MIZAN TEPI UNIVERSITY

COLLEGE OF ENGINEERING AND TECHNOLOGY

DEPARTMENT OF CONSTRUCTION TECHNOLOGY AND MANAGEMENT

Assignment of Construction law (CoTM 4321)

PREPARED BY: BANDU TUCHA

ID No: ETR/2130/12

SUBMITTED TO: Mr. BELETE .

SUBMISSION DATE: 24/05/2016 E.C

Table of Contents

1.Can a verbal agreement be treated as a legal contract? .............................................................................. 2

2.What are the elements of a valid Contract? ................................................................................................3

3. What are Implied Terms in a Contract? .................................................................................................... 4

4.Can a Counteroffer be Treated as Acceptance? ......................................................................................... 6

6.When a contract forms? Issigning the contract necessary? ........................................................................ 8

7. What is the Concept of Termination of Contract by Frustration? ............................................................. 8

8. What is the purpose of the bid bond? ...................................................................................................... 10

9.When will be the bid bond returned to the bidders? .................................................................................10

10. Suppose a contractor withdraws its offer: ............................................................................................. 11

11. Is the Letter of Intent a legal document to form a valid contract? ........................................................ 12

12. What is the purpose of the Condition of Contracts in a construction contract? .................................... 13

13. Why are Standard Forms of Contracts recommended over the Bespoke Contracts? ...........................14

14. What are the Standard Forms of Contracts widely used in the construction ........................................ 15

15. What is a Bespoke Contract? .................................................................................................................17

16. What are the contents of a typical Contract Document? ....................................................................... 18

17. What is the priority order of documents per the FIDIC 2017 Red Book? ............................................ 20

responsibilities from their primary contract to the subcontractor. This arrangement often ........................ 21

19. What is Contractual Claim? .................................................................................................................. 21

20. What is General Claim/Legal Claim? ................................................................................................... 23

22. Who is a Named Subcontractor? ........................................................................................................... 24

RFERENCE .................................................................................................................................................27
1.Can a verbal agreement be treated as a legal contract?
 In general, a verbal agreement can be considered legally binding and enforceable as a
contract, although the enforceability of verbal contracts may vary depending on the
jurisdiction and the nature of the agreement.
 In many legal systems, contracts can be formed through an offer, acceptance, and
consideration. While written contracts provide clear evidence of the terms agreed upon by
the parties, verbal contracts rely on the parties' spoken words and actions to establish the
agreement. However, it can be challenging to prove the existence and terms of a verbal
agreement in a dispute, as the lack of written documentation can lead to disagreements
and misunderstandings.
 Some jurisdictions have specific laws that require certain types of contracts to be in writing
to be enforceable. For example, contracts involving the sale or transfer of real estate,
contracts that cannot be performed within one year, and agreements to pay someone else's
debt are often required to be in writing to be enforceable. Additionally, certain contracts
may need to meet specific formalities and be in writing, such as those governed by the
Statute of Frauds.
 It is always advisable to have written contracts for important agreements to provide clarity
and protection for all parties involved. This helps ensure that the terms of the agreement
are accurately documented, reducing the risk of disputes and facilitating enforcement if
necessary. Consulting with a legal professional is recommended to understand the specific
contractual requirements and enforceability in your jurisdiction.
Verbal Agreements as Legal Contracts
 A verbal agreement can be treated as a legal contract under certain circumstances. In
general, for a contract to be legally binding, it must meet certain criteria, such as offer and
acceptance, consideration, and an intention to create legal relations. While verbal
agreements are generally enforceable, they can be more challenging to prove in court
compared to written contracts. However, there are specific situations where verbal
agreements can be legally binding.
Enforceability of Verbal Agreements
 Verbal agreements are generally enforceable if they meet the essential elements of a
contract. These elements include an offer by one party, acceptance by the other party,

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consideration (something of value exchanged), and an intention to create legal relations. If
these elements are present, a verbal agreement can be legally binding.2
Statute of Frauds
 In some jurisdictions, certain types of contracts must be in writing to be enforceable under
the statute of frauds. These include contracts for the sale of real estate, contracts that
cannot be performed within one year, and agreements to pay someone else’s debts. In
these cases, a verbal agreement may not be sufficient to create a legally binding contract.
Evidence and Proof
 One challenge with verbal agreements is the difficulty in providing evidence and proof of
the terms agreed upon. In a dispute, it may come down to one party’s word against the
other’s. This can make it more challenging to enforce a verbal agreement compared to a
written contract where the terms are clearly documented.
Exceptions
 There are exceptions where verbal agreements are commonly accepted as legally binding
contracts. For example, in everyday transactions such as buying goods from a store or hiring
services from a professional, verbal agreements are often considered binding. However, it is
always advisable to have important agreements put in writing to avoid misunderstandings
and disputes.
 In conclusion, while verbal agreements can be treated as legal contracts under specific
circumstances, it is generally advisable to have important agreements documented in
writing to avoid potential disputes and challenges in enforcement

2.What are the elements of a valid Contract?

