1.

Six essential elements of a valid contract

1) Offer and Acceptance
Establishes an agreement between the contract parties.
2) Consideration
Must be provided by both contractual parties except for contract under seal.
3) Contractual capacity
Each party possesses the legal capacity to enter into the contract.
4) Genuineness of consent
Both parties must have the intension to enter into legal relations and must do so in
their own free will.
5) Form of a contract
the contract must be in a particular form.
6) Legality of object
The subject of the contract must be legal.
Lacking one or more of the above elements, the contract will be treated as void,
voidable or unenforceable. Void contracts are destitute of legal effect.

How an acceptance can be legally?

2. An acceptance can be communicated by the orally, writing or conduct. The
general rules for acceptance are: an acceptance has no effect until it is
communicated to a person making the offer; and the offeree accepting the terms of
the offer without any qualification or amendment. Then the offer is legally accepted.

3. Consideration is the legal term given to the benefits in exchange between the
contracting parties. No contract can be formed if one party is not bound to provide
consideration to the other party.
The rules of consideration are:
1) Past consideration is treated as no consideration, that means contractor cannot
enforce(執行) the original promise if the act was performed before the promise was
made.
2) Consideration must be sufficient but not need to be fair
3) To carry out either public duty or an existing contractual obligation does not
provide consideration.
4) Only the parties to the contract who can be given consideration and will be able
to enforce a contract.
4. Quantum Meruit is the duty imposed by law to pay a reasonable sum for goods
or services received.
a. Where no price is fixed.
-If the contractor does work, he is entitled to be paid a reasonable sim for his
labour and materials supplied.
-If contract term for payment is for the whole work, completion may be made a
condition before payment.
-In absent of clear workings, contractor is entitled periodically to demand payment
on account of the value of work he has done.
b. Failed negotiations
-If work is carried out while negotiations on the terms of the contract are proceeding,
but never reached upon essential terms, contractor is entitled to be paid a
reasonable sum for the work carried out.
c. Prevention of completion by employer
-If wrongful acts by the employer prevent completion, the contractor can claim a
quantum merit payment.
d. Acceptance of part performance
-If the contractor can prove, by inferred or implied agreement, a new contract to pay
for the work done, he may recover the money for the work be has completed on the
basis of the new contract.
e. Wavier of a condition
-It is always open to a party to waive a condition, which is inserted for his benefit.
f. Work outside the contract
-Contractor, who does work outside the contract at the client’s request, is entitled to
be paid a reasonable sum for the additional work.

5. Different between Simple contract and Contract under seal

Simple contract
Can be oral, in writing and conduct
No action can be brought after expiration of 6 years from the date on which the
cause of action accrued.
Contract under seal
In writing only
12 years from the date on which the cause of action accrued.
6. Contract Discharged
Discharge by agreement:
Contract discharged by subsequent agreement that parties provided consideration.
Bilateral discharge:
No performance and mutual agree of the parties who provides consideration.
Unilateral discharge:
A contract make provision for its own discharge such as employment contract.
Discharge under conditions:
The conditions of a contract are not fulfill such as violating conditions of a contract.
Discharge due to frustration:
The agreement become impossible to perform due to unforeseeable circumstance.
Anticipatory breach:
An express declaration of intent not to perform, before time for performance arrives.

7. Main Contractor’s Obligations

(i) Progress and complete the works in accordance with the contract.
(ii) Provide the necessary indemnities [settlement] to the Client against.
(iii) Provide necessary insurance (EC & CAR insurance).
(iv) Submit any claims to the architect within a reasonable time.
(v) Keep a competent foreman-in-charge constantly upon the works.
(vi)Allow the architect and his representatives access to the site / workshops at all
reasonable times.
(vii) Permit carrying out of inspection reports by the clerk of works if appointed.

Employer’s Obligations
(i) Payment
(ii) Give possession of the site
(iii) State extent and time of possession
(iv) Appoint an architect and quantity surveyor
(v) Supply instructions
(vi) Must not interfere with progress

Duty of:
Architect
Design, advise, supervise construction, and certify payments due to main contractor.
Act as an agent for the client under terms of engagement which constitutes an
independent sub-contractor contractual relationship.
Quantity Surveyor (QS)
(i) Pre-Contract Stage :
Advise on project costs, prepare tender documents and tender report.
(ii) Post Contract Stage
Prepare certificates of payment and variation accounts and calculate adjustments to
the contract sum due to fluctuations.

Foreman-in-Charge
Receive architect’s instructions on behalf of the main contractor on site.

8. Variations
1. Most building contracts are entire contracts which mean no obligation to carry
out variations or to pay for variations.
2. Can introduce a variation clause to modify doctrine of entirely.
3. Give client right to require variations and provide rules governing adjustment of
contract sum.
4. Where the valuation relates to the carrying out of:
4.1 Additional or substituted work which can be properly valued by measurement;
4.2 Work which is the subject of Provisional Quantities or Provisional items; or
4.3 Work involved in the expenditure of Provisional Sums.
5. The work shall be measured and shall be valued in accordance with following
rules;
5.1 Where the work is the same as or similar in character to and is carried out under
the same or similar conditions to work priced in the Contract Bills, and the variation
does not substantially change the quantity of the work, the rates in the Contract Bills
for that work shall determine the Valuation;
5.2 Where the work is the same as or similar in character to work priced in the
Contract Bills but is not carried out under the same or similar conditions, or the
Variation substantially changes the quantity of the work, the rate in the Contract Bills
for that work shall determine the Valuation but with a fair adjustment for the
difference in conditions or quantity; and
5.4 Where the work is not the same as or similar in character to any work priced in
the Contract Bills the work shall be valued at fair rates.
9. Retention
1. Objective: Secure main contractor ‘s obligation to complete the work and make
good defects.
2. Client holds retention money as trustee for the main contractor but without
obligation to invest.
3. Normally is 10% of the certified value of contractor work done, limit 5% of the
contract sum.
Client is permitted to draw from the fund to reimburse himself for:
1. Work executed by third party where main contractor did not compile with a valid
instruction.
2. Issuing of Certificate of Practical Completion, one moiety of the retention fund is
released.
3. The rest being released after the issue of the Certificate of Making Good Defects.

10. Law of tort (5 elements)

1) Duty of care is a legal obligation that is owed to another and that needs to be
satisfied, an obligation for which somebody else has a corresponding right.
2) Breach of duty is the violation of a legal or moral obligation, the failure to act as
the law obligates one to act.
3) Damages are actual or physical harm and the monetary values ascribed to those
harms.
4) Causation is the cause in fact and proximate cause, cause in fact means without
that cause, the event could not be occurred. Proximate cause is legally sufficient to
result in liability, an act or omission is considered in law to result in a consequence,
so that liability can be imposed on the actor.
5) Remoteness is the damage must not the too remote to be recovered.

Example: Driver have a duty to follow the rules of the road and ride the passenger to
his destination. Passenger have duty to pay the fee.