Contracts & Procurement
Expression of willingness
1. Explain the need and importance of
formulating and entering in to service
contracts when considering the Facilities
Management Profession? (In 3 lines) I
have explained the same in detail hope
you’ll have taken notes.
 To transfer, reduce Risks
 Service level enhancements
 Cost Benefits
 Acquiring Expertise
2. What are two models applied by a
Facilities Management Service Provider
when entering in to a Client Contract?
 Principal Model: One TFM Service
provider enter in to a contract with
the Client and all the other
outsourced FM Vendor Contracts
are signed with the TFM service
provider
 Agency Model: TFM Service
provider act as the managing
agent for all FM vendors behalf of
the Client, All FM Vendor Contracts
are directly signed with the Client.
3. What are the essential elements which
need to be available if a promise to be
enforced by the courts as a valid legal
contract?
- Agreement constituted by a sometime being referred in the FM
corresponding offer & acceptance
- Consideration – mutual exchange of
something (Ex: Money)
- Intention to create legal relations
- Terms of the agreement are certain
not vague
- Agreement is a complete agreement
that does not need further
developments or clarifications (must
contain all essential terms necessary to
execute the agreement.
4. What is an Offer?
to contract on certain terms
5. Define what it is mean by Terms in a
Contract and why it is important? (In 2
lines)
Terms are what the parties to contract
obliged to do or not to do, it is of critical
importance to establish the terms of any
contract because the question of whether
or not the contract has been breached
depends upon whether one party has
failed to perform according to the terms
of the contracts.
In addition, the rights that an injured party
has following a breach of contract by
another party depended upon whether
the term breached was a major term or a
minor term.
6. Mention two reasons in brief as to why the
courts (operation of statute) involve in
implying terms in to contract?
- Provide Standardization
- Measure of Protection
7. What are main two types of contracts?
- B2B Contracts: Business to
Business Contracts
- B2C Contracts: Business to
Consumers Contracts
8. What are the laws applicable for each
category of contracts?
*UK Laws are also mentioned as those are
practice
B2B Contracts: UK Laws: Sales of
Goods Act (SGA) 1979, Supply of
Goods Services Act 1982 (SGSA), Unfair
Contracts Terms Act 1977 Sri Lanka
Laws: Sale of Goods Audience no 11
1986, Unfair Terms Act 1977 (26).
B2C Contracts: UK Law: Consumer
Rights Act 2015, Sri Lanka Law:
Consumer Affairs Authority Act No 09
of 2003
9. What are terms implied by status to each
category of contracts?
B2B Contracts: Terms will only be implied
where goods/services provided in the
course of a business.
SGA s.12 – an implied term that the seller
has the right to sell the goods
SGA s.13 – an implied term that the goods
will conform to any description given
SGA s.14 (2) – an implied term that foods
are of satisfactory quality
SGA s.13(3) – an implied term that the
goods are reasonably fit for any purpose
which the buyer made known to the seller.
SGSA s.13 – an implied term that any
service provider will carry out the service
with reasonable care and skill
B2C Contracts
CRA s.11(1): a duty on the trader to supply
goods that conform to any description
given.
CRA s.9(1): a duty on the trader to supply
goods of satisfactory quality, Satisfactory
quality is to be assessed by reference to a
non exhaustive list of factors set out in s.9
(2)-(7).
CRA s.10 (1): a duty to supply goods that a
reasonably fit for any purpose made
known to the trader by the consumer.
CRA s.49(1): a duty on the trader to
perform any service with reasonable care
and skill.
10. What are the main types of clauses in
which the court is concerned about?
Judges of common law has no means of
directly to control these clauses. Clauses
where by a contractor sought to exclude
(Exclusion or Exception clauses) were
particular source of concern. Especially
when a party to sought to exclude liability
for their own negligence.
11. What are the Acts applicable for governing
above type of clauses?
B2B Contracts
Unfair terms contract act 1977 (UK), Unfair
terms act 1977 (Sri Lanka).
B2C Contracts
Consumer Rights Act 2015 (UK), Consumer
Affairs Authority Act No 09 of 2003 (Sri
Lanka)
12. By the above Acts some clauses are either
made invalid or made subject to the
requirement of reasonable, Write one
examples for each?
Invalid Clauses: Liability for negligence
causing death or personal injury and those
excluding liability for the implied terms in
supply of goods contracts with consumers
Subject to the test of reasonableness:
Exclude liability for negligence causing loss
or damage to property, Excluding
contractual liability in relation to those
contracting on the other party’s written
terms, excluding liability for the implied
terms in supply of goods contracts with
business customers.
13. What are the two main areas which a party
should be concerned about when seeking
to enforce a restraint of trade in a
contract?
- A party who seeks to enforce a
restraint of trade clause in a
employment contract or sale of
business must establish that he
has legitimate interest to protect
the restrain must be reasonable
between the parties, it must do no
more than is reasonably necessary
for the protection of employer
- The restrain must not be injurious
to the public, it must also be
reasonable in the interests of the
public.
14. What are four general ways of discharging Work Scope, SLAs & KPI (You need read in
/ ending a contract? detail about these, do a research and find
By performance – Fulfill contractual out how FM scope SLAs & KPI can be
obligations developed). I have presented and
By the agreement of the parties – Entering explained a real FM work scope, hope
in to a subsequent binding contract to end you’ll have taken notes.
their first contract
Breach – Not performed their contractual
obligations
Frustration – Supervening events which
occurs without fault in either party
15. What is the purpose of awarding
damages?
Every breach of contract entitles the
injured party to claim damages for the loss
caused by the breach. The purpose of an
award damages is simple to put the party
in the position as far as the money can,
they would have been in but for breach of
contract.
16. What are the two methods of measuring
losses?
- Expectation measure: Profit that
the contract would have created
for the claimant
- Reliance measure: Compensate
the claimant for the wasted
expenditure which has incurred
17. What are two main devices which limit
awarding of damages?
Remoteness: Losses which are not
foreseeable
Mitigation: A party cannot recover for a
loss that he would have reasonably
avoided
18. In General is it possible under the contract
law to claim damage for non-financial
losses? Cannot recover for non-financial
loss (in general) Example: Injured feeling,
Distress
19. In a Facilities Management Service
Contract what is the main area of concern
for a Facilities Management Professional
and why? (In three lines)