What Is a Contract Period in Construction

/What Is a Contract Period in Construction

What Is a Contract Period in Construction

The terms and conditions of the contract refer to a specific period (a specific date or period) within which a contract must be concluded.3 min read However, some legal requirements cannot be changed by a contract, not even by a written contract. An example of this is the limitation period, which governs how much time a party has after a dispute to make a claim in court. As a general rule, Contracting Parties may shorten this period (at least, usually not less than one year), but the Parties may not extend this period. A contract is deemed to have been concluded when there are no longer significant costs or risks. The base date shall set the deadline from which the conditions under which the tender was drawn up shall be considered to be known to the contractor and shall therefore be duly reflected in their price. If certain conditions change before the contract is implemented, the contract can be adjusted to reflect this. In the case of costs plus fixed costs, the owner pays the contractor an agreed amount beyond the documented labor costs. [10] Under a lump sum contract, an owner agrees to pay a certain lump sum to a contractor after the completion of the work without a breakdown of costs. [8] [9] Once the work is completed, no detailed action is required. When negotiating construction contracts, the parties should pay particular attention to the definition of terms relating to completion deadlines. Indefinite terms can lead to later problems. It is extremely rare to find a construction contract that provides for a fixed or determinable completion time without an accompanying clause apologizing to the contractor for delays caused by circumstances beyond their control. The contractor should insist on such an excuse clause.

Contractual clauses that excuse the Contractor`s delays due to circumstances beyond its control are called “force majeure” clauses; Force majeure means a superior or irresistible force. With this type of contract, the owner has more powers in monitoring, inspecting and regularly reviewing the project before final payment. Therefore, the risk is transferred from the owner to the contractor and this would be an attraction for the client. [12] The time frame for completion of work is usually described by a number of days or weeks from the beginning or by a specific date. The completion time usually does not mean the completion of all the work, but the essential completion point. What constitutes an essential achievement must be expressed in the contract. The essential completion is defined in the AEOI document A201 – 2017 (which contains the general conditions that are part of the owner/contractor agreement) in section 9.8 as follows: This list is not exhaustive, and in the next section, which deals with the key elements of construction contracts, there are other terms that are often found in construction contracts where the distribution of risks is equally appropriate. The exact provisions depend on the specific form of the contract that is accepted.

For example, in the draft contract and the construction contract of the Joint Contract Tribunal (JCT), the base date determines the distribution of risks with regard to changes in legal regulations, changes in VAT exemptions and changes in the definitions of daily work. According to the YCW Standard Construction Contract, 2011 Edition, the contractor must change the scope of work to comply with the scope of services if there are changes to the “legal requirements” after the base date of the contract. The modification is considered to be a modification for which the contractor is entitled to payment, even if no formal instructions have been given. [23] However, the owner will also want to ensure that the contractor`s project completion time is not extended if it has not provided a realistic project completion time or has not exercised caution. In addition, the owner wants to ensure that the completion time is not extended due to problems caused by the contractor.B, such as a failure to order equipment or materials on time, or a failure to organize and plan the work appropriately. Set a grace period (i.e., the lump sum compensation begins on the seventh day following the required date of substantial completion), A holdback is a sum of money that the owner withholds under the contract to serve as security against incomplete or defective work. If the lowest interest rate and the position of comparison between the contractors have already been determined before the opening of the offer, the percentage contract is used. The percentage contract is a type of contract where there is no possibility of an unbalanced offer. The completion date may be changed during the contract. B, for example, if the date on which the contractor takes possession of the construction site for the start of construction is delayed or if an extension of time is granted due to delays in the work for which the contractor is not responsible. Practical completion must therefore be certified before the last agreed completion date.

It is important to determine the essential completion date. The guarantees required by the contractual documents usually begin on this date. In addition, the significant completion date has financial implications. It is quite common for a contractor to receive a holdback, minus a sum for items on the list of outstanding defects, once completion is significant. Special contracts are further divided into five types: if the parties have agreed on a lump sum compensation, the relevant point for the start or termination of the lump sum compensation is usually the material conclusion. .

By |2022-04-13T08:09:04+00:00abril 13th, 2022|Sem categoria|0 Comentários

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