DOCUMENTATION

LECTURE 1: Contract Laws and Construction/Building Contracts

 Introduction
Task 1
• Write a personal essay outlining the following:
• Why you think you need to study this course
• Your expectations from DCT621S (and your passing target)
• What are your strategies to successfully complete the course
and attain your target

To be submitted during the next class, hardcopy typed.

12 Arial font, at least 1.5 pages

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 Introduction
• Civil engineering mainly consists of the
design and construction of projects
which, could require the involvement of
various separate parties during the
different stages of the project.
• People in the civil engineering industry
can be divided into five groups;
– builders, designers, regulators, purchasers
and users of buildings

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 Introduction
• Civil engineering mainly consists of the
design and construction of projects
which, could require the involvement of
various separate parties during the
different stages of the project.
• The parties to the project are:
• The Promoter (client/employer)
• The Engineer (consultant/advisor)
• The Contractor (constructor)

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 Introduction
Structure of responsibilities in construction projects
• The Promoter
• This refers to the ‘issuer’ of the project.
• Typically a government department, or an
organisation in the private sector who are
developing their own assets in the form of
buildings, factories or warehouses.
• It is the promoter who demands the project
and secures the finances necessary to
procure and undertake the project.

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 Introduction
Structure of responsibilities in construction
projects
• The Engineer
• This term is often used to describe the
organisation that designs the project and
sometimes supervises/inspects the
construction of the project.
• It is usually a firm of consulting engineers, or
sometimes an in-house department
specialised in this function.

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 Introduction
Structure of responsibilities in construction projects
• The Contractor
• This is the organisation that carries-out the
construction of the project.
• It is specialised in the mobilisation and management
of men and resources to build the structure.
• It is common for contractors to subcontract part of
the work to specialist subcontractors. For example
piling work and earthworks are often
subcontracted.

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 Introduction

Structure of responsibilities
in construction projects

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 Introduction
• Realisation of a civil engineering
project

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 Introduction
• Stages In Civil Engineering Procedure:
1) Design brief: The Promoter - who has the need and
finance for the project but not the technical skill to
develop it - employs the Engineer and gives him essential
features of the project.

2) Feasibility study: With an understanding of what the

Promoter wants, the Engineer proceeds to the first stage of
the design and identifies a number of alternative schemes
that will satisfy the Promoter’s requirements. The Engineer
then compares the schemes, reports them and recommends
his choice to the Promoter for approval.

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 Introduction
• Stages In Civil Engineering Procedure:
3) Project Design: Upon approval, the Engineer
designs the selected scheme in detail,
with full calculations of all dimensions and
quantities of parts and materials, as well as
workmanship, required to complete the
project.

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 Introduction
• Stages In Civil Engineering Procedure:
4) Tender/Contract Documents: The completion of the
design process will culminate into the production of
these documents.
It is on the basis of these documents that a Contractor
will be selected to carry-out the work. Having entered
into contract with a Contractor, the Promoter now relies
on the Engineer to ensure that the Contractor’s work is
done in accordance with the contract documents.
When the work is complete, it is handed over to the
Promoter and the procedure is essentially concluded.
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 Introduction
Project Life Cycle

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 Introduction

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 CONTRACT LAWS

WHY LAWS IN THE FIRST

PLACE? Scope of presentation:
• Legal context of Contracts
• Requirements of a valid
contract
• Basic concepts
• Public Procurement Act 15 of
2015
• Labour Act 11 of 2007

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 Law Definitions
• “Laws” means all national (or state) legislation,
statutes, ordinances and other laws, and regulations
and by-laws of any legally constituted public authority

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 Contract Definitions
• Generally,

• An agreement :
– Based on consensus between legal subjects with
contractual capacity,
– Legal,
– Physically possible and
– Complies with the prescribed formalities reached with
the intentions of creating a legal obligation with
resulting rights and duties.
In short, a contract is an agreement which gives rise to
a legal obligation.
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 Contract Definitions
• According to Method of Payment: The agreement of how the
owner will pay the contractor for work performed such as a lump-
sum or cost-plus payment.
• From a Legal Point of View: A mutual agreement between two or
more parties that something shall be done, an agreement
enforceable at law.
• According to FIDIC: Contract means the General Conditions, the
Supplementary Conditions, the Specifications, the Drawings, the Bill
of Quantities, the Tender, the Letter of Acceptance, the Contract
Agreement, and such further documents as may be expressly
incorporated in the Letter of Acceptance or Contract Agreement.

