11 function of an engineering contract Flashcards

1
Q

What is an engineering contract?

A

A mutual agreement between 2 parties for the purpose of undertaking, on a commercial basis, certain clearly specified engineering works

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2
Q

Who are the parties in an engineering contract?

A

the principle- party that requires the work to be done

the contractor- party who agrees to undertake the work for payment

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3
Q

What are negotiations?

A

Spoken and written transactions between parties leading to a contract agreement

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4
Q

How is a contract negotiated?

A

1 principle invites proposal to one or more qualified contractors
2 formal offer made by contractors = tender bid
3 if only one party then direct negotiation, if more than one then competitive tendering

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5
Q

How is the existance of a contract demonstrated?

A

contract should be clearly evidenced by writing down agreed terms and conditions under an instrument of agreement - signed by all parties

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6
Q

Why is a contract needed?

A

To ensure the final negotiated agreement is enforceable by law

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7
Q

In the event of a party failing to keep a contract agreement, what does the law of contracts consider?

A

1 whether a contract exists
2 the intentions of the contract
3 whether the contract has been broken
4 what compensation is due to the injured party

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8
Q

What are the 2 types of contract?

A

formal and simple contracts

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9
Q

What is a formal contract also refereed to? and what does it mean?

A

contract under seal, a deed whose validity depends solely upon its form.
a dded must be signed under seal by the party executing the deed and a witness to affiliated with either party

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10
Q

what are the 3 differences between a formal and simple contract?

A

1 A simple contract must be supported by consideration - inducement to enter into a legally enforceable agreement
2 limitation period generally longer for formal contracts = time following breach in which innocent party can take action on the other.
3 A formal contract has an estoppel= rule of law that stops a party later claiming a statement in contract is incorrect

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11
Q

What does the principle’s representative do?

A

represent in all matters relating to the management of the contract

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12
Q

Who is the principle’e representative in an engineering and construction contract?

A

the project manager

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13
Q

What are the 4 basic requirements of a contract?

A

1 intention by both parties to form an enforceable contract must be demonstrable
2 genuine consent
3 legality of purpose
4 legal capacity of both parties

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14
Q

When does an instrument of agreement maintain a simple contract?

A

both parties sign with no witness

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15
Q

When does an instrument of agreement create a formal contract?

A

the instrument of agreement states that it is a deed and is signed, sealed and delivered by the parties in presence of attesting witnesses

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16
Q

What 2 elements does a simple contract needs that a formal does not?

A

1 offer and acceptance - an offer is made by one party and unconditionally accepted by the other
2 valuable consideration = payment for work done

17
Q

What is the privity of a contract?

A

legal relationship and mutual interest that exists between the parties in a contract. The responsibilities of the contract parties are non transferable to a third party

18
Q

What happens in assignment in a contract?

A

when one of the parties to a contract substitutes another party in its place for all or some of the purpose of the contract

19
Q

When does discharging a contract occur?

A

When the project is completed or terminated

20
Q

How can a contract be discharged?

A
1 performance of its provisions 
2 agreement between 2 parties 
3 operation of the law
4 frustration - when a contractual obligation is has become incapable of performance
5 fundamental breach
21
Q

What is a fundamental breach?

A

the breach causes a situation in which the other party is unable to perform their duties and responsibilities

22
Q

Why is contract law the product of commercial civilisation?

A

commercial civilisations developed trade that was not completed at the same time for both parties so laws and courts were needed to ensure promises were kept

23
Q

What is a merger?

A

transformation of simple to formal contract by creating a formal instrument of agrrement

24
Q

What are the 4 main factors that influence the type of contract when classified by method of payment?

A

1 degree of certainty about final design
2 flexibility to cope with design changes
3 contractors incentive for efficient performance
4 extent of risk likely to occur during the contract

25
Q

What is the difference between an item and an activity?

A

item is a process of work, activity is a discrete unit of project construction

26
Q

Whats the difference between BoQ and schedule rates?

A

BoQ has quantity estimates for each item so allows estimate of total construction phase

27
Q

How can legality of purpose occur?

A

illegal but common law or by statute ie commit a crime, hinder administration of justice, injure public services or attempt corruption

28
Q

How can a person not have legal capacity?

A
underage
not mentally stable 
under the influence of alcohol or drugs 
bankrupt 
in legal custody