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IMPLIMENTATION OF CONTRACT CLAUSES

Presentation by

SRI. S. SREEKUMARGM(ENGG), NER

Dt. 09-09-11

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

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

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The Indian Contract Act 1872

This act is applicable to whole of India (except the state of Jammu and Kashmir).

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.

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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 .

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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. Acceptance of contract conditions must be absolute.Acceptance of offer is complete only when it is absolute and unconditional.

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Steps involved in contract

Proposal and its communication.Acceptance of proposal and it’s communication.Agreement by mutual promises.ContractPerformance of contract

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Essential requirements of a valid contract Offer and its acceptance.Free consent of both parties.Mutual and lawful consideration for agreement It should be enforceable by law.Parties should be competent to contractObject should be lawfulCertainty and possibility of performanceContract should not have been declared as void under contract Act or any other law.

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Implimentation of Contract clauses

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

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Obligations of the department Signing agreement and providing copy of agreement to the contractor.Handing over of site.Acceptance of time and progress chart.Supervision and Measurement of work.Payment of bills.Principle Employer.Approval of Drawings and sample of materials.

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Any contract have basically three Dimensions Time. Quantity. Quality.

External Environment

Safety and security rules Labour laws Others

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

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

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Obligations of the department Signing agreement and providing copy of agreement to the contractor.Handing over of site.Acceptance of time and progress chart.Supervision and Measurement of work.Payment of bills.Principle Employer.Approval of Drawings and sample of materials.

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

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Safety & Security Safety code.Contractors liability and Insurance of works – clauses 46 . Insurance for staff.

Labour lawsContractors labour regulations – Clause 19. Minimum wages act.

OthersStatutory laws .

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Dispute Resolution and Arbitration. – Clause -25

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