Professional Contracts and Agreements

FAR EASTERN UNIVERSITY JUNE 2021
INSTITUTE OF ARCHITECTURE AND FINEARTS
Professional Contracts and Agreements

The Contract Document
Basis of any claims. The extent of the change may only be measured and evaluated by reference to the drawings and
specification upon which the contract is based.
Claims
claimant’s entitlement to make a claim will usually be spelled out in the conditions of contract, as will the procedure to be
followed in the event of a claim.
If there is a disagreement between the parties as to design, quality, responsibility, scope of works or procedures, the contract
is the place to look for guidance and resolution.
Considerations before claiming a claim
• The likely outcome and seriousness of the event

• The value of the claim.
• The strength of the claim and its chances of success
• The strategy should also consider how the claim is to be pitched
• Some claims are complicated in their very nature and if this is the case, they require a certain amount of knowledge
and experience to prepare. Do in‐house resources contain adequate experience and knowledge to produce the
desired result, or should additional resources be brought in?
• Client relationships should be considered.
• The parties who are likely to make the determination should also be considered.
Contract Terminologies
The Employer
The party who has ordered the work to be done. In other forms of contract, this party may be referred to as ‘the
Client’ or ‘the Owner’.
The Contractor
The party who is responsible for completing the work.
The Engineer
The party responsible for administering the Contract. In other forms of contract, this party may be referred to as
‘the Architect’, ‘the Supervising Officer’ or ‘the Project Manager’.
The Reviewer
The person responsible for reviewing a claim or response and producing a determination, defence or response to
the submitted document.
The Contract
The various documents including the letter of award, the agreement, contract conditions, the specifications, the
drawings and any further document listed in the agreement or letter of award which together form the contract
between the parties.
Programme
a breakdown of the work required into a list of planned activities showing the times and dates when they are
intended to happen or be done, in the form of a bar chart. In some parts of the world, this is customarily referred
to as a ‘schedule’.
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Delay Damages
A sum of money, which shall be paid by the Contractor to the Employer in the case of failure to complete the
Project by the Time for Completion. Some contracts deduct such monies under provisions of ‘liquidated damages’
or ‘penalties
Currency
refer to monetary values.
The Contract Document
Basis of any claims. The extent of the change may only be measured and evaluated by reference to the drawings and
specification upon which the contract is based. The contract documents will typically comprise the following:
1. The agreement
2. The particular conditions of contract
3. The general conditions of contract
4. The specification
5. The drawings
6. The bills of quantities
7. Other documents
UAP Contract Sample

