee.
b. Conduct of the employee.
c. Redundancy.
d. Contravention of a duty or restriction prohibiting the continuation of employment.
e. Some other substantial reason which justifies the dismissal, for example the non-
renewal of a fixed term contract.
 In addition Pentreath must act fairly by:
a. Having procedures that encourage staff to improve where possible, rather than just
imposing a sanction.
b. Informing a member of staff about the complaint against him/her and giving the
employee an opportunity to state his/her case before reaching a decision.
c. Ensuring that employees know that they have a right to be accompanied at meetings.
d. Not taking disciplinary action until the facts of the case have been established.
e. Not dismissing a member of staff for a first disciplinary offence, unless it is a case of
gross misconduct.
f. Always giving an employee an explanation, in writing, for their dismissal.
g. Giving the minimum notice period as stated in the employees contract of employment
unless there is a case of summary dismissal for gross misconduct. Should Pentreath
Ltd not wish the employee to work their notice period for any reason, then payment in
lieu of notice should be paid? This is paid net of tax, National Insurance and any
other legally authorized deductions.
h. When a contract of employment is terminated the employee’s leave entitlement must
be calculated and payment or deduction must be made accordingly – if the employee
has not taken enough leave then the remaining leave will be added to the final pay, if
the employee has taken too much leave then pay will be deducted in respect of days
taken over that due.
Manager’s responsibilities
 The manager will discuss the matter with the Chief Executive who will ultimately be
responsible for terminating the contract.
 If the dismissal is because of capability or ill-health the manager will follow the
procedure set out in the capability policy and procedure and/or the management of
absence policy.
 If the dismissal is because of conduct, the manager will follow the disciplinary policy
and procedure.
 If the dismissal is due to the non-renewal of a fixed term contract (see Fixed Term
Contract Guidance), the manager will contact the Human Resources Officer at least
two months before the expiry of the contract to ensure that the employee receives
adequate notice and the correct process is followed. Further to this:
o At least one month before the contract ends the manager will write to the
employee explaining the circumstances why the contract has not been renewed
and will invite the employee to a meeting to discuss the termination of the
contract. The employee will have the opportunity to express their views and
discuss any suitable potential employment opportunities within Pentreath.
o After the meeting, the manager will inform the employee, in writing, of the
outcome, the reasons and of the right to appeal.

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  If the dismissal is due to redundancy, the manager will follow the process set out in
Pentreath’s Redundancy policy.

Employees’ responsibilities
 The employee must make every effort to attend the meeting that their manager
arranges to discuss the termination of their contract.
 If the employee wishes to appeal, they must use Pentreath’s appeal process.
 The employee must take reasonable steps to attend an appeal hearing.

Company Property
On the final day of employment all company property in the employee’s possession must be
returned. Any IT equipment such as laptops, memory sticks etc should be returned to the IT
Officer, Petty cash floats (with receipts) and company mobile telephone should be returned to
the Finance Manager. Any other company property such as client files, keys, diaries etc
should be returned to the Human Resources Officer or Line Manager.
Failure to return company property could result in the incident being reported to the Police.

Reference for Leavers

It is not Company Policy for line managers or other staff to provide references for employees
(current or past). Employee references are produced by the Human Resources Officer. This
ensures that references are fair, protected from personal bias, and legal. There may be
circumstances where a Line Manager may wish to provide a reference, however this would
not represent the Company, it could only be used as a personal reference and must clearly
state that it is a personal reference.

Door Security Code

When a member of staff leaves the company’s employment then the door security code must
be changed. This must also be changed on a regular basis to ensure that the security of the
building is not breached. (see Data Security Policy).

Review
This policy and procedure will be reviewed annually or earlier should Employment
Legislation alter.

 DISPUTE RESOLUTION PROCESS

Type of Claim
When an owner brings a lawsuit or other claim for breach (an act of breaking a law,
agreement) of a construction contract there are two different ways of determining
construction contract damages.
The first, and most common, is that the owner can recover the amount of money it will take
to repair defects or make the structure conform to the original plans and specifications for
work and materials. In other words, the owner recovers damages in an amount needed to fix
the home and make it the way it was supposed to be under the contractor agreement.
There's an exception to this rule, however. If the contractor can prove that to tear out work
and repair defects would be unreasonable economic waste, the owner's damages are
calculated another way. In that situation the owner is entitled to recover the difference in the

