A Construction Contract is an Agreement between an owner of a property or building and a contractor, to construct a structure on real property or renovate an existing structure.
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_Extracts from the Book estimating & Tendering for Building Work 3rd Edition|Page 34-35 By Martin Brook
01/05/10
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Standard form of contract exist to identify the roles and responsibilities of the parties, and their agents Contract provide rules and mechanisms to protect and direct the parties to a contract should things go wrong Clients can use standard forms of contract e.g. from the Joint Building Council or Architectural Association or a custom made contract. There are many forms of contract published using different principles, terminology and apportionment of risks
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Construction contracts depend on the general principle of law. A contract is “an agreement between two or more parties which is intended to have legal consequences”. In construction, the contract is generally for producing a building or part of the built environment. It can be entered into in any of the following four ways:
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Implied by conduct of parties; a contractor may submit an offer and later have access to the site. By word of mouth; typically where an offer is accepted e.g. by telephone By exchange of letters ; common for small domestic works e.g. extension, alteration or repair. Using a written contract; the contract documents often include the enquiry documents , the written offer, minutes of meeting, tender-stage correspondence, a programme, a method statement and a formal contract.
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There must be an offer by one party and an acceptance by the other or others Each party must contribute something of value to the other’s promise: a client is responsible for making payments and the contractor must complete the construction. Each party must have the legal capacity to make a contract The parties must have exercised their own free will, without force or coercion/pressure.
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A contract comes into existence when an offer has been unconditionally accepted. In construction the offer is the “tender’, “estimate” or “bid” and suppliers and sub-contractors sometimes refer to their offers as “quotations”. The term “estimate” could be used in a wider context to mean a guide to how much something will cost. This ambiguity should be avoided wherever possible. A contractor expects to receive an acceptance in clear terms from the client. A letter of intent is often used to let a contractor know that he should prepare to start work.
