Abstract
This chapter considers the skills that a contract manager must possess in order to draft a contract and the essential points he/she must consider in drafting a well-structured contract between an employer and the contractor. As well, this section will guide contract managers when reviewing a contract already prepared by others. Major clauses in a contract are listed and each clause is described to give the reader the basic knowledge needed in drafting or reviewing a construction contract and what he/she must consider as a priority. This chapter examines the principles and the main essential clauses that should be taken into consideration when drafting a construction contract. In essence, this chapter complements Chapter 4, which reviews the standard forms of contract, as each standard form includes many of the headings listed in this chapter and approaches it differently, in many instances. A brief description is included for each clause heading and emphasis is placed on some of the main clauses that are recurrent in construction contacts. Any professional in this field can research each topic in depth if he so requires.
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Notes
- 1.
Force majeure.
- 2.
In the event of conflicts among the contract documents, documents with the order they are listed takes precedence.
- 3.
Review of submittals by the engineer is not conducted for the purpose of determining the accuracy and completeness of other details such as dimensions and quantities, or for substantiating instructions for installation or performance of equipment or systems, all of which remain the responsibility of the contractor as required by the contract documents.
- 4.
The right of the engineer to stop the work shall not, however, give rise to a duty on the part of the engineer to exercise the right for the benefit of the contractor or any entity.
- 5.
If the contractor, while performing a construction activity, is either aware or should have been aware that it involves an error, inconsistency or omission in the contract documents, and does not give notice of such to the designer, the contractor shall assume full responsibility for such performance and shall bear the full costs for correction.
- 6.
These are subject to the limitations of the contract.
- 7.
Also called schedules.
- 8.
Called baseline schedule or baseline programme.
- 9.
Usually not to exceed 10% of contract sum.
- 10.
Or similar as inserted in the agreement.
- 11.
- 12.
This can vary according to the parties’ agreement.
- 13.
Also called ‘payment certificate’.
- 14.
Part of the bill of quantities (BOQ).
- 15.
Further readings in Chapter 7.
- 16.
5% is standard and could be up to 10% in specific projects.
- 17.
The contractor shall, by appropriate agreement with each subcontractor, require each subcontractor to make payments to sub-subcontractors in similar manner.
- 18.
Also called ‘site instruction’.
- 19.
If the works are performed by a subcontractor, the main contractor’s overhead and profit shall not exceed 5% (or as agreed).
- 20.
Also called ‘work order’.
- 21.
Or as noted in the contract.
- 22.
Dispute resolution clauses in standard forms of contract often stipulate that in the event a dispute arises, parties have to undertake certain steps such as negotiation and mediation to resolve the dispute amicably before commencing arbitration. Before discussing how domestic courts approach these multi-tiered clauses, it is useful to consider the advantages and the disadvantages of such clauses.
- 23.
Through negotiation or early meditation, frivolous or trivial claims can be settled or written off at the outset.
- 24.
If no court proceedings are listed in the contract as the final procedure in a dispute.
References
Calamari J, Perillo J, Bender H, Brown C (2018) Cases and problems on contracts, American Casebook Series, 7th edn. West Academic Press, St. Paul, MN
Kenneth AP (2018) A manual of style for contract drafting, 4th edn. American Bar Association, Chicago, IL
Nancy K (2016) The fundamentals of contract law and clauses: a practical approach. Edward Elgar Publishing, Northampton, MA
Scott JB (2016) Drafting and analyzing contracts: a guide to the practical application of the principles of contract law, 4th edn. Carolina Academic Press, Durham, NC
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Haidar, A.D. (2021). Contract Drafting and Main Conditions. In: Handbook of Contract Management in Construction. Springer, Cham. https://doi.org/10.1007/978-3-030-72265-4_5
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DOI: https://doi.org/10.1007/978-3-030-72265-4_5
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