Module 3: Contracts
Contract – meeting of minds between two persons
whereby one binds himself, with respect to the
other, to give something or to render some service.
Contract and obligation distinguished
• Contract is one of the sources of obligations. On
the other hand, obligation is the legal tie or
relation itself that exists after a contract has been
entered into.
• There can be no contract if there is no obligation.
But an obligation may exist without the contract.
Contract and agreement distinguished
Contracts are agreements enforceable through legal
proceedings.
• Agreements which cannot be enforced by action
in the courts of justice (like an agreement to go
to a dance party) are not contracts but merely
moral or social agreements.
• A contract cannot be given effect if it is contrary
to law because law is superior to a contract.
Contract must not be contrary to morals.
• Morals deal with norms of good and right
conduct evolved in a community.
• These norms may differ at different times and
places and with each group of people.
Ex.: An agreement that X is to render service as a
servant to Y without compensations long as X has not
paid his debt is reprehensible and censurable. It is
also contrary to law.
Contract must not be contrary to public order
• Public order refers principally to public safety
although it has been considered to mean also the
public weal.
Ex.: A stipulation in a contract of lease whereby the
landlord can use force to eject the tenant in case of
failure of the latter to pay the rent agreed upon is
void as being against public order.
Contract must not be contrary to public policy.
Public policy is broader than public order, as the
former may refer not only to public safety but also to
considerations which are moved by the common
good.
Ex.: X stole the car of Y. Later, they entered into a
contract where Y will not prosecute X in lieu of
₱50,000.
A contract is an agreement which gives rise to
obligations.
It must bind both parties in order that it can be
enforced against either.
Without this equality between the parties, it cannot
be said that the contract has the force of law
between them.
Ex.: S agreed to sell his car to B for ₱100,000. The
contract is binding upon both contracting parties and
either of them can enforce the contract against the
other.
Classification of contracts according to perfection
a. Solemn contract - that which requires
compliance with certain formalities prescribed by
law. (e.g. donation of real property which must
be in a public instrument)
b. Consensual contract - that which is perfected by
mere consent. (e.g. sale, lease, agency)
c. Real contract - that which is perfected by the
delivery of the thing subject matter of the
contract. (e.g. pledge)
Stages in the life of a contract
a. Preparation or negotiation – This includes all the
steps taken by the parties leading to the
perfection of the contract. At this stage, the
parties have not yet arrived at any definite
agreement.
b. Perfection or birth – This is when the parties
have come to a definite agreement or meeting of
the minds regarding the subject matter and
cause of the contract.
Consummation or termination – This is when the
parties have performed their respective obligations
and the contract may be said to have been fully
accomplished or executed, resulting in the
extinguishments or termination thereof.
Ex.:
1. S offers to sell his car to B for ₱100,000. B asks S
to show him the car. Later, S brings the car and
shows it to B. B offers to pay ₱80,000 for the car.
Here, the parties are taking all the steps that may
lead to the perfection of the contract.
2. Now, if S agrees to sell the car for ₱80,000, the
contract is perfected because there is a meeting
of the minds upon the subject matter and the
cause of the contract.
3. The contract will be consummated after S
delivers the car to B and B pays ₱80,000. B
becomes the owner of the car and S, the owner
of the money paid by B.
As a general rule, a person is not bound by the
contract of another of which he has no knowledge or
to which he has not given his consent.
A contract involves the free will of the parties and
only he who enters into the contract can be bound
thereby.
Essential Requisites of Contracts
There is no contract unless the following requisites
concur:
a. Consent of the contracting parties
b. Object certain which is the subject matter of the
contract
c. Cause of the obligation which is established
Classes of elements of a contract
a. Essential elements – those without which no
contract can validly exist. They are also known as
requisites of a contract.
They may be subdivided into:
o Common – those present in all contracts,
namely, consent, object, and cause.
o Special – those not common to all contracts
or those which must be present only in, or
peculiar to, certain specified contracts.
b. Natural elements – those that are presumed to
exist in certain contracts unless the contrary is
expressly stipulated by the parties, like warranty
against eviction or warranty against hidden
defects in sale.
Accidental errors – or the particular stipulations,
clauses, terms, or conditions established by the
parties in their contract like conditions, period,
interest, penalty, etc. And, therefore, they exist only
when they are expressly provided by the parties.
Consent
• Consent – the meeting of minds between the
parties on the subject matter and the cause
which are to constitute the contract.
• Offer – a proposal made by one party to another
to enter into a contract. It is more than an
expression of desire or hope. It is really a promise
to act or to refrain from acting on condition that
the terms thereof are accepted by the person
(offeree) to whom it is made.
The offer must be certain or definite so that the
liability (or the rights) of the parties may be exactly
fixed because it is necessary that the acceptance be
identical with the offer to create a contract.
Ex.:
a. “Will you buy this watch for ₱1,000?” This is
an offer.
b. “I am willing to consider the sale of my land
to you for ₱150,000.” The offer here is
uncertain. Its acceptance will not create a
contract.
c. “I am willing to buy you a car.” There is no
offer because it is incomplete. No price is
given.
The offer must be certain or definite so that the
liability (or the rights) of the parties may be exactly
fixed because it is necessary that the acceptance be
identical with the offer to create a contract.
Ex.:
a. “Will you buy this watch for ₱1,000?” This is an
offer.
b. “I am willing to consider the sale of my land to you
for ₱150,000.” The offer here is uncertain. Its
acceptance will not create a contract.
c. “I am willing to buy you a car.” There is no offer
because it is incomplete. No price is given.
Acceptance – the manifestation by theofferee of his
assent to the terms of the offer.
• Without acceptance, there can be no meeting of
the minds between two parties. The acceptance
of an offer must be absolute or unqualified.
• It must be identical in all respects with that of the
offer so as to produce consent or meeting of the
minds.
Ex.: S asked B: “Will you buy my car for ₱150,000?”
If B answers “yes, I accept your offer,” or “yes, I
agree,” or just “yes,” the acceptance of B is absolute
or unconditional.
The following cannot give consent to
a. Contract
b. unemancipated minors
c. insane or demented persons, and deaf-mutes
who do not know how to write
Drunkenness and hypnotic spell impair the capacity
of a person to give intelligent consent. These
conditions are equivalent to temporary insanity.
Contracts entered into during a lucid interval
Lucid interval – a temporary period of sanity. A
contract entered into by an insane or demented
person during a lucid interval is valid. It must be
shown, however, that there is a full return of the
mind to sanity as to enable him to understand the
contract he is entering into.
Under the Rules of Court, the following are
considered incompetents and may be placed under
guardianship
a. persons suffering the accessory penalty of civil
interdiction
b. hospitalized lepers
c. prodigals
d. deaf and dumb who are unable to read and
write
e. those who are of unsound mind even though
they have lucid intervals
f. those who, by reason of age, disease, weak mind
and other similar causes, cannot, without outside
aid, take care of themselves and manage their
property, becoming thereby an easy prey for
deceit and exploitation
Characteristics of consent
a. It must be intelligent – there is capacity to
act.
b. It is free and voluntary – there is no vitiation of
consent by reason of violence or intimidation.
c. It is conscious or spontaneous – there is no
vitiation of consent by reason of mistake, undue
influence, or fraud.
Vices of consent
a. error or mistake
b. violence or force
c. intimidation or threat or duress
d. undue influence
e. fraud or deceit
Mistake or error – the false notion of a thing or a fact
material to the contract.
Violence requires the employment of physical force.
For intimidation to vitiate the consent of a party to a
contract, the following requisites should be present
a. It must produce a reasonable and well-
grounded fear of an evil.
b. The evil must be imminent and grave.
c. The evil must be upon his person or property,
or that of his spouse, descendants, or
ascendants.
d. It is the reason why he enters into the
contract.
Ex.: If X signs the document because a gun is pointed
at him by Y who threatens to kill him and he has no
reason to believe that Y will not carry out his threat,
the intimidation would vitiate consent. But if X was
merely intimidated that he would be shot by Y and
the latter had no gun at the time of the threat, there
is no intimidation.
All things which are not outside the commerce of
men, including future things, may be the object of a
contract.
