Types of contracts

1. Cost reimbursement contract/cost plus contract:

Here , final total cost is determined when the project is completed or at another predetermined date within the contract’s time frame.

Cost-plus award fee contract:

Contractor is awarded for good performance.

Cost-plus fixed fee contract:

Contractor is reimbursed with predetermined amount.

Cost-plus incentive fee contract:

Contractor is only given a reward if they exceed the expectation.

Cost-plus percent of cost contract:

Contractor’s reimbursement is a percentage of the actual total cost of the project.

2. Package deal :

It’s an order that contains a number of exchange or deposity items that must be completed simultaneously.

3. Bill of quantity:

A document containing various items of payment.

4. Bilateral contract

Both parties make an exchange of promises to perform a certain action.

5. Unilateral contract

A party promises another party to pay after they have performed a specified task.

6. Implied contract

Agreement that exists based on the action of the involved parties. E.g warranty on a product.

Types

Implied in fact:

Contracts that creat an obligation between two parties based on the circumstances of the situation.


Implied in law:

Contracts where the law imposes a responsibility on someone to uphold their end of an agreement.

Other types of contracts include:

Unit price contract
Time and material contract etc
standard forms used by contract managers in the construction industry

1.FIDIC– Fédération Internationale Des Ingénieurs-Conseils
2.General Conditions of Contract for Construction Works (GCC).
3.JBCC Series 2000
4.New Engineering Contract (NEC3)

Contract documents

1.Agreement
2.Scope of Work
3.Definition
4.General Condition (condition of contract part one)
5.Special Conditions (condition of contract part two)
6.Bill of Quantities.
7.Work Schedule.
8.Drawings.
9.Technical Specifications.
10. Letter of acceptance
11. Addenda

1. Agreement
Is the document that formalizes the construction contract, and it’s the basic contract.
2. General condition
Define the right, responsibilities, and relations of all parties to the construction contract.
3. Special condition
Are used to amend or supplement parties of general condition.
4. Working drawing
Contain the dimensions and locations of building elements and materials required, and delineate how they fit together.
5. Specifications
Are written instructions concerning project requirements that describes the quality of materials to be used and their performance.
6. Addenda
Are drawing or information that modifies the basic contract documents after they have been issued to the bidder , but prior to the taking of bide.

Breach of contract

Is the violation of a contract obligations
OR
A risk faced by anyone who enter a legal agreement.

Occurs when one party breaks the term of an agreement between two or more parties.

Remedies for breach of contract
Damages
Quantum Meruit
Specific performance
Injection
Rescission
Restitution
Damages
Are monetary compensation allowed to the injured party of the loss for the injuries suffered by him or her as a result of the breach of contract.

The party is not being punished for the damage but instead compensate for the damage.

Quantum Meruit
Reffers to as much as been done

These may be available to either parties without claiming damages or compensation for the work done.

It can also be done by reasonable compensation.

Specific performance
It reffers to carrying out the contract as agreed.
It’s an equitable remedy and it may be granted:
1. -where monetary compensation is not adequate relief.
2-where there’s no standard for asserting the actual damage.
3-where it’s probable that the compensation is money can’t be gotten.

Injuction
Is a court order restraining a person from doing a particular act.

Rescission (undoing of contract)
It occurs when(aggrieved) angry party decides not to perform his part of the contract.
He may even ( petition/request) Sue and be granted rescission by the court in which case he becomes entitled to compensation for any damage which he has sustained through non fulfillment of the contract.

Restitution
Is a remedy design to restore the injured party to the position occupied prior to the formation for the contract.

Instead, restitution aim at returning to the plantiff(complainant) any money or property given to the defendant under the contract.

Plantiffs typically seek restitution when contract they have entered are voided ( having lost all legal validity) by court due to va defendant’s incompetence or incapacity.

Consequences

Reduction of contract prices
Remedy of the defect
Compensation for damage
Interest for delay
Types

1.Actual breach of contract
Refers to a breach that has already occurred, meaning the breach party has either refused to fulfill their obligation by the due date or perform their duty improperly.

2.Material breach of contract
Occur when one party receives signicantly different results than what was specified in a contract.

3.Minor/partial/Immaterial Breach of contract

Reffers to a situation where the deliverables of the contract was ultimately received by the other party, but the party in breach failed to fulfill some part of their obligation.

4.Anticipatory breach of contract
An actual breach has not yet occurred, but one of the parties has indicated that they will not fulfill their obligation under the contract.

How to reduce risk on breach of contract
1. Drafting the best possible agreement
2. Analysing past agreement

Steps involved to reduce the risk & mitigate losses

Make sure everyone involved is aware of their responsibility
Keep tabs on contract performance
Ensure contracts are always accessible

Formation of contract for the sale of Goods

It’s a contract whereby bthe seller transfers or agree to transfer the property in goods to the buyer for a money consideration called the price.

