CONTRACT AND CONTRACTOR: • Contract comes from Contrctum (Latin) means drawing

together. • Indian Contract Act came into force on 1st Sept, 1872. • It contains 266 sections. • The
one who takes up the contract is the contractor and he is selected through a proper screening
process. • A contract is a legally binding or valid agreement between two parties. The law will
consider a contract to be valid if the agreement contains all of the following elements: • Offer and
acceptance; • An intention between the parties to create binding relations; Consideration to be paid
for the promise made; • Legal capacity of the parties to act; • genuine consent of the parties; and •
Legality of the agreement.
An agreement that lacks one or more of the elements listed above is not a valid contract.
DIFFERENCE BETWEEN A CONTRACT AND A TENDER:
Tender Documents: A tender is an offer in writing to contractors to execute the some specified
works or to supply specified materials within a fixed time frame and as per conditions of contract
and agreement between the contractor and the owner or the department or the party. The tender
documents contains the bill of quantities (BOQ), specifications of the works to be carried out, time
frame for the completion of the work, conditions of the contract and plans and drawings. These
documents are provided to the contractor on the payment of certain fees. The contractor who quotes
the lowest rates for the overall works are offer the contract to execute the work.
Contract Documents: Contract documents are the agreement between the owner or the party or the
department and the contractor to execute the works as specified in the tender documents as per
conditions of contract on the rates quoted by the contractor. • Tender we often called as an
invitation of trade / bid. • Whereas Contract is an agreement which is enforceable by law. •
Sometimes buyer / seller intend to procure/sell his/her requirements, subsequently, he / she usually
request for an offer / quotation from potential bidder. His/her request consists of certain parameters
to perform the work, called as tender. Now, when buyer / seller submits their offer / quotation and if
is accepted by the other party, then buyer / seller send an formal agreement to go for performance
the required parameters as agreed. This forms as a contract. • So, we can understand the chain of
contract formation. First it is Tender, then offer, Offer + Acceptance=Agreement, Agreement +
enforceable by law=Contact.
GENERAL PRINCIPLES OF CONTRACT:
A Contract should, • Describe scope of work • Establish time frame • Establish cost and payment
provision • Set fourth obligations and relationship • Minimize disputes • Improve economic return
of investment • A construction contract is a mutual or legally binding agreement between two
parties based on policies and conditions recorded in document form.
• The two parties involved are one or more owners, and one or more contractors.
• The owner has full authority to decide what type of contract should be used for a specific
development to be constructed and to set forth the legally-binding terms and conditions in a
contractual agreement.
TYPES OF CONTRACT:
The main classification of type of contract is as follows, • Separated Contracts • Management
Contracts • Integrated Contracts
1)SEPARATED CONTRACTS:• Traditional system & sequential process • Division b/w design
& construction responsibility • Design - project briefing, outlining proposal, detail design, etc. •
Delay - preparation & approval of drawings, mistakes in design documentation • Lengthy tendering
period & suitable for small to medium sized projects where time is not critical
Major types: 1. Lump sum contract 2. Measurement contract 3. Item rate 4. Percentage rate 5. Cost
plus percentage
2)MANAGEMENT CONTRACT: • Managing contractor is appointed and he deals with number
of small contractors • Client deals with only contractor and designer • Contractor provides planning,
management & coordination services to client • Responsibilities: • Preparing overall construction
schedule • Work package schedule • Coordinating with designer • Assistance in subcontractors
selection • Coordinating among different subcontractors
3)INTEGRATED CONTRACT:
Design- build:
• In this contractor takes the responsibilities of both design & construction based on basic plans
drawn up by the client • This avoids conflict b/w designer & contractor • Often adopted when client
has no in-house design with him • This method reduces the cost, develops the technical power in
contractor & reduces disputes
4)LUMP SUM CONTRACT: • In a lump sum contract an owner agrees to pay a contractor a
specified lump sum after the completion of work without a cost breakdown. After work no detailed
measurements is required. • The lump sum agreement will reduce owner risk, and the contractor
has greater control over profit expectations. • The time to award this type of contract is also longer;
however, it will minimize change orders during construction.
Lump Sum Contract Advantages:
• 'Fixed' construction cost. • Minimize change orders. • Owner supervision is reduced when
compared to Time and Material Contract. • Bidding analysis and selection process is relatively
easily.