Requisites of things as object of contract
In order that things may be the object of a contract,
the following requisites must occur:
a. It must not be impossible, legally or physically.
b. The thing must be within the commerce of men,
that is, it can legally be the subject of commercial
transaction.
c. It must be in existence or capable of coming into
existence.
d. It must be determinate or determinable without
the need of a new contract between the parties.
Requisites of services as object of contract
In order that service may be the object of a contract,
the following requisites must occur:
a. The service must be within the commerce of
men.
b. It must not be impossible, physically or
legally.
c. It must be determinate or capable of being made
determinate
Rights as object of contract
Ex.:
a. Outside the commerce of men – Things of public
ownership such as sidewalks, public places,
bridges, etc., things that are common to
everybody such as air, sunlight, rain, etc.
b. Impossible, physically and legally – Prohibited
drugs and all illicit objects, to kill a person
c. Determinate things – All the sacks of rice in a
bodega,; my land with the smallest area; the land
at the corner of a particular street.
d. Future things or rights – Things to be
manufactured, raised, or acquired after the
perfection of the contract such as wine that a
vineyard is expected to produce; rice to be
harvested next harvesting season; young animals
not yet in existence, etc.
Cause of Contracts
Cause (causa) – the essential or more proximate
purpose which the contracting parties have in view
at the time of entering into the contract.
Ex.: X sells a watch to Y for ₱5,000. As far as X (the
seller) is concerned, the subject matter or object is
the watch and the cause is the price. As regards Y
(buyer), the subject matter or object is the price and
the cause is the watch. The cause of X is the delivery
of the price and for Y, the delivery of the watch. But
for both X and Y, the subject matter of the
transaction is the watch.
Classification of contracts according to cause
a. Onerous – one the cause of which, for each
contracting party is the prestation or promise of
a thing or service by the other.
In this contract, the parties are reciprocally obligated
to each other.
Ex.: Sale; lease of thing; partnership
b. Remuneratory or remunerative – one the cause
of which is the service or benefit which
remunerated.
The purpose of the contract is to reward the service
that had been previously rendered by the party
remunerated.
Ex.: X rendered service as the defense counsel of Y
who agreed to pay X ₱10,000 for said services.
c. Gratuitous – one the cause of which is the mere
liberality of the benefactor or giver.
Ex.: Pure donation
Requisites of cause
a. It must exist at the time the contract is entered
into.
b. It must be lawful.
c. It must be true or real.
Effect of absence of cause
Absence or want of cause means that there is a
total lack of any valid consideration for the contract.
Contracts without cause confer no right and produce
no legal effect whatever. Thus, a contract which is
absolutely simulated or fictitious is inexistence and
void.
Form of Contracts
The form of contract refers to the manner in which a
contract is executed or manifested. The contract
may be oral, or in writing, or partly or and partly in
writing.
Classification of contracts according to form
a. Informal or common contract – that which may
be entered into in whatever form provided all the
essential requisites for their validity are present.
b. Formal or solemn contract – that which is
required by law for its efficacy to be in a certain
specified form.
Contracts which must appear in a public document
A public document or instrument is one which is
acknowledged before a notary public or any official
authorized to administer oath, by the person who
executed the same.
a. Creation, etc., of real rights over immovable
property.
Ex.: As security for his debt, D mortgaged his land to
C. This mortgage must appear in a public document.
The extinguishments of the mortgage, upon
payment of the debt by D, must likewise appear in a
public document
b. Cession or renunciation of hereditary rights or
those of conjugal partnership of gains.
Ex.: X and Y are the heirs of Z, their deceased father.
X, being financially stable, renounces his share in the
inheritance. This renunciation must appear in a
public document.
c. Power to administer property.
Ex.: X is leaving for the U.S. to study for 2 years. He
appoints Y, agent, to manage his property. In this
case, the authority of Y to administer the property of
X must appear in a public document.
d. Cession (surrendering) of actions or rights.
Ex.: D mortgaged his land to C to secure the payment
of a debt. This mortgage appears in a public
document. The cession by C of his right, as
mortgagee, to T must also be in a public document.
Interpretation of a contract – the determination of
the meaning of the terms or words used by the
parties in their contract.
Ex. A contract was executed between S and B. The
contract recites that it is a sale of parcel of land
belonging to S for P500,000. In the contract, S is the
vendor and B, the vendee. The terms of the contract
are clear and it does not appear from the
circumstances that the intention of the parties is
contrary to the literal meaning of said terms.
Therefore, the contract should be considered a
contract of sale. No interpretation should be given
which would alter or change the plain meaning of the
wording thereof, it not being lawful to make a new
contract between the parties.
• Voidable or annullable contracts are those
which possess all the essential requisites of a
valid contract but one of the parties is incapable
of giving consent.
• Ratification cleanses the contract from all its
defects from the moment it was constituted.
• Unenforceable contracts are those that cannot
be enforced in court or sued upon by reason of
defects provided by law until and unless they are
ratified according to law.
• Unauthorized contracts are those entered into in
the name of another person by one who has been
given no authority or legal representation or who
has acted beyond his powers.
• Voidable contracts are valid contracts until
annulled unless there has been a ratification.
These are those which possess all the essential
requisites of a valid contract but one of the
parties is incapable of giving consent.
• Rescissible contracts are valid contracts because
all the essential requisites of a contract exist but
by reason of injury or damage to one of the
parties or to third persons, such as creditors, the
contract may be rescinded.
Ex.: G is the guardian of M (a minor). G sells the
property of M worth P200,000 for only P150,000.
The contract of sale cannot be rescinded because the
lesion (injury) is not more than ¼. However, if the
property is sold for less than P150,000, M can rescind
the sale by proper action in court upon reaching the
age of majority.
• Void or inexistent contracts are absolutely null
and void. Void contracts have no effect at all and
cannot be ratified.
• Rescission is a remedy granted by law to the
contracting parties and sometimes even to third
persons in order to secure reparation of damages
caused them by a valid contract.
Types of contracts
Contract is made after business arrangement is set.
In construction of an architectural or engineering
work, it requires a group or organization of expert of
various trade and related works to implement such
complex undertaking and carry out the work.
A. The Lump-Sum contract.
The oldest and most common method of letting
work under contract is by receiving competitive bids
with fixed prices. It is commonly referred to as "Hard
Dollar contracts". The contractor agrees to perform
a stipulated job of work in exchange for a fixed sum
of money. The satisfactory completion of the work
for the stated amount remains the obligation of the
contractor, regardless of the difficulties and troubles
that may be experienced in the course of
construction activities and even though the total cost
of the work may turn out to be greater than the
contract price. This type of contract is popular with
owners for the obvious reason that the total cost of
the project is known in advance.
Advantages
• The cost is known before the work began.
• Though the actual cost maybe high, a definite
limit is fixed.
• The responsibilities related to work are carried by
the contractor.
Disadvantages
• It may lead to exorbitant payments for any extra
work required.
• It gives no information as to what the contractor
regards as a fair price for each item of the work
to perform, on which deductions omitted and
extra payments be based.
• New work may be done on labor and material
basis but usually laborers tend to be in efficient
knowing their work benefits only their employer.
B. Contract for Cost-Plus-a-Percentage
The most common method used to obviate the
difficulties of the fixed price contract is to pay the
contractor the actual cost of the construction work
with a specified percentage as compensation for his
overhead expenses, personal services, and profits. It
does not provide any direct incentive for the
contractor to minimize construction costs. Rather, it
seems to work the other way.
Advantages
• The owner will pay only such costs as are actually
incurred.
• As the risk or hazard of construction is entirely
removed from the contractor, the owner can
secure his services with the advantages of his skill
and experience.
Disadvantages
• Every increase in cost increases the amount
payable to the contractor.
• A contractor might be tempted to deliberately
increase the cost notwithstanding his moral
obligations
C. Contract for Cost-Plus-a-Fixed Sum
This is a substitute from a percentage to a fixed sum
where the contractor can not profit by any increase
in cost. It secures the greatest returns for the
contractor by keeping the least expenditures of time
and money for the owner. When this scheme is
utilized, the work must be of such a nature that it can
be fairly well defined and a reasonably good
estimate of cost can be approximated.
