CHAPTER 10 CONTRACT AND PROBLEMS ARISING THEREFROM General Notes 1. The Couneil of Architecture has a number of publications to its credit. However, no standard form of contract has yet been published. ‘Since the architects ll over the country in general adopt the form of the Indian Institute of Architects, the said form has been adopted as the base forthischapter, The observations made will also be useful for other forms ‘a8 a number of conditions of the contract remain the same with neces- sary alterations. 2, Clause 711) of the LLA. form of contract (1979 Ed.) makes a reference to the mae of measurements to be adopted for preparation of the contract bills. It provides that unless otherwise specified. all contract bills are to be prepared in accordance with the principles of the standard method of measurement of building works last before issued by the Indian Standard Institution, Hence, the students will have to study the standard method of measurement of .S.L along with the contract. ‘The tople of contract has been dealt with under the following sections Mike Section - A Introduction. Section - B Concept of Building Contract. Section - C Classification of Contracts and Problems. ‘Section - D [Articles of Agreement and the Appendix. Section -E ‘Scope and Intent, Section -F + Pre-Requisites. Section - G Contributories to the Work. ‘Section - H Progress and Performance. Section -I Duties as to Possession, to Proceed Diligent. Extension of Time and Damages. ‘Section - J ‘Variations and Fluctuations Section -K Wave of Disturbance and Determination. Section -L Certileates and Payments, Section -M_ ; General. INote-(1) A reference to LA. form of contract shows that practically every Condition is Interwoven with rights — dues, relationship of parts (0 the contractor tripartite rights ~ duties relationship with the architect To mR e nanrennrenrngrampesnr hens aR 2 ot eeetions qua jet duties ha been onder SECTION-A INTRODUCTION shorty the man as the powerful sola aimat wil enter 21st century fo du to advancements in aclenee of Cosme Space, Moon Colony may. come up tnveving construction work, with light weight Summum structures, magnetic holding down foundation and 80 on ‘Thus, the relationship ofthe employers and contractors wich respect to {heir dates and abies relating te earth based construction work wil beraquired tote transplanted in Moon colony too, Legal history shows {hat man has adopted some cart based logal concepts for enactment ct Jaw relating to other arcan where econo actvitles were Being caried out by mankind. Res Nulous, Res Communis, Res Public, Res Exton CCommercium were transplanted tn sea and the outcome io the Law of Sea. Five mulllateral treaties including Outer Space Treaty and Moon Agreement of 1979 are afew lustratione of the socalled Outer Space Lawin broader sense which are based on analogies from Sea rw! Airbase When viewed from the above angles, space communities vil need “space Contract Act for sich the Contract Ato an Welter of legal decisions of dierent countries wil form its take of point, Besides theabove the Contract Act has go its own inportance in the feld of building contracts as alo when ontdesires to stay LIA, Fore of Contract, for after all Bulding contrac ts a species of the gern contract, To study building contract without grasping the principles aed down in the Indian Contract Act, 1872 is just like making the architects earn architecture without the study. of History of Architecture or making the engineers learn the use of steel structural tables without study of the concepts like bending moment, shear force and deflection. Its the art and imagination of the architect/engincer which create a field for vivid type of players like employers, contractors, specialiste as also including them to play their respective roles in the field of construc lion industry. The cementing force among the players is the contract which expects every party to perform its obligations within the para: meters set out so that final goal is achieved. In order to translate the Paper dreams in realities, the architect/ engineer besides being master designers, have to pay adequate attention to their vocation where the finance plays a prime role. The contract aims at fulfilment of the140 PROFESSIONAL PRACTICE obligations by all players so that no unbalancing tn form of defaults or ‘delays takes place resulting in loss. The architect/englneer have a major role toplay in the contract and it wall nct be possible for them to run every now and then for legal advice. However, in order to reduce the troubles and tensions ofthe architect/engineer the Indian Institute of Architects has glven the standard form of contract, the study of which 1s necessary along with the Indian Contract Act, 1672. Contract in Standard Form. / Inpresent day lle the standard forms of contract are to be found in ‘a number of economle activities and building industry is not an excep- ‘ion, Since bullding industry covers a wide fleld of activites with varying nature of construction jobs, even the Government has got its own form ofcontract with standard terms and cendition like 1A form. This form 1s being used practically by all the architects and engineers subject to certain changes if any. If all go well no difficulty will arse, but 1f unbalancing results, the architects and engineers start applying thelr ‘minds to the relevant conditions which the parties adopt as their pivots. Here also the architects and engineers meet with dificulties in tnder- standing the scope of various conditiors which run in 58 along with one Appendix. This 1s partly on account of the fact that some of these professionals do not have an elementary knowledge of the Indian Con- \wact Act, 1872. After all bullding contract can be considered as a planet revolving round the Indian Contract Act and owes its existence toi. [tis agreed that LA. contract Is the outcome of study of building works vis-a-vis Uie employer (owne?) and the contractor and a complete cade BY tse, yet itis the Indian Contract Act which provides plle foundation for it s0as to prevent It from collapsing. Hence, Its essential that (a) Archutect and engineer do stuty the Indian Contract Act, 1872; and (©) The study ofthis Act has to te incorporated at the University level, along withthe subject orofessional Practice or Quantity Surveying for courses in Architecture and Engineering. Development of the Present Form of 1979 ‘The present contract document being used by the architects and ‘engineers for bullding works has been approved by the Indian Institute of Architects, Bombay-400 001, somewhere in 1979. It appears that Inspiration to devise the present form as well as that of 1936 has been, ALBA. Form of Contract as afterall we have taken overall the legacies Jeft by the British people in the legal feld and adopted the same with necessary modification to sult our requirements; to cite a few illustra {Hons like Indian Contract Act, 1872; Trenafer of Property Act, Negotiable Instrument Aet, ete ‘The first approved form of bullding tontract saw the day of light in 1909 and was known as “1909 RILB.A. Form”. Though this form wasorenc a aoe ISH THEREON : ene, yt as equeny wae at a ne And Ube Pe onstruction of tis dorumen: ovng employer crinted ore orm of 1909 had its own die, Ce ces 72 of LLA. Contract which di ee marc te aie ae wi Sn Mone eae Tehreagens tesa aie esc eta cei tenance em aor entra the essential condiuons proved We (a) Blue order. (0) Tobe signed {) Cast to be app tao by the employer the employer a5 not ign roved by the committee ALBA. Form” were called for yet ‘yas that of 1919 followed by me was the Form of 191. This Architects RBA, rsand the Institute of Bullers. 