Construction Contract Essentials Guide
Construction Contract Essentials Guide
Section V: Section V emphasizes the Section V prioritizes land and Section V's "Act of God" in ⚫ Contractors must provide
Protection of contractor's responsibility to environmental protection, damage responsibility is reliable watchmen to
Work and saf eguard employment and particularly f or trees and ambiguous and susceptible to protect the site and
Property property, including the owner's plants. It emphasizes strict interpretation, and there are no maintain f ire saf ety
property and materials, by f ire saf ety regulations, site specif ic sanctions f or non-
providing qualif ied watchmen security with watchmen, and compliance with protective Any existing trees and
and f ire saf ety equipment, holding contractors measures, potentially leading plants within the project
prohibiting smoking, accountable f or drainage to enf orcement f ailures. site must be protected,
conserving on-site items, and issues, demonstrating a clear and relocation, if required,
ensuring clear drainage understanding of must be done.
throughout the project to environmental
minimize damage. responsibilities. Contractors are
responsible f or ensuring
natural drainage remains
unimpeded
Section VI: Section VI outlines contractors' The f ocus on employing The provision allowing Workers must be competent, or
Labor, Work and responsibilities in labor, work competent workers and architects to demand changes they can be removed at the
Payments methods, and adjustments enabling the architect to in methods could lead to delays architect’s request.
during construction. It ensure quality work is if not managed ef f iciently. Def ective work must always be
emphasizes hiring skilled commendable. The 5% limit on work replaced at the contractor’s
workers, withholding payments, Emergency provisions quantity adjustments might be expense.
and maintaining construction ensure quick responses to too restrictive f or projects with Contractors can adjust work
benchmarks. Contractors must saf eguard lif e and property, substantial unf oreseen quantities within a 5% limit without
prioritize inspections and take showing a strong f ocus on changes. altering the contract price.
swif t action during saf ety. The 15-day limit f or Immediate action is required in
emergencies. The accountability f or adjustment claims could be emergencies without waiting f or
def ective work upholds high challenging in complex instructions.
It allows Owner to order extra standards and ensures that scenarios, particularly if Changes require written
work or scope changes, with only quality outputs are unf oreseen issues arise. authorization f rom the Owner.
Architect approval f or sub- accepted. Allowing outsourcing of extra Contractors can claim
surf ace conditions. The detailed process f or work might create conf licts if adjustments in cost and time f or
Adjustments must include handling changes ensures not clearly communicated to signif icant changes.
equitable costs, sureties' clarity and accountability, the Contractor. The Architect can authorize
consent, and perf ormance protecting both the Owner The 15-day window f or minor changes without extra cost.
bonds. and the Contractor. claiming extra costs might be Extra work is valued by lump-
Allowing claims f or too restrictive in complex sum, unit prices, or actual costs plus
The Contractor is required to equitable adjustments in cost situations. 15%.
inf orm the Architect of any and time is f air and practical, The obligation f or def ect Adjustment claims must be made
delays or extra costs, clean the given the unpredictability of correction within 60 days, while within 15 days, unless extended.
site, and issue a Certif icate of construction conditions. reasonable, could be Starts work within 7 days.
Completion upon substantial Minor changes authorized challenging f or extensive Monthly Payment Requests
completion. They must correct by the Architect without cost issues. include photos and documentation.
def ects within 60 days. implications streamline Payment delays if disputes Final payment requires As-built
decision-making. arise during certif ication. drawings, inspection certif icates,
The contract outlines The Owner’s right to Heavy dependence on the and clearance of all dues.
responsibilities f or work outsource unresolved extra architect’s discretion f or Retention release within three
completion, payment work avoids unnecessary payment and def ect decisions. months of f inal payment.
processes, and quality delays. Stringent requirements f or
assurance. Contractors must The clear def inition of extensions, requiring written
start work promptly and adhere "substantial completion" bondsmen consent.
to the agreed timeline. (98% completion) provides a
Extensions may be granted practical benchmark.
with proper documentation. The structured process for
Liquidated damages apply if handling def ects and making
project isn't completed on time. good ensures accountability
Payments are progressively and quality.
based on work completed, with The Owner's ability to use
f inal payment contingent on portions of completed work
contractor documentation. while retaining rights to claim
Contractors are liable for damages is f air and practical.
correcting def ective work within The requirement f or site
a year. cleanup emphasizes
prof essionalism and
readiness f or occupancy.
Clear timeline and
scheduling guidelines.
Provision f or time
extensions in case of
unavoidable delays.
Regular payments based
on work progress.
Requirement of as-built
drawings and documentation
f or transparency.
Release of retention within
a reasonable period af ter f inal
payment.