• The contractor computes the amount of the fee
on the basis of the size of the project, estimated
time of construction, nature and complexity of
the work, hazards involved, location of the
project, equipment and manpower
requirements, etc.
Advantages
• This type of contract eliminates certain
objectionable terms of the percentage form of
contract.
• The contractor, to secure the greatest returns,
will keep the least expenditures of time and
money for the owner.
Disadvantages
• Quality of work might suffer just to keep the least
expenditures of time and money for the owner.
• Since the contract will just be receiving a fixed
sum aside from contract for cost, he might
become lax in fulfilling the contract.
D. Contract for Cost-Plus-a-Variable Premium
This is a contract where the contractor undertakes to
complete the work for a fixed sum and in a definite
time. He will be paid in addition to the sum a stated
premium which is reduced or increased accordingly
as the actual cost and time of completion are greater
or less than the stipulated costs and time of
completion.
Advantages
• The owner can determine the final cost as almost
as closely as under the lump sum contract.
• If the cost of the work is less than the estimate,
the owner is benefited to the extent one-half the
 amount saved. The other half is paid to the
contractor as an extra premium earned.
Disadvantages
• If the cost of the work increases, the owner pays
half the additional cost and the other half is
deducted from the contractor's premium. This is
also true with the time of completion, wherein an
equivalent amount per day will be shared either
as an increase or decrease for two parties.
• The estimated cost may be high and the time of
completion too great, that the contractor may
secure an unfair premium by his ability to reduce
the cost and time below his estimated.
E. Construction by the Direct Employment
The responsibility for the cost and construction is
placed on a group created by the owner or
governmental body wherein results depend mainly
on their efficiency.
Advantages
• The operation is said to be flexible and the owner
has control over the operation.
• In case required, the construction maybe started
before the details on plans and specifications
have been completed thereby delay is sometimes
avoided.
• The owner can choose materials that exactly suit
his desires without any detailed plans and
specifications and contract.
Disadvantages
• There is always a danger of interference in the
personnel of the organization that will seriously
handicap and injure the efficiency.
• Personal responsibility is often minimal or
missing for accomplishing proper work at the
lowest cost since no personal incentive or gain to
keep in maintaining construction cost at lower
price.
• It is difficult for the owner to retain skilled
workers. There are often hard times in looking for
good superintendents and foremen since at
normal times very seldom will accept temporary
jobs.
• Tools and equipment acquired will be sold at
lower prices after the completion of work.
F. The Unit-Price Contract
It is based on estimated quantities of defined items
of work and costs per unit amount of each of these
work items. The owner compiles the estimated
quantities, and the unit costs are those bid by the
contractor for carrying out the stipulated work in
accordance with the contract documents.
• The total sum of money paid to the contractor for
each work item remains an indeterminable factor
until completion of the project, because payment
is made to the contractor based on units of work
actually done and measured in the field.
• The owner does not know the exact ultimate cost
of the construction until completion of the
project.
G. Cost-Plus-Fee Contract
This is an open-ended contract in the sense that the
total construction cost to the owner cannot be
known until completion of the project.
• When the drawings and specifications are not
complete at the time of contract negotiation, the
owner and contractor negotiate what is called a
'scope contract'
Four important considerations
• A definite and mutually agreeable subcontract
- letting procedure should be arranged.
• There must be a clearly understood agreement
concerning the determination and payment of
the contractor's fee.
• A common understanding regarding the
accounting methods to be followed is essential.
• A list of job costs to be reimbursable to the
contractor should be set forth.
Contract Documents
a. Advertisement, or request for bids
b. Instruction to bidders
c. Proposal
d. General conditions
e. Supplementary conditions
f. Drawings
g. Technical Specifications
h. Proposal
i. Bid Bond
j. Agreement
k. Performance Bond
Lowest responsible bidder - the lowest bidder
whose offer best responds in quality, fitness, and
capacity to fulfill the particular requirements of the
proposed work and with the terms of the contract.
Agreement - document specifically designed to
formalize the construction contract. It acts as a single
instrument that brings together all of the contract
segments by reference, and it functions for the
formal execution of the contract.
Progress payments - It is normally neither
practicable nor desirable for the contractor to
finance the construction from its own resources.
• In lump-sum contracts, the degree of completion
of each major work category is usually expressed
as a percentage.
• Fixed-price contracts commonly require the
contractor to submit applications for payment at
least 10 days before the date established for each
progress payment.
The quantities of work done on unit-price contracts
are determined by the field measurement of work
put in place.
• Cost-plus contracts usually provide for the
contractor to submit payment vouchers to the
owner at specified intervals during the life of the
contract.
Many contracts provide that if the owner does not
make timely payments to the contractor as required,
the contractor has the option of stopping the work.
Owner supplied & excluded items - This part of the
contract describes the materials excluded in the
scope of the Contractor and instead will be supplied
by Owner in accordance with the construction
schedule.
In case where delivery of Owner Supplied Materials
is delayed and the Contractor is forced to advance its
own material, all costs, handling charges and
surcharges for such materials as advanced by the
Contractor for the Owner shall be for the account of
the Owner.
Scope of works - Scope of works is the performance
or service to be rendered by the Contractor under
such agreement until completion or delivery of the
project as stipulated in the contract documents.
Contract price - the amount in money or other
consideration to be paid by the Owner to the
Contractor for the execution of the work in
accordance with the contract.
Adiustment of contract price - Adjustment of
contract price takes place under such agreement in
scope there are change orders or variation orders
from the original scope of works as stipulated in the
contract and contract document.
Change order - is a written order to the contractor
issued by the Owner after the execution of the
contract authorizing a change or variation in the
work or an adjustment in the contract price or
contract time.
Terms of payment - describes how the down
payment, progress billing, retention and release of
retention are being paid by the Owner. There are
certain insurance and surety required to be
submitted to the Owner prior to Contractor's claim
of payment.
Time of completion - the period of time allowed by
the Contractor for the completion of the project or
any stipulated portion thereof.
Failure to complete works - In case of delay in the
completion and turnover of contract works, the
Contractor shall pay the Owner liquidated damages
under the contracted computations but not greater
than the percentage of contract price set forth.
Retainage - Many construction contracts provide
that the owner will retain a certain percentage of the
progress payments. A retainage of 10% is typical.
The Warranty Period - One year is a commonly
specified warranty period, although periods of up to
5 years are sometimes required to make good, at its
own expense, defects detected during this period.
Contract Time - When the contract time is stated to
be a given number of calendar days, the date on
which the time begins is an important matter.
• Construction contracts usually state that the
time will begin on the date the contract is
signed or on the date the contractor receives a
formal 'notice to proceed'.
Liquidated Damages - An advantage to the use of a
liquidated damage provision in a construction
contract is the possible avoidance of subsequent
litigation between owner and contractor.
Acceleration - refers to the owner's directing the
prime contractor to accelerate its performance to
complete the project at an earlier date than the
current rate of work advancement will permit.
Differing site condition, or changed condition, or
concealed condition - refers to some physical aspect
of the project or its site that differs materially from
that indicated by the contract documents or that is
of an unusual nature and differs materially from the
conditions ordinarily encountered.
Owner-Caused Delay - Examples include delays in
making the site available to the contractor, failure to
deliver owner-provided materials on time,
unreasonable delays in the approval of shop
drawings, delays caused by another contractor,
delays in issuance of change orders, and suspension
of the work because of financial or legal difficulties.
Value Engineering - It is applied after the contract is
awarded and is concerned with the elimination or
modification of any contract provision that cost to a
project but is not necessary to the structure's
required performance, safety or maintenance.
Termination of the Contract
a. Material breach of contract by either
party
b. Default and failure to perform under the
contract
c. Mutual agreement of both parties
d. By giving the contractor written notice to
this effect
Subcontract - an agreement between a prime
contractor and a subcontractor under which the
subcontractor agrees to perform a certain
specialized part of the work.
Purchase order - a written document that defines
and prescribes the conditions pertaining to a
purchase of materials, supplies, equipment,
machinery, and similar goods.