UAP Document 401 provides the format for the Owner-Architect Agreement. However, since the adoption of the 2010
Standards of Practice (SPP) Documents by the PRBoA and the 2014 Architects Guidelines on Methods of Compensation
and Schedule of Fees, the document has not yet been amended or updated. Here is a sample format for the contract which
incorporated the 2010 SPP and 2014 Architects Guidelines. This sample contract can be used for the basic or full detailed
architectural and engineering design (DAED) services. You may amend some provisions to suit your project requirements.
PROJECT : __________________
LOCATION : ___________________
OWNER-ARCHITECT AGREEMENT
THIS AGREEMENT, made and entered into this __ day of Month, Two Thousand and xxx by Mr. ________________ of
legal age, Filipino and with postal address __________________, the party of the First Part, hereinafter called the OWNER
and between ____________, a duly registered and licensed architect under the laws of the Republic of the Philippines with
PRC Registration No __________, of legal age, Filipino and with postal address at ________________________, the party
of the Second Part, hereinafter called the ARCHITECT.
WITNESSETH,
That whereas the OWNER intends to build a (project title) building at (lot number/street/barangay/municipality/city),
hereinafter called the PROJECT.
NOW, THEREFORE,
The OWNER and the ARCHITECT, for and in consideration of the foregoing premises and of the other covenants hereinafter
named, agree as follows:
ARTICLE 1. SCOPE OF WORK
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That the scope of work to be done by the Architect, as herein authorized by the Owner for the subject Project herein referred
to, consists of professional services for the following:
1.01 Site development planning (SDP) of the grounds of the building, including other concomitant structures within the
Project site, as may be determined by the Owner.
1.02 Basic (Regular) Detailed Architectural and Engineering (DA&E) Design of the Project to be located at
________________________________.
ARTICLE 2. ARCHITECT’S BASIC SERVICES
The Architect’s Basic Services consist of the following:
2.01 Project Definition Phase
This phase involves the definition of the requirements of the project by the Owner. The Architect in turn informs the Owner
of the technical requirements of the project and the concomitant professional fees. In this phase, the Architect:
2.01.01 consults with the Owner to ascertain the conceptual framework and related requirements of the project and confirms
such requirements with him.
2.01.02 gathers relevant information and data leading to the definition of the requirements of the project, including the scope
of the Architect’s services.
2.01.03 reviews and refines the owner’s space requirements and translates them into an architectural program.
2.01.04 prepares an initial statement of probable construction cost.
2.02 Schematic Design Phase
This phase consists of the preparation of schematic design studies derived from the Project Definition Phase, leading to
conceptual plans. The Architect:
2.02.01 evaluates the Owner’s program, schedule, budget, project site and proposes methods of project deliveries.
2.02.02 prepares the initial line drawings representing design studies leading to a recommended solution, including a
general description of the project for approval by the Owner.
2.02.03 submits to the Owner a Statement of the Probable Project Construction Cost (SPPCC) based on current cost
parameters.
2.03 Design Development Phase
Based on approved schematics and conceptual plans, the Architect prepares:
2.03.01 the Design Development documents consisting of plans, elevations, sections and other drawings,
2.03.02 outline specifications to fix and illustrate the size and character of the entire project as to type of materials, type of
structural, electrical, mechanical, sanitary, electronic and communications systems.
2.03.03 diagrammatic layout of construction systems, and
2.03.04 an updated SPPCC for submission to the Owner.
2.04 Contract Document Phase
Based on the approved Design Development Documents, the Architect:
2.04.01 prepares the complete Contract Documents consisting of detailed designs and construction drawings, setting forth
in detail the work required for the architectural, structural, electrical, plumbing/ sanitary, mechanical, electronic and
communication works prepared by the Architect and the respective professionals involved.
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2.04.02 prepares Technical Specifications describing type and quality of materials, finish, manner of construction and the
general conditions under which the project is to be constructed.
2.04.03 submits to the Owner seven (7) sets of all construction drawings and technical specifications for purposes of
obtaining a building permit.
2.04.04 updates the SPPCC based on changes in scope, requirements or market conditions.
2.04.05 assists the Owner in filing the required documents to secure approval of government authorities having jurisdiction
over the design of the Project.
2.5 Bidding or Negotiation Phase
2.05.01 In this phase, the Architect:
a. prepares the Bid Documents such as forms for contract letting, documents for construction, forms for invitation and
instruction to bidders, forms for bidders’ proposals, general / specific conditions of contract, etc.
b. assists the Owner from the early stage of establishing a list of prospective Contractors to awarding of the construction
contract.
2.05.02 For competitive bids / procurements, the Architect:
a. furnishes complete sets of the Bid Documents for purposes of bidding in as many sets as may be required to conduct a
successful bidding. The said documents are loaned to bidders at an amount sufficient to cover direct and indirect costs
attendant to the preparation, packaging, reproduction and delivery of the said documents.
The Bid Documents are the intellectual property of the Architect (Sec. 33 of R.A. No. 9266), and must be returned by all
entities acquiring bid documents. A bond may be required to assure the return of the Bid Documents.
The Architect retains the sole ownership and copyright to the said documents (Sec. 33 of R.A. No. 9266). As such, bidders
must not reproduce nor use the documents for unauthorized purposes. The Owner also must not use the documents for
any other purpose other than the project for which the Owner and Architect signed an agreement.
b. helps in organizing and conducting pre-bid conferences,
c. responds to questions from bidders,
d. assists the Owner in obtaining proposals from Contractors, analyzes bid results and prepares abstract of bids, notice of
award, notice to proceed and other construction contracts.
2.05.03 For negotiated contracts, the Architect performs similar functions as in item 2.5.2 but negotiates with one Contractor
instead of many bidders.
2.06 Construction Phase
In this phase, the Architect performs the following:
2.06.01 makes decisions on all claims of the Owner and Contractors on all matters relating to the execution and progress
of work or the interpretation of the Contract Documents.
2.06.02 prepares change orders, gathers and turns over to the Owner written guarantees required of the Contractor and
Sub-Contractors.
2.06.03 makes periodic visits to the project site to familiarize himself with the general progress and quality of work and to
ascertain that the work is proceeding in accordance with the Contract Documents. The Architect shall not be required to
make exhaustive or continuous 8-hour on-site supervision to check on the quality of the work involved and shall not be held
responsible for the Contractor's failure to carry out the Construction work in accordance with the Contract Documents.
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During such project site visits and on the basis of his observations, he shall report to the Client defects and deficiencies
noted in the work of Contractors, and shall condemn work found failing to conform to the Contract Documents.
2.06.04 determines the amount owing and due to the Contractor and issues corresponding Certificates for Payment for such
amounts based on his observations and the Contractor's Applications for Payment. These Certificates will constitute a
certification to the Client that the work has progressed to the state indicated and that to his best knowledge, the quality of
work performed by the Contractor is in accordance with the Contract Documents. The Architect shall conduct the necessary
inspection to determine the date of substantial and final completion and issue the final Certificate of Payment to the
Contractor.
2.06.05 Should more extensive inspection or full-time (8-hour) construction supervision be required by the Client, a separate
full-time supervisor shall be hired and agreed upon by the Owner and the Architect subject to the conditions provided in the
SPP Document on Full -Time Supervision. When the Architect is requested by the Owner to do the full time supervision, his
services and fees shall be covered separately in conformance with the applicable and appropriate SPP Document.
