IMPLIMENTATION OF CONTRACT CLAUSES Presentation by SRI S

IMPLIMENTATION OF CONTRACT CLAUSES Presentation by SRI. S. SREEKUMAR GM(ENGG), NER Dt. 09 -09 -11 1

Ø Contract is a legally enforceable agreement between two or more parties with mutual obligations, which may or may not have elements in writing. Ø The elements of a contract are mutual assent and consideration. Ø The remedy at law for breach of contract is usually “damages” or “monetary” compensation. 2

Agreement: Ø Every promise and every set of promises forming the consideration for each other is an agreement. Ø A person makes a proposal or offer. When it is accepted by other it becomes a promise. Ø Promise cannot be one sided. Only a mutual promise forming consideration for each other is agreement. 3

The Indian Contract Act 1872 Ø This act is applicable to whole of India (except the state of Jammu and Kashmir). Ø It is well settled that while the Indian Contract Act merely provides certain basic conditions under which a contract becomes binding on the parties, it does not lay down any particular form or condition of a contract. The parties to the contract may agree to particular form or condition or mode in which the contract is to be executed. 4

Ø Consideration: - When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. 5

Ø All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void. Ø Acceptance of contract conditions must be absolute. ØAcceptance of offer is complete only when it is absolute and unconditional. 6

Steps involved in contract ØProposal and its communication. ØAcceptance of proposal and communication. ØAgreement by mutual promises. ØContract ØPerformance of contract it’s 7

Essential requirements of a valid contract Ø Offer and its acceptance. ØFree consent of both parties. ØMutual and lawful consideration for agreement ØIt should be enforceable by law. ØParties should be competent to contract ØObject should be lawful ØCertainty and possibility of performance ØContract should not have been declared as void under contract Act or any other law. 8

Implimentation of Contract clauses Ø Studying the agreement in toto. Ø Understanding about the contract clauses. ØCommunication of proposal/revocation/ acceptance are vital to decide validity of a contract. A communication is complete only when other party receives it 9

Obligations of the department Ø Signing agreement and providing copy of agreement to the contractor. ØHanding over of site. ØAcceptance of time and progress chart. ØSupervision and Measurement of work. ØPayment of bills. ØPrinciple Employer. ØApproval of Drawings and sample of materials. 10

Any contract have basically three Dimensions Ø Time. Ø Quantity. Ø Quality. External Environment Ø Safety and security rules Ø Labour laws Ø Others 11

Time Ø Time is the essence of the contract – clause 5. Ø Submission of Time & Programme chart and mutual acceptance. Ø Extension of Time. Ø Compensation for Delay – clause 2. Ø Completion Certificate and Completion Plans. Clause 8. Ø Payment of final bill – Clause 15. ØDefects liability Period – Clause 17. 12

Quantity Ø Measurement of work done – Clause 6. Ø Payment of Intermediate Certificate and Final bill. ØPayment on Account of Increase in prices of materials – Clause 10 C, 10 CA, 10 CC. Ø Deviation/Variations Extent and pricing – Clause 12. Ø Payment of Advances – Clause 10 B. Ø Tools & plants – Clause - 18 13

Obligations of the department Ø Signing agreement and providing copy of agreement to the contractor. ØHanding over of site. ØAcceptance of time and progress chart. ØSupervision and Measurement of work. ØPayment of bills. ØPrinciple Employer. ØApproval of Drawings and sample of materials. 14

Quality Ø Performance Guarantee – Clause 1. Ø Security Deposit – Clause 1 A. Ø Determine the contract – Clause 3. Ø Work to be executed in accordance with specifications, Drawings, orders, etc – Clause 3. Ø Action in case work not done as per specifications – clause 16. Ø Contractor liable for Damages, defects during maintenance period – Clause 17. 15

Safety & Security Ø Safety code. ØContractors liability and Insurance of works – clauses 46. Ø Insurance for staff. Labour laws ØContractors labour regulations – Clause 19. Ø Minimum wages act. Others ØStatutory laws. 16

Dispute Resolution and Arbitration. – Clause 25 17

THANK YOU 18