Contractor's responsibility for accidents and
damages
a. Safeguard to be undertaken by the contractor.
Contractor shall take all necessary precautions
for the safety of employees and workmen on the
work and comply with all laws to prevent injury
to persons on, about or adjacent to the premises
where the works is being performed.
b. Owner not to be responsible
The contractor shall render the owner free and
harmless for the death of the disease contracted
or injury received by the contractor or any of his
employees or laborers, for any damage done by
or to contractor' plant or materials from any
source or cause and damages caused by him or
his employees to adjacent property.
c. Contractor's default
The owner shall have the right to undertake
reasonable safety and protection measures in
case of contractor's default and charge the cost
of such measures to the contractor.
Contract bond form - a simple document that makes
no attempt to describe in detail the specific liabilities
of the surety. The bond can be invoked by the owner
only if the contractor is in breach of contract.
Performance bond - acts primarily for the protection
of the owner. It guarantees that the contract will be
performed and that the owner will receive its
structure, built in substantial accordance with the
terms of the contract.
Payment bond - acts primarily for the protection of
third parties to the contract and guarantees
payment for labor and materials used or supplied in
the performance of the construction.
Indemnity of surety
Under the bond, the surety indemnifies the owner
against default by the contractor. They in turn must
indemnify the surety against any claim that may be
brought against the surety because of the
contractor's failure to perform in the prescribed
manner.
Contractor's insurance and bonds
a. Contractor's Liability Insurance
The contractor shall secure and maintain
insurance coverage from an insurance company
acceptable to the owner as will protect himself,
his sub-contractors and the owner from claims
for bodily injury, death or property damage
which may arise under the contract.
b. Accident Insurance for Workers
The contractor shall, in additional to compulsory
coverage of workers under the Workmen's
Compensation Law, obtain insurance coverage
for accidental death or injury of his employees
and laborers without regard to their tenure and
employment.
c. Contractor's fire insurance
In addition to such Fire Insurance as the
contractor elects for his work, he shall secure and
maintain the policies upon such structures and
materials and such amounts as shall be designed
in the joint names of the Contractor and the
Owner as their respective interest may appear.
d. Contractor's Performance and Payment Bonds
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 from the contract to its workers,
subcontractors and suppliers.
e. 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 1 year
commencing from the date of posting as a guarantee
that all materials and workmanship installed under
the contract are of acceptable quality.
Owner's Responsibilities and Liabilities
a. Advance payment
An advance payment in an amount to be
mutually agreed upon shall be paid by the owner
to the contractor, provided that the contractor
shall post a surety bond of equivalent amount
callable on demand and acceptable to the owner
to guarantee its repayment. The contractor shall
use the advance payment for mobilization
purchase of materials and the like for the project.
This shall be recouped pro rata in the progress
billing.
b. Protection of Employees and Professionals
performing services for the owner
The owner shall be responsible for and shall
maintain such insurance as will protect him from
liability for personal injury including disease and
death of persons under his employ or service
whether as temporary or permanent in status
that are assigned to the project.
c. Owner's optional insurance
The owner may maintain such insurance as will
protect him from his contingent liability for
damages, for personal injury, including death,
which may arise from the work under the
contract.
Other warranties or responsibilities of the
contractor
a. In case of any defect or defects in workmanship
or materials which may become apparent in the
course of the construction, the contractor, upon
the request of the owner, shall attest own
expense, tear down and replace such portion of
the work done and/or materials installed that as
in the owner's reasonable option, are unsound or
defective, or not in accordance with plans and
specifications.
b. The hereby does warrant and guarantee that all
the materials to be supplied by it under this
agreement are new, first class, free from defect
and shall fully comply in every respect with the
specifications, approved samples and other
requirements of the contract plans and other
related contract documents.
c. The contractor guarantee and shall maintain the
stability of all works, equipment and materials
furnished and keep the same in good repair and
condition for a period of 1 year after issuance of
final in good repair and condition for a period of
1 year after issuance of final acceptance of the
work by the owner. Defects appearing during this
period or any damages resulting from such
defects shall be corrected without expense to the
owner.
Module 4: CE CODE OF ETHICS
American Society of Civil Engineers
Fundamental Principles
1. Engineers uphold and advance the integrity,
honor and dignity of the engineering profession
by:
a. using their knowledge and skill for the
enhancement of human welfare and the
environment;
b. being honest and impartial and serving with
fidelity the public, their employers and clients;
c. striving to increase the competence and prestige
of the engineering profession; and
d. supporting the professional and technical
societies of their disciplines.
2. Fundamental Canons
a. Engineers shall hold paramount the safety,
health and welfare of the public and shall strive
to comply with the principles of sustainable
development in the performance of their
professional duties.
b. Engineers shall perform services only in areas of
their competence.
c. Engineers shall issue public statements only in an
objective and truthful manner.
d. Engineers shall act in professional matters for
each employer or client as faithful agents or
trustees, and shall avoid conflicts of interest.
e. Engineers shall build their professional
reputation on the merit of their services and shall
not compete unfairly with others.
f. Engineers shall act in such a manner as to uphold
and enhance the honor, integrity, and dignity of
the engineering profession.
g. Engineers shall continue their professional
development throughout their careers, and shall
provide opportunities for the professional
development of those engineers under their
supervision.
3. Guidelines to Practice – Under the Fundamental
Canons of Ethics
CANON 1. Engineers shall hold paramount the
safety, health and welfare of the public and shall
strive to comply with the principles of sustainable
development in the performance of their
professional duties.
Fundamentals
a. Engineers shall recognize that the lives, safety,
health and welfare of the general public are
dependent upon engineering judgments,
decisions and practices incorporated into
structures, machines, products, processes and
devices.
b. Engineers shall approve or seal only those design
documents, reviewed or prepared by them,
which are determined to be safe for public health
and welfare in conformity with accepted
engineering standards.
c. Engineers whose professional judgment is
overruled under circumstances where the safety,
health and welfare of the public are endangered,
or the principles of sustainable development
ignored, shall inform their clients or employers of
the possible consequences.
d. Engineers who have knowledge or reason to
believe that another person or firm may be in
violation of any of the provisions of Canon 1 shall
present such information to the proper authority
in writing and shall cooperate with the proper
authority in furnishing such further information
or assistance as may be required.
e. Engineers should seek opportunities to be of
constructive service in civic affairs and work for
the advancement of the safety, health and well-
being of their communities, and the protection of
the environment through the practice of
sustainable development.
f. Engineers should be committed to improving the
environment by adherence to the principles of
sustainable development so as to enhance the
quality of life of the general public.
CANON 2. Engineers shall perform services only in
areas of their competence.
Fundamentals
a. Engineers shall undertake to perform
engineering assignments only when qualified by
education or experience in the technical field of
engineering involved.
b. Engineers may accept an assignment requiring
education or experience outside of their own
fields of competence, provided their services are
restricted to those phases of the project in which
they are qualified. All other phases of such
project shall be performed by qualified
associates, consultants, or employees.
c. Engineers shall not affix their signatures or seals
to any engineering plan or document dealing
with subject matter in which they lack
competence by virtue of education or experience
or to any such plan or document not reviewed or
prepared under their supervisory control.
CANON 3. Engineers shall issue public statements
only in an objective and truthful manner.
Fundamentals
a. Engineers should endeavor to extend the public
knowledge of engineering and sustainable
development, and shall not participate in the
dissemination of untrue, unfair or exaggerated
statements regarding engineering.
b. Engineers shall be objective and truthful in
professional reports, statements, or testimony.
They shall include all relevant and pertinent
information in such reports, statements, or
testimony.
c. Engineers, when serving as expert witnesses,
shall express an engineering opinion only when it
is bounded upon adequate knowledge of the
facts, upon a background of technical
competence, and upon honest conviction
d. Engineers shall issue no statements, criticisms, or
arguments on engineering matters which are
inspired or paid for by interested parties, unless
they indicate on whose behalf the statements are
made.
e. Engineers shall be dignified and modest in
explaining their work and merit, and will avoid
any act tending to promote their own interests at
the expense of the integrity, honor and dignity of
the profession.
