CONTRACT

DEFINITION: It is an Agreement between

Two or more parties having

Consideration
CONTRACT

and

is

enforceable by law is called a

AGREEMENT
Promise/s to do something or not to do something by parties is called an AGREEMENT

CONSIDERATION
It is a reciprocal of things promise/s is called or a

exchange

consideration

Hence all agreements are not a

contract but all contract are

agreements.
Enforceable by Law means that it should be a legal agreement and

contract

LEGALLY ENFORCEABLE CONTRACT

As per Contract Act 1872 Contract entered by the parties are major, agreement/ promises are legal and consideration is legal than the contract is said to be an legally enforceable Contract not enforceable by law is called as a Void Contract

VOID CONTRACT
Entered by the party who is

Minor Lunatic Illegal act to do (Agreement) Illegal Consideration Fraud

VOIDABLE CONTRACT
Contract which has ability to become void is called as a Voidable contract which are entered upon by

Misrepresentation Undue Influence Corson

Hence Legal contract are enforceable by

law and are governed by law.

So we need to understand the Contract

law so as to handle the contract in a manner that same can be completed without any differences and/or disputes

Contract Law is to understand and interpret the promises between the parties to the contract.
Law are set by the Court with reference to the Act passed by the Parliament Act is a BARE Act and Sections of act interpreted by court and Judgement passed is called as Law

We need to handle the situation from the

formation of the contract to administration

of contract to concluding the contract so

as to achieve successful completion of contract and project with zero dispute situations

FORMATION OF CONTRACT
It is an invitation of proposal and receiving offer and acceptance of offer is called as a Contract Hence invitation of proposal need be taken care Offer need be proper And acceptance should be absolute

 TENDER WHEN ACCEPTED AFTER SCRUTINY IS BECOMING A CONTRACT DOCUMENT EVERY WORD WRITTEN IN TENDER ARE PROMISES AND CONTRACTUAL OBLIGATIONS OF THE PARTIES TO THE CONTRACT HENCE DRAFTING OF TENDER DOCUMENTS IS VERY IMPORTANT

 THE CLAUSE IN THE TENDER SHOULD BE DRAFTED KEEPING IN VIEW LAW RELATED TO CONSTRUCTION CONTRACT COURT HAVE STARTED CALLING CERTAIN CLAUSES AS EXCULPATORY AVOID AMBIGUITY IN THE DRAFTING

PROJECT/CONTRACT ADMINISTRATOR
IT IS NECESSARY TO LET EVERY ONE KNOW EXACTLY HIS SPHERE OF ACTIVITIES AND RELATED RESPONSIBILITY AND AUTHORITY. EACH CADRE HAS TO BE TRAINED FOR THE EXACT JOB. FOLLOWING ACTIVITIES ADMINISTRATION ARE A MATTER OF CONTRACT

1. 2. 3. 4. 5. 6. 7. 8.

MEASUREMENTS, BILLS AND PAYMENTS. EXTRA-ITEMS AND CHANGE ORDER. EXTENSION OF TIME. MATERIALS ACCOUNTS. QUALITY. CLAIMS MANAGEMENT. LABOUR WELFARE. PUBLIC INTEREST AND ENVIRONMENTS.

ADMINISTRATION AND HUMAN RELATIONS :

THE CONSTRUCTION PROCESS IS AN INTENSE INTERACTION BETWEEN PEOPLE ON ALL SIDES. THERE MUST BE A DEGREE OF CONFIDENCE BETWEEN THE TWO SIDES. OWNERS MUST FEEL THEY WILL HAVE THEIR PROJECT DONE WITHIN REASONABLE TIME AND MONEY. CONTRACTORS SHOULD

HAVE CONFIDENCE THAT THEIR LABOURS WILL NOT GO WASTE. THIS REQUIRES A GOODS BALANCED CONTRACT

DRAFTED SO THAT ADMINISTRATION POSES LESS PROBLEMS.

CONSTRUCTION WHICH HAS

PROJECT

IS

PROCESS

A)SPECIFIC OBJECTIVE TO BE COMPLETED WITHIN CERTAIN SPECIFICATIONS. B) DEFINITE START AND COMPLETION DATES.

C) PRE SANCTIONED FUND WITH LIMITED CUSHION.

D) TO CONSUME RESOURCES SUCH AS MEN, MONEY, MACHINERIES

SHORT COMING OF CONTRACT ADMINISTRATION:

SHORT COMINGS OF CONTRACT ADMINISTRATION COULD BE TRACED TO FOLLOWING AREAS.
1. CONFUSION ABOUT WHO IS WHO IN THE ORGANISATION FOR DELEGATION OF DUTY AND EXERCISE OF POWERS. 2. UNTIMELY AND DEFECTIVE WORK ORDER. 3. DELAY IN SITE HANDING OVER WITH PROPER ACCESS WITH RESPONSIBILITY OF WATER/ POWER NOT CLEARLY UNDERSTOOD. 4. DRAWINGS MAY NOT BE READY. 5. USERS HAVE NOT FROZEN THEIR REQUIREMENTS. 6. TIME ESTIMATED FOR CONSTRUCTION IS WRONG. 7. B.O.Q. IS NOT FAIRLY ACCURATE AND REQUIRES LOT OF VARIATIONS. 8. ALTERATIONS, EXTRAS, SUBSTITUTIONS ARE MORE OFTEN REQUIRED. 9. INADEQUATE SITE STAFF FOR SUPERVISION AND RECORD OF BILLS. 10. CLAIMS MANAGEMENT. 11. PAUCITY OF FUNDS.

CONTRACT ADMINISTRATION, SHORTCOMINGS AND REMEDIES

CONTRACT IS A SET OF ENFORCEABLE PROMISES. IN THIS CONTEXT, FOLLOWING DOCTRINES ARE MOST IMPORTANT.