Lump Sum Contract Disadvantages:
• It presents the highest risk to the contractor. • The Owner might reject change order requests. •
The project needs to be designed completely before the commencement of activities. • The
contractor will select its own means and methods.
5)TIME AND MATERIAL CONTRACTS OR UNIT PRICE CONTRACTS:
• Unit price contracts are what we call an hourly rate. This type of contract is typical in freelance
work. • The main advantage of this type of contract is that the seller will make money for every
hour he spends on the project. • As Project Manager, it is his responsibility to enter into the right
kind of contract with service provider to reduce risk and have the job delivered on time.
6)LUMPSUM AND SCHEDULE CONTRACT:
• In a lump sum contract an owner agrees to pay a contractor a specified lump sum after the
completion of work without a cost breakdown with a specified time.
Lump Sum And Scheduled Contract Advantages:
• 'Fixed' construction cost and time. • Can be handover on time. • Owner supervision is reduced
when compared to Time and Material Contract.
Lump Sum And Scheduled Contract Disadvantages:
• It presents the highest risk to the contractor • The Owner might reject change order requests.
7)COST PLUS FIXED FEE CONTRACT:
• A cost-plus-fixed-fee contract is a cost-reimbursement contract that provides for payment to the
contractor of a negotiated fee that is fixed at the inception of the contract. • The fixed fee does not
vary with actual cost, but may be adjusted as a result of changes in the work to be performed under
the contract.
Advantages: • A cost-plus contract is often used when long-term quality is a much higher concern
than cost. • Final cost may be less than a fixed price contract because contractors do not have to
inflate the price to cover their risk.
Disadvantages: • There is limited certainty as to what the final cost will be. • Requires additional
oversight and administration to ensure that only permissible costs are paid and that the contractor is
exercising adequate overall cost controls. • Properly designing award or incentive fees also requires
additional oversight and administration.
COST PLUS PERCENTAGE OF COST CONTRACT:
• In construction, a method of payment to a contractor in which an additional amount of money,
expressed as a percentage, is paid by the client that is designated to cover the contractor's overhead
costs. When paid as a predetermined profit, the client will usually require a strict accounting of
expenses. • Suitable for small jobs.
NEGOTIATED CONTRACT:
• Contract awarded on the basis of a direct agreement with a contractor, without going through the
competitive bidding process. • Also called negotiated agreement.
MEASURABLE CONTRACT:
• Payment made according to actual work varied out, which is determined by physical
measurements.
PACKAGE CONTRACT:
• Packaging is normally associated with general contractors who split a large project into a series of
work packages suitable for obtaining tenders and placing orders with the subcontracting and goods
supply chain thereby transferring risk for delivering some elements of the works to others. •
However the design team, generally advised by the cost consultant, may elect to pre-empt a general
contractor by selecting specialist systems required for early inclusion into the evolving design. This
creates a built-in package requirement.
CONTINUING CONTRACT:
• Continuing contract is a contract calling for periodic performances. Under such a contract,
performance is in several units over a period of time. It is an executory, as distinguished from an
executed contract.
ITEM RATE CONTRACT: • The contractor agrees to carry out a unit quantity of particular work
(cm3, m2) for particular sum of money. • In this tender document consists of detailed BOQ , where
estimated quantity of work for each item involved in particular work are listed along with detailed
description. • Total contract value - multiply total quantity with quoted item rate and add cost of all
items.
PERCENTAGE CONTRACT: • Tender document contains scheduled rates for each work in
addition to detailed estimate for execution of work. • Contractor works out his rates for items I
usual manner& arrives at total price which is converted to total percentage by which amount differs.
• Adopted by government departments & large organizations.
DESIGN, MANAGEMENT AND CONSTRUCTION CONTRACT: • Client appoints single
contractor to take care of design & construction. • Basic design concepts may be provided by client
himself or through an independent agency. • After basic concepts client calls for tender and selects
appropriate agency for designing, management & construction services.
THE TURN-KEY CONTRACT: • Responsibilities of all activities are taken up by contracting
agency. • The owner simply wants to turn the key at completion to take over the facility. • All
activities related to surveying, drawing specifications, design, project planning, construction and
test operation are given to one large organization. • They are useful in projects involving
combination of civil, electrical, mechanical, chmical& mining engineering. Mostly seen in
petrochemical plants & nuclear power stations.