Is formed according to the ordinary principle of the common law i.e
1.By offer
2. By acceptance

Number of parties in a sale of good contract

For a transfer of property in the good to occur there must be at least two destinct parties that’s a a seller and a buyer
Seller and a buyer must be two different entities.

Contract of Guarantee and Indemnity
Indemnity
Is the protection against future loss.
Contract of indemnity
Is a special contract by which one party promises to save the other from the loss caused to him by the conduct of the promiser himself or by the conduct of any other person.
Indemnifier (promisor)
A person who promise to make good to the loss.
Indemnified/indemnity holder (promisee)
The person whose loss is to be made good.
Indemnity- can also be defined as
Sum paid by A to B by way of compensation for a particular loss suffered by be . A, the indemnitor may or may not be responsible for the loss suffered by B, the indemnitee.

Forms of Indemnity

Cash payment
Repair
Replacement
Reinstatement
Rights of indemnified/Indemnity holder

1. All cost which he may be compelled (forced) to pa in any such suit if in bringing or defending it, he did not contravene the order of the promisor, and acted as it would have been prudent for him to act in the absence of any contract of Indemnity , or if the promisor authorised him to bring or defend the suit.

2. All damages which he may be compelled to pay in any suit in respect of any matter to which he promise to Indemnity applies .

3. All sum which he may have paid under the terms of any compromise of any such suit, if the compromise was not contrary to the orders of the promisor , and was one which it would have been prudent for the promise to make in the absence of any contract of Indemnity, or if the promisor authorised him to compromise the suit.


Rights of indemnifier

After compansating the Indemnity holder, indemnifier is entitled to all the way, and means by which the indemnifier might have protected himself from the loss.

Essential Elements of a valid contract

Elements of a contract
1. Agreement
2. Legal obligation


Essential Elements of a valid contract

Agreement
Intention to create legal relationship
Free and genuine consent
Parties competent to contract
Lawful consideration
Lawful object
Agreements not declared void or illegal
Certainty of meaning
Possibility of performance
Necessary legal formalities
Agreement
Here there must be offer & acceptance

Offeror
Party making offer
Offeree
Party to whom offer is being made


Intention to create legal relationship
There should be an intention on the part of the parties to the agreement to create a legal relationship.
An agreement of a purely social or domestic nature is not a contract.

Free and genuine consent

The consent of the parties to the agreement must be free and genuine.

Should not 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.

Parties competent to contract

The parties to a contract should be competent to enter into a contract.

Circumstances under which one become competent to a contract;

Is of age of majority
Is of sound mind
Is not disqualified from contracting by any law to which he is subject
If a party to a contract suffer from any of these flaws, the contract is un enforceable
excey in certain exceptional circumstances.

Lawful consideration
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. Moreover, the consideration must be real and lawful.

Lawful object
The object of the agreement must be lawful and not one which the law disapprove.

Agreement not declared illegal or rapid
Some 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.

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.

Possibility of performance
The term of agreement should be capable vof performance. An agreement to do an act impossible in itself cannot be enforced.

Necessary legal formalities
A contract may be oral or in written .
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.



Common contract clause
Merger and integration clause
Choice of law and forum clause
Statute of limitations clause
Indemnification language
Time of performance
Arbitration clause
Saving (severability) clause
Attorney fee clause
Non-waiver clause
Liquidated Damage clause
Merger and integration clause
It prevent the parties to a contract from later claiming that the contract does not reflect their entire understo, was changed by a subsequent oral agreement, or is not consistent with prior agreement.
(Contain entire agreement with the party)

Choice of law and forum clause
Contracts will often contain language expressing that they are to be interpreted under the law of a particular state or juridiction, and that any litigation will occur within a specified court system.

Statute of limitations clause
It changes the statue of limitations which applies to litigation relating to the subject matter of the contract.

Indemnification language
An Indemnity clause requires that one party indemnify the other, in the event that certain expenses are incurred.

Time of performance
Some contract will provide that “time is of the essence” which may support an action for breach if contract where the contract is not completed within a reasonable (specified) time.

Arbitration clause
Some contracts include language specifying that all dispute under the contract will be resolved by arbitration.

Saving (severability) clause
Most contracts include a saving clause, which is meant to ensure that the contract remains enforceable even if part of the contract is later held invalid.

Attorney fee clause
It requires, that in the event of litigation, the loser reimburse the prevailing party’s attorney fee.

Non waiver
It protects a party who excuses the other party’s non compliance with contract terms and to prevent the parties course of conduct under the contract from resulting in the loss of enforceability of the actual terms of the contract.

Liquidated Damage clause
Where it can be difficult to calculate actual, damage , it may be appropriate to include a” liquidated Damage clause” in a contract.