HIZON, RALPH LAWRENCE
Section VII: This section outlines the ⚫ Defined ⚫ Ambiguity in ⚫ Contractor's
Contractor– relationships and Responsibilities: Enforcement: Responsibility: The
Separate responsibilities between the Clear delineation of There’s insuf f icient contractor is responsible f or
Contractors– main contractor, separate roles f or contractors clarity on how overseeing the work of sub-
Sub-Contractors contractors, and sub- and sub-contractors disputes between contractors.
Relations contractors involved in a ensures contractors will be ⚫ Sub-Contractor Approval:
project. It aims to def ine roles, accountability. enf orced or resolved Sub-contractors need the
resolve conf licts, and ensure ⚫ Coordination beyond the architect’s owner’s approval bef ore
collaboration to achieve the Emphasis: The mediation. starting work.
project’s goals. contractor's role as ⚫ Sub-Contractor ⚫ Coordination of Work:
the central Independence: Sub- The main contractor must
coordinator contractors may f eel ensure smooth coordination
promotes ef f iciency overly restricted under between separate
and minimizes the contractor’s contractors and sub-
conf licts. authority, potentially contractors.
⚫ Conflict Resolution limiting their innovation ⚫ Payments: The contractor
Mechanism: The or f lexibility. must ensure sub-contractors
architect’s are paid in a timely manner.
involvement in ⚫ Contract Terms Apply:
resolving disputes Sub-contractors must
f osters f airness and comply with the same
transparency. contract terms as the main
⚫ Liability contractor.
Assignment:
Holding contractors
responsible f or their
sub-contractors
ensures quality and
adherence to the
project plan.
Section VIII: - This section ⚫ Right to Request ⚫ Work Suspension ⚫ Suspension of Work: The
Suspension of outlines the procedures and Clarifications: Risks: The ability to owner can suspend work if
Work and guidelines f or suspending or Contractors can suspend work could necessary, but the
Termination of terminating a construction request clarif ication lead to project delays contractor will be paid f or
Contract contract. It details the f rom the architect on if abused or not work done up until that
conditions under which the unclear plans or adequately mediated. point.
owner or contractor may instructions. ⚫ Liens Against the ⚫ Contract Termination:
suspend or terminate the ⚫ Work Suspension Owner: The process The owner can terminate
work, the rights and Clause: Contractors could harm the the contract if the
obligations of both parties in are empowered to owner's f inancial contractor f ails to perf orm
such events, and the suspend work due to standing if not properly their duties.
processes f or resolving delays or non- managed or justif ied. ⚫ Reasons for Termination:
f inancial settlements and compliance by the Termination can happen
liabilities. The section owner, ensuring due to f ailure to f ollow the
emphasizes accountability, f airness. contract, poor perf ormance,
f airness, and adherence to ⚫ Payments and or delays.
proper documentation and Liens: Contractors ⚫ Notification: The
notif ication procedures. are protected contractor must be notif ied
through mechanisms bef ore termination, giving
that ensure timely them a chance to address
payments f or issues.
completed work. ⚫ Payment Upon
Termination: If the contract
is terminated, the contractor
is entitled to payment f or
completed work.
Section IX: This section outlines the ⚫ Safety Emphasis: ⚫ Indemnity Clause: ⚫ Safety Precautions: The
Responsibilities obligations, responsibilities, The contractor’s The contractor’s contractor is responsible
and Liabilities of and liabilities of the contractor obligation to maintain indemnif ication of the f or saf ety on-site and
Contractor and and owner during a saf ety on-site and owner can sometimes must f ollow saf ety laws.
Owner construction project. It comply with local f eel overly one-sided, ⚫ Accident Responsibility:
includes provisions on laws is crucial f or especially f or The contractor is liable f or
accident prevention, worker and public unavoidable incidents. accidents, injuries, or
damages, insurance, bonds, protection. ⚫ Final Payment damages caused by their
liens, disputes, and ⚫ Insurance Withholding: work.
arbitration. Requirements: Requiring lien ⚫ Insurance: The contractor
Mandatory releases or bonds must maintain insurance to
insurance liability, bef ore f inal payment protect against bodily injury,
f ire, perf ormance could delay payments death, or property damage.
bonds minimizes unnecessarily, ⚫ Guarantee: The contractor
risks f or all af f ecting the guarantees their work f or at
stakeholders. contractor's cash f low. least one year and must
⚫ Guarantee Bonds: ⚫ Architect’s Decision repair any def ects at no
Guarantee bonds Power: The cost to the owner.
ensure the quality of architect’s decisions ⚫ Dispute Resolution:
materials and on disputes being Disputes can be resolved
workmanship, f inal and conclusive through arbitration if needed.
protecting the owner. may f eel biased
⚫ Arbitration Clause: without proper checks
Formal arbitration and balances.
processes provide a
structured approach
to resolving disputes
without litigation.