Elements of a Valid Contract
 A valid contract is a legally binding agreement between two or more parties. For a contract
to be considered valid, it must contain certain essential elements. These elements are
crucial for the contract to be enforceable in a court of law.
 The following are the key elements of a valid contract:
1. Offer and Acceptance: The first element of a valid contract is an offer made by one party to
another. An offer is a clear indication of the willingness to enter into a contract under specific
terms. Once the offer is made, the second party must accept the offer without any

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modifications for it to be considered valid.
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2. Intention to Create Legal Relations: For a contract to be valid, both parties must have a
genuine intention to create legal relations. This means that they must intend for the agreement
to be legally binding and enforceable by law.
3. Consideration: Consideration refers to something of value that is exchanged between the
parties as part of the contract. It can be in the form of money, goods, services, or promises to
do or not do something. Consideration is essential as it signifies that each party is giving
something up in exchange for what they are receiving.
4. Capacity: Capacity refers to the legal ability of each party to enter into a contract. This means
that the parties involved must be of sound mind, of legal age, and not under the influence of
drugs or alcohol at the time of entering into the contract.
5. Legal Object: The object of the contract must be legal and not against public policy.
Contracts with illegal objectives, such as those involving illegal activities or actions that are
harmful to society, are not considered valid.
6. Certainty and Possibility of Performance: A valid contract must have clear and definite
terms that are capable of being performed. The terms and conditions of the contract should not
be vague or uncertain.
7. Free Consent: Free consent implies that the parties involved in the contract must have
entered into it willingly and without any coercion, undue influence, misrepresentation, or
mistake.
In conclusion, for a contract to be considered valid, it must encompass all these essential
elements. Failure to include any of these elements may render the contract void or
unenforceable.

3. What are Implied Terms in a Contract?

Implied Terms in a Contract
 In contract law, implied terms are terms that are not expressly stated by the parties but are
nonetheless considered to be part of the contract. These terms are inferred by the courts or
are implied by law, custom, or previous dealings between the parties. Implied terms play a
crucial role in ensuring fairness and reasonableness in contracts, as they fill in gaps and
address issues that may not have been explicitly addressed by the parties.

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Types of Implied Terms:4
 Terms Implied by Fact: These are terms that are implied into a contract based on the
factual circumstances surrounding the agreement. The courts may infer these terms to give
effect to the presumed intentions of the parties.
 Terms Implied by Law: These are terms that are implied into certain types of contracts
by operation of law. They are deemed to be automatically included in contracts of a
particular nature, regardless of the actual intentions of the parties.
 Terms Implied by Custom: In some cases, terms may be implied into a contract based
on established customs or practices within a particular trade or industry. These customs
become part of the contractual agreement unless expressly excluded.
 Terms Implied by Previous Dealings: When parties have had prior dealings with each
other and have established a course of dealing, certain terms may be implied into
subsequent contracts between them based on their past conduct.
Criteria for Implied Terms:
 Courts typically apply certain criteria to determine whether a term should be implied into a
contract:
 Necessity: The term must be necessary to give business efficacy to the contract or must be
so obvious that it goes without saying.
 Consistency: The implied term must not contradict any express terms of the contract.
 Equitable and Reasonable: The term should be fair and reasonable, aligning with the
presumed intentions of the parties.
Challenges and Disputes
 Disputes may arise when one party believes that certain terms should be implied into a
contract while the other party disagrees. In such cases, courts may intervene to interpret
the contract and determine whether any terms should be implied based on the
circumstances and legal principles.
Enforceability
 Implied terms, once established by a court, carry the same legal weight as express terms in
a contract. They are binding on both parties and must be adhered to just like any other
contractual provision.
 In conclusion, implied terms in contracts serve as an important mechanism for addressing

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gaps and ensuring fairness in contractual relationships. They provide a means for courts to
uphold the presumed intentions of the parties and maintain equity in contractual dealings.
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4.Can a Counteroffer be Treated as Acceptance?

 A counteroffer is a response to an offer that proposes different terms than the original
offer. In contract law, acceptance is a crucial element for the formation of a contract. The
question of whether a counteroffer can be treated as acceptance depends on the legal
jurisdiction and the specific circumstances of the case.
Understanding Counteroffer and Acceptance
 An offer is a proposal made by one party (the offeror) to another party (the offeree)
expressing an intention to enter into a contract under certain terms. When the offeree
responds to the offer with different terms, it constitutes a counteroffer rather than an
acceptance. This means that the original offer is terminated, and the parties are not bound
by its terms.
Legal Perspective on Counteroffer and Acceptance
 In contract law, acceptance is defined as an unqualified expression of agreement to all the
terms of an offer. A counteroffer operates as a rejection of the original offer and becomes a
new offer. Therefore, unless the original offeror accepts the counteroffer, there is no
binding contract between the parties.
Treatment of Counteroffer as Acceptance
 In general, a counteroffer cannot be treated as acceptance because it introduces new terms
or conditions. However, there are exceptions where a counteroffer may be deemed an
acceptance:
 Implied Acceptance: In some jurisdictions, if the original offeror acts in a manner that
implies acceptance of the counteroffer, it may be considered as such.
 Conditional Acceptance: If the counteroffer includes conditions that mirror those in the
original offer, it may be interpreted as an acceptance with modifications.
 Silence as Acceptance: In certain situations, silence or inaction by the original offeror in
response to a counteroffer may be construed as acceptance.
Legal Precedents and Interpretations
 Courts have addressed the issue of whether a counteroffer can be treated as acceptance in

