Presented by:Dr.

Salaheldin Ajban
 For standardization of civil Engineering Contracts it is
necessary to unify terminology. The following
definitions are adopted from conditions of contract -
international - For works of civil Engineering
construction, FIDIC, 1983
(1) The Employer (Clinet):

 The body ordering the goods, works or services

covered by the Contract
(2) The Contractor
 The body whose offer to provide the goods, works, or
services or has been accepted by the Employer
(3) The Engineer
 The engineer/ architect appointed by the firm to act
on his behalf as provided in the contract. When a
firm of consultants is appointed by the client to
mange a contract on his behalf, the firm itself will
frequently be designated The Engineer and will
operate through a named individual whom they must
appoint with fall - or other specified - powers of the
Engineer to act for and on behalf of the firm. The
appointment is to be notified in writing to the
Contractor and the Employer
(4) Plant:
 All machinery, apparatus, articles, materials and
things of all kinds to be provided by the Contractor,
other than contractors Equipment.
(5) Contractor's Equipment
 Tools, stores, machinery, vehicles and other things
brought to site by the Contractor for the purpose of
the works but not for incorporation therein
(6) The Works
 All Plant to be provided and works and services to
be done by the Contractor under the contract
(7) The Site:
 The place where plant is to be delivered or work to
be done by the Contractor and so much of the
surrounding area as the Contractor shall be allowed
for use in connection with the Works other than purely
for the purpose access to the place
(8) A Bid
 An offer by a tenderer to enter into a contract in
response to and in general accordance with an
enquiry from the Employer (or the Engineer on has
behalf) at a price and on the terms stated
(9) Contract
 The bargain agreed between the parties in respect
of the Works as expressed in the Contract Documents
(10) Contract Documents
 Documents of all kinds (including drawings) specified
by the parties to a contract as recording their agreed
intentions under the contract.
(11) Contract Price
 The sum to be paid to the contractor for the whole
Works / Contract
(12) Contract Value
 The valuation, on the basis of the contract price, of a
stated portion of the Plant or the Works in the
condition and at the place in which it is at the relevant
time. HO (1)
(13) Agreement
 Although a contract necessitates agreement, an
agreement is not necessarily a contract. An
agreement indicates a formal contract drawn up in
the terms of an agreement and concluded under hand
or seal. It should be mentioned that in many countries
it is customary to refer both to the bargain between
the parties and to the formal Agreement by the word
(contract) with resulting confusion.
Notes
 The Employer and the contractor are the two parties
to the contract. The Engineer is not a party to the
contract although he will normally have a well
defined role in connection with it specified in the
contract Documents. The Engineer has, in fact, a dual
role. Formally, he is the appointed agent of the
Employer authorized to act for the Employer in
connection with the Contract on such matters and to
the extent that the agreement
 between the Employer and the Engineer provides. His
authority under the Contract stems from his
appointment. But he must frequently act as a quasi-
arbitrator between the two contracting parties and
must be fair and be seen to be fair in his decisions,
guided by the ethics and general practices of his
profession
 In establishing a contract between an Employer and a
contractor it is frequently the Function of the Engineer
to:
 1. draw up and issue the enquiry,
 2. receive and evaluate tenders,
 3. assist in the negotiation of points of difference
between Employer and Tenderers,
 4. recommend to the Employer where the Contract
should be placed, and
 5. Supervise construction.
 In this course we assume throughout that the Employer
has retained a firm of consultants for the contract and
has fully nominated them in the Contract Document as
"The Engineer" with wide delegated powers
 When an offer (e.g. tender) by one party is
unconditionally accepted by the person to whom it is
made - the second party, a contract is formed.
Unconditionally is a keyword which means no ife, no
buts, no provided that's etc. Any of these means a
counter - offer to be resubmitted for acceptance or
rejection
 (1) An Agreement of Views Between The Parties:
Parties must know the of each other and fully agree
on them. Refer to the previous definition of
agreement.
 (2) Intention to Create a Legal Relationship:
 This requires that the parties intend that their
agreement shall be one enforceable at law
 (3) A Genuine Consent of The Parties:
 This implies that the agreement must be clear,
voluntary and without malice. It covers the following
matters:
 (a) Fraudulent misrepresentation,
 (b) Innocent misrepresentation,
 (c) Duress (entering a contract by threatened violence to the weaker party),
 (d) Undue influence (acceptance of the weaker party to a contract non -
 voluntarily),
 (e) Genuine mistakes (including : important mistakes as to the identity of the
other party, mutual mistakes as to the existence of the subject matter of the
contract, mutual mistakes as to the identity of the subject matter of the
contract, mistakes as to the nature of the contract).
 (4) Legal Capacity of The Parties to Enter a Contract
 The persons signing the contract must be' authorized to do so
by their respective organizations either by delegation of
power or by the regulations or articles of association to commit
the organizations.
 It is common practice to state in the document itself (in the
introductory recital or with the signature at the end) the names
and positions of the persons signing for the two parties and a
statement that they are respectively authorized to do.
 (5) Legality of the Object of The Agreement:
 This is the nature of the subject matter of the contract.
It should be a legal object or the contract may be
void. Examples of illegal objects are: restrictive trade
agreement, smuggling of narcotics etc. Examples of
semi-illegal objects are: to overload a ship, avoid tax
payments, circumvent a regulation having the effect
of law etc
 (6) Valuable Consideration Passing Between The
Parties:
 It is an essential element of every simple contract
(that is, a contract not under seal) that a consideration
of value must pass both ways between the parties. In
effect this constitutes a bargain (as opposed to a gift)
in which party A gives something acceptable to party
B as a quid pro quo for the fulfillment of a promise
by B. The considerations must be specific - vague or
general considerations are not sufficient
 Contracts are not always large and complicated documents.
Contracts are not always written (purchases from shops , travel
on public transport, eating in restaurants etc. are all forms of
contracts).
 - However, in civil engineering contracts are always written.
 - The term in writing does not imply necessarily a deed or
formal contract; an exchange of letters can equally constitute
a contract if they have the essential ingredients previously
mentioned
Refers to breach of the terms of contract. Terms fall into
two categories:
1) Conditions:
 Terms expressing matters basic to the contract. Failure