ARTICLE 3. ARCHITECTS’ FEE AND MANNER OF PAYMENTS
3.01 That the Owner agrees to pay the Architect for professional services, a fee of ____________________, with other
payments and reimbursements hereinafter provided, exclusive of twelve percent (12%) Value-Added Tax (VAT), the said
amount hereinafter called the Basic Rate.
3.02 Payments to the Architect on account of the agreed Professional Fee shall be made by the Owner on the different
phases of the work of the Architect as follows:
3.02.01 Upon signing of the Service Agreement: An amount equivalent to 5% of the agreed Professional Fee shall be paid
by the Owner as engagement fee or as the acceptance fee of the Architect that shall cover the mobilization component of
the services. The Professional Fee shall be computed based on the Statement of Probable Project Construction Cost
(SPPCC) as included in the Annex of the Service Agreement.
3.02.02 Upon the completion of the Schematic Design Phase: Upon completion and submission of the documents under
Schematic Design Phase as stipulated in the Service Agreement, but not more than 15 days after submission of the
documents to the Owner, the Owner shall pay the Architect a sum equal to fifteen percent (15.0%) of the Professional Fee,
or a sum sufficient to increase the total payments on the fee to twenty (20.0%) percent of the Professional Fee (amount
paid under Section 3.02.01 shall be deducted from the total amount). The Professional Fee shall be computed based on
the Statement of Probable Project Construction Cost (SPPCC) that shall be part of the documents to be submitted at this
particular stage.
3.02.03 Upon the completion of the Design Development Phase: Upon completion and submission of the documents under
Design Development Phase as stipulated in the Service Agreement, but not more than 15 days after submission of the
documents to the Owner, the Owner shall pay the Architect a sum equal to twenty percent (20.0%) of the Professional Fee,
or a sum sufficient to increase the total payments on the fee to forty (40.0%) percent of the Professional Fee (accumulated
amount paid under Section 3.02.02 shall be deducted from the total amount). The Professional Fee shall be computed
based on the Statement of Probable Project Construction Cost (SPPCC) that shall be part of the documents to be submitted
at this particular stage.
3.02.04 Upon the completion of the Contract Document Phase: Upon completion and submission of the documents under
Contract Document Phase as stipulated in the Service Agreement, but not more than 15 days after submission of the
documents to the Owner, the Owner shall pay the Architect a sum equal to fifty percent (50.0%) of the Professional Fee, or
a sum sufficient to increase the total payments on the fee to ninety (90%) percent of the Professional Fee (accumulated
amount paid under Section 3.02.03 shall be deducted from the total amount). The Professional Fee shall be computed
based on the Statement of Probable Project Construction Cost (SPPCC) that shall be part of the documents to be submitted
at this particular stage.
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3.02.05 Bidding or Negotiation Phase: Within 15 days after the award to the winning bidder or bidders the payment to the
Architect shall be adjusted so that it will amount to a sum equivalent to ninety (90%) percent of the Professional Fee,
computed upon the lowest bona fide Bid or Bids or upon the winning Bid Price.
3.02.06 Construction Phase: The remaining of the ten (10%) percent of the Professional Fee is broken down as follows:
a) Five (5%) percent for Architect's Liability under the Civil Code, and
b) Five (5%) percent for the Periodic Construction Supervision (PCS)
Progress Billing can be done on the remaining ten percent (10%) of the Architect’s Fee based on the original Statement of
Probable Project Construction Cost (SPPCC).
Upon completion of the work (when Certificate of Completion is issued to Contractor), the balance of the Architect shall be
paid computed on the Final Project Construction Cost (FPCC).
6.4.7 The Owner can make partial payments during each of the various stages of the Architect’s work, upon request of the
Architect, provided that such payments are within the framework of the manner of payments outlined above.
ARTICLE 4. THE OWNER’S RESPONSIBILITIES
4.01 Provide full information as to his requirements for the Project.
4.02 When necessary, designate a representative authorized to act on his behalf.
4.03 Promptly examine and render decisions pertaining to documents submitted by the Architect to avoid unreasonable
delay in the progress of the Architect’s work. The Owner should issue orders to the General Contractor only through the
Architect.
4.04 Furnish or direct the Architect to obtain at his expense, a certified survey of the site, giving, as may be required,
topographical and/or relocation surveys covering grades and lines of streets, alleys, easements, encroachments and related
information, boundaries, with dimensions and complete data pertaining to existing buildings, structures, trees, plants, water
bodies, wells, excavations / pits, etc. and other improvements and full information as to the available utility / service lines
both public and private; zoning compliances, clearances, deed/s of restrictions, encumbrances and annotations to titles,
association guidelines and standards, and soil investigations / tests, borings and test pits necessary for determining soil
and sub-soil conditions.
4.05 Promptly pay for architectural and all other engineering and allied services required for the project.
4.06 Pay for the design and consulting services on acoustic, communication, electronic, and other specialty systems which
may be required for the project.
4.07 Arrange and pay for such legal, auditing, insurance, counseling and other services as may be required for the project.
4.08 Pay for all reimbursable expenses incurred in the project as called for in Section 7: “Other Conditions on Services” and
all taxes including VAT (but not including income tax) that the government may impose on the Architect as a result of the
services rendered by the Architect on the project, whether the services were performed as a natural person i.e. an individual
practitioner or as a juridical entity i.e. as a sole proprietorship, partnership or corporation.
4.09 If the Owner observes or otherwise becomes aware of anything that may impair the successful implementation of the
project, he shall give prompt written notice to the Architect.
ARTICLE. 5. PROJECT CONSTRUCTION COST
Project Construction Cost (PCC) as herein referred to, means the cost of the completed building to the Owner, including the
structure, plumbing/sanitary and electrical fixtures, mechanical equipment, elevators, escalators, air-conditioning system,
fire protection system, alarm and clock system, communications and electronic system, elements attached to the building
and all items indicated in the plans, designs, drawings and specifications prepared by the Architect and his consultants. The
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construction cost of other items planned and designed by the Architect, such as architectural interiors (AI) and site
development plan elements and other items of similar nature, additionally planned / designed by the Architect are also part
of the PCC.
The cost of materials used and the labor for their installation are part of the PCC. If these items are furnished by the Owner
below its market cost, the cost of the material and labor shall nonetheless be computed on the basis of the current (and fair
market value) costs.
The PCC does not include any of the fees for the Architect, the Engineer, the Specialist Consultants or the salaries of the
construction inspectors.
ARTICLE 6. BASIC FEE AND BASIC RATE
The “Basic Fee” and “Basic Rate” refers to the compensation to the Architect on account of his delivery of the Regular or
Basic Services referred to in Article 2. Where the Architect has to render more than the regular or basic services, it shall be
the subject of a special additional charge commensurate with the special services required. Such special charge shall be in
additional to the basic fee provided herein.
ARTICLE 7. OTHER EXPENSES CHARGEABLE TO THE OWNER
7.01Government Taxes on Service: The Architect’s Fee is a net amount. Any tax (exclusive of income tax) that the national
and/or local government/s may impose on the Architect as a consequence of the services performed for the project shall be
paid by the Owner.
7.02 Different Periods of Construction: If portions of the building/s are erected at different periods of time, thus increasing
the construction period and Architect’s burden of services, charges pertaining to services rendered during the Construction
Phase shall be adjusted proportionately. When the suspension of construction exceeds a period of six (6) months, the fee
for the remaining works shall be doubled.
7.03 Services of Specialist Consultants: If the Owner requires the services of specialist consultants, they shall be engaged
with the consent of the Architect. The cost of their services shall be paid for separately by the Owner and shall not be