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value of the property as it exists and the value it would have had if the work had been done
properly.
For example, you can require that disputes be resolved in arbitration, which is usually faster
and less costly than litigation. (Usually, there is 10% retention to be deducted from the total
project cost)
Types of Disputes
A few different areas of dispute arise in these situations:
Poor work man ship or defective materials.
1. An owner may object to the quality of workmanship, either by the general contractor or by
a subcontractor hired by the general contractor, or to the quality of materials used.
2. It will be much easier to resolve this kind of dispute if the contractor agreement is very
clear in specifying what materials to use and how the project is to be done. If the construction
contract is vague, and says something like, "good quality materials," the owner may find that
his or her idea of good quality is not the same as the contractor's and it will be very difficult
to prove what the contract meant.
Failure to complete on time
If the contractor agreement specified an approximate time for the completion of the
project, the general contractor negligently failed to complete the project on time, and the
owner suffered damages because of the delay, the owner may claim compensation. An
amount of damages can be agreed upon at the time the contractor agreement is signed to
cover this kind of breach on the part of the contractor. (This is called liquidated damages.)
Damage to the property
A contractor may cause damage to the property while doing the project that isn't
covered by the contractor's insurance. This is why it's important to make sure the general
contractor has up-to-date liability insurance.

Dispute resolution
 International commercial arbitration, most frequently under the auspice of the ICC
(international chamber of commerce), is the preferred choice of the supply side of the
industry for the final resolution of disputes arising from an international project.
 Few contractors or designers wish to be subjected to the jurisdiction of a court, unless
they understand, at least to some extent, the rules that will be applied, the language
and the timetable.
The other advantage of international arbitration is that an award can be enforced under the
New York Convention 1958 in a wide range of countries
 Investment arbitrations under the International Centre for Settlement of Investment
Disputes (Icsid) have become more widely used.
 Icsid is only implied where there is a bilateral investment treaty or a multilateral
investment treaty between the countries of the two parties, one party being a state and
the other a private company.
 However, the term "investment" has been interpreted broadly and Icsid can provide
another independent and enforceable dispute resolution procedure that is available for
international construction projects.

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  Job-site dispute resolution procedures are often available in major projects, through
the use of dispute boards (more common in North America) or the FIDIC approach of
adjudication boards.
 The latter comprise three members and should be appointed at the outset of the project
in the same way as a dispute review board.
 However, a dispute adjudication board makes a binding decision in respect of any
disputes that are referred to it while a review board makes a non-binding
recommendation.
 Decisions can be made during the course of the project that are binding on the parties
unless and until advised in arbitration.
 A single person dispute board can be used in smaller projects, or a standing panel with
a number of people on it could be used for a whole group of projects carried out by a
common employer with perhaps different contractors.
 Finally, mediation now features more frequently internationally. More than one-third
of construction disputes in the UK High Court settle as a result of mediation, and the
process is becoming more widely encountered throughout Europe, the Middle East
and Asia.

LO3. Administer the regulations relating to OHS, welfare, workers

compensation, noise abatement and working hours
A. SAFETY PROGRAM
Safety Program
A Safety Program is a plan or outline of activities conducted to promote safety consciousness
among management and workers in work places in order that accidents and/or illness can be
eliminated or minimized to the lowest reducible level.
The Importance of a Construction Safety Program
• Benefits of a construction safety program;
 Allow workers to go home safely at the end of the work day;
 Increase productivity;
 Provide higher profit margin for the company;
 Provide lower insurance costs;
 Enhance the company reputation;
 Offer better personnel policy;
 Support compliance with the law;
• A study reveals that an effective safety program can save $4 to $6 for every $1
invested
• Factors that contribute to the cost of accident are grouped as direct cost, indirect
cost and intangible cost;
 Direct cost includes medical treatments for injured workers, temporary wage
replacement, and awards for permanent impairment;
 Indirect costs are those not covered by the insurance which includes items as
lost time by injured workers and efficiency costs associated with breaking up
and reforming crews;