CANON 4. Engineers shall act in professional matters
for each employer or client as faithful agents or
trustees, and shall avoid conflicts of interest.
Fundamentals
a. Engineers shall avoid all known or potential
conflicts of interest with their employers or
clients and shall promptly inform their employers
or clients of any business association, interests,
Or circumstances which could influence their
judgment or the quality of their services.
b. Engineers shall not accept compensation from
more than one party for services on the same
project, or for services pertaining to the same
project, unless the circumstances are fully
disclosed to and agreed to, by all interested
parties.
c. Engineers shall not solicit or accept gratuities,
directly or indirectly, from contractors, their
agents, or other parties dealing with their clients
or employers in connection with work for which
they are responsible.
d. Engineers in public service as members, advisors,
or employees of a governmental body or
department shall not participate in
considerations or actions with respect to services
solicited or provided by them or their
organization in private or public engineering
practice.
e. Engineers shall advise their employers or clients
when, as result of their studies, they believe a
project will not be successful.
f. Engineers shall not use confidential information
coming to them in the course of their
 assignments as a means of making personal
profit if such action is adverse to the interests of
their clients, employers or the public.
g. Engineers shall not accept professional
employment outside of their regular work or
interest without the knowledge of their
employers.
CANON 5. Engineers shall build their professional
reputation on the merit of their services and shall not
compete unfairly with others.
Fundamentals
a. Engineers shall not give, solicit or receive either
directly or indirectly, any political contribution,
gratuity, or unlawful consideration in order to
secure work, exclusive of securing salaried
positions through employment agencies.
b. Engineers should negotiate contracts for
professional services fairly and on the basis of
demonstrated competence and qualifications for
the type of professional service required.
c. Engineers may request, propose or accept
professional commissions on a contingent basis
only under in circumstances which their
professional judgments would not be
compromised.
d. Engineers shall not falsify or permit
misrepresentation of their academic or
professional qualifications or experience.
e. Engineers shall give proper credit for engineering
work to those to whom credit is due, and shall
recognize the proprietary interests of others.
Whenever possible, they shall name the person
or persons who may be responsible for designs,
inventions, writings or other accomplishments.
f. Engineers may advertise professional services in
a way that does not contain misleading language
or is in any other manner derogatory to the
dignity of the profession.
Examples of permissible advertising are as follows:
• Professional cards in recognized, dignified
publications, and listings in rosters or directories
published by responsible organizations, provided
that the cards or listings are consistent in size and
content and are in a section of the publication
regularly devoted to such professional cards.
• Brochures which factually describe experience,
facilities, personnel and capacity to render
service, providing they are not misleading with
respect to the engineer's participation in projects
described.
• Display advertising in recognized dignified
business and professional publications, providing
it is factual and is not misleading with respect to
the engineer's extent of participation in projects
described.
• A statement of the engineers' names or the name
of the firm and statement of the type of service
posted on projects for which they render
services.
• Preparation or authorization of descriptive
articles for the lay or technical press, which are
factual and dignified. Such articles shall not imply
anything more than direct participation in the
project described.
• Permission by engineers for their names to be
used in commercial advertisements, such as may
be published by contractors, material suppliers,
etc., only by means of a modest, dignified
notation acknowledging the engineers'
participation in the project described. Such
permission shall not include public endorsement
of proprietary products.
h. Engineers shall not maliciously or falsely, directly
or indirectly, injure the professional reputation,
prospects, practice or employment of another
engineer or indiscriminately criticize another's
work.
i. Engineers shall not use equipment, supplies,
laboratory or office facilities of their employers
to carry on outside private practice without the
consent of their employers.
CANON 6. Engineers shall act in such a manner as to
uphold and enhance the honor, integrity, and dignity
of the engineering profession.
Fundamentals
a. Engineers shall not knowingly act in a manner
which will be derogatory to the honor, integrity,
or dignity of the engineering profession or
knowingly engage in business or professional
practices of a fraudulent, dishonest or unethical
nature.
CANON 7. Engineers shall continue their professional
development throughout their careers, and shall
provide opportunities for the professional
development of those engineers under their
supervision.
Fundamentals
a. Engineers should keep current in their specialty
fields by engaging in professional practice,
participating in continuing education courses,
reading in the technical literature, and attending
professional meetings and seminars.
b. Engineers should encourage their engineering
employees to become registered at the earliest
possible date.
c. Engineers should encourage engineering
employees to attend and present papers at
professional and technical society meetings.
d. Engineers shall uphold the principle of mutually
satisfying relationships between employers and
employees with respect to terms of employment
including professional grade descriptions, salary
ranges, and fringe benefits.
Organization: Japan Society of Civil Engineers
Source: Sendai Declaration 2000 on Infrastructure
Development and Civil Engineering Technology
Date Approved: November 22, 2000
Sendai Declaration 2000 on Infrastructure
Development and Civil Engineering
Technology
- Civil Engineer's Resolution -
Japan Society of Civil Engineers (JSCE), consisted of
civil engineering practitioners, researchers and
others affirmed its noble mission and tremendous
responsibility to the society and announced "the
Beliefs and Principles of Practice for Civil Engineers"
in March 1938.
• This was the first ethical code announced ever by
a professional engineering society in Japan.
• It was a statement of civil engineers that they
should be the persons of wisdom and highest
integrity, who employ their expertise and skills to
harmonize between the environment and human
community.
• Also, in May 1999, JSCE revised the above code
and established the "Code of Ethics for Civil
Engineers," which defines civil engineer's
professional conducts and describes the
integrity, honor and dignity of the civil
engineering profession.
• Being aware of the public's demand for
reconsideration of further infrastructure
developments, JSCE responded to it by issuing
this Sendai Declaration 2000:
• It, containing the Society's philosophy, mission
and strategies to enhance the welfare of society,
was a pledge to enforce the Code of Ethics among
civil engineering professionals.
A Civil Engineer shall: Significance of Infrastructure
Development.
Engage in building, maintaining and utilizing
infrastructures to create "a beautiful national land,"
"a safe and comfortable life." and "a prosperous
society.'
1. Principle 1 - Harmonization with Nature and
Sustainable Development"
Respect the nature while giving the highest priority
to the safety, welfare, and health of generations
today and in the future, and shall endeavor to
preserve and work with nature and the global
environment for the sustainable development of
mankind.
2. Principle 2 - Respect for Regionality
Give due respect for regionality, and encourage a
local community to govern itself in accordance with
its own characteristics without forcing a
standardized strategy for development on it.
3. Principle 3 - Respect for Historical Heritage and
Tradition
Show due respect for historical, archeological and
cultural heritage, local characteristics, culture,
climate and tradition and also promote new cultures
and civilizations.
• Strategy 1 - Communication and Accountability
to the Public.
Acknowledge their professional responsibility for
infrastructure development and build
communication with the public in order to acquire its
understanding and support and to fulfill
accountability for their duties and services to the
public.
• Strategy 2 - Clarification of Visions and Plans
Define medium and long-term visions for national
and local developments and take initiative in
mapping out the directions toward these visions.
• Strategy 3 - Introduction of Time Management
Concept
Introduce the time management concept in all
stages of infrastructure project development, from
planning to operation, taking into account the
opportunity losses of delayed projects and the
benefits of early completion.
• Strategy 4 - Fair Evaluation and Competition
Strengthen interdisciplinary and internationally
competitive technologies and human resources,
improve JSCE Civil Engineers' Qualification System,
and promote competitive selections between
individual engineers and between organizations on
the basis of fair and just evaluation of skill, expertise
and creativity.
• Strategy 5 - Technology Development for
Infrastructure Development
Improve their professional skills, knowledge and
competence on a continuing basis. In particular they
shall exert all efforts to improve their performance
of project management, cost saving, development of
new technologies including recycling ones to
contribute to the benefits of the global community.
Japan Society of Civil Engineers shall:
In pursuance of the aforesaid purpose, offer
suggestions for further improvements of institutions,
systems and other rules concerning infrastructure
development and give all possible assistance to
maintain and advance civil engineers' skills,
knowledge and competence.