Steps:
• In a project client first prepares documents regarding requirements of facilities to be constructed.
• Later he selects the best proposal submitted by multiple bidders.
DISCHARGE OF CONTRACT: • As per the Indian Contract Act – 1872 – “Discharge of
contract means the termination of a contractual relationship between parties”. • A contract is said to
be discharged when it ceases to operate, i.e., when the rights and obligation created by it come to an
end. • For e.g. two parties A and B, make a contract to build a fly-over in a city. A is the municipal
authority of the city & B is a construction company. Due to some reasons the contract gets
discharged. Then the both parties are free from the obligations of contract .i.e. the rights and
obligations of the parties come to an end.
how a contract can get discharged:
• A Contract may be discharged in any of the following way: • By Performance • By Agreement or
by consent • By Impossibility of performance • By Promisee failing to offer facilities for
performance • By Death • By refusing tender of performance • By unauthorised material alteration
of contract • Discharge by lapse of time • By operation of law • By Breach of contract
CONTRACT DOCUMENTS:
• Contract documents are the written documents that define the roles, responsibilities and work
under the construction contract, and are legally binding on the parties (Owner and Contractor). •
The individual documents that constitute the construction are called the Construction documents.
contents of contract document:
• Copy of public notice or copy of letter of invitation • Copy of work order • Letter of offer by
contractor • Articles of agreement • General conditions of contract • Appendix • Specs of work and
material references to standard specifications • Contract Bill • Contract drawings
CONTRACT DRAWINGS:
A contract document consists of the following contract drawings,
• Architectural Drawings • Setting out plan, Floor plans, Elevation drawings, Section drawings,
Working drawings, Opening schedules, Road drainage plan, Flooring plan, Furniture plan and
Typical details • Electrification Drawings • Electrical legend, Floor lighting plan, Floor power plan,
Single line drawing, Fire alarm layout, Floor sound system, CCTV Camera, Equivalency chart,
Lightening protection earthing details. • Public health Drawings • Legend and general notes,
Sewerage and rainwater layout plan, Manhole schedule, Plumbing construction details and water
supply layout. • Structural Drawings • General notes, Typical sections, Foundation excavation plan,
Footing sections, Ground floor column plan, Column sections, Ground floor plinth beams plan,
Plinth beams sections, Ground floor beam plan, Beam sections, Ground floor slab bottom rebar
detail, Ground floor slab top rebar detail, Ground floor slab section, Overhead water tank design
and Septic tank design.
• Fire fighting Drawings • Legend and notes, Fire fighting layout plan (for each floor) • HVAC
Drawings • Legend and general notes, AC layout plan (for each floor), Equipment schedule and
Installation detail
CONTRACT SUM:
• An amount representing the total consideration in money to be paid to the contractor for services
performed under the contract for construction. It should not alter or adjusted. It can only be altered
only in accordance with the express provisions of contract agreement. • The contract sum is the
price agreed with the contractor and entered into the contract. The contract sum should be
calculated and checked very carefully as errors are deemed to have been accepted by both parties. •
The contract sum may be subject to adjustment under the terms of the contract for example: •
Variations. • Fluctuations. • Prime cost sums. • Provisional sums. • Payments to nominated sub-
contractors or nominated suppliers. • Statutory fees. • Payments relating to opening-up and testing
the works. • Loss and expense.
• When the contract sum is adjusted, this adjustment should be taken into account in the valuation
of subsequent interim certificates. • Preparing the final account is the process of calculating and
agreeing any adjustments to the contract sum at the end of the defects liability period so that the
amount of the final payment to the contractor can be determined. • The amount of the final payment
is then set out in the final certificate (or final statement). • NB it is possible for the final certificate
to show that money is owed to the client, rather than due to the contractor. • Construction contracts
may in fact not require the preparation of a final account, although they generally do require the
contractor to provide all documents necessary for the adjustment of the contract sum within a
specified time, and set out the time scale for, and consequences of, issuing the final certificate. • On
measurement contracts, the contract sum may not be known when the contract is entered into, but
instead is calculated as the works progress based on some agreed method of measurement.