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  Intangible costs include such things as worker morale and company
reputation;
• In most cases, there is a line item in a project budget to account for the cost of
safety prevention, but there is no line item to account for accidents, making
accidents very costly to the company;
• Since the cost of accident is not accounted for in the budget, then the only place for
the cost is the profit;
The Supervisor’s Safety Responsibilities and Activities
• The supervisor must be trained in safety, especially as it relates to the specific
activities in their work area ;
 They must have their own safety program and be aware of other safety
programs and requirements relevant to their work area, including government
safety requirements, those of the client, those of their own company, and those
of the specific job;
• The supervisor is responsible for developing and implementing their own safety
program, compatible with all of those in the hierarchy above them;
 They are responsible to train their workers continuously, both formally and
informally;
 Formal training includes sending a worker to a class or requiring participation
in a periodic safety discussion;
 Informal training happens when the supervisor identifies an unsafe behavior or
condition and discuss it with the workers involved;
 The supervisor is responsible for enforcement of the safety program;
Safety Policy
A document stating the top management’s safety objectives, the level of safety that can be
performed by the organization, and the responsibility of the organization’s members for
executing the policy and ensuring safety.
GENERAL SAFETY POLICY - A brief statement of the company’s commitment to safety.
Sample of Safety Policy
“ABC Construction Company is committed to provide every employee to work under the
safest possible conditions. To this end, every reasonable effort will be made in the interest of
accident prevention, fire protection and health preservation.”
Assignment of Responsibility
To operating officials, safety directors, supervisors, health and safety committees.
Maintenance of Safe Working Conditions
• operational methods revisions to eliminate risks
• mechanical guarding
• isolation of operation storage or warehouse
• use of personal protective equipment
• proper ventilation
• proper use and maintenance of tools and equipment
• sufficient and proper lighting
• sanitation
• fire control measure

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 Maintenance of Safe Working Conditions
Safety Conditions can be appraised by keeping track of the following:
a. Regular routine inspection
b. Special inspection and
c. Follow-ups to see if recommendations for health and safety maintenance are met or
carried out.
Establishment of Safety Training
Conduct of training courses should be both for supervisors and employees.
Kinds of Training courses:
a. For new employees
b. On-the Job-Training
c. Refresher Courses
d. Supervisory Training
e. Participation in the Safety Work, off the job, workshop, conferences
An Accident Record System
Accident analysis reports on injuries measurements of results
a. Provide the safety director with the means for an objective evaluation of his program.
b. Identify high-injury rate.
c. Provide information on the causes of accidents which contribute to high injury rates.
Medical and First-Aide System
Treatment of injuries periodic health examinations.
Medical and First-Aide System
Pertinent Activities:
a. Conducts pre-employment physical examinations for proper physical check up and
proper placement of workers.
b. Conducts periodic physical examinations of workers exposed to harmful of toxic
substances.
c. Arrange surveys of new operations or processes to know what exposures are
detrimental to health that may be present.
d. Establishes a system for assigning injured workers on the kind of job they can handle
for their condition.
Acceptance of Personal Responsibility of Employees
Training – Maintenance of Interest Employees obligations for a safety program to succeed:
a. Observe safe practices and procedures.
b. Have regard at all times for the safety of fellow employees.
c. Report to proper authorities any unsafe condition that may call his attention.
d. Contribute his ideas, suggestions and recommendations for the improvement of
working conditions to achieve maximum safety.
e. Participate actively, whenever appointed as full pledge member of the health and
safety committee.

Some Promotional Methods

Safety Meetings

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 a. Executive and Supervisor’s Meeting to formulate policies, initiate or plan
special safety activities.
b. mass meeting c. Departmental Meeting d. Small Group Meeting
Signs for safety equipment

Emergen
cy

Federal Workers' Compensation

Federal workers compensation laws are administered by the Department of Labor's Office of
Worker's Compensation Programs. The four major federal programs are the Federal
Employee's Compensation Program, Long shore and Harbor Workers' Compensation
Program, Energy Employees Occupational Illness Compensation Program and the Federal
Black Lung Program. These programs provide benefits to federal workers injured or disabled
on the job and certain dependents. Benefits range from medical treatment and wage
replacement to vocational rehabilitation. For workers injured on the job while working for
private employers or state and local governments, the Department of Labor recommends
contacting a state workers' compensation board.