7 crsand (he lal and reasonable agreement betwen he eB has ben a for aatiaaciorycompletionofajcbdepess Upon the a core cnce ari understanding ofthe partis concemed rather than on at frm of words in contract ‘Freeater thus 1999 form went in revision fom tine tome, aera tne Royal ntttin of Chartered Surveyors in placeofInsitate i etilders forming one of te partes tothe sanction. [Nature of LA. Form of 1978 “The LIA. formof 1979 isanexcelient service rendered bythe Indian nau ofActutects tite membersin particular and bulllbg indus dana The frm via medias conaions provides an eboraie coe reefer aw which deals with most ofthe problems which might enet cree court's function gets ccumscribed to construe the conditions Tretporated to discover the intentions of the paris tothe contac, perro general law of eontraet namely the Indian Contract Act, 1872 ‘becomes important {a) To sobe problems created between the parties to discover {De Intentions due to ambiguity or inconsistency. (0) Fills up the gaps unfilled by the conditions. {e) Overrides or controls some ofthe conditions. Prior to 1956 thearchitcts were having their own forms ofeontracie ‘usually prepared with hell assistance. However, the Indian Inst™le aa2 HOFRSSIONAL PeactiCk cof Architects appears to have come out with tx form ef contract for the frat me I 1996 and revised form tn 107 ele ‘Composition of Model 1... Form The model 1... form consists of thire parts namely W) Articles of Agreement. (ii) General Conditions of Contract. (ai) The Appendix. Inaddition to the above every contract will be altached with general specifications, bill of quantities, a set of plans and schedule of payinen's sn case of item rate contract and general speciicatian, supplemental specifications or supplemental conditions describing in detal the scope of work covered by lump-sum contract, a set of plans and schedule of payments, ether amount oriented or rae per S.M. oriented. In the latter case bill of quantities may or may not be attached and the same will have limited use for determination of amount of variations tis agreed that building contract cannot be prepared within a water tight compartment as the building work by itself sof varying nature and suffers jolts due to a number of circumstances not expected by any one at the execution stage, like rise in cost of construction due to inflation ‘and budgetary provisions, works contract tax, site condition, change in design of foundation from isolated R.C.C. footings to plle foundations, obstructions and injunction from the occupants etc, yet the architect/ engineer have to cary out needed corrections, modifcations, and/or alterations, omissions, filing up of blank spaces so as to make the document practically @ complete one This will help in bringing owt the ‘eal intentions ofthe parties tothe contract as also will educe the heart ‘burnings at the dispute stage ‘The L.A. form contains certain order ofthe conditions and as far as possible the order has been maintained in carving out the groupings for ‘he purpose of explanation. One can have alternative groupings for explanation as some ofthe conditions cover more than one topic or share the subject-matter with other conditions too. SECTION. CONCEPT OF BUILDING CONTRACT Indian legislation has not set forth or codifled Law relating to ‘Butlding Contracts and perhaps one may not come across such a plece of legislation even outside India. The chief reasons for non-codification being the construction encompasses in tsel'a number ofoperations and ‘sub-operations (like 160 mm R.C.C. slab will involve operations ofry nent pare hen 7.000 ead dest “Te co fot greeters a net Te nage consent of partes cae yt sect ied as an agreement ea cae nace gee omer Oy na vaneeng one ‘i tract an inclusive OF include ‘consideration t.carTy goes valuable ages ee, eg cones BF tract isa species othe genuscomtract ven that BNP ‘nature of ike lump-sum con mae Ste mh plus minus Pereena Peontract, etc: As rightly ate contract at perecninge coma ed oat inte er net see iprista Lid. (1973) ALL Oe gen parties ete! intoa Paver LE ring ras of pecs Boe tract Re ‘ng frac there are 10 SPC ne Pal relationship apart SOT ‘beyond those res A ee eee study Soh geal 2 ening sam of correlated topics fr stu ran Contract Act, 1872, defines conknss St ageement enforceable atlaw, This oP OP wo questions namely what $e Gragreement and enforceability at Law. aeut oresoNA ATC ened ere aac oem tt we ne on sigs 10 another his itingrese ana Toothing Wh ale fo ota theasaet cae eam lng fhstnece Nee a to make a proposal and en ee a the proposal sade sights Ne acento eee accept A propos! when ascepted ee er *porenforceaily ofthe contzet, Secon i Seton 10 proves our essen tals namely the agreements must have keene 0) Fre consent i) Pats competent o contact is) Lawl constrain and object i Ageement must not be expressly declared tobe vou ‘simplified Application to Building Contract ‘The contractor as a promisor makes a proposal offer and proposal all synonyms) to carry out certain construction Job for a specified consl- eration. These offers take the form of tenders, The owner employer 10 whom the offer is addressed signifies his assent thereto, the proposal Is said tohave been accepted wherein the employer /owner as the promisce takes upon himself the burden of parting with money being the cost of work, This results ina valid contract provided itis not hit by Section 10 of the Indian Contract Act, 1872. The assent is glen either by the ‘employer oF his architect in the form of work order. ‘The above stinpliied application raises a number of questions like: i) Tender: topic dealt hereinbefore. (i) Mode of acceptance of tender. (il) Execution of contract and other aspects. is) Inconsistencies between printed and written matters (0) How about tnauthorised works Uke raising of floors over an ‘existing building: or