3.4 OTHER CONTRACT ISSUES & SPECIAL CLAUSES Flashcards
Agent
Person authorized to act on behalf of another party (principal)
Eg. Eng is often the agent to the owner (principal)
The principal is bound by the acts of the agent that are done within the scope of the agency
Agency can be created by
- Actual authority (actual agreement between absent and principal)
- Apparent authority (representation by the principal to a 3rd party)
Indemnity
Agreement to bear financial loss of another party for specified event
Eg. Insurance policy
They reflect the common law that each party is responsible for the harm it causes; these clauses add clarity to avoid litigation and give indemnified party contract remedies
Change orders
Changes to scope of work
Eg. Design changes/error, change in regulations, unforeseen changes
Extra: increase in contract price
Credit: decrease
Impact costs
Occur when extra work is required that may impact schedule and efficiency of the rest of work
Change directive
Owner instructs contractor to do extra work before price is agreed upon
Contractor should file a notice of performance under protest to reserve the right to dispute payment for change directive
Unforeseen
Conditions that are known to be possible but are not expected to occur
Eg. Large amount of subsurface bedrock
Owner is required, at tender stage, to divulge (make known) all available info regarding unforeseen conditions.
Contract administrator
Is typically the owners agent
Consultant maybe owners agent and arbiter of disputes (as arbiter consultant must act fair to contractor not favouring owner)
Must preform take in timely manner
Must not interfere with the right of the contractor to choose method or order of work
Contract terminate
- Complete performance
- Frustration
- Mutual agreement
- Breach
- Termination clause in contract