CONTRACT SUM ANALYSIS:
• Initial cost appraisals (studies of options prepared during the feasibility study stage). • Elemental
cost plan (prepared during the project brief stage and carried through to detailed design). •
Approximate quantities cost plan (from the end of detailed design through to tender). • Pre-tender
estimate (prepared alongside tender documentation). • Tender pricing document (strictly speaking
this is not a priced document, but is part of the tender documentation issued to the contractor for
pricing). • Contract sum (agreed with the contractor during the tender period and adjusted during
the construction period). • Contract sum analysis (a breakdown of the contract sum prepared by the
contractor on design and build projects). • Final account (agreed during the defects liability period).
CONTRACT BILL:
• Bills of contract included in the contract are known as contract bills. • If not mentioned, then the
quantities shall be worked out (measured) as per the standard method of measurement issued by ISI
(Indian Standard Institution). • If architect feels the other way it shall be done accordingly
irrespective of what is in ISI. • The bill of quantities (sometimes referred to as 'BOQ') is a document
prepared by the cost consultant (often a quantity surveyor) that provides project specific measured
quantities of the items of work identified by the drawings and specifications in the tender
documentation. • The quantities may be measured in number, length, area, volume, weight or time.
Preparing a bill of quantities requires that the design is complete and a specification has been
prepared. • The bill of quantities is issued to tenderers for them to prepare a price for carrying out
the works. • The bill of quantities assists tenderers in the calculation of construction costs for their
tender, and, as it means all tendering contractors will be pricing the same quantities (rather than
taking-off quantities from the drawings and specifications themselves), it also provides a fair and
accurate system for tendering. • The contractor tenders against the bill of quantities, stating their
price of each item. • This priced bill of quantities constitutes the tenderer’s offer. • As the offer is
built up of prescribed items, it is possible to compare both the overall price and individual items
directly with other tenderers offer, allowing a detailed assessment of which aspects a tender may
offer good or poor value. • This information can assist with tender negotiations.• The priced bill of
quantities will also: • Assist with the agreement of the contract sum with the successful tenderer. •
Provide a schedule of rates assisting with the valuation of variations. • Provide a basis for the
valuation of interim payments. • Provide a basis for the preparation of the final account.
DUTIES AND LIABILITIES OF CONTRACTOR, ARCHITECT AND EMPLOYER:
For contract execution, it is essential that all persons involved in the contract directly or indirectly
should discharge their duties and responsibilities with honesty and in fairness. Then duties and
responsibilities of some important persons involved in the contract are given as under:
CONTRACTOR: • The Contractor’s duties and responsibilities under contract are:
• He shall visit to the site prior to tendering for understanding difficulties and soil conditions of the
site. • He shall submit a performance bond as a security deposit (5% 0f the contract value) unless
specified in the contract in the form of Bank Guarantee or Government Bond etc. The security
deposit is retained by the Architect till “Defect Liability Period” is over. It is basically meant to
indemnify the client against losses from defects under the clause of the contract or due to the failure
of the contractor on Site.• He shall provide all necessary plants and equipments and build office
accommodation for his employees. He shall also build a hut for the watchman and temporary sheds
for storage of materials along with necessary sanitary conveniences for staff and workers on the
site. All these shall be removed when directed.
• He shall make payments for quarry fees, royalties and other charges. He shall also inform the
concerned authorities about the work. He shall get back such payments, if permissible under the
conditions of the contract. • He shall obtain all necessary licenses and permits required for the
controlled construction materials etc. • He shall submit a progress chart to the Architect for his
approval within 20 days from the date of executing the contract. • He shall make arrangements for
the water supply and temporary electric connection on the site at his own cost.
• He shall sub-let the work only with the written consent of the Architect. • In case the specified
material is not available in the market at required time, use of an alternative material may be done
with the consent of the Architect. The contractor, however, shall be responsible for its failure.
• It is implied that the contractor shall be responsible for the safety of adjoining buildings while
executing the works. • The contractor shall have no authority to vary the work from the drawings,
specifications and schedule of quantities, even on the instructions of the employer, without
consultation of the Architect. • If any material and workmanship are not found up to the mark any
time by the Architect, the same shall be replaced by the contractor at his own cost.
• He shall be allowed admittance to the site on date of commencement of the work in order to
complete the work in stipulated time. • He shall be liable to set up the work as per dimensions of the
drawings and in line, level and plumb. • He shall submit all samples and shop drawings for approval
of the Architect within 60 days of the date of executing the contract or not more than 120 days
before the date on which the particular work is scheduled to begin. • The Architect and his
representatives shall have access to work for inspecting and checking the materials and
workmanship at all reasonable times. • He shall coordinate the works of all sub- contractors and
appoint a site— Engineer as his representative to look after the work particularly in his absence.