to meet them implies a fundamental breach of an

essential obligation undertaken. The victim can, if he
wishes, terminate the contract and claim from the
offending party all damages he has suffered as a
result.
2) Warranty:
 .A term dealing with a matter not vital to the essence

of the contract, being subsidiary to the main purpose

for which the parties entered the contract. Its breach
does not give the right of termination of contract to
the victim. Only payment of compensations can
remedy the situation
 I. Contract Parties
Now comes _____________ of__________ and
_____
____________ of_____________ to hereby agree to
build a house on property located at
______________ and legally described
as___________________.
 The terms of this contract include all the documents
specifically listed below, and constitute the entire
terms of the agreement between the parties. The
terms of this contract shal prevail over any conflicting
provision in the documents incorporated by reference
 1. Architectural Plans and Drawings dated _______ with ___ number of
pages is hereby incorporated into this document.
 2. Specifications dated _______ with ___ number of pages is hereby
incorporated into this document.
 3. Schedule of Allowance Items dated _______ with ___ number of pages
is hereby incorporated into this document.
 4.________ ___________________________________
 _____________________dated ____ with ____
 number of pages is hereby incorporated into this document.
 The builder agrees to construct the home in
accordance with the plans, including specifications
and drawings, supplied by the buyer and
incorporated by reference into paragraph II. Contract
Documents. The builder assumes no responsibility or
liability for defects in the design or engineering in
these plans
 The buyer represents to the builder that the buyer is
the sole owner of the plans or has the legal right to
use the plans. The buyer agrees to indemnify and
hold the builder harmless for any copyright action
which may be asserted as a result of the use of the
plans
 The buyer warrants that the plans are adequate and
that the builder can rely on them. The buyer will be
liable for any damages caused by defects in the
plans, including, but not limited to, additional material
costs, additional labor costs, pro rata overhead and
profit
SECOND OPTION: USE WHEN THE
PLANS ARE SUPPLIED BY THE
BUILDER
 The buyer agrees to make a final payment in the
amount of $______ within ___ days of the buyer's
final inspection and acceptance of the property. The
buyer is not entitled to possession until after final
payment
 The builder agrees to construct the house according to
the plans. As consideration for the builder constructing
the house, the buyer agrees to pay the builder's full
costs and expenses, plus a fixed fee of $____
dollars.
 Upon signing the documents, the buyer will pay
$____ dollars as a deposit.
 Each __________________________ the builder
shall prepare for the
 buyer itemized statements of the costs and expenses
incurred to date
 The buyer will make a regular payment to the builder
on ______________ of the builder's unpaid costs and
expenses as stated in the most recent itemized
statement.
 The builder's costs and expenses include the following
 All gross wages, employment benefits, costs of workers'
compensation, and unemployment insurance incurred by the
builder as the cost of labor during the performance of this
contract, plus all salaries for builder's employees, but only to
the extent that their time is spent on work required by this
contract; The cost of all materials, supplies, and equipment
consumed in this project, including the cost of delivery and
transportation of materials; Rental charges consistent with
those prevailing in the area for the use of machinery and
equipment used at the construction site, whether owned by the
builder or by others;
 All land costs associated with building this house, which are
paid by the builder;
 All payments made by the builder for work performed
according to subcontracts under this agreement;
 All costs incurred for safety and security at the job site;
 All costs incurred for building and code compliance;
 All landscaping and backfilling costs necessary under the
contract documents;
 The builder has provided the plans, specifications and
drawings which are incorporated by reference into
paragraph II. Contract Documents, and which are to
be used for the construction of the house. The builder
makes no representation about the quality of these
plans beyond those specifically provided in the
