CONTRACT ADMINISTRATION
Adjusted Contract Sum
The adjusted contract sum is the contract sum but adjusted to take into account any additions or deductions pursuant (according) to the contract.
Bank Guarentee
Certification by a financial institution that a set sum of money is set aside as a guarentee of available funds to pay a builder, for example, for a housing contract sum. The funds are set aside and not able to be accessed by the proprietor or without the builders consent, or by the builder until his contractual obligations are met.
Bill of Quantities
A list of numbered or coded items describing the quantities and materials required to cary out a contract work this is divided into sections corresponding with their usual building trade classification.
Breach of Contract
Whenever one of the contracting parties fails in his obligation under the contract, the other is entitled to claim damages for the breach, unless the terms of the contract provide otherwise.
Building Contract
The document or articles of agreement and general conditions binding two or more parties together, including any drawings or specifications ect.
Building Documents
All documents related to the construction as stated in the Articles of Agreement and order of preference. Conditions of Contract, Specification, Drawings and may include the Bill of Quantities.
Contingency Sum
Is a monetary sum allowed in the tender/contract for unforseen expenses and is adjusted in the final account.
Contract
A contract is a legally binding agreement between two or more people or companies (called 'the parties') It is an agreement both parties intend to be legally binding. Each party to a contract is legally obligated to carry out his or her part of the bargain and a party who fails to do so is in breach of contract.
Contract Works Insurance
Insurance, ussualy taken out by the builder to protect against loss should the project under construction suffer damage prior to final completion. (eg. storm damage, fire vandalism, ect.)
Contractor
Person or persons who, by agreement under a contract, are required to perform certain work.
Contractor Licence
Means a contractor licence in force under the Home Building Act 1989.
Contract Sum
A contract sum, in respect of most building contracts means:
a) Where the proprietor accepted a lump sum, the lump sum;
b) Where the proprietor accepted rates, the sum determined by calculating the products of the rates and the corresponding quantities in the bills of quantities or schedule of rates;
c) Where the proprietor accepted a lump sum and rates, the aggregate (average) of the sums referred to in a a) and b) above. Including provisional sums but excluding any additions or deductions which may be required to be made under contract. The adjusted contract sum is as above but adjusted to take into account any additions or deductions pursuant (according) to the Contract.
a) Where the proprietor accepted a lump sum, the lump sum;
b) Where the proprietor accepted rates, the sum determined by calculating the products of the rates and the corresponding quantities in the bills of quantities or schedule of rates;
c) Where the proprietor accepted a lump sum and rates, the aggregate (average) of the sums referred to in a a) and b) above. Including provisional sums but excluding any additions or deductions which may be required to be made under contract. The adjusted contract sum is as above but adjusted to take into account any additions or deductions pursuant (according) to the Contract.
Cost Plus
A type of contract where the proprietor agress to pay the contractor sum plus a fee, or a percentage of the cost of the works.
Defects Liability Period
In addition to the obligation to remedy all defective work which may occur during construction, most contracts contain a clause which requires the builder, on being called on to do so, to rectify all defects which may appear during a fixed period after completion of the work (the Defects Liability Period)
Design and Construct
A term used to describe a contract where a builder is required to both designn and contruct a project in accordance with a specific set of requirements set out in a contract.
Determination
Determination of a contract is the ultimate right of each party to that contract.
Direct Labour
Site labour employed directly by the builder.
Dispute
In respect of a building contract, a dispute occurs when the parties to a contract cannot reach agreement in respect of the construction of the Contract or as to any oter matter or thing of whatsoever nature arising under the Contract or in connection therewith.
Do and Charge
A type of contract used primarily when the Client is not to sure of the scope of works or there are disruptive elements - such as work which is likely to be slowed down through other intrusive activities. The builder completes the works and then presents the client with the bill.
Drawings
These are a pictorial representation of the project, showing the extent of the works to be done under the contact. They should be clear, simple and complete.
Estimate/Budget
Forcasting the cost of construction based on the drawings and specifications.
Extension of Time
An extension of time, when applied to a building contract, is a charge in the date for completion of the project, brought about by some change in the project circumstances beyond the control of the builder.
General Conditions of Contract
Those conditions constitutiing the contract as a whole covering all matters excepting so called 'special conditions' which may be needed to cater for any particular circumstance of an individual project.
Head Contract
This is a contract between the proprietor and the builder. Even though the works may be supervised by an architect, this is still the head contract.
Implied Terms
A contract will require each party to do something. Some of the requirements will be spelled out in a contract (called 'express terms'), While others are never mentioned, but are still part of the agreement (called ímplied terms')
Inclement Weather
When work is prevented from being carried out due to any sever weather conditions including rain, wind, heat and cold.
