CONTRACTS &

SPECIFICATIONS
AGDINAOAY, JOHN RANDEL
ALONZO, DAHLI
ATILARES, SHEILA
BALUTE, BENJI ANNE C.
CONTRACTS
A meeting of the minds between two
persons whereby one binds himself,
with respect to the other, to give
something or to render some services.
BREACH OF CONTRACT
General Damages
Consequential Damages
Reliance Damages
Specific Performance 
EXAMPLE:
 Company A delivered the wrong kind of
furniture to Company B. After discovering the
mistake later in the day, Company B insisted
that Company A pick up the wrong furniture
and deliver the right furniture. Company A
refused to pick up the furniture and said that it
could not supply the right furniture because it
was not in stock. Company B successfully sued
for breach of contract.
DAMAGES FOR THIS
BREACH COULD INCLUDE
 refundof any amount Company B had
prepaid for the furniture;
 reimbursement of any expense Company
B incurred in sending the furniture back
to Company A
 payment for any increase in the cost
Company B incurred in buying the right
furniture
LIST OF CONTRACT
DOCUMENTS
 Agreement
 General Conditions
 Supplementary General Conditions
 Working Drawing
 Specifications
 Addends
TYPES OF AGREEMENTS
Lump Sum Agreement
Unit Price Agreement
Cost Plus Fee Agreement
TYPES OF CONTRACT
SYSTEMS
SingleContract
Separate Contract
FACTUAL ELEMENTS
 An offer
 An acceptance of that offer which results in a 
meeting of the minds
 A promise to perform
A valuable consideration
ATime or event when performance
must be made
WHAT ARE THE ELEMENTS OF
CONTRACT?
 Contractor
 Offer
 Acceptance
 Promise to perform
 Valuable Consideration
 Meeting Commitments (time and place)
 Terms and Conditions
 Performance
 Terms and Conditions?

Set of Rules and Guidelines that a entity must agree.

Acts as a legal contract between you and a contractor.

Determines the parties’ contract obligation.

 Contractual Term
Types of Terms
 Condition
 Generalset of rules in a contract and provides the very root of
a contract
 Breachof condition will entitle the innocent party to terminate
the contract
 Warranty
 provides a leeway letting the contract survive a breach
 Innominate Term
 breach of which may or may not go to the root of contract
 Why use contracts in
construction?
 Describes the scope of work
 Establish time frame
 Establish cost and payment provision
 Set forth obligations and relationship
 Minimize disputes
 Improve economic return of investment (ROI)
 Types of Contract (Billing)
1. LUMP SUM CONTRACT

 The contractor agrees to perform a stipulated

job of work in exchange for a fixed sum of
money. In other word a single tendered price is
given for the completion of a specified work to
the satisfaction of the client by a certain date.
 Types of Contract (Billing)
2. UNIT PRICE CONTRACT
 The total price of the project in unit price
contract is based on the price of each item’s
unit. The contractor is paid as per the rates of
items specified in the bill of quantity.
 The risk is shared with the contractor and the
owner. This type of contract has more flexibility
for design changing than the lump sum contract.
 Types of Contract (Billing)
COST-BASED CONTRUCTION CONTRACT
3. COST PLUS CONTRACT
 Thecontractor is paid based on the actual cost of
the project including direct and indirect costs plus
specific fee. this fee could be a fixed fee or
percentage of costs.
 This
type of contract is ideal when the project
scope is uncertain in the early stages of project.The
contractor can start the execution of the project
before finishing the design.
 Types of Contract (Billing)
4. TARGET COST CONTRACT

 Thistype of contract has mutual features of the

lump sum and cost plus contract. Contractor is paid
based on the actual costs plus a certain fee either
fixed or percentage of total cost in case of the cost
of project doesn’t exceed certain target cost
specified by the owner
3 ELEMENTS OR REQUISITES
OF A CONTRACT
 Consent of the contracting parties
 Object certain which is the subject
matter of the contract
 Cause of the obligation which is
established
SPECIFICATIONS
SPECIFICATION
The scope of civil engineering work
is usually defined using drawings
and specifications.
Specifications set out the quality
required
 Where no specification is provided, it will
be implied into the contract that work is
to be done with proper skill and care,
using good quality materials which are
reasonably fit for their purpose.
 The specification documents tend also to
contain a variety of requirements and
stipulations as to the manner of working.
 REFERENCES

 www.slideshare.net/rpundlik111/contracts-and-its-types
 legal-dictionary.thefreedictionary.com
 www.businessdictionary.com
 https://www.law.cornell.edu/wex/contract
 http://contracts.uslegal.com/
 Civil Engineering Construction Contracts by M. P. O’Reilly