The Federal Employees Compensation Act provides coverage for more than 3 million federal
employees and postal workers worldwide. The Division of Federal Employees' Compensation
adjudicates claims, pays medical bills and compensation, and assists injured workers in
returning to work. In fiscal year 2009, almost 130,000 new cases were created. In the same
year, approximately 253,000 workers and survivors received benefits.
Long shore Workers' Compensation
The Long shore and Harbor Workers' Compensation Act provides benefits similar to those
for other federal employees. It covers workers traditionally associated with maritime work,
such as long shore workers, shipbuilders and harbor construction personnel. The Long shore
Act extensions also include workers under the Defense Base Act for federal government
employees at overseas U.S. military bases and contractors working outside the United States
on certain government projects. Offshore oil rig workers on the Outer Continental Shelf are
also covered under an extension of the Long shore Act.

o Energy Employees Compensation

The Energy Employees Occupational Illness Compensation Program began in 2001 and was
expanded in 2004. It provides lump-sum compensation and health benefits to Department of
Energy nuclear weapons workers. These workers include current and former employees,
contractors and subcontractors. If a worker is deceased, certain survivors receive lump-sum
payments.

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 o Black Lung Compensation

The Division of Coal Mine Workers' Compensation administers claims under the federal
Black Lung Benefits Act. Coal miners "who are totally disabled by pneumoconiosis arising
out of coal mine employment" receive compensation, according to DCMWC information
published on a Office of Workers' Compensation Programs website. Eligible miners also
receive medical care for treatment of lung diseases related to pneumoconiosis, commonly
known as black lung disease. Compensation is also provided to survivors of coal miners
when death is attributed to black lung disease.

o Compensation Information Disclaimer

An information disclaimer on the Office of Workers' Compensation Programs longshore

compensation website sums up the Department of Labor's information disclaimer for federal
workers' compensation. It cautions that information provided "should not, under any
circumstances, substitute for a party's own research into the statutory, regulatory, and case
law authorities on any given subject addressed." Information provided is a "tool, not a final
authority, and should not be cited or otherwise considered an authoritative

LO 4 Implement rehabilitation arrangements

Rehabilitation for Injured Employees
Introduction
This procedure outlines the management process to ensure the prompt, safe return to work of
injured employee under the Workers Rehabilitation and Compensation Act 1986.
Roles and Responsibilities
Line Managers and supervisors are responsible for: completing and submitting online
OHSW Hazard or Incident Report within 12 hours of all injuries that have resulted, or are
likely to result in lost time as documented in the online
OHSW Hazard or Incident Report
• notify OHSW & IM Services of an injury/illness if time is lost and an employee is unable to
submit an Incident Report or claims documents
• completing and submitting online OHSW Hazard or Incident Investigation Report as soon
as practicable and within designated time lines
• maintaining contact and communicating with the injured employee and the Rehabilitation
Consultant
• ensuring copies of injured employees WMC’s, signed Record of Attendance (if an
employee is working partial hours) is forwarded to OHSW & IM Services within 24 hours
• maintaining a return to pre-injury duties as the primary goal of rehabilitation and by fully
participating in the rehabilitation and return to work process
• making available safe and suitable alternative duties tailored to the employee’s medical
restrictions
• monitoring progress of the injured employee’s return to work attending meetings convened
by the Rehabilitation Consultant to prepare rehabilitation and return to work plans /

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programs resolving issues associated with an employee’s rehabilitation in a timely and
effective manner ensuring the injured employee only carries out duties as specified by their
rehabilitation plan ensuring other employees in the injured employee’s work area support
their return to work ensuring that other employees do not work unsafely or are not placed
under increased stress or pressure as a result of a rehabilitation program or rehabilitation and
return to work plan for an injured employee ensuring an accident investigation is conducted
within 5 working days of the incident occurring and compete the online investigation form
OHSW&IM PROCEDURE
• Provision of job training for alternative work arrangements if a need is identified
• maintaining confidentiality about personal information that the employee does not want
disclosed
• completing the online Injury Management module for Managers/Supervisors
Responsibilities of Employees:
• Report work-related injuries / illnesses to your manager / supervisor within 12 hours after
the occurrence, and participate in the incident / injury investigation process
• Promptly provide a Work Cover Medical Certificate (WMC) to your employer to cover all
time lost from work within 24 hours of your medical appointment
• attend medical appointments reasonably made for you
• Actively participate in an established rehabilitation and return to work plan / program with
the agreed primary goal being a return to work
• accept duties and restrictions specified for the duration of the program or plan
• provide a copy of your Work Cover Medical Certificate(s) to your supervisor for the
duration of the incapacity, that is, from the time of incident to a return to work to pre-injury
duties. provide a copy of your WMC’s to OHSW&IM Services (via fax 8302 1380 or
emailed to WMC@unisa.edu.au) after medical reviews if you are undertaking modified
duties until your medical practitioner recommends that you can return to pre-injury
workplace duties
Ensure you have leave approved by your supervisor and notify OHSW&IM Services for any
leave taken whilst you are receiving income maintenance payments avoid disruptions to
return to work activities by arranging, where possible, appointments outside agreed working
hours if you are working normal hours abide by the agreed medical restrictions as outlined
by your treating medical practitioner at work and at home notify your supervisor and the
Rehabilitation Consultant immediately if you are unable to attend for work inform your
supervisor of the circumstances if you need to leave work before completing the nominated
hours prescribed by your treating medical practitioner. You should contact the Rehabilitation
Consultant within 24 hours of the difficulties or aggravation to enable early corrective action
to be taken. A change to duties may be necessary and the treating medical practitioner
contacted and the rehabilitation plan altered ensures that you do not provide any false or
misleading information about a claim (NOTE: it is an offence to provide false or misleading
information about a claim)
The Rehabilitation Consultant
The Rehabilitation Consultant: is a person employed by the University to coordinate the
management of workplace injuries and support injured employees throughout the

