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Construction Contracts

Instructor:
Engr. Cyrus D. Esguerra

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Description of a Contract
Construction Contracts defined as an agreement between two parties
that is enforceable by law.
- It requires a meeting of minds and there must be a service
and consideration.
- One party must agree to perform work (service) for the other
party and receive payment (consideration) for the work.
- Oral contract are essentially impossible to enforce in
construction because of lack of evidence regarding the scope of
the agreement.
- Generally written contracts eliminates problems by removing
any doubt about agreed on terms

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Criteria for a contract to be Valid and


Enforceable by Law
there must be mutual agreement or meeting of minds
there must be an offer
the offer must be accepted
there must be consideration for the service performed
payment
the subject matter of the contract must be lawful
the contracting parties must have legal capacity to enter a
contract
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Four Essential Contract Documents


1. The Agreement
- the document that represents and reflects the legal contract between
two parties
- Between
- Between
- Between
- Between

Owner and Contractor


Owner and Designer
General Contractor and Sub contractors
Contractors and suppliers

-the purpose of the agreement is to record in written form those items


agreed to by the two parties.
- It simply a letter that constitute legal evidence that a contract exist
and forms the basis for its enforcement.

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Four Essential Contract Documents


1. The Agreement
- the agreement must contain:

Date of Agreement
Names and addresses of the contracting parties
Description of the scope of work
Time Limitations
Contract Considerations
Payment Conditions
Reference to other Documents
Signatures

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Four Essential Contract Documents


2. General Condition
- it defines the responsibilities of the owner and the
general contractor
- it describes the guidelines that will be used in the
administration of the contract

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Four Essential Contract Documents


2. General Condition (Standard base from AIA)
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General Condition
The Owner
The Contractor
Administration of the Contract
Subcontractors
Construction by Owner or by Separate Contract
Changes in the Work
Time
Payments and Completion
Protection of person and Property
Insurance and Bonds
Uncovering and Correction of Work
Miscellaneous Provision
Termination or Suspension of the Contract

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Four Essential Contract Documents


2. General Condition (Non Standard Minimum Requirements)
A definition of the contract documents that lists and gives a brief description
of the documents that forms the contract
Document precedence which clearly states which document will have
precedence over the other in case of discrepancy
Duties and Responsibility of the owner and contractor while the construction
is in progress
Definition of how a portion of work can be awarded to a subcontractor and the
working relationships between subcontractors
The right of owner to self perform construction or to award work to separate
contractor
Time for the completion of work
The mode and frequency of the payment
The requirement and penal value of the bonds and insurance
The conditions thats constitute a change of work must be clearly defined
System for dispute resolution
Miscellaneous provisions such as the governing laws etc.
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Four Essential Contract Documents


3. Supplementary Conditions
- sometimes known as special provisions or special
conditions
- the purpose of supplementary conditions is to provide an
extension of the general provisions of the contract to fit the
specific project at hand.
- they serves as amendments or augmentation to the
general conditions

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Four Essential Contract Documents


3. Supplementary Conditions

The number of copies of contract documents to be received by the


contractor
Survey information to be provided by the owner
Changes in insurance requirements
Phasing requirements
Site Visits
Start Date of the Construction
Requirement for security and temporary facilities
Procedures for submittal and processing of shop drawings
Cost and schedule reporting requirement
Traffic control and street Cleaning requirements
Responsibilities for testing of materials
Actions to be take in the event of discovery of artifacts or items of
historical value

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Four Essential Contract Documents


4. Drawings and Specifications
Drawings
- means by which the designer conveys the physical, quantitative and
visual description of the project to the contractor
- Architectural Drawings
- Structural Drawings
- Electrical Drawings
- Mechanical Drawings
- Plumbing and Sanitary
- etc.

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Four Essential Contract Documents


4. Drawings and Specifications
Specifications
- also known as Technical Provisions
- written instruments to be used in conjunction with the drawings, so
together with the drawings and the specifications fully describe and
define the requirements of the contract, to include the quality that is to
achieved.

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