• He can be granted extension of time only on application, when work is delayed due to any one or
more reasons given below:• Exceptionally bad weather for days together. • Damage to work due to
fire, flood or earthquake etc. • Civil war or labour strike etc. • Lot of and variations and postpone of
work. • Non availability of required drawings and instructions from the Architect. • Delay on the
part of nominated sub- contractor/supplier. • Opening of work for inspection which takes long
duration and later found as per specifications. • Having no control over availability of materials in
time. • He shall pay the “Liquidated damages” to the employer, if he fails to complete the work
within time limit. • It is implied that he shall observe the following:
• No child labour less than 14 years age shall be employed.
EMPLOYER: The employer’s duties and responsibilities under contract are as under:
• To enter into a contract with the contractor in all fairness.
• To give possession of site to the contractor on due date.
• To make all payments as certified by the Architect to the contractor in time.
• Not to interfere with the progress of work and not to issue orders for extra work directly to the
contractor. • To appoint sub- contractor, consultants and other employees like clerk of works or site
manager etc. on the advice of the Architect.
• To take a note of observations made by the Architect on his inspection and visit to the site.
ARCHITECT: • The Architect’s duties and responsibilities under contract are:
• To act as employer’s / client’s true representative during total construction period.
• To give periodical Visit to the site for keeping in track over the progress and quality of work.
• To keep informed the client about progress of the work at intervals. • To safe guard the interest of
the client/employer against defects and deficiency of the work.
• To Condon the work which is not fit as per contract documents and to stop the work as and when
necessary. • To work as Interpreter of the contract in all fairness and see that both the parties of the
contract discharge their duties and responsibilities fairly well.
• To give decisions in all matters connected with the contract documents, work and claims etc.
• To issue further drawings, details, written instructions, directions and explanations from time to
time as may be necessary for:
• Variation or modification of design. • Quality, quantity, additions, omissions or substitution of any
work. • Any discrepancy or divergence between drawings and specifications. • Removal of rejected
materials and improper work. • Dismissal from work any person employed by the contractor who is
incompetent or misconducts the architect or his representatives. • Order for opening of any covered
work for inspection. • Amending and making good of any defect under defect liability period. •
Postponement of any work to be executed under the provision of the contract.
• The Architect, however, shall not be responsible to the client for contractor’s failure and also to
the contractor for his losses. His responsibility shall be limited to:
• Get the drawings approved from all concerned authorities and obtaining necessary no objection
certificate (NOC) as may be necessary. • Design the work as per building rules and regulations and
other statutory requirements. • Give notice about commencement of work and submit completion
certificate for it as prescribed in rules and regulations.
• Checking of land use, right of ownership and area, boundaries and soil conditions of the site etc.
based on the data supplied by the client.
SUB-CONTRACTORS:
• The duties and responsibilities of sub-contractors are as under:
• They shall execute the work to the satisfaction of the Architect.
• They shall follow the main contractor for the same duties and responsibilities.
• They shall give access to the Architect and his representatives to the workshops and work at site.
• They shall complete the work within specified time. The extension of time, if required, shall be
granted by the main contractor, but with the written consent of the Architect.
• They shall be liable to pay the liquidated damages to the main contractor.
• Their retention fund shall also be deducted from their running bills.
• In certain cases, they may receive their payments directly from the employer that too on the
certification of the Architect.
• Their payments shall subject to the indemnification against latent defects.
CONSULTANTS:
The duties and responsibilities of consultants are as under:
• They shall be appointed on the advice of the Architect and work in coordination with him
• They shall finish their jobs in specified time and if required, give visits to the site.
• They shall receive their fees directly from the employer on the advice of the Architect.
• In case of negligence of any consultant, the Architect shall file a suit against him.
QUANTITY SURVEYOR:
The duties and responsibilities of the quantity surveyor are as under:
• To prepare the estimate of works correctly.
• To prepare a schedule of materials to be priced by the contractors for their tenders.
• To render his advice to the Architect on the value of the works for payments of Interim and final
certificates to the contractor.
• To measure and value all variations of work under the contract.