deducted from the Architect’s fee.
7.04 Other Professional Services: that the Architect’s fee includes normal structural, electrical, electronics, plumbing,
sanitary and mechanical engineering services. Services for survey, soil exploration and laboratory test are on the account
of the Owner as stipulated in Article 4.04. Other services that may be needed in order to complete the project such as
services of acoustic and illumination engineers / specialists, mural painters, sculptors, and other service providers are to be
recommended by the Architect for the Owner’s approval. Costs for these services are to be paid for separately by the Owner
and shall be subject to a coordination fee payable to the Architect.
7.05 Separate Services: Should the Owner require the Architect to design movable or fixed pieces of cabinets and other
architectural interior (AI) elements, site development plan (SDP) components, urban design elements, and other items of
similar nature, the Owner shall pay the Architect in addition to the Architect’s fee. The fee shall be based on an agreed
method of compensation.
7.06 Miniature Models: Should a scale model, 3D models and/or walk-thru presentation of the architect’s design be
necessary for exhibition and display purposes, they are to be recommended by the Architect for the Owner’s approval.
Costs for these services are to be paid for separately by the Owner and shall be subject to a coordination fee payable to
the Architect.
7.07 Per Diems and Traveling expenses: A per diem of not less than __________ Pesos (P 0,000.00) plus traveling and
living expenses shall be chargeable to the Owner whenever the Architect or his duly authorized representative is required
to perform services at a locality beyond 50.0 kilometers (air, straight line or radial distance) from his established office as it
appears in the Architect’s letterhead.
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7.08 Extra Sets of Contract Documents: The Architect is to furnish the Owner seven (7) sets of Drawings, Specification and
other Contract Documents. Cost for printing or reproduction of extra sets of Contract Documents when required by the
Owner or his representative is to be paid by the Owner at a cost equivalent to ______________ Pesos (P00,000.00) per
set.
7.09 Changes Ordered by Owner: If the Architect renders additional professional services due to changes ordered by the
Owner after approval of the Architect’s outputs, the Owner shall pay the Architect for extra time, resources/ drafting, or other
office expenses.
7.10 Work Suspended or Abandoned: If the work of the Architect is abandoned or suspended in whole or in part, the Owner
shall pay the Architect for the services rendered corresponding to the amount due at the stage of suspension or
abandonment of the work.
The primary service of the Architect is the preparation of architectural plans/designs, specifications and other building
construction documents. These are sets of detailed instructions that shall serve as the basis for the General Contractor to
implement the project. Once the Architect has prepared all these documents, the Architect has completed the Detailed
Design and Contract Documents Phase of his services, which is equivalent to Ninety percent (90%) of his work.
When the Owner therefore fails to implement the plans and documents for construction as prepared by the Architect, the
Architect is entitled to receive as compensation the sum corresponding to ninety percent (90%) of the Architect’s fee
ARTICLE 8. FULL-TIME SUPERVISION
Upon recommendation of the Architect and with the approval of the Owner, full-time construction supervisors as will be
deemed necessary shall be engaged and paid by the Owner. If no Project / Construction Manager is present, the full-time
construction supervisor shall be under the technical control and supervision of the Architect and shall make periodic reports
to the Owner and to the Architect regarding the progress and quality of the work done.
ARTICLE 9. ESTIMATE
Any SPPCC or any Cost Estimate submitted by the Architect can attain only a certain degree of accuracy. As the Architect
has no control over the cost of labor and materials, or the many factors that go into competitive bidding, he does not assume
any professional responsibility for such cost estimates, unless glaring errors or discrepancies are clearly evident.
ARTICLE 10. COST RECORDS
During the progress of work, the Owner shall furnish the Architect a copy of the records of expenses being incurred on the
construction. Upon completion of the project, the Owner shall furnish the Architect a copy of the summary of all cost of labor,
services, materials, equipment, fixtures and all items used at and for the completion of the construction.
ARTICLE 11. DESIGN AND PLACEMENT OF SIGN
All signboards of the General Contractor, sub-contractors, jobbers and dealers that shall be placed at the project site during
the progress of construction shall be approved by the Architect as to size, design and contents. After the completion of the
project, the Owner or his building lessee shall consult the Architect for the design, size of all signboards, letterings,
directories and display boards that will be placed on the exterior or public areas attached to the building project in order to
safeguard the Owner’s interest. Nothing should be installed inside or outside of the building that would compromise its safety
and aesthetics.
ARTICLE 11. OWNERSHIP OF DOCUMENTS
All designs, drawings, models, specifications and other contract documents and copies thereof, prepared, duly signed,
stamped and sealed and furnished as instruments of service, are the intellectual property and documents of the Architect,
whether the work for which they were made is executed or not, and are not to be reproduced or used on other work except
with a written agreement with the Architect (Sec. 33 of R.A. No. 9266).
ARTICLE 12. SUCCESSORS AND ASSIGNS
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The Owner and the Architect each binds himself, his partners, successors, legal representative and assign to the other party
to this Agreement, and to the partners, successors, legal representative and assigns of such other party in respect of all
covenant to this Agreement. Except, as above, neither the Owner nor the Architect shall assign, sublet or transfer his interest
in this Agreement without the written consent of the other.
ARTICLE 13. ARBITRATION
All questions in dispute under this Agreement shall be submitted in accordance with the provisions of the Philippine Law on
Arbitration and provided for in Art. 2042 of the New Civil Code of the Philippines and the provision of the Republic Ac. No.
876, (but all litigations shall be confined under the jurisdiction of city/municipality and both parties agree not to adjudicate in
any other areas for that matter.)
The Parties in dispute under this Agreement hereby agree to full performance of the covenants contained herein.
IN WITNESS WHEREOF, the parties to this Agreement have on the day and year first above given, hereunto set their hands
at the bottom of this page and on the left-hand margin of all the other pages of this Agreement.
By:
NAME OF OWNER/CLIENT NAME OF ARCHITECT
OWNER ARCHITECT
SIGNED IN THE PRESENCE OF:
_________________________________ ______________________________
ACKNOWLEDGEMENT
(Republic of the Philippines)
City/Municipality of _______________ ) S.S.
Before me, a Notary Public in ______________ personally appeared Mr. _______________, with Residence Certificate
No. _____________ issued on _______________at ______________ and Architect _______________ with Residence
Certificate No. _____________ issued on ____________ at ______________, both known to me and to me known to be
the same persons who execute the foregoing instrument and acknowledged to me that the same is their free act and deed.
In witness whereof, I have hereunto set my hand and affixed my Notarial Seal this __ day ______________ in the City of
___________, Philippines.
________________________
NOTARY PUBLIC
Bonds - from CIAP Document 102 (Uniform General Conditions of Contract for Private Construction) 2004 Ed.
The Contractor, prior to signing the Contract, shall furnish a Performance Bond equal to 15% of the Contract amount for the
faithful performance of his work and 15% bond covering Contractor's obligations arising from the Contract to its workers,
subcontractors and suppliers. Such bonds shall be in the form of surety bond as approved by the Owner, and shall remain
in effect until replaced by the Contractor's guarantee bond.
The Performance and Payment Bonds will be released by the Owner upon posting by the Contractor of a Guarantee Bond
equivalent to the amount of the retention released to the Contractor. The Guarantee Bond shall be for a period of one (1)
year commencing from the date of posting as a guarantee that all materials and workmanship installed under the Contract
are of acceptable quality.
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EXECUTION, CORRELATION, MEANING OF TERMS, AND INTENT OF DOCUMENTS