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 Requirements of valid contracts
• There are 5 requirements;
1. Consensus
2. Contractual capacity
3. Legality
4. Physical

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 Basic concepts
• The parties
As there must be at least two corresponding wills for consensus to
exist, it follows naturally that at least two or more parties must
participate in the conclusion of a contract.

• The performance
Performance can consist of positive conduct (where the debtor
must do, deliver or pay something), or negative conduct (an
omission, such as not doing business in a certain area for a
specified period).

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 Basic concepts
• Types of contracts
– Unilateral
– Reciprocal contracts
– Nominate contracts

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 Basic concepts
• Three categories of a contracts
– Essentialia
– Naturalia
– Incidentalia

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 Basic concepts
• Contracts which are null and void
– Where one or more of the requirements for a
valid contracts are absent, no contract and
consequently no legal obligation can come into
being.

– When a contract is said to be null and void, it

actually means that no contracts has come into
being.

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 Basic concepts
• Voidable contracts
– Where a contract did come into being, but it can be set aside
because of a defect, it is called voidable contract.
– The defect must have been present at the time of conclusion
of the contract.
– Where the parties so reach do reach consensus, but the
consensus was obtained in some or other improper manner
such as duress, such consensus can be invalid
– The prejudiced party may, however, choose to uphold the
contract and is not obliged to have it set aside.
– The contract then remains valid.
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 Basic concepts
• Unenforced contracts
– Certain contracts create legal obligations, which are
recognized but not enforced by law.
• Offer
– An offer is a declaration by the offeror of his intention
to conclude a contract, while all the terms on which he
is prepared to contracts are set out in this declaration.

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 Basic concepts
• Offer must be clear and unambiguous
– The offer must be clear, in other words it must
contains sufficient information to place the offeree in
a position to assess sufficiently what the offeror has in
mind.

• The offer must be complete

– The offer must contain all the terms the offeror wishes
to embody in the contract. The offeree will be bound
only by those terms set out in the offer and accepted
by him.
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 Basic concepts
• The offer must be communicated to offeree
– It is hardly necessary to state that the offeree must be
aware of the existence of the offer.
– The offer must be made with the intention that it shall
serve as an offer so that it may be accepted and result
in a contract coming into existence.

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 Basic concepts
• Acceptance
– An acceptance can be described as the declaration by
the offeree of his intention to conclude a contract in
accordance with the terms set out in the offer.

– REQUIREMENTS

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 Basic concepts
 The date and place of conclusion of the contract
– A contract comes into being at the moment when and
the place where the parties reach consensus
– When the parties are in each other’s presence when
offer and acceptance are being made, it is normally
clear where and when the contract is concluded,
namely at the place where the parties find themselves
and at the moment when the offeror becomes aware
of the acceptance.

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 Basic concepts
 Contracts concluded by post
– Acceptance must come to the notice of the offeror
and the offeree must effect his acceptance in the
prescribed manner, if any.
– Declaration theory: in terms of the declaration theory
the contract comes into being at the place where and
the time when the letter of acceptance is written,
– In other words, when the offeree has declared his
acceptance.