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rehabilitation and return to work process. The role may be achieved through, but not limited
to the following functions and responsibilities:
• ensure that contact is made with injured employees to assess the initial need for
rehabilitation
• inform employees of the rehabilitation process and procedure to ensure they are aware of
their rights and responsibilities
• implement rehabilitation and return-to-work strategies
• coordinate the management of workplace injuries by liaising with stakeholders including
line managers, supervisors, OHSW consultants, HR managers, doctors and health
professionals to ensure a cohesive approach to rehabilitation
• provide effective case management and liaise with all involved stakeholders, e.g. Injured
employee, primary treating doctor, line manager/supervisor, claims manager, OHSW & IM
Manager and vocational providers
• facilitate and provide advice about modification to work areas or equipment to stakeholders
for an employee’s safe return to work
• coordinate and consult injured employees about issues and their capacity to return to work
and ensure that they are involved in decision-making about their rehabilitation
• ensure that recovery and return to pre-injury hours and duties is the goal of rehabilitation
until that goal is deemed not achievable by medical experts
• involve employees in the development of a return to work plan and assist the line
manager/supervisor to identify appropriate duties that comply with medical restrictions.
This may involve meeting with employees and involved parties to discuss their capacity
ensure that rehabilitation and return to work plans (RTWP) and programs take acof individual
needs, particularly recognition of cultural or linguistic background. Afor an interpreter if
required keep personal information confidential support employees throughout the
rehabilitation process to undertake meaningful in a safe and appropriate manner organize and
conduct case conferences with medical experts develop and review RTW Plans and identify
hazards and recommend strategies remedial action that is necessary to prevent other injuries
implement the provision of suitable alternative duties if an employee is unable to their
substantive position explain the Complaint Management Procedure if an employee is
dissatisfied with rehabilitation or a claim decision contribute to quality Injury Management
Systems and the IM Action Plan
• establish and maintain case files and relevant documentation in accordance with
Work Cover Performance Standards and ensure that they are kept in a secure location
External Rehabilitation Providers are responsible for:
• developing and implementing rehabilitation programs and rehabilitation return to work
plans for injured employee in accordance with legislative requirements, UniSA’s needs and
this procedure
The need for rehabilitation
On receipt of an incident report the Rehabilitation Consultant will assess the need for
rehabilitation. A record of the assessment will be placed in the injured employee’s
rehabilitation file.
Rehabilitation may commence if:
• An injured employee is absent from work or likely to be for a period of 5 days or more or;

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• A request has been made for rehabilitation assistance (eg by the injured employee, medical
practitioner or supervisor) or;
• Significant changes are required to duties or hours.
The Rehabilitation Consultant may commence a rehabilitation program prior to a claim being
determined under the provisions of Sec 26(4) of the WR&C Act.
If rehabilitation commences prior to the determination of the claim, it is not an admission of
liability or indicative of the acceptance of the claim.
The Rehabilitation Consultant may decide to engage an external rehabilitation provider in
some circumstances.
Obtaining Medical Information
The Rehabilitation Consultant may obtain relevant medical information with regard to the
nature of the injury / illness, possible prognosis, treatment plan and capacity for work
following written authorization from the injured employee.
The injured employee will be required to sign an “Authority to Exchange Information” form.
Developing a Rehabilitation and Return to Work Plan or Program
Rehabilitation programs may be provided for an injured employee whose claim has not been
determined or where a claim is accepted but an injured employee has no immediate prospect
of returning to work.
Rehabilitation Programs may also be used when a claim has been rejected and the decision is
in dispute. In these circumstances the rehabilitation consultant may develop a rehabilitation
program or rehabilitation return to work plan Form OHSW 43 or OHSW 44.
Rehabilitation and return to work plans are developed in consultation with an injured
employee who is incapacitated for work by a compensable disability. The objectives of
rehabilitation are the safe return to work of the injured employee, at the earliest practicable
time, to suitable employment at a level of remuneration which is as close as practicable to
their pre-injury remuneration, in accordance with the WR&C Act.