ADMINISTRATION OF CONTRACTS:
• The contract administration involves those activities which are to be performed after a contract has
been signed. • It determines how well the employer and the contractor have performed to meet the
requirements of the contract. • It encompasses all dealings between the employer and the contractor
from time, the contract is signed, work is completed and accepted and payments have been made.
• And also all disputes have been resolved. • In contract administration, the focus is kept on
obtaining supplies and services of requite quality on time and within budget.
• The legal requirements of the contract are determined in proper course of action by the Architect,
who administers the contract exercising his professional skill and judgment, to protect effectively
the interest of the employer and the contractor both.
The specific nature and extent of contract administration varies from contract to contract:
• It can range from minimum acceptance of a delivery of work and payment to the contractor to
extensive involvement of audit and procurement of materials and workmanship throughout the
contract period. • Factors influencing the degree of contract administration include the nature of
work, the type of contract and the experience and commitment of the personnel involved. • The
contract administration starts with developing clear, concise and performance based statements of
work to the extent possible for preparing a contract administrative plan which can measure the
contract performance and provide guidance to make payments accordingly.
DETERMINATION OF CONTRACTS:
• Determination of Employment and Termination Of Contract are Same In Meaning And in terms of
Implications. • One of the common problems in the construction industry which usually has serious
implications on the project and the parties concerned is termination of contract or determination of
employment by the Employer or Contractor. • The action of determination or termination almost
always brings the contracting parties into arbitration or litigation. • However, although the
implications are serious for the parties concerned to arrive at such a precarious state, many players
in the construction industry still lack the understanding and appreciation of the difference between
determination of employment and termination of contract. • Often the term has been construed,
mistakenly, as being the same in meaning and implications when in fact they are somewhat
different and can be well distinguished. Further, it is often said that a contract has been determined
or the contractor’s employment has been terminated, which in the strictest sense and interpretation,
is wrong. • It means that although the employment of the contractor has ended, the contract
nevertheless still subsists but the rights and obligations of the parties are governed by the post
determination provisions as set out in the contract. • A good firm should have procedures and
provisions for breaking of contract. • Contract document lays down definite procedure to make and
break contract. • There are two parties to it, i.e. Owner and the contractor
OWNER: Under following reasons and conditions
1. DEFAULT: • Suspension before completion by contractor • No regularity and diligence • Non
compliance to written of verbal instructions • Sub letting with order to consent in writing Procedure:
• Written notice specifying default • If contractor notices to default for more than 14 days • Or
repeat same time and again • Owner can determine the employment of contractor within 10 days
2. BANKRUPTCY
3. OFFERING GIFT TO GET THE CONTRACT: • In above circumstances the owner has the
following rights and duties to get the work completed. • Employ other. • Determined contractor to
hand over the agreements for supply of material and then owner shall pay the suppliers or sub
contractors • Removal of determined contractors completely • Direct or damage losses to be paid •
Time and other indirect losses can be recovered from retention money
CERTIFICATE OF PAYMENTS:
• Many standard forms of contract provide a certification system for payments. • An architect's
certificate for payment is relied upon by the owner as acknowledgement of a professional opinion
as to the progress of the work, the owner's lender in releasing funds in accordance with the opinion
and the contractor as an assistance in advancing payment under the provisions of the contract with
the owner. • A clear, concise and consistent standard format provides the architect with a vehicle in
which to deliver professional certificates for payment. • The parties have agreed that he will be the
particular expert to carry out this function. • Two types of certificate need to be differentiated,
namely interim and final certificates.
1)INTERIM PAYMENT CERTIFICATES:
• Most standard forms of contract state an entitlement on the part of the contractor to interim
payment. • These payments assist in the contractor`s cash flow, but the actual determination of the
contractor`s entitlement is not made until the final certificate. • The interim payments are therefore
sums paid on account of whatever the contractor might eventually be entitled to recover from the
Employer. • Most standard forms make the issue of a certificate a condition precedent to the
contractor`s right to payment. • It is a matter of fact whether payment for work carried out is a
statement of acceptance or approval. • Most contract provisions for interim certification and
payment are based on cumulative valuation of work done, and are only for payments on account. •
They are neither binding nor conclusive of acceptance of the work.
2)CERTIFICATE OF VISUAL COMPLETION- Statement of the fact which shows that the
works given in the contract are complete to the satisfaction of the architect. • This certificate fixes
the date of commencement of defect liability period as well as it fixes the last date of calculation of
liquidated damages.
