Construction ContractThe term construction contract when used in construction management is normally defined as being an agreement which is entered into by two parties under the terms of which one of the party agrees to perform a specific task for which the other party will pay for. The documents that need to attached to or stated in an agreement will also form an integral part of any construction contract. There are certain things which are essential to a contract to ensure that it is valid. 1. Each party involved in the contract must be competent as well as being legally capable of taking part. 2. The subject matter contained within the contract must also be legal and provided definite information in respect of certain requirements and duties that each party must undertake. As long as the above requirements can be met by both parties then the proposal and acceptance stages can take place. Firstly a proper proposal must be made by one of the parties and then this should be absolutely and without qualification being accepted by the other party. However what you should know that this part of the procedure is not binding until the party receiving the proposal has accepted it. It is also not binding after its date of validity. Once the proposal has been accepted then either the estimate for the works can be produced or the project can commence. Other terms which you may hear of during the process of a construction contract being prepared are as follows:- 1. Free Consent of Parties to the Contract Consent is only said to be free in this respect when it is not caused either by force, undue influence by one or other of the parties, or because or fraud or because of misrepresentation by either party involved. 2. Breach of Contract This results when either party is unable to perform the duties that they were assigned in the initial contract. However what should be noted is that not every failure to perform an obligation will amount to there being a breach of contract. Certainly when a construction contract has been broken without either party providing a decent excuse or justification for this they will then have to provide compensation for any loss or damage caused to the other party because of this breach. Generally such compensation will be a monetary one. |