CE 413- CONSTRUCTION

METHODS AND PROJECT

MANAGEMENT
Chapter 1 - CONTRACTS AND SPECIFICATION
 CONTRACTS AND SPECIFICATIONS
• CONTRACTS AND SPECIFICATIONS
• Specification

“ Specification” is a general term applying to all directions,

provisions, and requirements pertaining to the performance
of the work and payment for the work.
 CONTRACTS AND SPECIFICATIONS
• CONTRACTS AND SPECIFICATIONS
• Specification is one of the components that makes up the
documents used for bidding and construction of a project.
• Specification is defined as the designation or statement by which
written instructions are given distinguishing and/or limiting and
describing the particular trade of work to be executed.
• In short Specification is a statement of particular instructions of
how to execute some task.
• Specifications are, written based on the prepared designdrawings,
general and scientific trends of workmanship, quality expected,
equipment involved, and materials to be used for the particular
trade of work.
 CONTRACTS AND SPECIFICATIONS
• CONTRACTS AND SPECIFICATIONS
• The specifications should clearly specify design and drawing, labor
employment, materials to be used, construction method, equipment
used.
• Specifications should be clear, concise, and brief description of
what is required to execute the proposed trade of work.
 CONTRACTS AND SPECIFICATIONS
• Purpose of Specification

• The purpose of specifications generally includes:

• i. Guide the bidder at the time of tendering to arrive at a reasonable
cost for the work.
• ii. Provide guidance for the execution of the work
• iii. Guide contractor for the purchase of materials
 CONTRACTS AND SPECIFICATIONS
• Purpose of Specification

• Iv. Serve as part of contract document to limit and describe the rights and
obligations of each contracting parties.
• v. Guide the bidder to identify his capacity to execute the work
• vi. Serve as fabrication and installation guide for temporary and permanent
works.
• vii. Guide the contractor for purchase and/or hiring of equipment's.
• viii. Serve the owner to know what she/he is intended to receive.
• ix. Serve for the manufacturers of construction materials, equipment's, tools
etc. to grade, classify, and improve qualities of their products.
• x. Indicates method of testing and acceptance of final products.
• xi. Guide parameters for rejection of non conforming works.
• xii. Indirectly, the specifications are very much related to the legal
considerations, insurance considerations, bidding requirements, alternates and
options, rights, obligations and remedial measures for the contracting parties.
 CONTRACTS AND SPECIFICATIONS
• A clearly written specification will enable proper quality control and
avoid disputes in administering construction projects.
• Types of Specification

• In general, specifications can be broadly classified into four

categories:
• 1. Manufacturer’s specification: Manufactures prepare
specification of their product for guidance of their users, which may
include property description and installation guide lines.
• 2. Guide specification: specification prepared by an individual or
group of individuals based on manufacturer’s specifications,
established trends of workmanship, service and laboratory tests and
research findings to be used as guide lines for preparation of
contract specification.
 CONTRACTS AND SPECIFICATIONS
• A clearly written specification will enable proper quality control and
avoid disputes in administering construction projects.
• Types of Specification

• In general, specifications can be broadly classified into four

categories:
• 3. Standard specification: specifications which are intended to be
used as reference standard in the construction of a project. The
guide specification which has been standardized by recognized
authority.

• 4. Contract (Project) Specification: The specification prepared

for a particular project to accompany the drawings and other
contract documents.
 CONTRACTS AND SPECIFICATIONS
• The specifications described above can be prepared following the
format which has general and specific parts (General Specification
and Specific Specification).
In the general part of the specification the following items are
included:
▪ Administrative and Procedural Requirements
▪ Scope, definition
▪ Reference Organization and Standards
▪ Project Description, site facilities
▪ Submittals and quality assurance
▪ Delivery, storage and handling
▪ Project records, Insurances other general requirements
 CONTRACTS AND SPECIFICATIONS
• In the specific part of the standard specification the detailed
description of the quality of items to be used and preparatory
actions and methods of incorporating the items are included.
• “Technical Specification and Methods of Measurement for
Construction of Buildings”
• In the general requirement part the following items which may be
applied to any project and any trade of work are described in
general terms:
• 1) General
• 2) Site Description ♦
• 3) Quality Assurance
• 4) Project Records
• 5) Site Facilities
• 6) Cleaning Up
 CONTRACTS AND SPECIFICATIONS
• Specification can also be classified as Material and Workmanship
Specification and Performance Specification.

• I. Material and Workmanship Specifications

• This form of specification includes,

• The description of the scope of the works,
• The general and specific requirements that are necessary for the
execution of the work,
• Material requirements,
• Construction details, and
• Method of measurement and payments for completed works
 CONTRACTS AND SPECIFICATIONS
Specification can also be classified as Material and Workmanship
Specification and Performance Specification.
I. Material and Workmanship Specifications

A. Material Specifications

• This form of specification includes,

• The description of the scope of the works,
• The general and specific requirements that are necessary for the
execution of the work,
• Material requirements,
• Construction details, and
• Method of measurement and payments for completed works
 CONTRACTS AND SPECIFICATIONS
• B. Workmanship Specifications: describes the desired results that
need to be achieved in the works which include; This form of
specification includes,

