Construction Contract
ASSIGNMENT
TABLE OF CONTENTS | | PAGE | 1.0 | Is it possible for one standard form of construction contract to meet the need of every project? Discuss by reference to at least two forms in common use in industry. | 2 | 1.0 | What is a Construction Contract? | 2 | 1.1 | Why use a standard form of contract? | 3 | 2.0 | Different forms of contract | 3 | | 2.1 PWD (Public Works Department) FORM OF AGREEMENT | 4 | | 2.2 FIDIC | 4 | 3.0 | Main differences between both forms of contract | 6 | | 3.1 Payments | 7 | | 3.2 Variation | 8 | | 3.3 Extension of time | 9 | | 3.4 Unforeseen ground conditions | 9 | | 3.5 Delays and costs | 10 | 4.0 | The construction industry | 10 | 5.0 | Conclusion | 11 | 6.0 | Reference | 12 |
Is it possible for one standard form of construction contract to meet the need of every project? Discuss by reference to at least two forms in common use in industry.
1. What is a Construction Contract?
A construction contract is a legally binding agreement between two parties under the terms of which one party agrees to perform a specific job for which the other party agrees to pay. This type of contract covers very expensive and complex as well as simple projects. There are two types of clients that use construction contracts namely residential and commercial.
A residential construction contract includes three basic elements. They are project scope, schedule of work and payment details. This type of contract takes place between the property owner who has requested the work and the project manager for the construction company. The project scope is a statement showing all the details of the construction work included in the contract. A schedule of work specifies the start date, milestones, and project completion date. Finally, the payment details section includes the total project cost and payment dates. The basis of payment of all construction projects is based on percentage of completion. At the
TABLE OF CONTENTS | | PAGE | 1.0 | Is it possible for one standard form of construction contract to meet the need of every project? Discuss by reference to at least two forms in common use in industry. | 2 | 1.0 | What is a Construction Contract? | 2 | 1.1 | Why use a standard form of contract? | 3 | 2.0 | Different forms of contract | 3 | | 2.1 PWD (Public Works Department) FORM OF AGREEMENT | 4 | | 2.2 FIDIC | 4 | 3.0 | Main differences between both forms of contract | 6 | | 3.1 Payments | 7 | | 3.2 Variation | 8 | | 3.3 Extension of time | 9 | | 3.4 Unforeseen ground conditions | 9 | | 3.5 Delays and costs | 10 | 4.0 | The construction industry | 10 | 5.0 | Conclusion | 11 | 6.0 | Reference | 12 |
Is it possible for one standard form of construction contract to meet the need of every project? Discuss by reference to at least two forms in common use in industry.
1. What is a Construction Contract?
A construction contract is a legally binding agreement between two parties under the terms of which one party agrees to perform a specific job for which the other party agrees to pay. This type of contract covers very expensive and complex as well as simple projects. There are two types of clients that use construction contracts namely residential and commercial.
A residential construction contract includes three basic elements. They are project scope, schedule of work and payment details. This type of contract takes place between the property owner who has requested the work and the project manager for the construction company. The project scope is a statement showing all the details of the construction work included in the contract. A schedule of work specifies the start date, milestones, and project completion date. Finally, the payment details section includes the total project cost and payment dates. The basis of payment of all construction projects is based on percentage of completion. At the
References: 1. BEST PRACTICE GUIDELINE #C2 “choosing an appropriate form of contract for engineering and construction works” (September 2005 Second edition of CIDB document 1010) 2 7. Gellert Ivanson Limited, 2009. “Construction Contracts Act 2002” 8 9. F. Tatarestaghi, M. Dr. Zuhairuse Md Darus, M.F.I Irfan Md Nor, 2011. EuroJournals Publishing, Inc. “An Overview of Comparison between Parties of Construction Contracts In Malaysia” 10