2.01 INTENT OF CONTRACT:
The intent of the Contract is to include all labor and materials, equipment and transportation necessary for the proper
execution of the Work.
2.02 STANDARD OF CONDUCT:
Each party to the Contract acknowledges that, in the exercise of his rights and in the performance of his duties, he must act
with justice, give the other party his due, and observe honesty and good faith.
2.03 INTERPRETATION OF CONTRACT
a. In case of conflict between the provisions of the Agreement or of any Contract Document, or between the provisions of
one of the Contract Documents and the provisions of another Contract Document, or in case of discrepancy, defective
description, error or omission in the Contract, the following rules shall be followed:
RULE 1: The Agreement and the Contract Documents shall be taken as mutually explanatory of one another. The various
provisions of the Contract shall be interpreted together, attributing to thedoubtful ones that sense which may result from all
of them taken jointly.
RULE 2: The provisions of the Civil Code of the Philippines on the interpretation of contracts and of the Rules of Court on
the Interpretation of Documents shall be applied.
RULE 3: Where the conflict between or among the provisions of the Agreement and/or the Contract Documents cannot be
resolved by Rules 1 and 2, it shall be understood that:
(a) the Detailed Drawings shall prevail over the General Drawings;
(b) words and figures shall prevail over the Drawings;
(c) words shall prevail over figures in Contract Documents;
(d) written dimensions shall prevail over measured dimensions.
RULE 4: Where the conflict cannot be resolved by applying Rule 3 or where Rule 3 does not apply, the conflict shall be
resolved by giving precedence to the Agreement or to provisions of a Contract Document higher in order of priority among
the various documents which comprise the Contract. The order of priority among these documents shall be as follows:
(a) Agreement as modified by Notice of Award of Contract, if such be the case, and the Contractor's conformity thereto:
(b) Instruction to Bidders and any amendment thereto;
(c) Addenda to Bid Documents;
(d) Specifications;
(e) Drawings;
(f) Special Conditions of Contract;
(g) General Conditions of Contract;
(h) Other Contract Documents; and
(i) Other documents forming part of the Contract attached thereto or incorporated therein by reference.
Where the order of precedence is modified in the Agreement, such modified order of precedence shall be followed; however,
the mere listing of Contract Documents in the Agreement or any Contract Document shall not be interpreted as establishing
an order of precedence among them.
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RULE 5: Where there is discrepancy, defective description, error or omission in any Contract Document, the Contract
Documents shall be interpreted as being complementary to each other. Thus, what is called for in one Contract Document,
although not mentioned in another Contract Document where it should have been mentioned, shall be deemed to be called
for by the Contract.
RULE 6: The apparent silence of the Drawings, Specifications or any other Contract Document as to any detail, or the lack
of detailed description concerning any part of the work, shall be understood to mean that good and accepted construction
practice in accordance with the usage or custom of the place shall be followed.
RULE 7: Rules 1 to 6 shall yield to specific rules of interpretation in this document or in the Contract.
b. The Owner shall resolve the conflict, or interpret or explain such discrepancy, defective description, error or omission
with due regard to Article 2.04 below.
c. The interpretation of or explanation by the Owner shall be issued in the form of instructions to the Contractor. Where the
Owner fails to issue the instruction in writing, the execution of that part of work affected by the interpretation or explanation
without a timely objection or protest of the Owner shall be deemed to have been executed in accordance with the Owner's
explanation or interpretation.
d. In all cases where a device, item or part of equipment is referred to in the singular number, it is intended that such
reference shall apply to as many such devices, items, or parts as are required to complete the work.
2.04 CONFORMITY TO THE CONTRACT: The Work shall be executed in accordance with the Contract.
a. If there be a variance between the Drawings and the Specifications, the provisions of the Specifications shall control. In
case of conflict between the General Conditions or any modification thereof and the detailed specification requirements, the
detailed specification requirements shall control.
b. Any discrepancy found between the Drawings and Specifications and site conditions or any error or omission in the
Drawings or Specifications shall be immediately reported to the Owner, who shall promptly correct such discrepancy, error,
or omission. Any work involving such discrepancies shall be estimated by the Contractor and unit prices or lump sum
amounts shall be agreed upon by the parties whenever possible before the work is done. Any work done by the Contractor
involving discrepancies found by the Contractor and not reported to and without the knowledge of the Owner shall be
considered as having been done at the Contractor's risk.
c. The Owner shall be fully responsible for adequacy of the design and for sufficiency of the Drawings and Specifications.
The complete requirements of the Work shall be set forth in Drawings and Specifications to be supplied by the Owner.
d. In the event that any part or whole of the Works, when agreed upon, are designed by the Contractor, then all
responsibilities assigned to the Owner for the said design shall automatically be assigned to the Contractor as his
responsibility
Claims
claimant’s entitlement to make a claim will usually be spelled out in the conditions of contract, as will the procedure to be
followed in the event of a claim. If there is a disagreement between the parties as to design, quality, responsibility, scope of
works or procedures, the contract is the place to look for guidance and resolution.
The burden of the claimant is to prove his case on the balance of probabilities and to do so, he must substantiate that the
events have actually occurred, possibly substantiate the timing of the events and substantiate that the provisions of the
Contract have been complied with in terms of notices and submissions Records may comprise letters, memos, transmittals,
meeting minutes, daily, weekly and monthly reports, programmes and notices.
Important contemporaneous supporting evidence to any claim could include the following:
• Tender and Contract documents

