Module 2 - ELEMENTS OF CONTRACTS

Elements of Contracts

Construction Contract

is a legally binding set ofdocuments typically between a contractor who is taking onthe work and the owner who is requiring the work. ​

Contracts in Construction

are comprehensive coveringeverything including cost and payment terms, schedule,scope, specific tasks to be performed, and any othercontract terms required by one of the two parties. Thecontract also notes how any disputes should be handled.​

IMPORTANCE of Contract in Construction​

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• Provides Clarity on responsibilities of parties involved​

• Reduces Disputes in constructions​

• Protects legal rights of parties involved​

• Ensures project is completed on time and within thebudget​

Elements of Construction Contracts​

• Parties Involved ​

• Scope of Work​

• Project Timeline​

• Payment Terms​

• Project Milestones​

• Change Orders​

• Termination Clause​

• Warranties and Liabilities​

• Dispute Resolution Methods​

• PARTIES INVOLVED ​

• SCOPE OF WORKS​

• PROJECT TIME LINE

• ​PAYMENT TERMS

• PROJECT MILESTONES

• CHANGE ORDER

• TERMINATION CLAUSE

• WARRANTIES & LIABILITIES

• DISPUTE RESOLUTION METHODS

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PARTIES INVOLVED IN CONSTRUCTION CONTRACTS

• Owner /Client​

• General Contractors/Subcontractors/Specialty Works Contractors​

• Construction Project Management​

• Consultants​

SCOPE OF WORKS

Outlines the specific tasks, deliverables, and timeline for a project, acting as a detailed blueprint for execution. It clarifies what work is included and excluded from the project. ​

PROJECT TIMELINE

Visual representation of a project’s schedule, showing the sequence and duration of task.​

PAYMENT TERMS

it is define how and when a contractor is paid for their work, ensuring fair & timelycompensation.​

PROJECT MILESTONES

are specific significant events or accomplishments that mark the progress andachievements in project.​

CHANGE ORDER

It is a formal written amendment to a construction contract that modifies the originalterms and condition. It is used to document and approve alterations to the project’sscope, schedule or cost, typically arising from the design changes, unforeseen siteconditions or owner requests.​

TERMINATION CLAUSE

-is a contractual provision that outlines the conditions and procedures for ending a contract agreement. It specifies the circumstances under which the contract can be terminated, such as: ​

1. Breach of Contract

2. Non-Payment

3. Convenience

4. Force Majeure

Breach of Contract

Failure to fulfill obligations

Non-payment

Failure to make payment

Convenience

Termination without cause

Force Majeure

Unforeseen events beyond control

WARRANTIES & LIABILITIES

A contractual agreement guaranteeing that the contractor will repair or replace defective workmanship or materials for a specific period after completion.​

DISPUTE RESOLUTION METHODS

process used to resolve conflicts or disagreements between parties ​