Independant Expert Appraisal
In the context of the building contracts, an appraisal sought by one or both parties, usually to assist in dispute resolution, by a person sufficiently qualified in the relevant feild to offer meaningfull advice and genuinely independant of the matter and parties involved i.e. free of any conflict of interst.
Indirect Labour
Management/clerical work employed by the builder and involved in managing or controlling the process of building.
Labour Only
A type of contract where the contractor hires out labour at an hourly rate.
Latent Conditions
Physical conditions on site or affecting the site which differ materially from the physical conditions which should have reasonably been anticipated at the time of contracting.
Lien
A type of security over property whereby a creditor has the right to retain possession of a debtors property until the debt is paid.
Liquidated Damages
Simply put; liquidated damages is monetary compensation.
Lock-Up
The time when the works may be fully secured by physical means to prevent entry other then forced entry; ie when the external shell of the building is complete.
Lump Sum
A type of contract where the Contractor agrees to do the work for a lump sum.
Mediation
A means of dispute resolution akin to that of conciliation.
Mediator
A person, preferably with meaningful expertise in the matter of the dispute and dude procedure and natural justice, who convenes a mediation session.
Negotiation
To discuss and exchange ideas and/or proposals as a means of reaching an agreement such as in dispute resolution or preceding a business agreement.
Nominated Sub Contractor
A Sub-Contractor who is nominated by the client to perform a seperate or specialised section of the work, the cost of which is allowed as a provisional sum in the contract.
Period Contract
A period contract is one where a client enters a contract with a Contractor for the provision of services or materials, or both, for an established period of time and for established cost.
Practical Completion
The work under the contract has been completed except for minor omissions and minor defects.
Preliminaries
Those times required for building which annot be easily included within any trade; e.g. scaffolding, shedding, electricity, cost of supervision, craneage, testing of materials, quality assurance costs.
Prime Cost Item
These are fittings and appliances you must choose before you sign. Make sure you give enough details about products you want, so prices quoted in the contract can be accurate. Where possible, list the brandnames and models of all fittings, tiles and appliances, ect that you want used.
Principal
For larger projects, the sub contractor will lodge progress claims at intervals nominated in your contract.
Progress Claim
Fixed Price Contracts are financed by the builder, who recieves regular progess payments (usually fortnightly or monthly) from the propretor; for materials delivered and work done on site.
Project Management (Contract)
This is the Contract between the Proprietor (client) and the Project Manager.
Provisional Quantities
A monetary allowance for certain components of the works when the exact quantities are unkown at the time of tendering and adjusted according to agreed rates on performance of the work.
Provisional Sum
A provisional sum is uncluded in a contract where the Propietor has been unable to finalise a specific detail or material and sets a figure that the builder is to include in the Contract Sum. During the progress of the Works the Proprietor, or Superintendent, will issue instructions to the Building in respect of the workd covered by the provisional sum.
Schedule of Rates
A list of unit rates prepared and submitted by the Builder to be used for te preperation of progress claims or for use by an Architect or Client to adjust Builders claims for variations.
Security/Retention
Both security and retention are money held back by the proprietor for the purpose of ensuring the due and proper performance of the Contract by the Builder.
Special Conditions of Contract
Often added to the general conditions of generic contract, for example, special conditions are added when is a particular circumstances relating to a particular projec required inclusion in the contract.
Specification
This document sets out the technical requirements of the work. It is a direct explanation of the drawings, and with them serves three purposes; first, as a full description of the project, so that bids may be properlly compiled; second, as a mandatory requirement for materials and quality of workmanship during construction; and third, as legal evidence in the event of a litigation. The specification is therefore a most important document and must be prepared individually for each project.
Sub Contract
Legally binding agreement between the priniciple contractor or owner builder and the sub-contractor(s)
Subletting
The letting of a contract of tenancy, for example, to another party by the party to the original letting.
Superintendent
Superintendents are representatives of, and are paid by, the client. They are often architects but can be other suitably qualified personnel such as a Clerk of Works or Building Consultant.
Suspension of Works
The right to suspend the works is normally given when the other party is in breach of the contract and allows the aggrieved party to protect its position and prevent further expenditure without determining the contract.
Tort
The decision of courts arising out of civil (tort) cases; i.e. precedents
Variation
A variation is a charge or adjustment to what has already been agreed in the contract. The builder or tradesperson may need to vary the contract because of a council requirement or unforseen circumstances. If the reason for a variation is the builder's or tradesperson's fault, you do not have to pay for any extra work to rectify the problem. Variations must be in writing and attached to the contract and signed by both you and the contracting builder/tradesperson, or their nominated supervisor or agent.