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various cases. The outcomes often depend on factors such as the intent of the parties,
communication between them, and applicable laws.6
5.What is Consideration?
Consideration
 Consideration is a fundamental concept in contract law. It refers to something of value that
is given by one party to another in exchange for a promise or performance. In other words,
it is what each party gives up or promises to give up in a contract. Consideration can take
various forms, such as money, goods, services, a promise to do something, or a promise not
to do something. For a contract to be legally binding, there must be valid consideration

from both parties

Types of Consideration
 Executory Consideration: This type of consideration occurs when both parties make
promises to each other to perform certain acts in the future.
 Executed Consideration: Executed consideration refers to situations where one party
performs their part of the bargain immediately at the time the contract is made.
 Past Consideration: Past consideration involves a promise or act that has already been
performed before the contract was made. Generally, past consideration is not considered
valid in contract law.
Elements of Consideration
 For consideration to be valid, it must satisfy certain elements:
 Bargained-for Exchange: There must be a mutual exchange between the parties involved in
the contract. Each party must give or promise something of value in return for the promise
or performance of the other party.
 Legality: The consideration must be legal. It cannot involve illegal acts or go against public
policy.
 Sufficiency: While consideration must have value, the law generally does not evaluate
whether the consideration is adequate or fair. As long as there is some value exchanged, it
is considered sufficient.
Importance of Consideration
 Consideration serves several important purposes in contract law:

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 Evidence of Agreement: It serves as evidence that both parties have agreed to enter into
a contract.
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 Fairness and Equity: Consideration ensures that both parties receive something of value
and that there is fairness in the exchange.
 Enforcement: Without valid consideration, a promise may not be legally enforceable as
a contract.
 In conclusion, consideration is an essential element in contract law, representing the
value exchanged between parties and forming the basis for legally binding agreements.

6.When a contract forms? Issigning the contract necessary?

When Does a Contract Form?
 A contract is formed when there is an offer, acceptance, consideration, and an intention to
create legal relations between the parties involved. The process of forming a contract
involves several key elements, including an offer made by one party to another, the
acceptance of that offer, and the exchange of something of value (consideration) between
the parties. Additionally, for a contract to be legally binding, there must be an intention by
both parties to create legal relations.
Is Signing the Contract Necessary?
o In many cases, signing a contract is not necessary for it to be legally binding. While a
signature can serve as evidence of agreement to the terms of the contract, it is not always
required for a contract to be valid. Contracts can be formed through various means,
including verbal agreements, conduct, or even through email exchanges. However, in some
situations, certain types of contracts may require signatures for validity or enforceability,
such as real estate transactions or agreements involving the sale of goods over a certain
value.
o In essence, while signing a contract can provide clear evidence of the parties’ intention to
be bound by its terms, it is not always a strict requirement for the formation or
enforceability of a contract.

7. What is the Concept of Termination of Contract by Frustration?

In which circumstances. a contract can be terminated by Frustration?

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Concept of Termination of Contract by Frustration
 The concept of termination of a contract by frustration refers to the situation where an
unforeseen event occurs after the formation of a contract, rendering it impossible to fulfill
the contract’s obligations or fundamentally changing the nature of the contractual rights8
and obligations. When such an event occurs, the contract may be discharged by frustration,
relieving the parties from further performance.
Circumstances in which a Contract can be Terminated by Frustration
 A contract can be terminated by frustration under specific circumstances. These
circumstances include:
 Supervening Event: A supervening event must occur after the formation of the contract,
which makes it impossible to fulfill the contract’s obligations or fundamentally changes the
nature of the contractual rights and obligations.
 Impossibility of Performance: The event must render the performance of the contract
impossible, illegal, or radically different from what was originally contemplated by the
parties.
 No Fault of Either Party: The frustrating event should not be due to the fault of either party.
It should be an unforeseen event that neither party could have anticipated or controlled at
the time of entering into the contract.
 Fundamental Change: The frustrating event must lead to a fundamental change in
circumstances, making it unjust to hold the parties to their original obligations under the
contract.
 Not Contemplated by Parties: The event should not have been contemplated by the parties
at the time of entering into the contract. If the risk of such an event was foreseeable and
provided for in the contract, it may not lead to frustration.
 Commercial Impracticability: In some jurisdictions, frustration may also apply when
performance becomes commercially impracticable due to an unforeseen event, even if not
strictly impossible.
 Impact on Subsequent Performance: The frustrating event must have a significant impact
on subsequent performance under the contract, making it substantially different from what
was initially agreed upon.
 When these circumstances are met, a party may seek to terminate a contract by frustration,

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thereby releasing both parties from their future obligations under the contract.

8. What is the purpose of the bid bond?

Purpose of the Bid Bond
o A bid bond serves as a guarantee to the project owner that the contractor submitting a bid
will enter into a contract and provide the required performance and payment bonds if
awarded the contract. It is a form of security for the project owner, ensuring that the
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bidding contractor is financially capable of undertaking the project and will not withdraw
their bid or fail to execute the contract if selected.
o Bid bonds are commonly used in construction projects and government contracts to protect
the project owner from financial loss in case the winning bidder fails to fulfill their
obligations. By requiring a bid bond, project owners can filter out unqualified or unreliable
bidders, thereby ensuring that only serious and capable contractors participate in the
bidding process. In essence, the purpose of the bid bond is to provide assurance to project
owners that the bidding contractors have the financial stability and commitment to carry
out the project as per the terms of their bid. It helps maintain integrity in the bidding
process and protects project owners from potential risks associated with contractor default.

9.When will be the bid bond returned to the bidders?