construction on reserved plots for public ‘purposes, or expansion of scope of work beyond sanctioned plans like permission for repairs has been obiained but under the garb of repairs, works of additions and alterations are being carried out of far reaching nature e.., covering ofthe chowk, raising of loors, change of users, etc Mode of Acceptance ‘The Indian Contract Act, 1872 dees not provide any special mode of Acceptance of the tender. It can be in writing or it can take an oral Acceptance when the employer hands over possession of the site and Permits the contractor to commence the works. The above is subject to fone exception and that is when the tender provides for a written Acceptance only, However, the acceptance has (0 beba pen [coma AND PROOLENE ASN THIERERHOML nm (0) tnabotate that te without counter offer: anv A tect be what reasonable die athe tender oes not provide prio during wtih tender # to rama Force Fxecutton of Contract “The contract is executed on stamp paper ofthe valle as presertb under the haiian Stamp Act, 1899and must be signed, scaled (in case of Cadtract by publi bode) and delivered. Unstamped documents cant ‘atid in evsience lore an astialor ar cout In such easy partes wil be directed to get the documents duly stamped by paying “amp duty as well as penalty as preseribed by the sald Stamp Act ‘Leaving aside the question of unstamped document. even when no contract exits between the partes, the court wil ook not only to the ‘Correspondence exchanged but wilalso ook to theconductof the parties {o see fit can spell out a contract containing definite terms, Proper stamping prorto the execution ofthe contract results in the ‘saving of time, labour and money. _- Contract by « Private Party and Public Body ‘The contract by a private party s executed by signing the necessary ‘contact document whereas in case of Public bodies, Government wd ‘Tecalauthorttes, te same shouldbe made user thelr respective seals (0) The sel of tue authority must be axed by those persons who authorised todo 20. " (2) ‘The tstrament operates at once, as soon asthe scl is aff (3) The seal should not be afled carelessly and indiferenty (4) The seal shows that every member ie hound by whatever hao ‘been done by the person authorised t0 do so. Retrospective Applicaton of Contract In case of bullding contracts ts common thatthe contracts are signed and exchanged afer the workhas commenced. In spite ofthis fact ‘ur accepted contract wl apply retrospectively to works already ee ‘outed though the partes do not expressly say 20 Discharge of Contract ‘There are four ways in which a contract can be dlecharged (1) By agreement (2) By performance (3) By being excused by law frm performing (4) By breach _Ahen Conteact Becomes Vold “The contract becomes vod due to:148 FROFESSIONAL PRACTIC (1) Misrepresentation, (2) Fraud, (3) Mistake Mistake should not be of the nature of general proposition of law eg. owner thinking that sub-soll will require ple foundations but sub: sequently realises his mistake, which will not make the contract votd. ‘The contract for additions and alterations to a building becomes vold if it gets destroyed for any reasons whatsoever Just after the signing of the contract, ‘What Happens if there are Inconsistencies between Printed Matters in the Contract and Written Clauses When there ae printed and typewritten clauses in a contract, they have tobe given equal ellet unless there is an inconsistency between the two in which case greater force may be given to the latter, It sa fact that writen words are the immediate language anc words Selected by the partes themselves form the expression of thelr meanings yet the printed portion eannot be discarded in toto. The Architect should tr to find out ‘he real intentions of the parts tothe contract from the printed as well fas writen words Unauthorised Works ‘Now-a-days in Bombay and out of Bombay here has been a sprawl ‘of unauthorised works, Some such works are complete and some may be tm progress, both under the sword of Democies. Notices for removal of such works may have been served on the parties. The question is how ‘about the position ofthe contractor in such cases? ‘The contractor willbe at loss in both the crcumstances namely: (0) When he has entered into a contract to commit an legal act ‘whereby the contract becomes void: and (i) When he has entered intoa contract unaware of legality of the aca which situation will arise when the omner produces necessary plans and structural drawings duly signed by the professionals, ‘ut not approved by the authority, heehe stands atthe losing ced because the acti egal, and contract becomes unenforceable Oe me ~ SIFICATION OF BUILDING CONTRACTS AND a Classification of building contracts may be considered as an alias for modes of execution ofthe bulding works. Broadly speaking there a {wo classifications of contraet which are popular with the arcitecta/ engineers namely Zaff f Conky, sntvact snchading one with bone, / ding rise and fall clauses, swmmomems ana WrHETOM / en cowreect 1) Lexmp st £0 4 Mtem rate con Ineatdes the above other tage or cost plus fee contract. “Gy Cost plus percentage 1 Cerf ee fee wither without Bonus and penalty {is Labour contract fie) Demolition work contract rye following forms of the contracts also show the methog execution of the work and these are: ne method caer work Refer lause 304%) ofA. Fm of Contra (0) Piece work. {) Daily labour. fact nc classes of the contract are Lomip sum Contract ics an agreement creating an obligation on. he contractor g con sa de Seren sown onthe drawings and deseibed by sp coe al contitions/apecieatons i any subject onder eres suppivingall materas, labour and eter implements neces. Teratens Spreumior a unitate per SM. ofplinth area, which hump. San eat i nubjoct to adjestments and payable By the owner asa ur aay bligaion citer in ene molety or by instalments as may have been agreed rere explanation of lump-sum contract creates {wo su, chance ofcontract namely \ () Lump-sum contact g fied eum contract (i) Area based contract Bceides the above the practice shows that there fsa thd group f tne contract which can wel be neorporaed in the Broad classiiationat [nnp-sum contract and that contract is known as package deal or tum Ha Zontrace In this case the bulder/eveloper contractor purchases {02 land, employs his own architect/engineer and agrees to hand ovr Coinpeted tenements fo the enployer (usually society) against spe fou vate per Saf of the ara: of course subject to payments by 7 thttalments asthe work progresses, This type of contract resembles be Contract for sale of the fats/ tenements, the only distinguishing eatre ‘between the {wo is that to come within the fold of building contract, the ‘builder purchases the land in the name of the