1. WAIVER 2. ESTOPPELS 3. ELECTION 4. ALTERATION

WAIVER
ON BREACH OF ANY TERM OF CONTRACT, BY ONE PARTY THERE COMES

TO THE OTHER PARTY. THE OTHER PARTY NOT EXERCISING ITS RIGHT IS
CALLED A WAIVER

ESTOPPELS
ESTOPPELS IS A COROLLARY TO WAIVER IN THE SENSE THAT ONCE YOU HAVE WAIVED A RIGHT, YOU ARE STOPPED FROM ENFORCING THE RIGHT. YOUR ACTION CREATING RELIANCE FOR OTHER PARTY YOU CANNOT REVERSE THE

CREATES AN ESTOPPELS FOR YOU.

ACTION WITHOUT CREATING A LEGAL DETRIMENTS TO YOU.

ELECTION
FOR RELIEF OR OTHERWISE, YOU MAY HAVE A FEW OPTIONS. YOUR OPTING FOR ONE, CREATES ESTOPPELS FOR OTHER. LIQUIDATED DAMAGES LINKED TO EXTENSION OF TIME IS ONE SUCH SITUATION SO YOU ARE ADVISED TO PUT THAT PHRASE WITHOUT PREJUDICE.

ALTERATION
WHEN ONE ALTERS A CONTRACT, THE OTHER PARTY HAS A RIGHT TO REPUDIATE OR AFFIRM. IT IS THE AFFIRMATION THAT CREATES NEW CONTRACTUAL RELATIONS AND REPUDIATION BECOMES WAIVER.

BECAUSE WE CANNOT HANDLE THE CONTRACT? BECAUSE WE HAVE BECOME LITIGANT?

BECAUSE WE MEAN NO BUSINESS AND ARE NOT INTERESTED IN DEVELOPMENT?

IS IT TRUE?

19TH CENTURY CONSTRUCTION SCENERIO

NAME DATE OF START

1. THE UNIVERSITY LIBRARY & RAJABAI CLOCK TOWER 2. P.W.D. BUILDING 3. THE GENERAL POST OFFICE 4. PRESIDENCY MAGISTRATES COURT 5. THE LAW COURTS 6. MUNICIPAL BUILDING

DATE OF COMPLETION 16TH JAN 1869 NOV.1878 ( 9 YEARS)

ESTIMATED COST IN RS. 6,32,451.00

ACRUAL COST IN RS 6,32,120.00

21ST MAY 1869 21ST FEB.1869

1ST APRIL 1872 11TH APRIL 1872

4,38,937.00 5,99,992.00

4,14,484.00 5,94,200.00

(3 YEARS)

(3 YEARS) 3RD NOV 1871 31ST DEC. 1888 3,87,361.00 3,73,694

(4 YEARS) 1ST APRIL 1871 NOV.1878 16,47,196.00 16,44,528.00

(7 YEARS) 25TH APRIL 1889 31 ST JULY 1893 (4 YEARS) 11,88,082.00 11,19,969.00

CAUSES:
1. IRRATIONAL RISK-SHARING.
2. MULTIPLE AGENCIES AND CONFLICT OF INTERESTS. 3. CONTINUOUS EROSION IN VALUE OF MONEY.

STRAINS NEED STRESS MANAGEMENT:

STRESSES ARE CLAIMS IN CONSTRUCTION: CLAIMS BECOME DISPUTES AND DISPUTES LEAD TO DISTRESS.

SOURCE OF CLAIM
1.DOCUMENTS 2.EXECUTION

3.PAYMENTS
4.TIME 5.DEFAULT

TYPES OF CLAIMS
(A) EXECUTION OF CONTRACT:
CHANGES/ EXTRA ITEMS/ VARIATIONS.

DIFFERING SITE CONDITIONS. DELAYS AND ITS CONSEQUENCES . PAYMENTS OF DUES. CLOSURE OF CONTRACT / TERMINATION LOSSES.

(B) ADMINISTRATION OF CONTRACT:

 DEFECTS IN DOCUMENTS / DESIGN / DECISION. INCOMPETENCE OF PARTIES TO COPE UP WITH CHANGES. DIFFERING SITE CONDITIONS. ATTITUDE OF ANY ONE OR BOTH THE PARTIES.

 EXCUSABLE & NON EXCUSABLE DELAY CRITICAL & NON CRITICAL DELAY CONCURRENT & NON CONCURRENT DELAY

General Rules of Interpretation: In deciding the "Breach of Contract" the adjudicating forum reads the terms and conditions within a framework of certain rules. reading intentions of parties from contract documents. These rules are as follows :1. Words be given plain meaning - Plain Meaning Rule Words which could have two meanings will be given that meanings which makes Contract valid rather than void. 2. If certain things are expressly mentioned, it will exclude other things of similar nature - Expressio Unius Rule 3. General word like "etc." be narrowed down to mean only things of same genre - Ejusdem generis Rule. 4. Words have to be construed forcibly against the drafter - Contra Profrentem Rule.

An A.I based computer programme to go through QuestionsAnswers logic linked to data bank of relevant case laws to appreciate likely outcome. This tool can be developed for computation of claims, documentations and decision-making as well as for strategies to argue claims. Early resolution of disputes in Construction is a must for all concerned in view of fast erosion in value of money. The constriction Disputes Resolution needs a rare combination of legal and engineering talent. This being so rare that we must develop tools of Artificial Intelligence for Computers to assist Arbitrators for expeditious disposal of the disputes. Construction industry in extensive interaction with Lawexperts can help us to develop such tools. I placed before you my modest effort at this.