Return of Bid Bond to Bidders
o The return of a bid bond to bidders typically occurs after the bidding process has been
completed and the contract has been awarded. Once the contract has been awarded, the
bid bond is no longer needed and can be returned to the bidders. It’s important to note that
the specific timing for the return of the bid bond may vary depending on the terms and
conditions outlined in the bidding documents and the regulations governing the
procurement process.
o In many cases, the bid bond is returned to unsuccessful bidders once the contract has been
awarded to the successful bidder. This is because the bid bond serves as a guarantee that
the successful bidder will enter into the contract if their bid is accepted. Once this has been
confirmed, the bid bond can be released and returned to the unsuccessful bidders.
o It’s essential for bidders to carefully review the bidding documents and any applicable

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regulations to understand the exact process and timeline for the return of the bid bond.
Additionally, communication with the procuring entity or contracting authority can provide
clarity on when bidders can expect the return of their bid bond.
o In summary, the bid bond is typically returned to bidders after the contract has been
awarded to the successful bidder. The specific timing and process for this return may be
outlined in the bidding documents and should be confirmed with the relevant authorities.10
10. Suppose a contractor withdraws its offer: soon after the letter of
acceptance is issued, but a formal agreement is not signed. What are the
possible options available for the client to compensate his loss, if any? the
possible options available for the client.
Possible Options for the Client to Compensate Loss
 Negotiation: The client can attempt to negotiate with the contractor to reconsider their
decision and continue with the agreement. This may involve discussing the reasons behind
the contractor’s withdrawal and finding a mutually beneficial solution.
 Seek Alternative Contractors: If negotiation fails, the client can search for alternative
contractors to complete the project. This may involve additional time and effort, but it
could help mitigate the loss caused by the initial contractor’s withdrawal.
 Legal Action: Depending on the circumstances, the client might consider taking legal action
against the contractor for breach of contract or other relevant claims. This could involve
consulting with a lawyer to understand their rights and potential remedies under the law.
 Claim Compensation for Damages: If the client can prove that they have suffered financial
losses or damages due to the contractor’s withdrawal, they might be able to claim
compensation. This could include costs related to project planning, materials, or other
expenses incurred before the contractor’s withdrawal.
 File a Complaint with Relevant Authorities: In some cases, the client may choose to file a
complaint with relevant authorities, such as a professional contractor’s association or
consumer protection agency. This could help raise awareness about the issue and
potentially lead to resolution or disciplinary action against the contractor.
 Learn from the Experience: While not a direct form of compensation, the client can use this
experience as an opportunity to learn and improve their approach to contracting services in
the future. This could involve conducting more thorough background checks on potential

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contractors, seeking recommendations from trusted sources, or using more detailed
contracts to protect their interests.

11. Is the Letter of Intent a legal document to form a valid contract?

The Letter of Intent as a Legal Document to Form a Valid Contract
 A letter of intent (LOI) is a document that outlines the preliminary understanding between
parties who intend to enter into a contract or deal. It is commonly used in various business
transactions, including mergers and acquisitions, real estate, and employment. However,
the question of whether a letter of intent constitutes a legal document to form a valid
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contract is complex and depends on the specific circumstances surrounding its creation and
execution.
Understanding the Letter of Intent
 A letter of intent is typically considered a non-binding document that sets forth the key
terms and conditions that parties intend to include in a formal agreement. It serves as an
expression of the parties’ serious intention to negotiate and eventually enter into a
contract. The content of an LOI can vary widely depending on the context, but it often
includes details such as the proposed transaction, key terms, timelines for negotiation,
confidentiality provisions, and any exclusivity arrangements.
Legal Status of a Letter of Intent
 Whether a letter of intent is legally binding and can form a valid contract depends on
several factors:
 Intent: The language used in the LOI itself can indicate whether the parties intended for it to
be binding or non-binding. If the parties clearly express their intention to be bound by the
terms outlined in the LOI, it may be considered legally enforceable.
 Terms: The specific terms and language used in the LOI play a crucial role in determining its
legal status. Ambiguity or conflicting language within the document can impact its
enforceability.
 Conduct: The actions of the parties following the execution of the LOI can also influence its
legal status. If they begin performing obligations outlined in the LOI as if it were a binding
contract, it may be treated as such by a court.

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 Negotiation: If the LOI explicitly states that it is subject to further negotiation and execution
of a formal agreement, it is less likely to be considered a final and binding contract.
Enforceability and Legal Precedents
 Courts have addressed the enforceability of letters of intent in various cases, often
considering factors such as the parties’ intentions, language used in the document, and
their subsequent conduct. In some instances, courts have upheld letters of intent as binding
contracts when they meet certain criteria, while in other cases, they have deemed them
non-binding based on their content and context.12