owner and enters the sité Siva lcensee of the owner to execute the works, whereas HE ‘contract for sale of flats, the Developers enter the site without permission tthe fat purchasers, may bean indvidual or group. “Theat types of contracts co crea @ lot of problems tobe seve architects engineers or by arbitrators in case of disputes due ‘tocare not Dring taken in advance —_—-"tas PROFESSIONAL PRACTICE Problem ‘Concept of Entire Contract: The concept ofentire contract has got ‘tits foundation on the premises that: (@) Contract is indivisible. {u) Consideration is one and it cannot be apportioned. ii) No part payments can be recovered because of absence of such ‘a provision. liv) Obligation of the owner to make payment does not arise tl the whole work is complete the incomplete (w) Even if the contractor abandons the work, performance ofthe work, however it may comply with the terms Et contract will not entitle the contractor to seek relief for work ddone on Quantum Merult basts. ractice one will nt find such a form of contract as the However, inp ‘do the job unless part payments are contractors ate not willing (© assured. Even for such a case the courts have been setting the matter right “wherever the ease calls for, based on the doctrine of “Unjust enrichment” eeerporated in Section 70 of the Indian Contract Act. Tis section lays down that where a person lawfully does something for another person, ser intending todo so gratuitously, and that another person enjoys the Benefit the same, hes bound tocompensate the person who has done thatact, However, the courts have interpreted such a typeof situation in thane of building contract as can be seen from the English case of Heing vs, Issacs, (1952) 2 ALL. E.R.176; the facts ofthe case are some what: the acceptance by the o1ner of part work must be with full knowledge ofthe failure to complete. However, its dificult to prove “acceptance ofthe owmer by mere occupation and use ofthe part of the Dull work. The mere fact that Uhe owmer isin possession of the ‘part built workis not enough because the owner cannot help being {a possession asthe land isis. I the bullder has falled to complete thie owner is not bound to keep the bulding in an incomplete state However, the owner of an apartment uses the Interior decoration land furniture ~ ifthe contract was fr furnishingand taking benefit fof the work-he would be lable to pay pro-rata”. Otherwise {t would tbe a case of permitting the owner unjust enrichment. (Hudson's Building & Engineering Contracts, p. 199 ~ 1959 Ed.) Problem ‘Area Problem: In area based contract the area and its mode of measurements hasbeen afertilebed of dispute, The carpet area and built ‘uparea have now been replaced by the "Built up plinth area” or “Plinth fea simplieiter. Another basis of unit which one can fin inthe contractCconrRAct ANT) PRORLEMS ARISING THREE ly sce space index permissible” by Bombay x te based on Preven of opinion crops uP DecAiee arriyia tPA ¢ oration. The difference of eh raet ane une buat up plinth area, tems to include ant iene, vs detintion. ten, whe epcaping and defining the econ Of PIN aren 4g “We computing total bull uP plinth ATER, sed reg jay been considered” ot Thin statement keeps open the Issue whether area of site poy conatlered or not, io fo what extent. However. I the g¢orton ect, te Shaineer mae a sxtement that “Sua computing tral built up plinth arc stited are SRSA Go to 75% of the actual extent and sane ayeSS t Sonetdered een Makes the matter clear and speciicand leaves no doubt for Inorder to make te matter clea both (othe contractor ag oe: touhcowner its the duty ofthe architect engineer to point outings at evaluation ntermacareaincludingall inclusions andexluaes rs their enenta Problem ‘From Lump-sum to Quantum Merutt:ifall go wel, the objective achieved and parties to the contract as well as the architect/ : happy. which in these inflationary days is not possible. Rise in cost > ‘construction due budget provisions as wells inflationary trends are the recurring phenomena whereby it Is not possible for the contractors ic ‘Complete the work at the speciied rates. Escalation clause may or may hnot have been provided, even if provided the same may not form Incasure of reli, “Take ft of Leave i will be the slogan of the owner or the owner may refuse to inerease the rates or the architect/engineer may intervene to grant necessary increment in consultation with the owner. [Nobody is at fault neither the contractor nor the owner and both are the ‘victims of happening of unspecified events which both have not eontem- plated. Ifboth are adament for one reason or another, breaking point is Teached whereby the contractor leaves the work and the owner agrees 0 ‘pay him for the work done. Work done may range from plinth work for one Dullding, casting of R.C.C. slabs (say 4 in nos. for another building) ‘construction of external walls for part portion, earth filling, compound wall works, ee. For sucha case the task before the architect/engineer is toworkout te rales of different items of works executed based on the complet? rate of Rs... per 5.M. of plinth area. The contract in a majority ofcases {éoee not contain a priced bill of quantiles which can form a base reliance. Even the contractor does not seem to work out the cost ‘of the plinth area based on bill of quantities, and if worked out the same ‘may of may not be produced belore te Arbitrator t per SM:150 PROFESSIONAL PRACTICE Ian attempt is made to work out the cost ofthe bullding based! on Dill of quantities, #1 has generally been observed that the overall cost works ol more than the cost obtained by multiplying the rate per $ M. with the total plinth area. If an actual exercise is undertaken, 10 difficult arise, but incase of arbitration coveringa number of buildings. {i becomes a herculean task which nobody wants to undertake. Under these circumstances the question posed by the Arbitrator is whether theres some ready reduction formula avallable whereby the ruling rates of different items of works be reduced by certain specified percentage, so as to ft in within the specified rate per S.M. in a completed stage. The {question of increment of the rates does not arise as already stated that Cost based on item rate analyats works out to more than the amount arrived at by multiplying specified area with unit rate, ‘There ts no authority available even in other countries. Moreover, the problem becomes aggrevated when the contract is a deal agreement where the contractor has not only to pay architect's and R.C.C. consultants fees but also: (a) Municipal taxes on the land under construction. () Incidental cost which starts right from planning stage ull ‘completion stage. ‘The usual argument advanced is to decide the issue by the schedule cor mode