• Daily and/or weekly site‐progress data
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• Periodic progress reports

• Daily staff, labour and plant records
• Material deliveries to site
• Drawing register showing issue dates and revision numbers
• Contract programme
• As‐built programme
• Progress records to show activities started, in progress, on hold, suspended or completed
• Variation Orders or the like
• Correspondence
• Meeting minutes
• Notices
• Site diaries
• Site memos and instructions
• Photographs with date records
• Site measurement records
• Daywork records (whether or not this will be the eventual means of evaluating additional works)
• Purchase orders and invoices
Many of the above may be submitted to the Engineer (or his representative or equivalent under various forms of contract)
on a periodic basis and if such a person can be persuaded to acknowledge them as being accurate contemporaneous
records, it would be difficult to repudiate them if they were later relied on as evidence to support a claim.
Types of Claims
Claims for Variations
a variation is something that changes the nature of the project. This may consist of additional or less work, a
change in the specification for part of the work, or in some cases a change to the contractual basis of the project
such as the contract price or period. Ideally such changes would be correctly administered by the Engineer by way
of formal variation instructions, accompanied by additional information, such as drawings, to enable the Contractor
to carry out the varied work and, of course, the instructions would all be issued in plenty of time so as not to disrupt
or delay the Contractor’s planned sequence of work in any way.
Claims for Extensions of Time
Other than variations, the most common reason for the submission of a claim is for an extension to the time for
completion of the works. The reasons for such a claim are twofold. It establishes a new completion date for the
project and prevents the Engineer from deducting liquidated damages or penalties for delay, which he is obliged
to do under most contracts. An award of an extension of time may also, however, entitle the Contractor to additional
payment as compensation for being obliged to maintain his site establishment and contribute to other overheads
for a longer period than was contemplated within the Contract.
Claims for Additional Payment Due to Prolongation
While an award of an extension to the time for completion will negate the Employer’s entitlement to deduct
liquidated damages or penalties, such an award does not usually automatically carry an entitlement to any
additional payment for the prolonged period. Such a payment may, however, be warranted in circumstances
whereby the Contractor, due to the circumstances that have caused an extension of time to be awarded, has been
obliged to maintain his site establishment and utilize his head‐office facilities and the like for a period longer than
anticipated. In such a case, the Contractor is usually obliged to submit a claim for the additional payment.
Acceleration and Disruption Claims
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This are concepts that are notoriously extremely difficult to prove and to calculate. It could be that the Employer has prevailed
upon the Contractor to accelerate the work to either mitigate delays caused for which the Employer is allocated the risk, or
simply to complete the project earlier than the time for completion provided for in the Contract. In such circumstances, the
Contractor will no doubt incur additional costs in doing so and consequently be entitled to additional payment for the
following:
• Extended working hours, resulting in additional costs of labour due to overtime payments
• Increased plant and labour, resulting in additional mobilisation and demobilisation costs
• Increased plant and labour, causing loss of efficiency as a result of too many workfaces operating at once
• Loss of production caused by working out of sequence, or working on more than the optimum number of
workfaces
Similarly, while acts of the Employer may not always cause delay, they may cause disruption to the Contractor’s planned
method of working, leading to loss of efficiency or additional costs incurred in order to mitigate the effects of the disruption.
Claims for Damages Under Law
the following circumstances under which the Contractor may make such a claim:
• Delayed Drawings or Instructions