warranties clause of this contract
 Assuming all conditions are satisfied and weather permits, the
work to be performed under the contract shall be substantially
completed no later than ________ days after the work
commences. The work shall commence within ___days after the
permits necessary to start work have been issued, the buyer
has supplied the builder with a written notice of financing as
described in paragraph V. Financing, and the buyer shall have
supplied the builder with a correct statement of the recorded
legal title of the property and the buyer's interest in the
property.
 Any time lost by reason of changes to the contract or
changes in plans by the buyer, other acts of the
buyer, strikes, weather conditions not reasonably
anticipated, or any other condition not within the
builder's control shall be added to the specified time
for completion. For any delays which are not the
builder's responsibility, the contract price shall
increase by any increase in the builder's costs caused
by the delay
 A claim for an increase in time for the performance
of the contract, or an increase in the contract cost
shall be made within ___ days after the builder first
recognizes the condition giving rise to the claim
 This contract is .contingent upon the buyer obtaining a
construction loan in the amount of $_____ dollars. All
fees and expenses of obtaining a loan shall be borne
by the buyer. The builder is not required to begin
construction until the buyer provides the builder with
written notice from the lender confirming the loan
 The buyer agrees to pay a total price of $___
dollars to the builder for construction of the house,
and the builder agrees to provide all the labor,
materials, equipment, tools, and other services
necessary to construct the house.
 Upon the signing of this contract, the buyer agrees to
pay $____ dollars to the builder as a deposit. The
buyer will make the following interim payments:
 All builder's risk and other insurance costs necessary
under the contract documents;
 All soil fees and civil engineering fees necessary for
this building project;
 All costs associated with differing site conditions. A
differing site condition is a physical characteristic of
the property that materially changes the construction
techniques from those reasonably expected at the
time of the contract.
 The buyer shall also pay to the builder a salary or
hourly rate of $_______ for the builder's actual hours
spent on supervision of the construction of this house.
 The buyer will make a final payment of all amounts
still owing within _____ days of the buyer's final
inspection and acceptance of the property. The buyer
is not entitled to possession until after final payment
 Upon signing this contract, the buyer shall be given
the selection guide that is incorporated by reference
into paragraph II, Contract Documents to help the
buyer select allowance items, materials, and colors
that will be required during the construction process.
Exterior selections must be made within __ days of
signing this contract. Interior selections must be made
within _ days of signing this contract.
 Payments not made in a timely fashion shall incur daily interest at the rate
of___% from the day the payment is due.
 If the buyer fails to pay the builder within seven days of the date the
payment is due, through no fault of the builder, the builder may stop work
and may keep the job idle until such time as payments that are due to the
builder are paid. If the builder chooses not to stop work after a payment
delay, this is not to be construed as a waiver of his rights to stop work if
future payments are delayed.
 All attorney fees incurred by the builder to collect sums owed by the buyer
shall be paid by the buyer, together with interest at the rate of____%.
 The buyer shall obtain and furnish all necessary surveys
describing the physical characteristics of the property, the
location of all utilities, and the location of all easements to the
building that are necessary to allow the builder to complete his
performance. If additional easements are necessary to
complete the work, the buyer shall obtain those easements
promptly.
 If no soil report is available, the buyer shall provide one at his
own expense.
 The builder shall obtain building permits, licenses, building
inspections, and approvals required by local law.
 If a covenant or architectural review committee requires the
approval of plans and specifications, the buyer shall be
responsible for obtaining these approvals and paying for any
fees connected with them
