Roles & Responsibilities

of
Parties in A Contract

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• Parties to a Contract
• three primary members: the Employer, the Contractor, and a
consultant,
• the Employer and the Contractor are the Parties to the Works Contract,
• The Engineer is not a Party to the Works Contract but has a separate
Services contract with Employer,
• there is no legally binding contract or agreement between the Engineer
and the Contractor.
• compliance with contract requirements is subject to test of
satisfaction; however, the parties pass this authority to a third person,

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• Parties to a Contract
• inclusion of the Engineer is effected via the conditions of the contract,
which define Engineer's functions, roles, responsibilities and
obligations,
• Virtually all communication passed through the Engineer except some
exceptions like: termination,
• the Conditions of Contract stipulate that where the Engineer’s duties
are discretionary, the Engineer shall act fairly and apply the provisions
of the Contract in an unbiased manner.

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• Parties to a Contract

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• Role of the Employer
• When the Employer identifies a need for a project, he/she usually
appoint consultant, and carries out identification of a Contractor
• Once a consultant has been appointed the role of the employer
reduces. However, the Employer as one of the two contracting Parties
will make the actual award of the contract.
• The employer’s primary responsibilities are to ensure that the Site is
available when required, and to timely make payments for work done.

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• Employer’s Rights and Obligations
• Rights:
• To require the Contractor to complete a Contract Agreement
• To give consent to assignment of the Contract
• To be notified of the appointment of Engineer’s Representative and
assistants
• To require the Contractor to provide a Performance Security
• To Claim for Delay Damages
• To employ others to carry out remedial works if Contractor doesn’t
do them

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• Employer’s Rights and Obligations
• Rights:
• To be jointly named on insurance policies
• To be consulted by the Engineer on determinations of additional
costs and/or extensions of time
• To take out insurances, at the Contractor’s cost, in the event of the
Contractor’s failure to do so
• To terminate the Contract
• To proceed to arbitration if dissatisfied with an Engineer’s decision

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• Employer’s Rights and Obligations
• Obligations: To appoint the Engineer (DBB)/Employer’s Representative
(DB & EPC)
• To define those duties of the Engineer which require prior approval
• To make available site investigation data
• To be responsible for his own workmen on Site
• To give the Contractor possession of Site
• To make payments within specific period after Engineer’s receipt of
Contractor’s Statement
• To attempt to reach amicable settlement prior to arbitration

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• Appointing the Engineer & Conditions of Appointment
• The Employer will have to appoint the Engineer/Employer’s
Representative to supervise the works.
• The consulting services agreement will set out conditions of
appointment and often impose restrictions on the Engineer’s freedom
of action
• The restrictions described in the consulting services must be the same
as the restrictions defined in the Particular Conditions of the contract.
• Any additional restrictions placed on the Engineer, after the bidding
process, may imply breach of Contract.

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• Appointing the Contractor
• The written acceptance of the Contractor's bid constitutes the
formation of the Contract.
• However, as per Ethiopian procurement regulations a contract
agreement is required to be signed to have a contract.

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• Providing Access to the Site and Rights of Way
• The Employer is to give the Contractor access to and possession of all
parts the Site within the time stated in the Contract OR within such
times as required to enable the Contractor to proceed in accordance
with the programme.
• If the Contractor is delayed or incurs costs due to failure to give
necessary possession, the Engineer is to grant an extension of time and
costs

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• Providing Access to the Site and Rights of Way
• Definition of the Site
It is essential to clearly define the ‘Site’ within the contract
documents.
• Length of Possession
There is usually ‘total’ or ‘undisturbed’ possession. Many projects show
a requirement for stage possessions or completions in Parts.

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• Payments to the Contractor.
• The Contract provides a mechanism for payments to the Contractor.
• The Contractor submit his request for an Advance payment or his
monthly evaluation of the work executed.
• The Engineer certifies such payments, and has a specified time in which
to certify the sum due.
• The Employer is required to pay the amount due within the specified
times and if not, interest will accumulate on late payment.
• Errors on Payment Certificate can only be corrected by the Engineer.

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• Agreeing Changes to the Contract
• Changes can be extremely disruptive to the smooth running of the
project, and could have major cost implications.
• The Employer does not have any authority under the Contract to
instruct the Contractor.
• The Engineer has no authority to do anything that will alter the
Contract or to relieve the Contractor of any of his obligations.
 