The rehabilitation and return to work plan / program will be based on current medical advice
and prepared in consultation with the injured employee and their supervisor or manager.
Both parties are required to sign the return to work plan / program. If the injured employee
does not wish to sign the rehabilitation and return to work plan / program this should be noted
in the file including the injured employee’s reason for refusing to sign the plan / program.

Provision of Duties
Safe, suitable duties will be provided for an injured employee who participates in a
rehabilitation and return to work plan/ program. The identification of suitable duties for an
injured employee should have regard to the skills, capacity and previous experience of the
employee, and the various options available for modification of duties, hours or working
conditions.

The Rehabilitation Consultant will arrange to meet as soon as practicable with the employee
and their immediate supervisor to document mutual expectations. A referral to an external
expert for advice may be made in some circumstances.
Relocation / Redeployment

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Every effort shall be made to provide safe and suitable duties within the University. Where
this is not possible, consideration may be given to job seeking options.
The Rehabilitation Consultant will facilitate a process whereby a clear vocational goal is
identified for all employees participating in rehabilitation (based on the WR&C Act and
Work Cover guidelines).

In seeking to redeploy an injured employee within the University, the Rehabilitation

Consultant will liaise with the Redeployment Consultant.

Not Participating in Rehabilitation

Where an employee refuses to undertake suitable duties for which they are fit, or fails to
fulfill an obligation of a rehabilitation and return to work plan / program the Claims Manager
may recommend that income maintenance payments cease.
Confidentiality
All information related to injured University employees will be kept confidential and made
available only to those specifically authorized to access it.
An authorization form from the injured employee will be required for the Rehabilitation
Consultant to exchange medical information.
The Rehabilitation Consultant will ensure that rehabilitation files are stored in a secure
location.
Access to rehabilitation files will be restricted to the following:
• Rehabilitation Consultant
• External Rehabilitation Providers engaged to coordinate the rehabilitation of specific cases
• Human Resources Director
• OHSW & IM Manager
• Work Cover approved evaluator/auditor

Rehabilitation Files
Rehabilitation files will be established where a need for rehabilitation has been identified.
Rehabilitation Files may contain:
• A signed authority to exchange medical information
• Copies of prescribed medical certificates
• Medical and other reports
• Rehabilitation programs and / or rehabilitation return to work plans
• Comprehensive case notes
• Correspondence
Linguistic Diversity of Workforce UniSA recognizes the existence of employees in the
workforce who use English as a second language. The Rehabilitation Consultant will take all
the necessary actions to identify the needs of employees who may require access to
interpreters or translators.

Workers Compensation & Rehabilitation Complaint Management Procedure

If you are dissatisfied with any aspect of your claim or rehabilitation you should immediately
discuss your concerns with the Claims Manager, Rehabilitation Consultant or OHSW&IM

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Manager. You can also seek independent advice or representation from your union or
solicitor if the issue cannot be resolved. A copy of the Workers Compensation and
Rehabilitation
Complaint Management procedure can be found on the OHSW & IM website.
Rehabilitation Case Closure
A Rehabilitation file shall be closed when:
• The injured employee member has made a full return to work or
• There has been an agreed outcome or
• When a decision has been made to cease rehabilitation
A rehabilitation closure report form OHSW 67 will be completed for the closure of
rehabilitation and placed in the employees rehabilitation file.
LO5 Comply with Taxation and Insurance Requirement s of government
A. TAXATION
Definition: -
 An amount of) money paid to the government, which is based on your income or the
cost of goods or services you have bought.
General application of the tax to individual building contractors
The operations of building contractors may be considered fewer than three classes of
contract and five operational categories.
The classes of contract are: -
Lump-sum
Cost-plus, and
Time and material
Presents a synopsis of the tax application of the various construction contract as they
apply to United States construction contractors and construction contractors other
than United States construction contractors.
The five operational categories are: -
The contracting for the erection and installation of a building on land
The repair and/or remodeling of existing building
The sale of building with out installation, i.e., packaged prefabricated buildings in
“knock down” condition
The erection, installation, and leasing of buildings
The sale and installation of machinery and equipment
Either the sales or use tax applies with respect to tangible personal property used in the
above operation on lump-sum and cost-plus construction contract as follows
 Contract for the erection and installation of building on land regulation 1521
1. As to tangible personal property which is defined as “fixture” the tax is due on the
cost of such material to the contractor.
2. As to tangible personal property which is defined as “fixtures” the tax is due on the
retail selling price of the fixture.
 Property which is used in the repair or remodeling of existing buildings.
(regulation1521) tax applies to the cost of the material used in remodeling or repair
work and the selling price of the fixtures.
 Sales of packaged prefabricated buildings