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 Basic concepts
– Expedition theory: in terms of the expedition theory the
contract comes into being at the place where and the time
when the letter of acceptance is posted.
– Reception theory: in terms of the reception theory the
contract comes into existence where and when the letter
of acceptance is received (delivered), even before it has
been read. The letter has reached is destination.
– Communication or information theory: in terms of the
information theory the contract comes into existence
where and when the letter of acceptance has been read,
in other words the acceptance has come to the notice or
acknowledge of the offeror.
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 Basic concepts
• Factors influencing consensus
• Mistake
• Misrepresentation
• Duress
• Undue influence

• Discuss how these factors influence consensus

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 Basic concepts
• Terms and conditions
• People often speak of the “conditions” of a contract when they
actually refer to the terms, clauses or stipulation in a contract
• A condition in a contract has a far more technical meaning and
should be distinguished from time clauses, terms and assumptions
• Obviously the parties have to reach agreement on a condition, but
it differs from the ordinary term
• While a condition is technically a term, a term is not necessary a
condition
• Time clause
• Warranties
• Penalty clauses

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 • Class exercise:
• Define the following concepts fully in such a way to
show their difference clearly:
– Valid contracts
– Void contracts
– Voidable contracts
• Define the following concepts briefly:
– Essentialia, neuturalia and incidentalia of a contract
– Unenforceable contracts
– Performance.

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 Public Procurement Act 15 of 2015

Objects of the Act

• The Objects of the Act are to promote integrity,
accountability, transparency, competitive supply,
effectiveness, fair-dealing, responsiveness, informed
decision-making, consistency, legality and integration in
the procurement of assets, works and services among
others.
• Lecture 4

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 Labour Act 11 of 2007
• Passed by the Parliament and signed by the President (on
21 December 2007) in terms of the Namibian
Constitution, published in terms of Article 56 of the
Constitution.
• To establish a comprehensive labour law for all employers
and employees;
• To entrench fundamental labour rights and protections;
• To regulate basic terms and conditions of employment;
• To ensure the health, safety and welfare of employees;
• To protect employees from unfair labour practices;
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 Labour Act 11 of 2007
• To regulate the registration of trade unions and employers’
organisations;
• To regulate collective labour relations;
• To provide for the systematic prevention and resolution of
labour disputes;
• To establish the Labour Advisory Council, the Labour Court,
the Wages Commission and the labour inspectorate;
• To provide for the appointment of the Labour Commissioner
and the Deputy Labour Commissioner; and
• To provide for incidental matters.

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 Labour Act 11 of 2007
• Basic Wage: Is that part of an employee’s remuneration in money
including the cash equivalent of payment in-kind, if any, as calculated
in terms of section 10 of the Act, paid in respect of work done during
the hours ordinarily worked but does not include:
(i) allowances, including travel and subsistence, housing, motor vehicle,
transport, and professional allowances, whether or not based on the
employee’s basic wage;
(ii) pay for overtime, as defined in section 8 (g);
(iii) additional pay for work on a Sunday or a public holiday;
(iv) additional pay for night work, as required in terms of section 19(1); or
(v) payments in respect of pension, annuity or medical benefits or
insurance.

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 Labour Act 11 of 2007
• Remuneration: Is the total value of all payments in
money or in kind made or owing to an employee arising
from the employment of that employee;
• The particulars that must be indicated on an envelope or
statement that must accompany remuneration paid to an
employee are as follows:
(a) the name and identity number (if any) of employee;
(b) the name postal and business address of employer;
(c) ordinary hourly, daily, weekly, fortnightly or monthly
basic wage of employee of employee;
(d) the period in respect of which payment of such basic
wage is payable;
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 Labour Act 11 of 2007
(e) the number of hours worked (by category) and the
amount paid to the employee in respect of-
(i) his or her basic wage;
(ii) overtime;
(iii) night work;
(iv) work on Sundays;
(v) work on public holidays; and
(vi) any other remuneration or allowances;

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 Labour Act 11 of 2007
(f) amount due for each part of remuneration in addition
to basic wage (for example, pension contribution, medical
insurance);
(g) the gross amount of remuneration payable to the
employee;
(h) the particulars and amount of any deductions from the
amount referred to in paragraph (g); and
(i) the net amount of remuneration payable to the
employee.