Engineering ethics is the field of applied ethics which
examines and sets standards for engineers'
obligations to the public, their clients, employers and
the profession. This article addresses the subject for
both professional engineers and other engineers.
Whistleblowing
A basic ethical dilemma is that an engineer has the
duty to report to the appropriate authority a possible
risk to others from a client or employer failing to
follow the engineer's directions.
• According to first principles, this duty overrides
the duty to a client and/or employer.
• An engineer may be disciplined, or have their
license revoked, even if the failure to report such
a danger does not result in the loss of life or
health.
CODE OF ETHICS:
Fundamental Principles
Civil engineers uphold and advance the integrity,
honor and dignity of the civil engineering profession
by:
1. using their knowledge and skill for the
enhancement of human welfare and the
environment;
2. being honest and impartial and serving with
fidelity the public, their employers/employees
and clients;
3. striving to increase the competence and prestige
of the civil engineering profession; and
4. supporting the professional and technical
societies of their disciplines.
Fundamental Canons
1. Civil Engineers shall hold paramount the safety,
health and welfare of the public and shall strive
to comply with the principles of sustainable
development in the performance of
their duties.
2. Civil Engineers shall perform services only in
areas of their competence.
3. Civil Engineers shall issue public statements only
in an objective and truthful manner.
4. Civil Engineers shall act in professional matters
for each employer or client as faithful agents or
trustees, and shall avoid conflicts of interest.
5. Civil Engineers shall build their professional
reputation on the merit of their services and shall
not compete unfairly with others.
6. Civil Engineers shall act in such a manner as to
uphold and enhance the honor, integrity, and
dignity of the civil engineering profession.
7. Civil Engineers shall continue their professional
development of those civil engineers under their
supervision.
Adopted in September 2001 as part of the Manual
of Professional Practice for Civil Engineers published
by the Philippine Institute of Civil Engineers
ASEP Code of Ethics
It shall be considered unprofessional and
inconsistent with honorable and dignified bearing
for any members of the Association of Structural
Engineers of the Philippines:
1. To act for his client or for his employer otherwise
than as a faithful agent or trustee.
2. To accept remuneration for services rendered
other than from his client or his employer.
3. To invite or submit priced proposals under
conditions that constitute price competition for
professional services.
4. To attempt to supplant another engineer in a
particular engagement after definite steps have
been taken toward his employment.
5. To attempt to injure, falsely or maliciously, he
professional reputation, business, or
employment position of another engineer.
6. To advertise engineering services in self-
laudatory language, or in any other manner
derogatory to the dignity of the profession.
7. To review the work of another engineer for same
client, except with the knowledge of engineer,
unless such engineer's engagement on the work
which is subiect to review has been terminated.
8. To advertise engineering services in self-
laudatory language, or in any other manner
derogatory to the dignity of the profession.
9. To use the advantages of the salaried position to
compete unfairly with other engineers.
10. To exert undue influence or to other, solicit or
accept compensation for the purpose of affecting
negotiations for an engineering engagement.
11. To act in any manner derogatory to the honor,
integrity or dignity of the engineering profession.
Adapted from the American Society of Civil
Engineers 'Code of Ethics', August 5, 1973.
Hyatt Regency walkway collapse
The Hyatt Regency hotel walkway collapse was a
major disaster that occurred on July 17, 1981in
Kansas City, Missouri killing 114 people and injuring
more than 200 others during a tea dance. At the time
it was the deadliest structural collapse in U.S. history.
Background: Construction on the 40-story Hyatt
Regency Crown Center began in 1978, and the hotel
opened in July 1980 after construction delays
including an incident on October 14, 1979, when
2,700 square feet of the atrium roof collapsed
because one of the roof connections on the north
end of the atrium failed.
• The building was part of a master plan devised by
Edward Larrabee Barnes and specifically
designed by the newly created architect firm
PBNDML. It was Missouri's tallest building.
• On June 4, 1979, the roof of the then-empty
Kemper Arena in Kansas City had collapsed
without loss of life.
• One of the defining features of the hotel was its
lobby, which featured a multistory atrium
crossed by suspended concrete walkways on the
second, third, and fourth levels, with the fourth
level walkway directly above the second level
walkway.
Disaster: On July 17, 1981, approximately 2,000
people had gathered in the atrium to participate in
and watch a dance contest.
• Dozens stood on the walkways.
• At 7:05 PM, the walkways on the second, third,
and fourth floor were packed with visitors as they
watched over the active lobby, which was also
full of people. The fourth floor bridge was
suspended directly over the second floor bridge,
with the third floor walkway set off to the side
several meters away from the other two.
• Construction issues led to a subtle but flawed
design change that doubled the load on the
connection between the fourth floor walkway
support beams and the tie rods carrying the
weight of the second floor walkway.
• This new design could barely handle the dead
load weight of the structure itself, much less the
weight of the spectators standing on it. The
connection failed and both walkways crashed
onto the lobby, killing 114 people and injuring
more than 200 others.
Investigation: Only four days after the disaster,
Wayne Lischka, a structural engineer hired by The
Kansan City Star newspaper, discovered a significant
change in the design of the walkways.
• The two walkways were suspended from a set of
steel tie rods, with the second floor walkway
hanging directly underneath the fourth floor
walkway.
• The walkway platform was supported on 3 cross-
beams suspended by steel rods retained by nuts.
The cross-beams were box beams made from C-
channels welded toe-to-toe. The original design
by Jack D. Gillum and Associates called for three
pairs of rods running from the second floor all the
way to the ceiling. Investigators eventually
determined that this design only supported 60
percent of the minimum load required by Kansas
City building codes.
• Havens Steel Company, the contractor
responsible for manufacturing the rods, objected
to the original plan of Jack D. Gillum and
Associates, since it required the whole of the rod
below the fourth floor to be threaded in order to
screw on the nuts to hold the fourth floor
walkway in place. These threads would probably
have been damaged beyond use as the structure
for the fourth floor was hoisted into position.
• Havens therefore proposed an alternate plan in
which two separate sets of tie rods would be
used: one connecting the fourth floor walkway to
the ceiling, and the other connecting the second
floor walkway to the fourth floor walkway.
• This design change would prove fatal. In the
original design, the beams of the fourth floor
walkway only had to support the weight of the
fourth floor walkway itself, with the weight of the
second floor walkway supported completely by
the rods.
• In the revised design, however, the fourth floor
beams were required to support both the fourth
floor walkway and the second floor walkway
hanging from it. With the load on the fourth-floor
beams doubled, Havens' proposed design could
only bear 30 percent of the mandated minimum
load.
• The serious flaws of the revised design were
further compounded by the fact that both
designs placed the bolts directly in a welded joint
between two facing C-channels, the weakest
structural point in the box beams.
• Photographs of the wreckage show excessive
deformations of the cross-section. In the failure
the box beams split at the weld and the nut
supporting them slipped through.
Quebec Bridge
Official name: Pont de Quebec
Carries 3: lanes of roadway
- 1 rail line
- 1 pedestrian walkway
Locale: Quebec City, and Levis, Quebec Design:
Cantilever Bridge Longest span: 549 m (1,800 ft)
Total length: 987 m (3,239 ft)
Width: 29 m (94 ft) wide
Opening date: December 3, 1919
• The Quebec Bridge is a riveted steel truss
structure and is 987m long, 29 m wide, and 104
m high.
• Cantilever arms 177 m long support a 195 m
central structure, for a total span of 549 m, the
longest cantilever bridge span in the world. It is
the easternmost (furthest downstream)
complete crossing of the Saint Lawrence.
• The bridge accommodates 3 highway lanes (none
(until 1929, 1 until 1949, 2 until 1993), 1 rail line
(2 until 1949), and a pedestrian walkway
(originally 2); at one time it also carried a
streetcar line. It has been owned by the Canadian
national Railway since 1993.
Background: Before the Quebec Bridge was built,
the only way to travel from the south shore of the St.
Lawrence in Levis to the north shore at Quebec City
was to take a ferry. As far back as 1852 a project for
a bridge over the St. Lawrence River at Quebec was
considered, and again, in 1867, 1882, and 1884.