12. What is the purpose of the Condition of Contracts in a construction

contract?
Purpose of the Condition of Contracts in a Construction Contract
 The purpose of the Conditions of Contract in a construction contract is to establish the
rights, obligations, and responsibilities of the parties involved in the construction project.
These conditions are essential as they provide a framework for managing the project,
addressing potential disputes, and ensuring that the project is completed successfully. The
Conditions of Contract typically cover various aspects such as scope of work, quality
standards, timeframes, payment terms, variations, dispute resolution mechanisms, and
other important provisions that govern the relationship between the parties.
 One of the primary purposes of including Conditions of Contract in a construction contract
is to clearly define the roles and responsibilities of each party involved in the project. This
helps in avoiding misunderstandings and conflicts by providing a clear understanding of
what is expected from each party. Additionally, these conditions also serve to protect the
interests of both parties by outlining their respective rights and obligations.
 Another important purpose is to establish the terms and conditions for payment. The
Conditions of Contract specify the payment terms, including milestones for payments,
retention amounts, and procedures for handling variations or additional work. By clearly
defining these terms, the contract provides financial security for both parties and helps in
preventing payment-related disputes. Furthermore, the Conditions of Contract also address
issues related to project delays, extensions of time, and liquidated damages. These
provisions help in managing project timelines effectively and provide a mechanism for

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addressing delays caused by unforeseen circumstances or changes in the scope of work.
 Moreover, these conditions often include clauses related to dispute resolution mechanisms
such as mediation, arbitration, or litigation. By outlining these procedures in advance, the
contract aims to provide a structured approach for resolving any disagreements that may
arise during the course of the project.
 In summary, the purpose of including Conditions of Contract in a construction contract is to
establish a clear framework for managing the project, defining the rights and obligations of
the parties involved, addressing payment terms, managing project timelines, and providing
mechanisms for resolving disputes.
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13. Why are Standard Forms of Contracts recommended over the Bespoke
Contracts?
Standard Forms of Contracts vs. Bespoke Contracts
 When it comes to contracts, standard forms are often recommended over bespoke
contracts for several reasons. Standard forms of contracts are pre-prepared contracts that
contain standardized terms and conditions, which are commonly used in specific industries
or for specific types of transactions. On the other hand, bespoke contracts are tailored to
the specific needs and requirements of the parties involved in a particular transaction.
While bespoke contracts offer flexibility and customization, standard forms of contracts are
generally preferred for their efficiency, consistency, and familiarity.
Advantages of Standard Forms of Contracts
 Efficiency: Standard forms of contracts are efficient because they are pre-drafted and
widely recognized within a particular industry or jurisdiction. This can save time and
resources that would otherwise be spent on drafting a new contract from scratch.
 Consistency: Standard forms promote consistency in contractual terms across similar
transactions. This consistency can help reduce misunderstandings and disputes by providing
a common understanding of the rights and obligations of the parties involved.
 Familiarity: Standard forms of contracts are often familiar to legal professionals, businesses,
and other stakeholders within a specific industry. This familiarity can streamline
negotiations and facilitate quicker agreement on contractual terms.

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 Risk Allocation: Many standard form contracts have been developed and refined over time
to allocate risks in a balanced manner between the parties involved. This can provide a level
of certainty and predictability in risk allocation, which may not be present in bespoke
contracts.
 Industry Standards: Standard forms of contracts often reflect industry standards and best
practices, incorporating provisions that have been tested and proven in similar transactions.
Disadvantages of Bespoke Contracts
 Time-Consuming: Drafting bespoke contracts from scratch can be time-consuming,
especially when parties have unique requirements that need to be carefully addressed in
the contract.
 Costly: Bespoke contracts may involve higher legal costs due to the need for extensive
customization and negotiation of terms tailored to the specific transaction.
 Uncertainty: Since bespoke contracts are tailored to specific circumstances, there may be
uncertainty regarding how certain provisions will be interpreted or enforced in the future.14
 Lack of Uniformity: Bespoke contracts lack the uniformity found in standard forms, which
can lead to inconsistencies across different transactions and potentially create confusion or
disputes.
 Expertise Required: Drafting bespoke contracts requires a high level of legal expertise to
ensure that all relevant issues are properly addressed and that the contract accurately
reflects the intentions of the parties involved.

14. What are the Standard Forms of Contracts widely used in the construction

industry?
Standard Forms of Contracts in the Construction Industry
 In the construction industry, standard forms of contracts are widely used to govern the
relationships and obligations between parties involved in construction projects. These
contracts help in defining the terms and conditions, responsibilities, and rights of the parties
involved, thereby providing a framework for managing risks and resolving disputes. Several
standard forms of contracts are commonly used in the construction industry, each with its
specific features and applicability.
1. Joint Contracts Tribunal (JCT) Contracts The JCT suite of contracts is one of the most widely

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used standard forms in the UK construction industry. These contracts are regularly updated to
reflect changes in legislation and best practices. The JCT contracts cover a wide range of
construction projects, including design and build, construction management, and traditional
procurement routes. They provide a comprehensive framework for managing various aspects of
construction projects, such as payment terms, variations, completion, and dispute resolution.
2. FIDIC Contracts The International Federation of Consulting Engineers (FIDIC) has developed
a
set of standard forms of contracts that are widely used in international construction projects.
FIDIC contracts are known for their detailed provisions covering various aspects of construction
projects, including design responsibilities, time for completion, payment terms, and dispute
resolution mechanisms. These contracts are designed to be adaptable to different legal systems
and are commonly used in complex infrastructure and engineering projects worldwide.
3. NEC Contracts The New Engineering Contract (NEC) suite of contracts is recognized for its
focus on collaboration and effective project management. NEC contracts emphasize clear
communication, risk management, and flexibility in adapting to changing project requirements.
These contracts are structured to promote cooperation among the parties involved and provide
detailed provisions for managing time, cost, quality, and risk throughout the project lifecycle.
Page 15
4. American Institute of Architects (AIA) Contracts In the United States, AIA contracts are
widely
used for construction projects. These contracts are designed to address the specific needs of
the construction industry in the U.S., covering various project delivery methods such as design
bid-build, design-build, and construction management. AIA contracts provide a framework for
defining the roles and responsibilities of architects, contractors, and owners while addressing
critical aspects such as payments, insurance requirements, and dispute resolution.
5. Other Standard Forms Apart from the aforementioned standard forms of contracts, there are
several other widely recognized standard forms used in the construction industry globally.
These include the Construction Industry Council (CIC) contracts in the UK, General Conditions
of
Contract (GCC) in the Middle East region, and bespoke forms developed by organizations or
government bodies to suit specific project requirements.