 The buyer may order changes in the work within the terms of
this contract, but only by a prior written order and agreement
with the builder that states the changes to the contract, the
amount of any additional cost, and the additional number of
days to be added to the contract completion date.
 Any of the buyers may sign the change order and that
signature will be binding upon all of the buyers.
 The buyers hereby agree to make all requests for change
orders to the builder, and not to issue instructions to, or
otherwise negotiate for additional or changed work
specifications with, the builder's employees or subcontractors.
 The builder shall obtain all workers' compensation, commercial
general liability insurance and comprehensive liability insurance
necessary to protect builder from claims for damages due to
bodily injury, including death, and for damages to property
that may arise out of and during operations under this contract.
 The buyer shall purchase his /own liability insurance including
fire and casualty insurance to the full insurable value of the
house and shall name the builder as an additional insured.
 Each party shall issue a certificate of insurance to the other
prior to the commencement of construction
 The buyer shall have access to the property and the
right to inspect the work in the presence of the
builder.
 If the buyer enters the property during the course of
construction without the permission of the builder, he
does so at his own risk, and the buyer hereby
releases the builder and does hereby hold the builder
harmless from any and all claims for injury or
damage to his person or - property, and to the
person or property of any person accompanying the
buyer
 At the final inspection, the buyer will give the builder
a signed and dated list that identifies any alleged
deficiencies in the quality of the work or materials.
The builder shall correct any items on the buyer's list
that are, in the good faith judgment of the builder,
deficient in the quality of the work and/or materials
according to the standards of construction in the area
in which the house is built. The builder shall correct
those defects within a reasonable period of time.
 After the defects have been corrected according to the
standards of construction in the area in which the house is built,
the buyer shall sign a certificate of acceptance acknowledging
that the defects on the buyer's list have been corrected
according to the standards of this contract.
 The builder shall provide the buyer with an affidavit stating
that all materials and services for which a lien could be filed
have been paid, or an affidavit identifying what services and
materials for which a lien could be filed have not been paid,
and swearing that such amounts will be paid from the
proceeds of the final payment.
 Occupancy will be granted to the buyer when the buyer makes
a final inspection of the home, signs a certificate of
acceptance, and makes the final payment.
 All warranties are limited to the implied warranties of
habitability and workmanlike construction and are
limited to a period of one year from the date of the
issuance of a certificate of occupancy by the local
building code enforcement authority. This limited
warranty is the only express warranty provided by
the builder
 Should any dispute arise relative to the performance
of this contract that the parties cannot resolve, the
dispute shall be referred to a single arbitrator
acceptable to the builder and the buyer.
 If the builder and the buyer cannot agree upon an
arbitrator, the dispute shall be referred to the
American Arbitration Association for resolution.
 All attorney fees that shall be incurred in the
resolution of disputes shall be the responsibility of the
party not prevailing in the dispute
 This contract will be construed, interpreted, and
applied according to the law of the state where the
property is located. This contract shall not be
assigned without the written consent of all parties
 This contract shall become effective on the date it is signed by both parties.
 We, the undersigned, have read, understood, and agree to each of the
provisions of this contract and hereby acknowledge receipt of a copy of this
contract.
 By: _______________ on behalf of________________________
 Builder's name Builder's company name
 Title: ______________________ Date:________
 By: _____________________ Date:.
 Buyer
 By: _____________________ Date:.
 Buyer
 Attached Contract Documents:
 Final Contract
 1. Plans and Specifications
 2. Allowance Schedule
 3. Other: ______________