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 Labour Act 11 of 2007
• Continuous Shift means a shift in a continuous operation,
as permitted by the Minister in terms of section 15(1);
• Incapacity means an inability to work owing to any
sickness or injury;
• Monetary Remuneration refers to that part of the
remuneration that is paid in money;
• Overtime means time worked in excess of the hours an
employee ordinarily works in any ordinary working day but
does not include any work done on -
• (i) a Sunday, if it is not an ordinary working day for that
employee; or
• (ii) a public holiday;
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 Labour Act 11 of 2007
• Sick Leave means any period during which the employee is unable
to work due to incapacity;
• Sick Leave Cycle means the period of 36 consecutive months’
employment with the same employer immediately following -
• (a) an employee’s commencement of employment; or
• (b) the completion of the last sick leave cycle; and
• Sick leave cycle includes any period, or combination of periods, not
exceeding a total of 36 weeks, during which an employee is on
annual leave, sick leave or any other absence from work on the
instructions, or with the permission, of the employer.
• Spread-over means the period from the time an employee first
starts work in any one 24 hour-cycle to the time the employee
finally stops work in that cycle.

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 Labour Act 11 of 2007
• Hours of Work: An employer must not require or permit an
employee, other than an employee contemplated in
subsection (3), to work more than -
(a) 45 hours in any week, and in any case, not more than -
(i) nine hours on any day, if the employee works for five days or fewer in a
week; or
(ii) eight hours on any day, if the employee works for more than five days in a
week; or
(b) if the employee works in a continuous operation, the
maximum number of hours prescribed by the Minister in
terms of section 15(2) for that employee’s continuous shift.
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 Labour Act 11 of 2007
• Hours of Work: The ordinary hours of work of an
employee described in subsection (1) whose duties
include serving members of the public may be extended
up to 15 minutes in a day, but not more than a total of 60
minutes in a week, to enable that employee to continue
performing those duties after the completion of ordinary
hours of work.

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 Labour Act 11 of 2007

Employer Duties to Employees:

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 Labour Act 11 of 2007
• Employer Duties to Employees: Every employer or person in
charge of premises where employees are employed must,
without charge to the employees:
(a) provide a working environment that is safe; is without risk to
the health of employees; and has adequate facilities and
arrangements for the welfare of employees;
(b) provide and maintain plant, machinery and systems of work,
and work processes, that are safe and without risk to the health of
employees;
(c) provide and maintain safe entry and exit from places of work;
(d) provide employees with adequate personal protective clothing
and equipment if reasonably necessary;

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 Labour Act 11 of 2007
(d) provide employees with adequate personal
protective clothing and equipment if reasonably
necessary;

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 Labour Act 11 of 2007
(e) provide employees with the necessary information and training to
work safely and without a risk to their health;
(f) ensure that the use, handling, storage or transport of articles or
substances is safe and without risk to the health of employees;
(g) ensure that employees are given the necessary instructions and
supervision to work safely and without a risk to their health;
(h) ensure that the organisation of work, including hours of work and
mealtimes, do not adversely affect the safety or health of employees;
and
(i) take any other prescribed steps to ensure the safety, health and
welfare of employees at work.

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 Labour Act 11 of 2007

Employer Duties to
Employees:

WHAT WOULD BE A
LAWFUL SOLUTION
FOR THIS SITUATION?
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 Labour Act 11 of 2007

Employer Duties to
Employees:

What are the implications?

WHAT WOULD BE A LAWFUL
SOLUTION FOR THIS
SITUATION?

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 Labour Act 11 of 2007

Employer Duties to Employees:

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 Labour Act 11 of 2007
• Employee Duties: Every employee has a duty to:
(a) take reasonable care to ensure -
(i) the employee’s own safety and health in the workplace; and
(ii) the safety and health of any individual who may be affected by the
employee’s activities at work; and
(b) co-operate with the employer to enable the employer to
perform any duty imposed under this chapter or the regulations.

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 Labour Act 11 of 2007

Employees’
Duties to
Employers:

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 End of Lecture 1
Questions?
Lecture 2

PREPARED BY: BEATHA N. NAKAMELA

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