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 1. The tax applies to the total sells price of the small prefabricated building, such as a
shed or kiosks, which are furnished and installed but not physically attached to real
property by the seller. When such buildings are required to be physically attached to
real property, they are considered to be construction contract.
2. A contract to furnish and install a prefabricated or modular building similar in size
to, but which is not, a relocate able class rooms is a construction contract whether the
building rests on place by its own weight or is physically attached to reality.
 The erection, installation, and leasing of buildings. Where as a contract is made for
the erection and installation of a building on the customers land and the payment is
received on the basis of an agreed number of lease installment, the tax applies to the
fixtures and materials in the same manner as a regular construction contract for the
erection and installation of a building.
 Sale and installation of machinery and equipment. Tax applies the gross receipts
from the sale of machinery and equipment furnished and installed by a construction
contractor. If the contract calls only for the furnishing and installation of machinery
and equipment, tax applies to the total contract price less those charges excludable
from gross receipts under section 6012 of the revenue taxation code. As to machinery
and equipment in United States Government contract.
A.Insurance
Insurance is a special type of contract between an insurance company and its client in which
the insurance company agrees that on the happening of certain events the insurance company
will either make payment to its client or meet certain costs.
The reason we call an insurance company special type of contract is because there are certain
characteristics that relate to an insurance policy that do not relate to most other contracts. In,
particular an insurance policy is a contract of “utmost good faith”. This means that the
insurance company and the insured person have certain very important obligations that do not
exist in normal contractors. These include the duty of disclosure and the duty not to make any
false statement in relation to a claim. This duty of good faith is why insurance companies can
refuse to pay your claim if you have not told the insurance company all material information
when you applied for or renewed the insurance. Some of the obligations that exist in an
insurance contract can be very onerous the insured person, and so over the years, the
government has regulated the insurance industry. This is considered under the regulation tab.
The special nature of the insurance contract also places very important obligations on the
insurance company. The insurance company has to act in good faith, and a failure to do so
can expose the insurance company to special types of damages. In addition, because many
insurance policies are contracts to provide comfort in stress full times, a failure by an
insurance company to honor its obligations can result in general damages being award by the
court.
Because an insurance policy is a type of contract is a type of contract, it is important to
remember that the duties of the insurance company and the insured person are largely
contained within that contract, often called a policy. Ask the insurance company for a copy of
the policy if one has not been provided to you, and read the policy carefully. Avoid
generalization. Whilst many insurance policies are similar, none are exactly the same, and
slightly different words in an insurance policy may have different meaning. Many people

Page 35
express opinion about insurance policies or what should or should not be covered with out
actual reading the policy, and must be avoided.
As well as the insurance contract it self, the law (called common law by lawyer) imposes all
kinds of special obligation on insurer and insured, and so when considering an insurance
contract, it is important to do so in the context of the common law obligations that are
imposed upon insurance companies.
Risk transfer mechanism that insures full or partial financial compensation for the loss or
damage caused by event beyond the control of the insured party. Under an insurance contract,
a party (the insurer) indemnifies the other party (the insured) against a specified period,
provided a fee called premium is paid. In general insurance, compensation is normally
proportionate to the loss incurred, where as in life insurance usually a fixed sum is paid.
Some types of insurance (such as product liability insurance ) are an essential component of
risk management and are mandatory only against tangible losses. It can not insure continuity
of business, market share, or customer confidence, and can not provide knowledge, skill, or
resources to resume the operations after a disaster.