3) PENULTIMATE CERTIFICATE- This certificate is issued to collect the necessary fees from
the contractor for which survey /engineer is bound
4)FINAL CERTIFICATES: • Some standard forms of contract, notably JCT Forms, IChemE
Forms and MF/1, include clauses which make conclusive the Final Certificate in relation to the
fulfilment of specified obligations under the Contract. • The Courts have upheld such clauses and
given effect precisely to the terms of the clause, sometimes to the surprise of the construction
industry. • In all cases it is a matter of construction of the particular contract.
ARBITRATION:
• All disputes or differences which may arise between the Client and the Architect under
"Conditions of Engagement and Scale of Charges" with regard to the meaning or interpretation or
matter or things done or to be done in pursuance hereof, such disputes and differences shall be
referred for arbitration to the Council of Architecture. • The arbitrator shall be appointed by the
President, Council of Architecture. The arbitration shall be conducted as per the provisions of the
Arbitration and Conciliation Act, 1996. • The decision and award of the arbitrator shall be final and
binding on the Architect and the Client.
principles of arbitration:
1) independence and impartiality
The conciliator should be independent and impartial. He should assist the parties in an independent
and impartial manner while he is attempting to reach an amicable settlement of their dispute.
2) fairness and justice
The conciliator should be guided by the principles of fairness and justice. He should take into
consideration, among other things, the rights and obligations of the parties, the usages of the trade
concerned, and the circumstances surrounding the dispute ,including any previous business
practices between the parties.
3) confidentiality
The conciliator and the parties are duly bound to keep confidential all matters relating to
conciliation proceedings. Similarly when a party gives information to the conciliator on the
condition that it is kept confidential, the conciliator should not disclose that information to the other
party.
4) disclosure of the information
When the conciliator receives a information about any fact relating to the dispute from a party, he
should disclose the substance of that information to the other party. The purpose of this provision is
to enable the other party to present an explanation which he might consider appropriate.
5) co-operation of the parties with conciliator / arbitrator.
The parties should in good faith cooperate with the conciliator. They should submit the written
materials, provide evidence and attend meetings when the conciliator requests them for this
purpose.
INDIAN ARBITRATION ACT:
INDIAN BARE ACTS THE ARBITRATION AND CONCILIATION ACT, 1996 No.26 of 1996
[16th August, 1996]
PRELIMINARY -part i arbitration chapter i -chapter ii arbitration agreement -chapter iii
composition of arbitral tribunal- chapter iv jurisdiction of arbitral tribunals -chapter v conduct of
arbitral proceedings- chapter vi making of arbitral award and termination of proceedings -chapter
vii recourse against arbitral award (section 34)- chapter viii finality and enforcement of arbitral
awards (section 35 & 36) -chapter ix appeals (section 37) -chapter x miscellaneous- part ii -
enforcement of certain foreign awards - chapter i
PRINCIPLES OF PROCEDURE
1) INDEPENDENCE AND IMPARTIALITY [SECTION 67(1)]-
The conciliator should be independent and impartial. He should assist the parties in an independent
and impartial manner while he is attempting to reach an amicable settlement of their dispute.
2) FAIRNESS AND JUSTICE [SECTION 67(2)]-
The conciliator should be guided by the principles of fairness and justice. He should take into
consideration, among other things, the rights and obligations of the parties, the usages of the trade
concerned, and the circumstances surrounding the dispute, including any previous business
practices between the parties.
3) CONFIDENTIALITY [SECTION 70]-
The conciliator and the parties are duly bound to keep confidential all matters relating to
conciliation proceedings. Similarly when a party gives a information to the conciliator on the
condition that it be kept confidential, the conciliator should not disclose that information to the
other party.
4) DISCLOSURE OF THE INFORMATION [SECTION 70]-
When the conciliator receives a information about any fact relating to the dispute from a party, he
should disclose the substance of that information to the other party. The purpose of this provision is
to enable the other party to present an explanation which he might consider appropriate.
5) CO-OPERATION OF THE PARTIES WITH CONCILIATOR [S. 71]
The parties should in good faith cooperate with the conciliator. They should submit the written
materials, provide evidence and attend meetings when the conciliator requests them for this
purpose.
