Homework 3

Spring 2019
Construction planning and management

Describe the primary rights and the primary duties of both an owner and a contractor in a
stipulated-sum contract.

The rights and duties of the owner and contractor can be partial to one side or the other
depending on the type of contract that is agreed upon. That said, the stipulated-sum contract
(lump-sum) shifts the risk away from the owner and onto the contractor by holding the
contractor to a lump-sum cost that is unnegotiable once settled. As such, the owner has a
greater ability to stem out-of-control costs or overbilling. Regardless, the owner has to provide
information, access to the site, and the complete design plan to the owner. The designer is
relegated the main duty in carrying out the design. In addition, the owner has to provide a
financial background of the project and surveys to the contractor. Their representative has to
be in all phases of the construction process. The contractor, more or less, has to meet the
deadline and be within budget. Generally, they have more duties than rights.

Question 4: Describe the legal background and aspects of changes in the work in a lump sum
contract.

The legal background and aspects of changes in lump sum contracts can be attributed to more
than one branch of law. Common law was once dominant in deciding matters of lump sum
contracts but statutes have become more relevant in lump sum legalities as society and
technology has advanced. Legislative statutes fill in the cracks of scientific and industry-specific
issues that common law precedents cannot cover. Either way, the law lump sum contracts
favors owners more than contractors. Nonetheless, if owners don’t provide their duties, they
are liable. This is a cut-and-dry interpretation, though, and there exists various exceptions to
the rule that the law may be unclear of. This is why there is always more space for newer laws.