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 In conclusion, standard forms of contracts play a crucial role in regulating construction
projects by establishing clear terms and conditions for all parties involved. The selection of a
suitable contract form depends on various factors such as project complexity, jurisdictional

requirements, and specific project delivery methods

15. What is a Bespoke Contract?

What is a Bespoke Contract?
 A bespoke contract is a customized legal agreement tailored to the specific needs and
requirements of the parties involved. It is created to address unique circumstances or
situations that may not be covered by standard or pre-existing contracts. Bespoke contracts
are typically used in business transactions, legal disputes, and other situations where a one
size-fits-all approach is not suitable.
 The process of creating a bespoke contract involves several steps. First, the parties involved
must identify their individual needs and objectives. This may involve consultation with legal
professionals or experts in the relevant field. Next, the contract is drafted, taking into
account the specific circumstances and requirements of the parties. This draft is then
reviewed and negotiated by all parties involved, with revisions made as necessary. Once all
parties agree to the terms, the contract is signed and becomes legally binding.
Bespoke contracts can be used in a variety of contexts, such as:
o Business transactions: Companies may enter into bespoke contracts for services,
partnerships, or joint ventures that require specific terms and conditions.
o Real estate: Property transactions may involve bespoke contracts that address unique
features or conditions of the property.16
o Intellectual property: Licensing agreements, assignments, or collaborations may require
bespoke contracts to protect the rights of the parties involved.
o Employment: Employers may use bespoke contracts to establish specific terms of
employment or to address unique working arrangements.
o Litigation: Parties involved in legal disputes may use bespoke contracts to settle their
differences or to establish a framework for future interactions.
Authoritative Reference Titles
 LegalZoom: LegalZoom is an online legal services provider that offers a wide range of legal

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documents, including bespoke contracts. Their services are used by individuals and
businesses to create customized legal agreements tailored to their specific needs. Using
LegalZoom’s contract creation services, we were able to gain a comprehensive
understanding of the bespoke contract process and the importance of tailoring contracts to
specific needs and circumstances.
 Thomson Reuters: Thomson Reuters is a global provider of information and tools for legal
professionals. Their resources include comprehensive guides and templates for creating
bespoke contracts, which were instrumental in understanding the intricacies of bespoke
contract creation. We used Thomson Reuters’ guides and templates to better understand
the key components of bespoke contracts and the steps involved in creating them.
 FindLaw: FindLaw is a legal information website that offers resources for individuals and
businesses seeking legal advice. Their resources include articles and guides on bespoke
contracts, which provided valuable insights into the importance of customizing contracts to
meet specific needs and circumstances. By referring to FindLaw’s resources, we were able
to gain a better understanding of the benefits of bespoke contracts and the potential risks
associated with using standard contracts in unique situations.

16. What are the contents of a typical Contract Document?

Contents of a Typical Contract Document
 A typical contract document contains several key sections and elements that are essential
for outlining the terms, conditions, and obligations of the parties involved. These contents
are crucial for ensuring clarity, legal enforceability, and protection of the rights of all parties.
The specific contents may vary depending on the nature of the contract, but generally
include the following sections:
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1. Title Page: This section typically includes the title of the contract, names and addresses of the
parties involved, date of execution, and any reference numbers or identifiers.
2. Table of Contents: A comprehensive table of contents is included to provide an organized
outline of the various sections and clauses within the contract document.
3. Introduction/Preamble: The introduction or preamble sets the stage for the contract by
providing background information, context, and the purpose of the agreement.

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4. Definitions: This section defines key terms used throughout the contract to ensure clarity and
consistency in interpretation.
5. Parties to the Contract: Here, the parties involved in the contract are clearly identified,
including their legal names, addresses, and any other relevant details.
6. Recitals: The recitals section outlines the reasons for entering into the contract and may
include statements about the intentions and considerations of the parties.
7. Main Body/Operative Clauses: This is the core section of the contract that details the rights,
obligations, responsibilities, and terms agreed upon by the parties. It covers aspects such as
scope of work, payment terms, delivery schedules, performance standards, warranties,
indemnities, dispute resolution mechanisms, termination clauses, and other essential
provisions specific to the subject matter of the contract.
8. Representations and Warranties: In this section, each party may make certain
representations and warranties regarding their authority to enter into the contract, ownership
rights, compliance with laws, etc.
9. Conditions Precedent: If there are any conditions that must be met before the contract
becomes effective or certain obligations are triggered, they are outlined in this section.
10. Schedules/Attachments/Exhibits: These are additional documents that are attached to and
form part of the contract. They may include specifications, drawings, pricing schedules, or any
other relevant details that support or supplement the main body of the agreement.
11. Signature Page: The signature page contains spaces for all parties to sign and date the
contract as a formal indication of their acceptance and agreement to be bound by its terms.
12. Governing Law and Jurisdiction: This section specifies which laws will govern the
interpretation and enforcement of the contract and identifies the jurisdiction where any
disputes will be resolved.18
13. Boilerplate Provisions: These are standard clauses that address matters such as
amendments to the contract, entire agreement clause, assignment rights, waiver provisions,
severability, notices, etc.
14. Execution Block: This is where witnesses (if required) sign their names attesting to
witnessing each party’s signature on the contract.
 In addition to these sections, a typical contract document may also include specific
provisions tailored to its unique requirements based on factors such as industry standards,

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regulatory compliance, and particular commercial arrangements between parties.