• Right of Access to the Site
• Setting Out
• Unforeseeable Physical Conditions
• Fossils
• Testing
• Variations
• Exceptionally Adverse Climatic Conditions
• Unforeseeable shortages in the availability of personnel or Goods caused by epidemic or governmental actions
• Any delay, impediment or prevention caused by or attributable to the Employer, the Employer’s personnel, or the
Employer’s other contractors on the Site
• Delays Caused by Authorities
• Interference with Tests on Completion
• Adjustments for Changes in Legislation
• Adjustments for Changes in Costs
• Contractor’s Entitlement to Suspend Work
• Consequences of Employer’s Risks
• Consequences of Force Majeure
Interim and Final Claims
An example of such may be where a variation instruction includes an item that is subject to special order and the
manufacture and delivery periods have not been finalized at the time when the claim is due to be submitted
Presentation of claim Submission
The claim submission should basically consist of two parts:
1. The narrative which deals with the details of the project, sets out the circumstances of the claim, demonstrates the
effects of the claim and explains the basis of any supporting documents that have been prepared to help
demonstrate the effects and/or quantum of the claim.
2. Appendices which contain documents such as programmes, calculations and project records that have been
prepared to support, illustrate or substantiate the claim.
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A well‐presented document demonstrates the professionalism not only of the company presenting it, but also of the
individual(s) responsible for compiling it and will include the following:
• Good‐quality files or folders containing the documents