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• Agreeing Changes to the Contract
• The circumstances under which the Engineer is usually required to seek
the specific approval of the Employer include:
• certifying additional cost or extension of time for unforeseeable
conditions
• issuing variation orders
• issuing extensions of time

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• Instructions by the Employer
• In some exceptions, the Employer shall issue notices, consents,
approvals, certificates and determinations. Examples:
• The Employer is responsible for the preparation of any contractual
agreements requested.
• The Performance Security is to be approved by the Employer.
• Insurances are approved by the Employer.
• The Employer is required to obtain planning and zoning
requirements.

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• Instructions by the Employer
• Approval of Securities
• The Contractor is required to submit different types of securities,
which shall be approved by the Employer.
• Taking Over the Works
• If works are completed and the Engineer has issued the Taking-Over
Certificate, the Employer is required to take over the Works.

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• Instructions by the Employer
• Delay Damages
• The payment of a specified sum, by the Contractor, to the Employer
if the Contractor does not complete the works within the contract
period.
• Termination of the Contract
• The conditions of contract make provision for the termination of the
contract, by the Employer,

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• Role of The Engineer
• The “Engineer” means the person appointed by the Employer to act as
Engineer. Similarly, “Employer’s Representative” means the person
named by the Employer and acts on behalf of the Employer.
• The Engineer’s duties include the supervision of the Works:
• to ensure that project is constructed to the required specification
• to keep Employer informed as to progress and financial viability
• The Engineer to give fair determinations within the terms of the
Contract and having regard to all the circumstances.

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• Role of The Engineer
• If the Employer wishes to limit the authority of the Engineer this must
be clearly stated in the Particular Conditions of Contract.
• The Engineer’s duty is to interpret the Contract as written.

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• Engineer’s Rights and Obligations
• Rights
• to exercise the authority to be implied from the Contract,
• to delegate powers to the Engineer’s Representative,
• to issue instructions to the Contractor as necessary,
• to request a revised programme,
• to require removal of the Contractor’s Representative,
• to require replacement of any member of the Contractor’s staff if
necessary

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• Engineer’s Rights and Obligations
• Rights
• to instruct tests on materials,
• to instruct a suspension of the Works,
• to request as revised programme from the Contractor to expedite
progress,
• to derive new rates or prices,
• to initiate variations,
• to correct or modify Interim Payment Certificates

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• Engineer’s Rights and Obligations
• Obligations
• to obtain the Employer’s specific approval when required,
• to determine additional costs and/or extensions of time,
• to issue the Taking-Over Certificate or instruct the contractor to
complete outstanding works,
• to issue the Performance Certificate,
• to determine the value of the Works by measurement,
• to value variations,
• to prepare Interim Payment Certificates,

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• Authority of the Engineer
• The Engineer may exercise the authority specified or implied by the
Contract in respect of:
• Instructions
• Approval and Acceptance
• Evaluation and Adjudication

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• The Engineer's Assistants
• The Engineer may appoint an assistant or Resident Engineer to watch
and supervise the construction process.
• The Engineer’s Assistant is required to carry out such duties and
exercise such authorities as may be delegated by the Engineer, in
writing, with copies to the Employer and the Contractor.
• The Engineer or the resident engineer may appoint any number of
people to act as “assistants” to the resident engineer.

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• The Engineer’s Duties
• Examination of the Site
It is important to examine ground conditions as the Engineer should
establish boundaries, ground conditions, access, existing structures and
trees/vegetation.
• Nominated Sub-Contractors
If the Engineer intends to utilise such services, the Contractor should be
given adequate advance notice so that he can incorporate any special
requirements into his programme.

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• The Engineer’s Duties
• Instruction as to Methods of Working and Temporary Works
It is not within the Engineer’s general remit to instruct the Contractor
how to undertake his work. Yet the Engineer possibly intervene if he
consider that method of working is unsafe, or will lead to a failure:
• Where Contractor’s methods contravene the specification;
• Where Contractor’s methods would imperil the final outcome of the
Works;
• Safety.

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• The Engineer’s Duties
• Supervision
The three main areas of supervision:
• Prevention,
• Intervene, and
• Detection

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• The Engineer’s Duties
• Quasi-Judicial Duties
• The Engineer must undertake his duties with discretion and fairness.
• The Engineer should only decide on matters of value, quality of
work or extensions of time, in consultation with both the Employer
and the Contractor.
• Both the Contractor and Employer must adhere to those instructions
and further the Works.