First design and Collapse of August 29, 1907. The
Quebec Bridge was included in the National
Transcontinental Railway project, undertaken by the
federal government.
• By 1904, the structure was taking shape.
However, preliminary calculations made early in
the planning stages were never properly checked
when the design was finalized, and the actual
weight of the bridge was far in excess of its
carrying capacity. The dead load was too heavy.
All went well until the bridge was nearing
completion in the summer of 1907, when the
local engineering team under Norman McLure
began noticing increasing distortions of key
structural members already in place.
• McLure became increasingly concerned and
wrote repeatedly to supervising engineer
Theodore Cooper, who at first replied that the
problems were minor. The Phoenix Company
officials were claiming that the beams must
already have been bent before they were
installed, but by August 27 it had become clear to
McLure that this was wrong. A more experienced
engineer might have telegraphed Cooper, but
McLure wrote him a letter, and then went to New
York to meet with him on August 29, 1907.
Cooper then agreed that the issue was serious,
and promptly telegraphed to the Phoenix Bridge
Company: "Add no more load to bridge till after
due consideration of facts." The two engineers
then went to the Phoenix offices.
• But the message had not been passed on to
Quebec, and now it was too late. That same
afternoon, after 4 years of construction, the
south arm and part of the central section of the
bridge collapsed into the St. Lawrence River in
just 15 seconds. Of the 86 workers on the bridge
that day near quitting time, 75 were killed and
the rest were injured. Of these victims, 33 were
Mohawk steelworkers from the Kahnawake
reserve near Montreal; they were buried at
Kahnawake under crosses made of steel beams.
Second design and Collapse of Sept. 11, 1916. The
new design was still for a bridge with a single long
cantilever span, but a much more massive one. On
September 11, 1916, when the central span was
being raised into position, it fell into the river, killing
13 workers.
Completion: Construction was ultimately completed
in August 1917, at a total cost of $25 million and 88
bridge workers' lives. On December 3, 1919, the
Quebec Bridge opened for rail traffic, after almost
two decades of construction. Its center span of 549
meters remains the longest cantilevered bridge span
in the world and is considered a major engineering
feat. The bridge was built and designed primarily as
a railway bridge, but the streetcar lines and one of
the two railway tracks were converted into
automobile and pedestrian/cycling lanes in
subsequent years. In 1970 the Pierre Laporte
Suspension Bridge opened just upstream to
accommodate freeway traffic on Autoroute 73.
Module 5: SPECIFICATIONS
Specifications
• written documents describing in detail the scope
of work, materials to be used, methods of
installation, and quality of workmanship for a
parcel of work to be placed under contract.
• part of the contract documents that define the
qualitative requirements of the project that is to
be built.
• a detailed description of requirements,
dimensions, materials, etc., as of a proposed
building, bridge, etc.
Supplementary conditions – Any standard set of
general set of conditions is intended to apply to a
relatively broad range of construction and must be
amended and/or supplemented at times to conform
to the idiosyncrasies of a given project.
• Supplementary conditions are occasionally also
referred to as special conditions.
Common examples of necessary amendments to
the general conditions:
• The number of sets of contract documents to be
furnished to the contractor
• Limitations on surveys to be provided by the
owner
• Special instructions to the contractor when
requesting material substitutions
• Changes in insurance requirements
• Special documentations required by the owner as
a condition of final payment
Two categories of specifications
a. General specifications – prepared by various
public authorities or trade associations for use
throughout the construction industry.
b. Particular specifications – prepared by
designers for specific projects.
Types of specifications
1. Open specifications – allows competition to
supply a material or product within broad limits
of equality. One way to achieve an open
specification is to follow a brand name or names
by the term ‘or approved equal’. It can provide
competition but, by permitting substitutions,
introduces the possibility of materials being used
that are inferior to those desired.
2. Closed specifications – If a material or process
specification is worded such that only one
proprietary product will be acceptable, and if no
provision is made for substitutions, it is known as
a closed specification.
• Most manufacturers feel that a closed
specification is usually not fair to
competition – unless they happen to be the
manufacturer specified.
• Owners also took a dim view of closed
specifications, feeling that it allows or
forces prices upward.
• It has the advantage of ensuring the desired
quality of material but the disadvantage of
eliminating competition among suppliers.
3. Performance specifications – involve designers
in preparing detailed description of end results
desired by the owner; the method used to
achieve that end is that left up to the contractor.
• It describes the required performance or
service characteristics of the finished
product or system without specifying in
detail the methods to be used in obtaining
the desired end result.
• This type of specification makes the
contractor responsible for obtaining the
results expected, and an end product is
required that will meet the acceptance tests
and standards specified.
4. The Technical specifications – These
specifications present verbal descriptions of the
technical requirements of the work to be
accomplished, with emphasis on the levels of
quality to be achieved.
• It is customary that a separate division of
the specifications be devoted to each major
type of construction operation that will be
involved, such as excavation, concrete,
structural steel, piping, insulation, and
electrical work.
5. Design specifications – In a design specification,
also referred to as a prescriptive specification or
a materials and workmanship specification, the
drawings and specifications spell out in explicit
terms what must be done to accomplish a desired
end result.
• It describes the kinds and types of materials
to be provided, their physical and
performance properties, their sizes and
dimensions, the standards and
workmanship, and the inspection and tests
required for verification of quality.
• It is common practice for a specific brand
name or names to be listed with model
numbers and other data to establish the
standard of quality desired.
6. Commercial specifications – (those that are
financed by the government). Commercial
specifications would probably be classed as
modified open or modified close. The
specifications’ writer selects several
manufacturers, at least three, whose product he
is familiar with the quality, appearance or other
features of which fit the project.
7. Streamlined specifications - While not perhaps a
type of specifications but more accurately a style,
there have been a number of attempts to shorten
the actual length of the written specifications.
These have been classified as streamlined
specifications since they try to create a shorter
version by eliminating certain words that may not
be necessary to the required meaning.
Prerequisite issues to consider in specifications
writing
• It is necessary to have a good knowledge of
construction principles, procedures and
practices.
• Specification writer must have a thorough
understanding of construction contracts and
procedures.
• A good specification writer will develop the
ability to analyze, synthesize, and organize
construction information and will be able to take
a building or contract apart mentally, put
information together in any required order and
then be able to present the information to others
in a convenient and recognizable form.
The 10 precepts to ensure quality of specifications
writing
a. Be complementary. Relate all parts of the
contract.
b. Be concise. Say only what have to be said.
c. Be consistent. In style, attitude and
firmness.
d. Be current. Eliminate out-of-date
references.
e. Be correct. Check errors and accuracies.
f. Be fair. Contract should be a bargain to
both parties.
g. Be objective. The job has to be bid and
built.
h. Be organized. Use standard formats where
possible.
i. Be practical. Contractors are not magicians.
j. Be specific. Do not talk in generalities.
Specifications language
Specifications should be written in as simple
language as possible so that no misunderstanding of
words is possible, and if technical terms are
necessary, they should be those used in common
practice and easily associated with local usage.
Avoid words having varied or indefinite meanings.
Ex. Do not say, “The equipment shall be removed
and replaced as indicated”.
Say: “Remove equipment during the alteration
thereof and reinstall after completion”.
Ex. Do not say, “The existing culverts shall be
replaced as indicated on the drawings”.
Say: “Remove existing culverts and reinstall in the
new location”.
Mandatory Construction
Specifications are instructions to the contractor and
suppliers of materials and should indicate exactly
what is expected and what will be accepted.
• This means the specifications are mandatory
upon the contractor.
• To be mandatory they must be imperative.
One of the most controversial words used in
specifications is the word shall, but it is entirely
proper; it is a command or a demand if you wish, but
it definitely tells the contractor that he is expected
to do something. A number of writers are reluctant
to be so demanding and use will or to be.
These are vague terms and allow the reader a
freedom to do or not to do if it is convenient to him.
Ex. “The contractor shall set all screws with a
screwdriver”. This sentence tells who and with what,
and is in the indicative mood, but it requires nine
words. It may be shortened by using the imperative
mood without loss of meaning as in “Set all screws
with the screwdriver”.
