Basic Contract Documents
A construction contract is a legal agreement between the client and the contractor in construction industry. Each construction project should have a contract and each contract should include basic contract documents. There are a lot of construction contract types used in the construction industry and contract management includes preparation, analysis and execution of contracts by the parties to those contracts to guarantee functional and economical performance is increased, and risks are decreased.
Preparation of an effective contract is the first step of a successfull contract management.
Below basic contract documents should be included in every solid contracts.
1. Contract Agreement
Contract agreement defines the agreement between the client and the contractor in which the parties are specified and their responsibilities are defined in the construction process. It is the essential document to which other contract documents attach or reference.
2. Scope of Work Definition
A scope of work should describe the project, the project deliverables and the statement of work. It must specify all tasks, duties and limitations to get anticipated results in accordance with the project objective.
3. General Conditions
General conditions define all general terms and items such as utilities, vehicles, organization structure, mobilization and demobilization. But these items are not direcly related to the construction activities. Obligations of both parties, general conditions, overhead costs, bonus and some other conditions are included in this portion.
4. Special Conditions
Special conditions describe specific requirements and instructions for the work. Mostly they are addendums to the general conditions.
5. Bill of Quantitites
Bill of Quantities is a document used for tendering itemizes all work to enable the contractor to price the work for which he or she is bidding. It includes quantity and price for each work and after bidding phase, it will be an attachment of the contract document.
6. Work Schedule
Work schedule is very important for both parties. Because a project can not be performed without a proper plan. A project schedule shows site delivery date, start and finish milestones, project duration and other useful information.
All contracts should involve drawings that form part of the work to be done. These drawings can be architectural, statical, electrical, mechanical, landscape. They must include adequate information for the entire project that’s being contracted.
8. Technical Specifications
Tehcnical Specifications describe the materials,workmanship and equipments required for a task. Typically tehcnical specifications describe the end product therefore the client should describe them clearly before the tendering stage. Every little task should be specified and deviation limits should be determined in tehcnical specifications.
9. List of Common Types of Construction Insurance
Construction insurances provide coverage for material, risks, natural disasters, employees.
Performance bonds, specific types of coverages and all risk insurance should be determined clearly in the contract in order to protect both parties and avoid conflicts.
For a successfull contract and project management basic contract documents should be created effectively. Additional documents can be added to main contract document depending on trade specification. The purpose of these documents is to develop a system to solve claims and potential problems in the case of any legal action.