17. What is the priority order of documents per the FIDIC 2017 Red Book?
a) the Contract Agreement
(b) the Letter of Acceptance
(c) the Letter of Tender.
b) the Particular Conditions Part A Contract Data
c) the Particular Conditions Part B-Special Provisions
d) these General Conditions:
e) the Specification.
f) the Drawings.
g) the Schedule
The priority order of documents per the FIDIC 2017 Red Book is as follows:
1.(c) The Letter of Tender.
2.(b) The Letter of Acceptance.
3.(a) The Contract Agreement.
4.(d) The General Conditions.
5.(e) The Specification.
6.(f) The Drawings.
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7.(g) The Schedule.
8.(b) The Particular Conditions Part A Contract Data.
9.(c) The Particular Conditions Part B-Special Provisions.

18. If the Engineer/Consultant revokes his determination in a Back-to-back

contract, how does it affect the claim settlement between the main contractor

and the subcontractor?

 If the Engineer/Consultant revokes his determination in a Back-to-back contract, it can
significantly impact the claim settlement between the main contractor and the
subcontractor. In a back-to-back contract scenario, the main contractor and the
subcontractor have an agreement where the main contractor passes on the obligations and

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responsibilities from their primary contract to the subcontractor. This arrangement
often
includes the engineer or consultant’s determinations, which play a crucial role in resolving
disputes and determining the financial implications of the project. When the
Engineer/Consultant revokes their determination, it can lead to several consequences that
affect the claim settlement between the main contractor and the subcontractor:
 Uncertainty and Disputes: The revocation of the determination may create uncertainty and
disagreements between the main contractor and the subcontractor regarding their
respective rights and obligations. This can lead to disputes and potential legal actions.
 Impact on Financial Obligations: The revoked determination may have financial implications
for both parties. For instance, if the determination involved payment adjustments or
penalties, the subcontractor might claim additional compensation, while the main
contractor may argue for reduced payments.
 Re-evaluation of Contractual Terms: The revocation may necessitate a re-evaluation of the
contractual terms between the main contractor and the subcontractor. They may need to
reassess their agreement and adjust it accordingly to address the changes brought about by
the revoked determination.
 Delay in Claim Settlement: The revocation of the determination can cause delays in the
claim settlement process between the main contractor and the subcontractor. They may
need to seek clarification from the Engineer/Consultant or engage in negotiations to resolve
the issue.
 Impact on Project Progress: The uncertainty and disputes arising from the revoked
determination can also affect the progress of the project. This may lead to delays, additional 20
costs, and potential damage to the relationship between the main contractor and the
subcontractor.

19. What is Contractual Claim?

Contractual Claim
 A contractual claim refers to a demand made by one party to a contract against another
party for a breach of the terms of the contract. When one party fails to fulfill its obligations
as outlined in the contract, the other party may file a contractual claim seeking damages or

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specific performance as a remedy. These claims can arise from various types of contracts,
including business agreements, employment contracts, construction contracts, and more.
Elements of a Contractual Claim
 For a contractual claim to be valid, certain elements must be present. These typically
include:
 Existence of a Valid Contract: There must be a legally binding agreement in place between
the parties involved.
 Breach of Contract: The claiming party must demonstrate that the other party failed to
fulfill its obligations as outlined in the contract.
 Damages or Remedies Sought: The claiming party must specify the damages incurred due to
the breach or seek specific performance as a remedy.
 Notice: In many cases, the claiming party is required to provide notice to the breaching
party before filing a formal claim.
Types of Contractual Claims
 There are various types of contractual claims that can be pursued based on the nature of
the breach and the desired outcome. Some common types include:
 Monetary Damages: This involves seeking financial compensation for losses incurred due to
the breach of contract.
 Specific Performance: In cases where monetary compensation is not sufficient, the claiming
party may seek specific performance, which requires the breaching party to fulfill their
contractual obligations as originally agreed.
 Rescission: This involves canceling the contract and restoring both parties to their pre
contractual positions.
 Reformation: In certain situations, the claiming party may seek to have the terms of the
contract modified to rectify any ambiguities or unfair provisions.
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Legal Process for Contractual Claims
 The legal process for pursuing a contractual claim can vary based on jurisdiction and the
specific terms of the contract. It often involves sending a demand letter outlining the breach
and requested remedies. If an amicable resolution cannot be reached, formal legal action
may be necessary, leading to litigation or alternative dispute resolution methods such as

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arbitration or mediation.
 In conclusion, a contractual claim is a legal demand made by one party against another for
breaching the terms of a contract. It involves demonstrating the existence of a valid
contract, proving breach of contract, specifying damages or remedies sought, and following
appropriate legal procedures to seek redress for the breach.

