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Australian National Training Authority

Qualification is the key to quality construction in the building industry. A person’s qualification once verified the client and the constructor enter into a contract. A contract is defined as the obligatory agreement which is concluded between two or more parties enforceable by the law. The act of the agreement is conducted by the promisor, who makes the proposal, and the promisee; the party to accept the proposal. One of the parties should offer a proposal which is established by the supplementary party for obligation. A valid contract has consideration for the constructor and engineer. An agreement not abiding by the law is considered to be a void agreement. A contract requires engaging of all the parties involved; if one party is engaged at the expense of another party, it is considered invalid. The contract’s objective must be legal for it to be valid, but if it is forbid by the law then the whole contract is considered to be a fraud. Thus, any contract is based on the equity doctrine of a common law, which encompasses the elements of offer, acceptance, consideration, capacity to create a legal relationship contract and the legal formalities which make the treaty’s conclusion possible.

  1. Nominate the type of Contracts used in your business or for each site or each type of project

The construction industry has five types of contracts namely head contract, sub-contracts, project management contracts, period management, and design and construct contracts. The construction company prepares a head contract with the client after agreeing on the payment according to work specification. The company enters into sub-contracts with other companies who have specialized in a product. For example, the company may agree to form a sub-contract with the supplier. Period contracts are created by the company with some equipment companies for use of equipment for a specified period. The company may enter into project management contract with a specified engineer to overview the work being done or with an architect. Design and construct contracts involve the agreement where the builder designs and constructs a project ordered by the client. This involves all the processes of site purchase and engagement of the architect engineers and consultants.

  1. List any supporting documents that must accompany each Contract

A contract is supported by three main documents that may be used as evidence, in case of the breach. They are also kept for record storage purposes. For a construction company, they include drawings, specifications and Bill of quantities or schedules.

  1. Drawings: they should be in conjunction with the specifications, which set out the technical requirements of the work. Specification is the direct explanation of the drawings that serves the project’s description, the material requirement and quality of workmanship.
  2. The specification: It explains the work to be carried out; drawings. It serves as legal evidence in case of litigation if the documents state the schedule and the timeline by which the contract needs to be accomplished, the equipment, materials and human resources required, site accommodation and service information concerning the construction site (Australian National Training Authority 2008).
  3. Bill of Quantities or Schedules: They present how the task is to be carried out, and act as evidence in case of breach by the company to the client. It is an appendix to the specifications. It is the basis for valuing the variations of any extra work.
  4. List the business procedure for preparing the contract for signing

The type of contract is to be carefully selected, according to the explained necessities of the construction project. The task is done through identification of documents, which collectively comprise the contract’s body, and by the identification of the requirements associated with the offer and acceptance of the contract.

  1. Analysis of the project is the first step. The client is to specify to the constructor of the site, design, Finance source, period to complete, the conditions and the Architect supervising.
  2. The company should give the client requirements for execution of the project and certificate or license showing they are capable of completing the project. It should be inclusive of the intended way to ensure the project is finished.
  3. The amount to be paid (consideration), forms of payment, and action to be taken in case of breach to the contract must also be included.
  4. In order to conclude a proper contract one is obliged to possess knowledge of various contracts’ types and the incidents they cover, the legal meaning of terms and clauses which are used in contracts for building, the definitions and interpretation which are common to construction contracts, and the relationship which exists between the institution and the clients (Australian National Training Authority, 2008)
  5. After the type of contract has been selected, the parties need to conduct all the necessary preparations. Experts’ advice is sought to enhance contract preparation. It is during the preparation of the contract that factors contributing to its termination are identified and critically analyzed. The value of the contract is calculated accurately, and the assessment of the schedule for payments has to be included in the preparation process. The final contract must be prepared in accordance to the generally accepted codes of legal practice, and in consulting the expert personnel.
  6. After the company and the client have come to an agreement on the work the signing of the documents should take place in an attorney’ office with the present of witnesses from both parties involved. The parties should be of the legal age to enter into the contract, which is verified by the lawyer or attorney.
  7. List the correct order the procedures that must be followed after the contract has been signed

The ratifying of a contract is ensured when the documents are signed by the client and the builder under the supervision of a legal law’s expert. The construction company is responsible in retaining the contract copy, the title of the site’s ownership, the architectural drawing and specifications. The client retains the documents of drawings and specifications of the project, the documents which indicate the material to be used and the workmanship quality. The documents are designed in distinctive computer programs that have the construction software, as they depict what is to be done in the process of construction. After the exchange of the documents, the contractor must inspect the construction site to assess the nature of work that needs to be carried out first.  The contractor and the sub-contractor sign an agreement in regard to the scope of work and the time required for work completion. The procedure of work is documented and stored in construction computer programs by the contractor and the sub-contractor.

There are various factors which prompt to the contract’s termination by the parties. The factors include notices which are unreasonable and vexatious, repudiation of the contract by one party in regard to the agreed definition. Satisfaction of the condition for cost completion and the effect of contract completion.

The processes above are to be followed in forming a contract and termination of a contract. In case of breach of contract the party harmed is to sue for damages or injunction as the case may be. The constructors are to ensure satisfaction of the contract requirements to ensure they do not incur losses.