POWER AND DUTIES OF ARBITRATORS:
(1) APPLICATION OF THE LAW.
In reaching his or her decision, the arbitrator shall follow applicable law, as embodied in statutes,
regulations, court decisions, interpretations of the agencies charged with the enforcement of ERISA,
and other pertinent authorities.
(2) PREHEARING DISCOVERY.
The arbitrator may allow any party to conduct prehearing discovery by interrogatories, depositions,
requests for the production of documents, or other means, upon a showing that the discovery sought
is likely to lead to the production of relevant evidence and will not be disproportionately
burdensome to the other parties. The arbitrator may impose appropriate sanctions if he or she
determines that a party has failed to respond to discovery in good faith or has conducted discovery
proceedings in bad faith or for the purpose of harassment. The arbitrator may, at the request of any
party or on his or her own motion, require parties to give advance notice of expert or other
witnesses that they intend to introduce.
(3) ADMISSIBILITY OF EVIDENCE.
The arbitrator determines the relevance and materiality of the evidence offered during the course of
the hearing and is the judge of the admissibility of evidence offered. Conformity to legal rules of
evidence is not necessary. To the extent reasonably practicable, all evidence shall be taken in the
presence of the arbitrator and the parties. The arbitrator may, however, consider affidavits,
transcripts of depositions, and similar documents.
(4 PRODUCTION OF DOCUMENTS OR OTHER EVIDENCE.
(a)The arbitrator may summon witnesses or documents upon his or her own initiative or upon
request by any party after determining that the evidence is likely to be relevant to the dispute. (b)
Prehearing conference. If it appears that a prehearing conference will expedite the proceedings, the
arbitrator may, at any time before the commencement of the arbitration hearing , direct the parties to
appear at a conference to consider settlement of the case, clarification of issues and stipulation of
facts not in dispute, admission of documents to avoid unnecessary proof, limitations on the number
of expert or other witnesses, and any other matters that could expedite the disposition of the
proceedings. (c) Proceeding without hearing. The arbitrator may render an award without a hearing
if the parties agree and file with the arbitrator such evidence as the arbitrator deems necessary to
enable him or her to render an award.
The following are the powers and duties of the arbitrators:
• Incase of joint arbitrators an “UMPIRE” has to be appointed within 30 days from the date of
entering upon the arbitration reference. • Award has to be given within four months from the date of
entering upon the arbitration reference or within extended time limit. • Person’s witnesses from
each side appearing on oath have to be examined and heard. • On legal points, opinion of the court
may be sought. • On application from the both the parties’ time limit for declaration of award
maybe extended or both the parties may be directed to apply to the court for necessary extension of
time limit. • Cost of arbitration and award and in what proportion the same has to be borne by each
party, shall be decided by the arbitrators. • Measurements and valuation and of the work maybe
decided. • The arbitrators can decide upon the withholding of final certificate of the architect and
determination of the contract by the contractor. • Clerical or computation mistakes in the award may
be corrected.
UMPIRE IN ARBITARATION • He is the person appointed by the joint arbitrator to decide upon
the disputes in case of difference between the joint arbitrators
ARBITRAL AWARD AND TERMINATION OF PROCEEDINGS:
Award
 It is a decision which is given by the arbitrators or by the umpire after careful investigation of
the case submitted to them  It conveys the findings of the arbitrators and it is binding on both the
parties Characteristics of award  It must be made within 4 months from the date of entering upon
reference or within the extended time limit  The award as a rule must be in writing  The award
must be self-explanatory without nay ambiguity, duly signed and signatures to be attested 
Stamping of an award: no stamp paper is necessary when the arbitration is in suit .But in case of
arbitration without the intervention of court the award must be in stamp paper  Due notice should
be given to the parties about the declaration of the award  The award can be a reasoned or non-
reasoned award Reasoned award • The decision of the arbitrator showing how he has arrived at such
a conclusion with discussion consideration of facts, evidences and materials before him Filing of
award in court  The award is very near to a judgment though it is not a judgment  It require
certain legal formalities to be complied before it become effective ie; this particulars has to filed in
the court
ENFORCEMENT OF ARBITRAL AWARD:
• The arbitral award is final and binding on both the parties under the code of Civil Procedure, 1908
in the manner as if it was a decree of the court. • Appeals, however, can be made to the court
against the arbitral awards.