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• The Engineer as Contract Administrator
• The Engineer" is required to act as the administrator of the contracts
with pre-defined authority to ensure the Employer’s wishes are fulfilled
and the Contractor's interests are protected as set out in the contract.
• Three headings representing the main functions of the Engineer:
• Approval and Acceptance
• Instruction
• Evaluation and Adjudication

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• Approval and Acceptance
• Permission to sub-let parts of the works
• Approval of programme and proposed methods of working
• Approval of contractor’s representative and employees
• Acceptance of workmanship and quality of materials
• Approval of measures to deal with problems such as slow progress
• Unforeseen physical obstructions or conditions
• Issue of taking-over certificate
• Issue of defects notification certificate

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• Instruction
• Drawings
• Variations of the works
• Suspension of the works
• Dealing with unforeseen physical obstructions and conditions
• Uncovering and making openings
• Removal of improper work or materials
• Provisional sums and employment of nominated subcontractors
• Contemporary records with regards to claims

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• Evaluation and Adjudication
• Ambiguities and discrepancies
• Drawings
• Obstructions or conditions unforeseen
• Delays and additional costs
• Liability for damage to the works
• Assessment of progress
• Measurement for interim payments and final account
• Variations and new rates
• Settlement of claims

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• Role of the Contractor
• The role of the Contractor is to execute and complete the Works, and
has an obligation to remedy any defects.
• The Contractor shall design, execute and complete the Works, and shall
remedy any defects.
• The Contractor shall provide the Plant, Contractor’s Documents,
Personnel, Goods, consumables and other things and services required
in and for design, execution, completion and remedying of defects.
• The Contractor receives and complies with instructions from the
Engineer and is responsible for the care of the Works

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• Contractor’s Rights and Obligations
• In “Design-Bid-Build” project, the Contractor will not be responsible for
design of the Permanent Works. If the Contractor is required to design
part of the Permanent Works, it must be made clear in the contract.
• Rights:
• To be notified of appointment of the Engineer’s Representative
• To be consulted on determinations of additional costs and/or
extensions of time
• To seek consent for work at night or on rest days

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• Contractor’s Rights and Obligations
• Rights:
• To give notice of readiness for issue of Taking-Over Certificate
• To be paid value of the Works certified
• To receive payments within specified period from the submission
date of Interim Payment Certificates
• To terminate the Contract in the event of default by the Employer
• To proceed to arbitration if dissatisfied with the Dispute Board’s
decision

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• Contractor’s Rights and Obligations
• Obligations:
• To comply with laws
• To seek the Employer’s prior consent to assignment of the Contract
• To execute the Works with due diligence, remedy defects
• To take full responsibility for operations and methods
• To execute and complete Works and comply Engineer’s instructions
• To provide full-time direction through Contractor’s Representative
• To keep the Site clear
• To remove any person employed on the Site or Works

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• Contractor’s Rights and Obligations
• Obligations:
• To expedite progress to complete Works within Time for Completion
• To suspend the Works if instructed
• To submit a programme
• To revised programme if required
• To submit monthly statements
• To take out insurances
• To submit detailed particulars of claims
• To attempt to reach amicable settlement prior to arbitration

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• Obligation to Complete
• Contractor's obligation to carry out and complete the Works
• Employer’s Risks are circumstances which may release the Contractor
from his obligations
• Remedies: termination, suspend the works, or slow down rate of
progress
• Situations: failure to pay, refusing or interfering with certification,
act of bankruptcy or liquidation, and economic dislocation

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• Subcontracts
• Main contractor is responsible for the performance of his
subcontractors.
• The Contractor shall not place any subcontracts without approval.
• The Contractor shall remain liable for all acts and defaults of
subcontractors.

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• Design and Quality of Materials and Work
• The Contractor is free to choose:
• methods of work
• materials and their source
• Contractor should ‘warn’ if the design is likely to fail or be unsuitable.
• Materials supplied should be ‘fit for purpose’ and without defects.  
• Workmanship: works should be carried out skilfully and to the
Engineer’s satisfaction

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• Progress
• The Contractor is required:
• commence works as soon as after the Commencement Date
• proceed with works with due expedition and without delay
• to apply to the Engineer for a Taking-Over Certificate
• Time for Completion Vs substantially completed
• Taking-Over Certificate Vs outstanding works to be completed
• Rate of Progress: obligations placed upon the Contractor to expedite
the Works
• The Contractor may ask for relaxation of restrictions of working hours

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• Notifications
• The Contractors obligations to provide notifications or ‘notices’:
• remains or items of geological or archaeological interest antiquities
• proof for paying Nominated Subcontractors
• programme of the Works and revised programme
• extensions of time to the contract and details
• vouchers, records and invoices for Provisional Sums works
• records of all labour, plant and materials utilised for Dayworks

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• Notifications
• quarterly ‘cash-flow’ estimates
• Contractors’ labour and equipment
• Monthly Statement.
• Intention to ‘claim’ and shall keep the records to support his
contentions

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