20. What is General Claim/Legal Claim?

Ex-Gratia Claim
 An ex-gratia claim refers to a payment made by an organization, government, or individual
as a gesture of goodwill, sympathy, or moral obligation, rather than as a legal obligation.
This type of claim is typically made in situations where there is no legal liability to provide
compensation, but the responsible party chooses to offer assistance or compensation
voluntarily. Ex-gratia payments are often made in cases of natural disasters, accidents, or
other unfortunate events where individuals or groups have suffered loss or harm.
Legal Context
 In legal terms, an ex-gratia payment is one that is made without any admission of liability. It
is a voluntary payment that is not legally required but is offered as a goodwill gesture. In
some cases, ex-gratia payments may be made to avoid potential litigation or to settle a
dispute without admitting fault.
Government and Corporate Use
 Governments and corporations may make ex-gratia payments in various circumstances. For
example, a government may provide ex-gratia payments to individuals affected by a natural
disaster when there is no specific legal obligation to do so. Similarly, corporations may offer
ex-gratia payments to customers or employees in certain situations where there is no clear
legal liability but where the company wishes to demonstrate goodwill and support.22
Humanitarian Aid and Assistance

 Ex-gratia claims are also common in the context of humanitarian aid and assistance.

International organizations, non-governmental organizations (NGOs), and charitable

foundations often provide ex-gratia payments to individuals or communities affected by
crises such as conflicts, displacement, or other emergencies. These payments are intended
to alleviate suffering and provide support without requiring a legal obligation on the part of

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the assisting organization.

22. Who is a Named Subcontractor?

A named subcontractor is a subcontractor specifically identified by name in the main
contract between the client and the primary contractor. This designation establishes a
direct contractual relationship between the client and the named subcontractor, and it
often includes specific requirements and obligations for the named subcontractor.
Named Subcontractor
o A named subcontractor is a specific subcontractor who is identified by name in the main
construction contract. This designation distinguishes them from other potential
subcontractors who may be selected by the primary contractor during the project. The
inclusion of a named subcontractor in the contract indicates that the client has approved or
specified this particular subcontractor for certain aspects of the project.
Role and Responsibilities
o When a subcontractor is named in the contract, they have a direct contractual relationship
with the client, in addition to their relationship with the primary contractor. This means that
the client can hold the named subcontractor accountable for their performance and
compliance with the contract terms. The named subcontractor is typically responsible for
providing specific goods or services as outlined in the contract, and they may have
obligations related to quality, timing, and other project requirements.
Implications for Project Management
o The inclusion of named subcontractors in a construction contract can have significant
implications for project management. It may impact scheduling, coordination, and overall
project performance, as the involvement of named subcontractors introduces additional
layers of communication and coordination among various parties involved in the project.
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Legal Considerations
o From a legal perspective, naming specific subcontractors in a contract requires careful
attention to detail. The terms and conditions related to named subcontractors should be
clearly defined to avoid misunderstandings or disputes during the course of the project.
Additionally, any changes or substitutions involving named subcontractors may require
formal approval and documentation to ensure compliance with contractual obligations.

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o In conclusion, a named subcontractor holds a distinct position within a construction project
due to their explicit identification in the main contract. This designation carries specific
responsibilities, implications for project management, and legal considerations that all
parties involved must carefully navigate.
23. Who is Nominated Subcontractor?
Nominated Subcontractor
o A nominated subcontractor is a subcontractor selected by the client or the main contractor
to carry out a specific part of the works. The use of nominated subcontractors allows the
client or main contractor to select a subcontractor for a particular package of work based
on their expertise and experience, even though the design is not complete. This can reduce
the lead time for the appointment of subcontractors and help ensure that they are
appointed on competitive terms.
Role of Nominated Subcontractor
 The role of a nominated subcontractor is crucial in construction projects. Once appointed,
the nominated subcontractor is responsible for carrying out the specified work in
accordance with the terms and conditions of their appointment. They are typically required
to coordinate their work with other trades and contractors on site, ensuring that it
integrates seamlessly with the overall project.
Appointment Process
 The appointment of a nominated subcontractor usually involves a formal process, which
may include pre-qualification, tendering, and negotiation. The client or main contractor will
assess the capabilities and track record of potential subcontractors before making a
selection. Once appointed, the nominated subcontractor will enter into a formal contract
with either the client or main contractor, depending on the specific project arrangements.24
Responsibilities
 Nominated subcontractors have various responsibilities, including delivering their scope of
work within agreed timeframes, complying with relevant health and safety regulations,
providing necessary documentation and certifications, and maintaining quality standards.
They may also be required to coordinate with other trades and contribute to the overall
project schedule.

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Risks and Considerations
 While the use of nominated subcontractors offers advantages in terms of expertise and
flexibility, there are also potential risks and considerations. These may include coordination
challenges, interface issues with other trades, performance-related concerns, and potential
disputes over responsibilities and liabilities.
 In conclusion, a nominated subcontractor plays a significant role in construction projects by
bringing specialized skills to specific aspects of the work. Their appointment involves a

formal process, and they bear various responsibilities related to their scope of work.

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 REFERENCE

1. FDRE Civil & Commercial Codes

2. International Federation of Consulting Engineers (FIDIC), General conditions of contract for
worksof civil engineering construction (the red book)
3. PPA (2011) Standard bidding documents

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