of part payments laid down in the contract. This schedule may be contractor oriented where on completion of R.C.C. frame with brick walls external and internal, nearly 80% of amount is drawn out leaving 20% for works of tile pavements, drainage and plumbing, electric instal- lation worke, door and window ehuttera, compound walle, compound Pavement, ete. This also creates dificulties when out of a specified item ‘say tile pavement, work of tiles on ground floor has not been carried out atall. ‘This mode or schedule of payments, even iit is a balanced, ts good ‘enough for the issue of interim certificates which shows approximate Value of the work done. Under these circumstances the architect engineer may be required toundertake the exercise toco-relate total value of work based on rate per ‘SM. with that arrived at on item rate basis provided he gets quantities fof each item of the work as otherwise he will have to resort to some sort of estimate to resolve the dispute. Problem F.S1. based Contract, where in Contract executed based on Rs. X per $M. of the bullt up area which built up area further qualified by the “entire Moor space index approved tn the plan passed by the Local Authority”‘CONTRACT AND PRONLEMS ARISING THEREFROM Zoey ate ppien ed the Ben nar gremrrainentnc name Arcata igo, face interme ay hen us geet itn the prmiatbe mi of 1.0 or 1:39 a8 the cane may eas Santmetor isnot toe pa anythingfor basement, ait, bales i See Se ween Fecal i Bacal but up pln area constructed including theme ve ‘constructed area. ted Muatration Area of pet oe Pull up plinth area without staircase and ta ground for level 200 sy, Bull up plinth area with stir and it ao 2 Butktingof gound nd fv uper floors wih ss on ground oor and balconies on ve upp fers lined hoa, Noor area PS perma i Employer/Ouner Contractor Sr Contrarrr Ground floor atts Na__| Suits at 50% of 2105. 10s Gee ase ee ee Five upper floors net after deducting stair area 200x5 = 1000 _| _Fivestoreys 5x 210 1050 Balconies FS. Nu | Balconies at 50% extent 4x5" 20) 30 Area constructed 1000 1205 Hence ented to the ‘Claim for built up plinth 1205 5. claim limited to 1000 ‘area. SM. of the of built up linth area. ‘This case calls for finding out the real intention of the parties tothe contract and to cull out the said intentions following principles a equired to be borne in mind: 7 just (2) To woe that it does not result in the absurdity and us enrichment.182 PROFESRIONALAMRACTICR (9) Technical words be given thelr ordinary technieal meanings and rcanings must be taken out from context 4) Exceptions carved out can never be held to destroy the baste 5 concept of PSL _ Vmterretation of Etre F. Jn order to examine the intention of the parties, examine the definition of for space index F.1 as gen inthe Development Control Regulations for Greater Bombay. 1991 \_-Rale2 42), “Flor space index (FSI" means the quotient of the rato of a the combined gross Noor area of lf fers, excepting areas spcctealy exempted under tise regulations, tothe total revolthepotves ‘otal covered! area on all oors Floor Space Index (rs) = ASL covered area on all Roors Plot area, Thus, the definition itself provides three concepts of floor space index namely: ) Entire FS. (i) Absolute FS. (ii) Exempted FS. > .,Enlire F'S.L= Absolute F.S.L + exempted FS. 2). “(Absolute FSI. is related to the area of plot to be counted after dedvcting constructed areas meant for common services and amenities, This is given in the form of quotent lke 1.00 or 1.38 el) Even this absolute Sta suject toresiriction when area ofthe plot 2801 8.4 and above, whereby area of plot i requlred tobe reduced by 19% of the toe pica 2) [Brempled FS 6 mosty rete tothe sre nated) The -pP L--eompassment of exempted FSi teal dow in. Regain No ao) hu “Floor space index” ofa plot or premises i the ratio ofthe combined gross floor area of all storeys including the area ofall walls as well {88 mezzanine floors of a building on a plot or premises to the total ‘area of the plot or premises. The gross floor area of a building shall be calculated as above, excepting that the following shall not be ‘counted towards computation of floor space index. A few exempted sven below. (a) Abasement or cellar and space under a building constructed on sts and used asa parking space sore room and alr condoning lant room, used as accessory to the principal use. () Electric cabin or sub-station, watchman’ booth pump house ‘and garbage shal. (©) Proecons and accessory buliing as spect exempted nee[CONTRACT AND PRORLEMS ARISING THEREFROM ae (a) Statrcase room and/or lift rooms above the top most storey, Srchitectural features, chimncysand elevated tanks of dimensloris fs permissible under these rus. One unit of sanitary block consisting of a bath room and water ‘Goset of standard size as per butlding Bye-laws provided for the Geo of domestic servants engaged on the premises at each floor level. (0 One room measuring 12* -0°x 10° - 0° on the ground floor of the Covoperative Housing Societies’ buildings and other multi- ‘storeved buildings as office-cum-letter box room. However, in Case of bigger Co-operative Housing Societies having 12 or more flats area of such office room upto 240 Sq.ft. Besides the above even the stair and lift well area are exempted from computation of absolute F.S.1 in suburbs on payment of specific’ premium as also balcony area at 10% of the area of floor in city and Suburbs, though of constructed nature, yet exempted. ‘The National Building Code of India uses the expression of Floor Area Ratio (F.A-R.) which is synonym to F.S.I. It defines F.A.R. as the Quotient obtained by dividing the covered area (plinth area) on all the floors by area of the plot ‘Total covered area of all loors ‘Area of plot It also provides floor area ratios in terms of figures based on occupancy classification like residential and educational etc. This 1s SPeolute FA.R, Besides it provides exempted F.A.R. for certain services Ghavamenitics with a limit of 20% of the absolute F.A.R, Here also entire FAR. will be: ‘Absctute FAR, + 20% of absolute FAR of the “Entire floor space index approved” be laid on the word “Entire” which means wreie or complete and not castrated or separated out from the over all eee oo oth the FS. namely absolute and exempted have becn Fiinned by the Local Authority and no class of F.S.1, has been dis: eEbroved by the said Local Authority. ‘Thus, the contractor's claim stands justified, ‘actor gets justification from Section 70 of the ‘The claim of the contr: Indian Contract Act. 1872 for which the following conditions are to be falfilled ike: (2) That the work done ts not unlawful: (2) That the contractor did not intend Construction gratuitously; and 7. PS/IV; PIS/It of National Bulding Code of India to FAR= to do the