• Covers and spine labels showing the necessary information
• Clearly tabbed and labelled dividers to separate exhibits and appendices
• Documents printed on good‐quality paper
• User‐friendly and attractive page layouts using good‐quality graphics
• Headers and footers showing the name of the party making the submission, the title of the document, page
numbers, the document date and, if necessary, the revision number
• Documents included as exhibits presented in a logical order, clearly and easily identifiable and cross‐referenced
• The submission contained in separate volumes and/or sections, which are in a logical order, clearly labelled and
clearly referenced
Essential Elements of a Successful Claim
The elements that are absolutely essential to include in a claim or determination are as follows:
1. Cause
2. Effect
3. Entitlement
4. Substantiation
Time Limits
The Contractor shall perform his work subject to certain Time Limits. This indexed section, as based on the entire General
Conditions, is provided for in order to facilitate the execution of his work.
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Other Definition of Terms
• ACT OF GOD OR FORCE MAJEURE shall mean any event beyond the reasonable control of the Owner or the
Contractor, as the case may be, and which is unavoidable notwithstanding the reasonable care of the party affected
and shall include, without limitation, the following:
a. war, hostilities or warlike operations (whether a state of war be declared or not), invasion, act of
foreign enemy, civil war;
b. rebellion, revolution, insurrection, mutiny, usurpation of civil or military government, conspiracy, riot,
civil commotion, terrorist acts;
c. confiscation, nationalization, mobilization, commandeering or requisition by or under the order of any
government or de jure or de facto authority or ruler or any other act or failure to act of any local or
state or national government authority;
d. strike, sabotage, lock-out, embargo, import restriction, port congestion, lack of usual means of public
transportation and communication, industrial dispute, shipwreck, shortage or restriction of power
supply, epidemics, quarantine, plague;
e. earthquake, landslide, volcanic activity, fire, flood, inundation, tidal wave, typhoon or cyclone,
hurricane, storm, lightning, or other inclement weather condition, nuclear and pressure waves, or
other natural or physical disaster;
f. shortage of labor, materials or utilities where caused by circumstances that are themselves Force
Majeure.
• Addendum - a separate explanatory statement intended to clarify, amend or supplement a document, drawing etc.
• Additional work - in contract administration, construction work ordered by the client after the contract has been
awarded, not included in the contract and for which the contractor is paid separately.
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• ADVERTISEMENT or INVITATION TO BID refers to the notice published by the Owner or the invitation issued to
prospective bidders, giving information as to the nature of the proposed project, conditions for the issuance of
Contract documents, date of bidding, and information that would give the Contractor a general idea of the
magnitude and extent of the project.
• AGREEMENT is the term used to describe the agreement signed by the Owner and the Contractor excluding the
Contract Documents which are attached thereto.
• BID is the tender, or proposal, or quotation, or offer of a bidder to perform the work described in the Contract which
in form and substance complies with the Instruction to Bidders.
• BID BOND refers to any acceptable form of bond accompanying the Bid submitted by the bidder as a guarantee
that the bidder will enter into the Contract with the Owner for the construction of the Work, if the Contract is awarded
to him.
• BID DOCUMENTS collectively refer to all documents provided or made available to prospective bidders which
include the Invitation to Bid and a copy of the Contract which the winning bidders would be required to sign with
the Owner.
• BID BULLETIN is a document containing additional information on Bid Documents issued to bidders before date
of bidding.
• Change order - in contract administration, an instruction from the client or client’s representative that implements
a change in the nature or extent of constructed work.
• CONTRACT DOCUMENTS are the documents attached to the Agreement identified therein as Contract
Documents, including all additions, deletions and modifications incorporated therein. These generally include the
following documents: a. Special Provisions or Conditions b. General Conditions c. Specifications d. Drawings e.
Other Bid Documents
• COST means all expenditures properly incurred or to be incurred, whether on or off the site, including overhead
and other charges properly allocable thereto but does not include any allowance for profit.
• Ex-gratia application - in contract management, a request by a contractor for payment in circumstances where he
has no legal right to reimbursement.
• FINAL PAYMENT refers to the payment of the final progress billing and all approved claims including but not limited
to variations in the work, Contract Price adjustments and/or escalation, acceleration of work, and others. It does
not include the retention money.
• Final certificate - a document that authorizes payment to the contractor of the final account, an approval that the
terms of the contract have been met.
• Fluctuation - an increase or decrease in the prices of labour, materials or plant from those specified in the tender,
allowed for in the building contract.
• Formula price adjustment – a method of calculating the amount to be added to or deducted from a contract sum
due to changes in the costs of labour, plant and materials during construction using a price variation formula.
• Formula variation of price contract - a variation of price contract in which prices are amended according to
previously agreed terms. Completion certificate in contract management, a document issued to the contractor that
certifies completion of specific areas of work, which have been approved by building control.
• Completion date - handover date; the on which work on a building under construction or repair is due to be
completed, as written in the building contract
• Completion of defects certificate - a document issued at the end of the defects liability period certifying that all
defects have been made good or repaired.
• Daywork - a method of payment for additional construction work on the basis of hourly rates of labour, materials
and plant.
• GUARANTEE BOND is the approved form of security furnished by the Contractor and his Surety as a guarantee
of the quality of the materials provided, the equipment installed, and the workmanship performed by the Contractor.
• INSTRUCTION TO BIDDERS refers to the list of instructions regarding the manner bids are to be prepared and
the conditions for the award of the Contract.
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• PAYMENT BOND is the approved form of security furnished by the Contractor and his Surety as a guarantee of
good faith on the part of the Contractor to faithfully comply with the Contract in respect of its obligations arising
therefrom to its workers, subcontractors, and suppliers.
• PERFORMANCE BOND is the approved form of security furnished by the Contractor and his Surety as a guarantee
of good faith on the part of the Contractor to execute the Work in accordance with the Contract.
• SCHEDULE OF MATERIALS AND FINISHES is an outline specification enumerating the type or trade names of
materials required to be used by the Contractor for the Work.
• SPECIFICATIONS are the written or printed description of the work to be done describing qualities of the material
to be used, the equipment to be installed and the mode of construction.
• SURETY is the person, firm or corporation which issues the bond required of the Contractor
• Request for information (rfi) - is the least formal of the three and the smallest commitment for the requestor. Rfis
are designed to collect information from a vendor with no commitment to engage in any particular project and it is
likely that minimal or no project details would be provided. Instead the document would focus on the vendor
capabilities, skills and experience. It will typically be followed by an rfq or rfp.
• Request for quote (rfq) - is commonly used when a requestor knows what they want but need information on how
vendors would meet the requirements and/or how much it will cost.
• Request for proposal (rfp) - is the most formal and intensive of the three for both the requestor and the vendor.
Rfps have strict procurement rules for content, timeline and vendor responses and are used when the request has
a specific project or problem.
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Professional Contracts and Agreements

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FAR EASTERN UNIVERSITY JUNE 2021

INSTITUTE OF ARCHITECTURE AND FINEARTS

Professional Contracts and Agreements

• The likely outcome and seriousness of the event

UAP Contract Sample

EXECUTION, CORRELATION, MEANING OF TERMS, AND INTENT OF DOCUMENTS

• Tender and Contract documents

• Periodic progress reports

• Delayed Drawings or Instructions

• Good‐quality files or folders containing the documents

Other Definition of Terms

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