Ex. “Portland cement shall conform to ASTM-C-150,
Type I”. This may be shortened by inference;
“Portland cement: ASTM-C-150, Type I”.
Punctuation
Punctuation is vitally important in the writing of
specifications and may change the meaning of a
sentence. The misplacement of a single punctuation
mark may change the meaning of the specification.
To eliminate problems, reduce the number of
punctuations. Extra care is necessary to insure that
the sentence meaning is clear.
Escape clauses
Escape clauses, grandfather clauses, or other non-
definable phrases or clauses are the bane of the
contractor who uses the specifications. Following is
a simple list of words or phrases often encountered
that have no enforceable meaning and should not be
allowed to be used in specifications:
• In the opinion of the engineer...
• As selected by the engineer...
• As the engineer may direct...
• To the satisfaction of the engineer...
• Unless otherwise directed by the engineer…
• In strict accordance with…
• In accordance with the best commercial
practice…
• In accordance with the best modern
standard practice…
• Workmanship shall be of the highest
grade…
Words and phrases
• The verbs shall and will are the two of the
misused words in specifications.
• Shall is a command, a positive statement, but will
means maybe something will happen at
someone’s convenience.
• Some other words that are open to
interpretation are:
Any: implies a choice when no choice may be
intended.
Ex. “Any surface not properly finished shall be
removed and replaced”. This could mean not all
improperly finished surfaces would be removed and
replaced. In this particular case the use of all in place
of any would be more appropriate.
Either: A “take your choice” word: “Provide glass
sidelights on either side of the door”.
• Better instruction would be “Provide glass
sidelights on both sides of the door”.
Exact word meanings
The correct use of words is of primary importance in
writing of specifications. Misuse of words, double
meanings, colloquial interpretation, or shortened or
slang words may mean something different from
what is intended.
Ex. Gage, calk: These are but two examples of words
that may be spelled in more than one way (gage =
gauge; calk = caulk).
There is nothing wrong with either spelling, but the
writer should be consistent throughout the
specifications.
Writing a specification General Specifications, as
one of the Contract Documents, deserve as much
care and attention as working drawings. They should
be clear, concise and written in a simple language to
come up with best results.
Preliminary review
The specifications should be started in the form of
construction outline or outline specifications to
accompany the schematic drawings and be further
developed as preliminary specifications to
accompany design drawings.
Things to do to come up with an immediate
preliminary or guide specifications
• Prepare a list of all sections
• Write scope of work for each section
• Coordinate “Scopes” to make sure
everything is included
• Prepare notes or brief specification
Component Parts of a Specification
a. Instructions to bidders
• Form of bid and signature
• Interpretations of drawings and
specifications
• Preparation of the proposal
• List of documents to be submitted with the
bid
• Bonding requirements
• What is expected of the successful bidder
• Insurance policies required
• Basis for selection of the successful bidder
b. General conditions – It is this document that
establishes the ground rules for administration of
the construction phase of the project.
• Legal definitions of terms used in the
contract
• Correlation and intent of the documents
• Time and order of the work
• Subcontractors
• Where to serve legal notices
• Right of the owner to terminate the
contract
• Right of the contractor to terminate the
contract
• Right of the owner to take over work
c. Technical Provisions – Part 3 of the specifications
that relate to the installation or construction of
the various parts of the work and to the materials
used in the work.
Addenda to the specifications
Addenda to the specifications are documents setting
forth the changes, modifications, corrections, or
additions to the contract documents that have
been issued after the project has been advertised for
bids, but before the time of opening bids -
sufficiently in advance of the bid opening date one
hopes to allow the bidder time to make the
necessary changes in his or her bid.
Standard specifications – a preprinted set of
specifications, usually comprising both a set of
General Conditions and complete technical
specifications for all types of construction and
materials that the originating agency expects
normally to cover in its kind of work.
Conflicts due to Drawings and Specifications
In case something is shown or noted one way on the
drawings and described differently in the
specifications, which will govern?
The specifications will normally take precedence
unless it says in the specifications that the plans will
govern. It is still the specifications that set the
controlling criteria.
Scope-of-Work Disputes
Contract documents often fail to adequately
describe, define, or delineate the work to be
performed.
• This generates the so-called scope of work
disputes. The most common of such
disputes is the lack of detail in drawings or
lack of specifics in specifications.
Avoiding Scope-of-Work problems
a. Provide adequate budget for drafting
specifications.
b. Work with a set of carefully prepared, carefully
coordinated front-end documents.
c. Place control of each set of project specifications
in the hands of a single, qualified specifications
engineer.
d. Do not mark up previous job specifications to
create another set of job specifications.
e. Update the master specification at least annually
to keep current with industry standards, codes,
and laws affecting construction.
f. Use the same set of front-end documents on all
projects to minimize contract administration
problems.
g. Front-end documents should not be edited by
project engineers.
What do the Specifications Mean to the Inspector
Without them, an inspector cannot possibly perform
in a competent manner. The inspector should have
an idea of the relative importance of each of the
various component parts of the contract documents.
Specifications and the Inspector
One of the principal weaknesses of some inspectors
is their general lack of a good working knowledge of
specifications. Also, some of the principal
weaknesses among the specification engineers are
their general lack of specific knowledge of
construction methods.
‘Methods used on other projects only work on
other projects’.
Allowances and Tolerances in Specifications
One of the factors that should be considered in the
efforts to involve the specifications writer and the
inspector in an effective working relationship is the
inclusion in the specifications of tolerance limits
instead of the traditional methods of specifying
absolutes.
Some problems for which the inspectors have been
blamed can actually be traced to the fact that the
specifications either provided for no tolerance at all,
or provided tolerances that were either
unreasonable or unenforceable.
The Use of Generalities in Specifications
• It is in the owner’s best interest to keep designers
from indulging in generalities in specifications.
• It is important to avoid the use of vague and
unenforceable subjective terms in specifications.
International Construction Contracts
International projects have their own standards,
usually FIDIC (International Federation of Consulting
Engineers). The documents are used almost
universally on international engineering projects
financed by the international banking industry, the
UN and others.
• Definition and interpretation
• Engineer and engineer’s representative
• Assignment and subcontracting
• Contract documents
• General obligations
• Labor
• Materials, plant, and workmanship
• Suspension
• Commencement and delays
• Defects liability
• Alterations, additions and omissions
• Procedure for claims
 • Contractor’s equipment, temporary works The shop drawing is the connecting link between
and materials design and construction. Most specifications require
• Measurement that the contractor refrain from ordering material
• Provisional sums until the results of the review of the shop drawing
• Nominated subcontractors submittal from the design organization have been
• Certificates and payment received. Any delay in processing of shop drawings
• Remedies affects the contractor’s scheduling and may result in
• Special risks extra cost of the owner.
• Release from performance
• Settlement of disputes Disapproving or stopping the work
Upon receipt of information from the engineer that
• Notices
the work is defective, the owner may order the
• Default of employer
contractor to stop the work on these grounds.
• Changes in cost and legislation
• Currency and rates of exchange

Differing site conditions

One of the most misunderstood of all contract
provisions, and the one that is frequently the cause
of large contractor claims for additional work and
change orders is the provision for differing site
conditions.

Subsurface and latent physical conditions at the site

present a special problem. If they differ significantly
from what is printed in the contract documents, the
contractor may well be entitled to additional
payment for any increased work involved.

Bidder’s obligations
a. Bidders are generally advised in the contract to
make a site inspection of their own.
b. The contract bid price is proportional to the
degree of risk that the construction contractor
must provide for in its competitive bid.
c. The most cost-effective construction is obtained
by accepting certain risks for latent or subsurface
site conditions.

Types of Drawings comprising the Construction

contract
• Shop drawings – those details and sketches
prepared by the contractor or the material
suppliers or fabricators that are necessary to
assure the fabricator that the basic concept is
acceptable before beginning costly fabrication.

They frequently contain information that is not

related to the design concept, or information that is
relative only to the fabrication process or
construction techniques in the field. In approving
shop drawings, the engineer only indicates that the
items conform to the design concept of the project
and compliance with the plans and specifications
prepared.