disputed area of7 ise PROFESIONAL PRACTICR (9) That theownersarebound tocnjoy thebenefitof the constructed ‘Since all the three conditions are satisfied in this case. Section 70 {s attracted whereby the owners are bound to pay for the increased area constructed Afem Rate Contract This contract deals in measurement of each stem of the work as, sive in the bill of quantities and sum to be pal is arrived at based on aT G psteadh item. Ja the bill of quantiies all the items awe described in detail along with the quantities. Here the rates are the art of the contract and the quantities which carry the prefix “approx! mate’, do not form part of the contraet in as much as varfations in the wants wot iat te eon) Problem Free Board for Tendered Quantities: Towhat extent contractor ie bound toexecute increased quantity ofan item of work in the quoted rate ‘and to what extent decrement in the quantities can be made by the This problem needs attention of both namely the contractor and the ‘owner to be specific on this issue. Condition No, 4ofL1.A. formofcontract lays down that the owner reserves the right to {a) Increase any of the quantities, (b) Decrease any of the quantities. (6) Totally omit any item of work. ‘And the contractor shall not claim any extras or damages on these grounds, Condition No. 4 furhter provides that any error in description or in {quantity or omission of item from the contract bill shall not vitiate this ‘contract but shall be treated as a variation Complete issue has been dealt with under the chapter of interpre- tation of contract, sulice to say here: WW Does the owner's right to increase the quantity extends to ouble or three times the cont-act quantity? (ti) Does the owner's right to decrease the quantity extends to the extent of 95% of the contract quantity, (Wy) Can the owner totally omit any item of work thus depriving the Contractor the reasonable proft thereon? What are the circumstances whereby the whole gamut will bbe brought under “Error in quantity” or “Omission of an item” within the fold of “Variation” as given in condition No. $0(2) of the LLA contract,‘CONTRACT AND PROBLEMS ARISING THEREFROM iy inorder toavoid such an unpleasant situation a few precedents are wen hereunder. However, one thing 4s certain that increment or decrement in ‘quantities beyond a specified percentage and/or amount has received seal of approval in construction industry Including with the Government Departments. The Bombay Housing and Area Development Board pro- vides for such a contingency subject to certain terms and conditions ax given below: (1) Quantities of tems below plinth may very to any extent due to local conditions for which the contractor will not be entitled to ‘the revised rates, (2) For super structure items the contractor is bound to execute ‘works in excess upto 25% of the tendered quantities without revised rates for such excess. (3) Even if the executed quantities are more than 25% of the tendered quantities, the contractor will not be entitled to the revised rates for such excess quantities if the value of such excess quantites at the tendered rates does not exceed Rs. 5,000/-. Mustration Tender Oty Rate 50 mm. Gil pipes 100 RM. [Re 95/- per RM. ‘Quanuty executed 150 RM. Texceeds permissible lait of 25% Value of excess quantity attender rate | 50xRs. 95 =| Rs. 4750/ ‘This amount is less than Re, 6,000/-and hence the contractor isnot entitled to the revised rates. ‘Our Supreme Court has dealt with such a problem the brief facts of which are as under: ‘The contract pertained to the tendered item of rock cutting with tendered quantity at 7,54,330 Ct. whereas the actual work done was 18, 18.704 C-ft, The contractor claimed for additional workat market rate which was refused by the Government. The question arises here is ‘whether the contractor under the variation clause is lable toexecute the (extra or additional quantities of the tendered item at the tendered rates toan unlimited extent, Clause No.12 of the contract laid down the extent of payment for additional work and their computations. It did not specily Gr any other condition did not specify what has to be “Pree board quantity” whether 10% or 20% or any other percentage. ‘Based on the fact that in some awards variations upto 10% limit has been accepted by the Government and beyond that the contractor ‘entitled as extra and further standard form of contract of the Central Publie Works Department awarded, lays down variation to the extent of156 PROFESSIONAL PRACTICE ~ ‘20% called the “Deviation limit’, the right ofcontractortoclaim exira fOr Fok Quantities above 20% of the tendered quantiues was uPhel '$ Harcharansingh us. Union of Ina, (1980) 48.0.0: 647 Schedule of Rates with Percentage up or Down Form of Contract ‘Thechlef problem inthis class ofcontract is the same with reference to the putcnt or quantities, omission of an item besides other problems dealing with the subject of variations. ‘cost Ph Percentage Contract or Cost Fos Fee contact /—Spouantinvogue{ ts eontracterentesan obligatonn the cn ac te SA tera, Laur and implements forthe trator to surly crcl shgaton onthe owner Wil be Sen touch cw Puna sped penta as pret ft hs certs) rete aide the advantages and dinvantages ofthis form Bt so fang od ate creping ae the arguments belng us il of cement als ave been mubjet to the process of sac! cut However, he problem wl be Whether epee percentage agreed relates oproftelement ony sna iclatesovertead charges"? Sos station wil erop up when the contact Is of ambiguous natura apecte no det wl arse Ha nn a charge an prot depend upon a numberof factors si et ai ats setanalconectrs steele a atu ie avnganc he dputed Punto cel caper or oerwise) cost Plus Fixed Fée Contract "CA medi form of cost plus percentage contrac s cost pls xed fee Soitact the eliference being that here the contractor is paid fixed (ee ieapectve of the cost oflabour, materals and other incidental cost ‘Fil tne! foe covers only the prot oF abo overhead charges must be Bae car sarc 99 ato vad fre ttgaions, Since ie Irrespective ofthe cos, It takes the form ofa ‘sum of money fsay Rs. 2 lakhs ‘of speciied percentage) and usually paid in sultable Anstalment ‘SomewhAre in 1950 oF so, a few works have been carried out on this ‘system without disputes because of the contractor possessing business ‘2cumnen and convincing owners whereby the owners instead of entering {ntoa regular lump-sum or item rate contract opted out for this mode; the factors cited being economy in construction cost; saving in profit of contractor against fixed fee payable; work (o taste, no litigation ete.y N vt rom 187 STRACT ANY PROALFMS ARIS THERE nueation whether there was 2aving OF NOK te Tey pesiap one ay Mi ail tis there, the same will be However na bon dita eat yet a few