o Types of insurance
Based on today’s life style the list of types of insurance is increasing day by day. You will
find a lot many numbers of new insurance policy with you might have not heard before. One
of the most important and compulsory insurance vehicle owners: third party insurance. The
main types of insurance available in the market are:
1. Life insurance: - in this policy the insurance companies pay in case of the demise of
the policy holder or at the time of the maturity of the policy. Now a day a new policy
has been launched by insurance companies in which you will be covered under the
insurance policy even after the maturity of the policy.
2. Property insurance: - this insurance helps you to prevent the looses against theft,
fire, burglary or any natural calamity like earth quake, flood etc. based on the point
mentioned in the policy.
3. Health insurance: - health insurance consists of a package of various types of
insurance related to health. For example medical insurance is one of the major part of
health insurance how ever in most of the cases, Dental issues are not covered in this
policy so there is another Dental insurance policy which covers dental problems and
is also a part of health insurance. The sub category of heath insurance also involves
the injuries of accident at work place insurance benefits.
4. Auto insurance: - any financial loss due to accident of a vehicle is covered under the
auto insurance policy. Some times the expenses on the medicines for treating injuries
and all other medical expenditure are also covered under this policy.
5. Travel insurance: - loss of personal belonging while traveling, medical coverage,
and delays in the travel are all parts of the travel insurance policy.
6. Insurance at Amusement point: - this is one of the new kind of insurance policy
(not very popular in India) where in you are insured against the equipment that you
are using at the amusement joint. For example if you are using boats for an
independent boat ride, then they will charge you with some extra money for an
property loss (say $5) and in case of any property damage you will not be liable to
pay any amount required to repair the damaged property.
7. Credit insurance: - this type of insurance pays the loans of the policy holder in case
of any accident of the policy holder or job loss or death. A type of insurance often

Page 36
 bought by mortgagors in which the amount of the policy matches the loan balance at
any given time; designed so that the loan will be paid off in full in the event of death.

Credit insurance may refer to:

 trade credit insurance purchased by businesses to insure payment of credit extended

by the business
 payment protection insurance purchased by consumers to insure payment of credit
extended to the consumer
 credit derivative financial instrument or technique designed to separate and then
transfer the credit risk of an underlying loan
8. Third party insurance: - these types of insurance cover damages caused by you
(first party) to others (third party).
LO 6. Administer all obligations and observe fair trading practice
 Trade practice

Taiwan Complains To Apple over 'China Province' Tag

Taiwan lodges a complaint with Apple over new iPhone and computer operating systems that
describe the island as a province of China....
Commentary

Five Emerging Trends Impacting Asian Manufacturing

Eighteen years ago, I was working on my PhD in Organization, Strategy & International
Management at the University of Texas at Dallas – my, how time flies. Back then I spent
quite a bit of time studying patterns of foreign direct investment abroad and attempting to
develop a more cohesive theoretical framework for how these FDI decisions were made. The
data I was using was mostly comprised of product companies looking to make captive
investments abroad to lower factor input costs, or to gain access to raw material markets or
end markets for their products....

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Canada's manufacturing sector showed expansion at a 15-month high in the September RBC
Manufacturing PMI. The composite indicator rose from 52.1 in August to 54.2 in
September....

LO 7. Comply with environmental legislation and its intent

 The future of textiles

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 The textile industry is one of the world’s largest industries. The production of textiles
over the years has contributed to significant environmental problems, especially due
to the water pollution it leads to. Much depends on the cotton, which is used in about
half of all textile manufacturing, and is extremely water-intensive. To produce one
kilogram of cotton can require up to 29,000 litres…

 Insulating buildings with cork

On this site you will find many articles on how the construction industry embraces the
concept of sustainable development and develop buildings, components and whole
building systems with lower environmental impact. “We have worked with building
materials for 30 years and for us, environmental issues have been with us the whole
time,” says Daniel Radom ski, CEO of the Build smart Group. “Almost…

 Packaging material that reacts to heat

“Optimal packaging meets the requirements for product protection and saves both
money and the environment. At the same time, it must.
 Renewing old windows
An ordinary house has a dozen windows, a large multifamily house often has several
hundred windows and the 449-meter-high Empire State Building...
 Recycling roofs
“We are one of the first companies in the world using an environmentally friendly
process for recycling roofing,” says Karsten...
 Concrete products purify city air
The air in many major cities is so bad that it does not comply with EU air quality
standards. Nitrogen oxides from car exhausts

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