owners did opt out for ths m reel with thls mode of contract and i Lsbour Contract ‘The Problem in this type of contract will be: Tha Tithe work tums out tobe defective or of sub-standard quality of Hot acceptable or any reason whatsoever, can the owner recover theft ‘ost of work inchading cost of material an labour or Inbour ‘alone? The outcome will depend upon the circumstances SECTION-D ‘THE ARTICLES OF AGREEMENT AND THE APPENDIX Preamble ‘The rst page of L.A form of contracts know as the preamble, It sttroutdescription ive cementsinitefrt partwhich getinvlved one way or another inthe contract ike: (0) Owner (4) Contractor ~ (iti) Nature of work. i) Situs of work, (0) Architect. Itstarts with Articles of Agreement land ends at the sum of Rupees me 5 with the architect/owner for due performance of this Agreement. ‘The essential requirement of this preamble 1s necessity to have Ra.10/- adhesive stamp as per the provisions af the Bombay Stamp Act, 1958. Following points need mention here that is (a) The Adhesive stamps should be got affixed on first page, on ‘blank form prior tofilingofthe blanks Alternatively fullcontents ‘ofPreamble pageand Agreementbe prepared on Rs,10/- stamps paper with all lank spaces fled in, (b) Date will be the date when the contiact has been entered into ‘and not the date of the tender. {c] Name of the owner and contractor tobe filed inthe blank spaces with thelr addresses. If a rm or a company is involved in ‘the contract, the names of its partners with their addresses be aiven.138 no FESSIONAL. PRACTICE 2) Natureot work tobe indicated along with theloeation of ate et WHEREAS the owner fs desirous of constructing a resident Duiling of ground and four upper floors, having twenty “three rooms" fatson PlotNo, 470, TPS. vs. VileParle, Azad Road, Vile Parle (East), Bombay {c} Name of the architect with his address to be given. (9 Contract drawings to be numbered and these drawings along ‘with the bills of quantities (known as "Contract bills) should be ‘signed by both the partis. (g) Amount deposited by the contractor towards the retention ‘money be shown and with whom deposites be indicated. Thel.LA. form of contract uses the term “Owner” in place ofthe terms Employer” generally used. A reference to conditicn No. 1 (2) defines ‘owner as (name fo be written) which is inclusive of his legal representa. tives, assigns or successors. This term “Owner” finds place in other ‘conditions too. ‘The second part of Preamble deals with: i) Contractor has supplied the owner with priced copy of bill of ‘quantities called contract bills. (ui) Contract drawings and contract bils to be signed by both the parties sai) Deposit of specified amount with the architect/owner. Contract bills form the subject-matter of condition No. 7 and con- tract drawings form the eubject-matter of condition No. § and have been, dealt there, ‘This complctes Preamble which forms introduction to the contract layingdown scope and purpose of the contract as also parties interested. ‘Agreement for Contractual Obligations ‘At the back of Preamble page of LLA. form of contract there is an agreement with four fandamental uses. These clauses are followed by 2ffestation clauses where the parties sign that is execute the contract tuner hands, Two witnesses who have seen the partes signing in thelr presence are desirable, However, even In their absence the contract wil ot lowe it efcacy. ‘The architect engineer are well advised not to occupy the position ‘of witness for the purpose of attestation, for building contract creates $ special role for them ranging fiom owner's representalives, iterpretors Of eonditions of contract as also arbiters in some matters ‘The frst clause deals withthe contractors obligation to carry out ‘and complete the work subject to conditions annesed and shown on (a) Contract drawings: and {b) Descrbed by contract bis: oFcontact AND PROIEMS ARH . buts lees inn ie act out tn laut) 40 Pay tothe con, Mes a eetter verre otha become papable herennder ) At time: ant 1a A nanner speci the sald conelitons, rio pte “Contact 9" WHI yy Clause (2) brings explained in condition No, 6 as under ae eee eee a es tt att ay soreiaherpetannintera tc Cerny Seco ane ie i ty pe ferent ete Se ie aun 22) tg 0 grt Srey rg senate tens fo cs hl a et by the Architect, By virtue of fundamental clauses (2) and (1) ead with the explana. lion of “Contract sum”, the contract may take the format of “Lump, sunt contract where the contract sum cannot be adjusted or altered wale, jgitenvise provided and subject to condition No. 7(2). This conditins No, 7(2) deals with error in description or in quantity or omission of eng ‘as “Valuation”. The adjustment of the contract sum is dealt with ince dition No. 3115). However, condition No. 3 which relates tothe type of contract lays down in clear terms that this contract isan “Item Rate Contract” ead te contractor shall be paid for the actual quantity of work dome as meseared (on site, at the rates quoted by him in the contract bille ‘Modification in Case of Lump-sum Contract he |-LA. form can well be utilised with necessary modification for ‘2 lump-sum contract as under: 1) Preamble Page epoca ae owner i desirous of constructing bullding/s including pare eind and overhead tanks, garage/s, comfonind medk eoonrou age, plumbing ang att) Pump room, septic tak: ete including dal ee PMmping and electriieation work ete, completeiiall ewe tiers sh has caused the drawing, specie = i specication, special specification con one prepared by hia Architect M/s, ANG eee peciication/ cond160) PROFESBIONAL, PRACTICE drawings duly numbered and the specification, spectal specification / conditions made of measurements of plinth area, schedule of payments hhave been signad by o on behalfof the parties hereto AND WHEREAS the contractor has deposited the stun of Rs... with the Architect owner for due performance of this Agreement. (2) Modification in Fundamental Clauses of Agreement NOW IT IS HEREBY AGREED AS FOLLOWS: 1. For the consideration of lump-sum of Re... « ior ‘SM.ofplintharcaxRs.. ‘erSM, ofthe plinth area totaling woRs. hereinafter referred to as "Contract amount” the contractor will upon subject to conditions annexed, carry out and ‘complete the “Work” as shown on the drawings, and described in the ‘speeiications, special specifications conditions. 2. ‘The owner will pay the contractor the contract amount as per schediule of part payment attached to this Agreement or such other sum as shall become payable hereunder at times and in the manner epecified {nthe said conditions subject tothe condition ofdeductionof. ....%from ‘every interim payment with a limit of deduction at Rs. vas retention amount ‘3, Condition: The contract shall be a lump-sum contract. The con- tractor shall be paid forthe work done based on schedule of payments attached to this Agreement. ‘Schedule of Part Payments ‘The schedule of part payments may be owner oriented one or contractor oriented one. It will be owner oriented one when on comple- ‘uonof about two third ofthe work, the contractor isbeing pald 50% of the cost of work and contractor oriented one when the contractor withdravs nearly 85% of the contract sum, leaving balance for complete drainage- plumbing, electric work, doors and windows shutters and for final fnishings. "No problem will arise if all go well However fthe contracts determined, this schedule of payments is put as instrument to work out the claim by any one of the two parties to Sispute in whose favour the schedule of payments swings. Though ‘the work is completed to the extent of two-third, one party may agree to pay about 50% of the cost or in the alternative another may claim 0% ofthe payments depending upon how the ached of payment Inspite of one providing a balance plcture of part payments, the ‘same is open to objections asthe total cost ofthe bullding worked out on, stem rate basis can never be equal tothe cost worked ot on plinth area, rate basis or lump-sum contract amount envisaged,cowre4ct AND PRONLEMS ARIK a 0 sho 0 Fret toy ceriente level other Conditions Requlring Modification for ® Lump-surm Contract ‘Subject —~ ‘Conon No. Conon Noo TAP ‘Scope of definition Condition No.2 Contract document. Conditon No ‘Type of contract condition No.4 Schedule of quantities, ‘condition No, 7 Contract bil Condition No.8 (1) Scope and intent Condition No. 30 Variations, ‘Third Fundamental Condition of the Agreement The ied fudamentl eonditon relates to meaning ofthe t “Arges Thee i teleece to Archie” also in Pants SI aises the Question: can the architect indicated in Preamble be, + ‘from the architect tied to the contract? ae Sr trough the owner ard he ie’ Supe j ha ung the works as per the Seals a inspecton nae during then y conta the ne the v Tatun fthe executing architect ort162 [PROFESSIONAL PRACTICE * Whereas the ov Ings and bill of quantities showing land describing the work to be done: tobe prepared by or under the direc: 5. XYZ. a Tina causa aime [~The erin Architect in the wad conditions shall mean the sald M\s. XYZ. or M/s. ABC. ‘Thus, there can be more than one architect and for the project lke: (a) One who carries out designing work only. (b) One who gets the plans approved from local Authority. (6) Onewho executes the work under his own personal supervision. 1s possible thatthe owner may employ one architect for al thejobs or different architects for different jobs ora combination of obs. In these clroumstances the A. form of contract contemplates one prime mover architect who has been clothed with a number ofduties and wide powers under “Architect's Instructions” ‘The L.A. form of contract does not contemplate to keep the position of Prime-mover vacant in case of his death or ceasing tobe the architect ‘or owner is dissatisfied with his services, then owner has been conferred ‘the right to nominate another architect subject to the contractor having no objection to such a new architect taking the position as new Prime: mover. Such a subs 7 (a) Approval: or (e) Instructions. {given or expressed by the old Architect prior to the appointment of new ‘ne. There is only one exception to the above and that is when the former architect's services are terminated by the owner for the failure in his professional duties in one or more aspects from the above. On retirement no difficulty wil arise in the way of new architect as the retiring architect will issue his no objection certificate for taking over ofthe work by new architect. However, ifthe owner has terminated the services of his old architect, the newly appointed one do eall for the no ‘objection of the old architect which will be in fitness of professional thle. In general there has not been any objection from the contractor for ‘nomination of new architect by the owner in case of death or ceasing of the former architect. But situation may arse ike owner as & Developer/ Builder appoints one who is in his employment or tat architect does not ‘enjoy the confidence in the professional ld whereby the contractor feels {hat justice wil not be forthcoming as also other elreumslances, the ‘ontfactor can objet to such an appointment whereby matter is referred ‘arbitration unver condition No. 6. that be eo, the main outcome will | |scores serene min Sor a i vas wet fe 0 i 6 mes se soos eggs chven ond a ee atone tan etiam hoc a Seer a nes ag SoS Soe el te tes cnet oS cetera separate Ferraro seat stacy mm aly Anscteeccerteatas et e Sincere etal ope Steric nec tarts cre og ors cu eel Seo en ee peat ee oa Seaoanaece (ame es Mw gn ag Coat ee - 1972 empower tne Coon to mae guano ft of rasan pounce cognac ec ke hse yh ari a a a a mt Sg Tete ese caFntay oben cs See lneqtoen 1960 Peepers 0 re ‘Teepe nt ly Se Se we ta eee So Stacchetaeeereaatoe Ponauveamees tee rereataeiatactesoummest eonoe ieee She as ait agtownsaromennss Sec Seca Snnekacentonms ier ac ecto rater sboe even autores ke We an oxer thee oat tScactn Pete 1870 Bon 3 we rn ithe apres proces witha we ree eat treonnbenepere, ems mt heal _ enteral ctumumucetugemn wr Pein Set te a Ricci eager ae arernenen | So te enero en ct ehieneemane Se wiles Sencar "massed no stjecin ceria from the previous architect DeSSLESSSE iow he tent ofthe emplers and tke FESS SSS poe ta wnat no objection ceria oF Serr asaceee seen = Laas ‘copier barn righ wseveop the property caniot develop because Saearieveceraet See epee nee oot pte ctceeaiceenesteecemmeaea eeieesteseancimraeeanets eeoeaneees of conratalogt or otherwise, aay! eet tora nee ‘iecmne evens at 9 Sitecnermoteemnomanyac noe 2 senate 4 Shnonemventges * ete. naceincneaheand EEA SUBD Ina te dectne of “Ungiat enrichment” at SSE Sas Rite meschicmetnanetby cane eS Se me Be anal Son ee appa as the Sette Dearne of he Sate ef Bengal Sor ‘Setoaet tneconractornare eed ote di Under Satan YO chine (Contncor unter Setn YOu the Conte he Theater te Sake areas ene come oreo SEs eee ie tas ear aaa Soa onl fr yarn Hey re Ret Seen eee Mcaa ace = himaeeteeeatne air ete es cata et cee ewes eater eee Seeeee eae cemte ences arent tas cee eee Seohoat een momuementnaresans See ee ace Eee teen meerreaes Soathieerecinetnnaeeeectoes cea see eve tere ace pe aaa ieetrewecermnuenceme tran rene femeeince yet neem eae Seren ineeicnn tee onees Senne eaearowa reat neces ES eee erate ee ees oa ao Sense aa Sor Se een Suse Terenas gears erate eerrneee etry Saree eeeart eee ee Se cee eer 2 ee cence a te ee ea eae Spree ey eS aaeeee ee oe Se en Ser att Scares een ee cera hctes ta em rome cee ee eee bed crs cack ea a a meng te eee ee at cen ee ea Se on cong pet aa ee retaaets an pacamet