• Specify the desired results as to the quality of workmanship

• State any detailed construction methods or procedures necessary
for the accomplishment of particular purposes.
• Stipulate any desired limitations or restrictions to be placed on the
contractor's methods in the interest of coordination of the work.
• Give any precautions necessary for the protection of the work or
adjacent property.
• Specify the methods of inspection and tests to which the work is to
be subjected
 CONTRACTS AND SPECIFICATIONS
• Contracts
• Contract is a written agreement between or among two or more
parties whereby each party promises to do or not to do something
and agrees to terms (conditions and Warranties) set out in the
contract.
• Conditions of Contract are terms in which parties in the
contract are governed / administered with. That is, it is an
administrative law which is the legally binding part of the
contract.
• A construction contract is a product of an agreement between
the employer & the contractor & it is enforceable at law.
“Enforceable at law” means that if the agreement reached
between the employer & the contractor breached (deviations
occur from the promises) by one of the parties, the aggrieved
party, either the employer or the contractor, may bring a legal
action against the other to demand the enforcement of its rights
with the support of law.
 CONTRACTS AND SPECIFICATIONS
• Contracts
• Legal definition of a contract
• According to Article 1675 of the Civil Code of Ethiopia: “A contract is an
agreement whereby two or more persons as between themselves create,
vary or extinguish obligations of a proprietary nature.
• Article 1305 of the Civil Code of the Philippines gives the general definition
of contracts: "A contract is a meeting of minds between two persons
whereby one binds himself, with respect to the other, to give something or
to render some service."

The definition contains the following elements. These are:

• That the contract is an agreement;
• The agreement is to be made between two or more persons; The Form of
Agreement, in the construction contract, clearly presents the Agreement reached
between the employer & the contractor.
• That the agreement is binding between such two or more persons;
The agreement is to create, vary & extinguish obligations;
• That the nature of obligations is proprietary or patrimonial meaning it can be
expressed in monetary form;
 CONTRACTS AND SPECIFICATIONS
• Contracts
• Elements of a Contract
• The parties are capable of contracting and give their consent
sustainable at law.
• The object of the contract is sufficiently defined and is possible
and lawful.
• The contract is made in the form prescribed by law.

• The following are the fundamental elements of a contract.

• Capacity of the contracting parties;
• Consent of the contracting parties;
• Object of the contract; and
• Form of contract, if any;
 CONTRACTS AND SPECIFICATIONS
• Contracts
• Capacity
• Capacity means competence to enter into a legally binding agreement. Parties
entering into an agreement or contract shall, therefore, be capable of contracting.

• Legal capacity is of two types.

• Personal (Own) capacity; and

• Representative (Agent) capacity;

• Capacity of persons is legally presumed unless the contrary is proved.

• Persons could be:-
• Natural (physical) persons; or
• Juridical (legal) persons;
 CONTRACTS AND SPECIFICATIONS
• Contracts
• Natural Persons & Legal Persons

• Natural or physical persons are human beings. Their legal capacity is determined by
law. The scope of capacity of physical persons is relatively unlimited unless the
contrary is proved.
• Legal persons are of two types in terms of determining their coming into being &
their legal capacity. These are:-
• By legislation; (In case of public bodies); and
• By registration; (In case of non-public bodies);
 CONTRACTS AND SPECIFICATIONS
• Contracts
• The existence of public bodies (Ministries, Commissions, Bureaus, Authorities,
Agencies …) & their legal capacity to enter into contract & bind themselves
emanates from the Civil Code & the special legal instrument (legislation),
which establishes that specific public body. The following may not have (legal)
capacity to enter into contract & bind themselves. These are:-
• Minors (under the age of 18);
• Companies adjudged or declared bankrupt;
• Judicially and Legally interdicted;
• Persons, whose civil rights are suspended by the court;
• Non-nationals, unless permitted by law or special prerogative;
• Non-authorized Agents;
• Agents, whose Power of Attorney has been revoked;
• Agents , the Scope of their Power of Attorney does not cover the intended; and
others;
• Natural persons or legal persons may enter in to contract directly by
themselves (in their own capacity) or through other persons called Agents.
 CONTRACTS AND SPECIFICATIONS
• The power of agents (i.e. their representative capacity)
should always be checked, with respect to construction
project, at:
• The tendering stage;
• The negotiation stage;
•The contract signing stage; and
• The Contract implementation stage;

The Power of Attorney creates a derivative legal capacity for

agents.
 CONTRACTS AND SPECIFICATIONS
• B. Consent is a declared will of the individual to enter in to contract. It is
the willingness of the parties to enter in to a legally binding relation.
Consent of the intended contracting parties decomposes in to:-
• Offer; and
• Acceptance;

• Offer
• Offer is defined as a proposal expressing the declared willingness of the
offeror to enter in to an agreement, if the offer is accepted. Offer is a legal
process which is a declaration of willingness or intent to be bound by specific
terms set out.
• Offer may be made:-
• Orally;
• In writing;
• By sign; By conduct; and
• By specially stipulated manner for acceptance.
 CONTRACTS AND SPECIFICATIONS
• Characteristics of Offer: These are that the offer should be:
• Certain;
• Communicated;
• Unconditional;
• Distinguished from invitation to treat;

• Acceptance is a declaration of will to enter into a legally binding contract. By

acceptance, a contract shall be completed, where the offeree accepts the
offer without any reservation. Forms of Acceptance:
• The following could be forms of acceptance.
• Orally;
• In writing;
• By sign;
• By conduct;
• As specially stipulated by the offeror;
 CONTRACTS AND SPECIFICATIONS
• Defects in Consent
• Consent given in the process of offer & acceptance should be free from
defects in consent or vices of consent. Defects in consent or vices of
consent are the following.

• Mistake is defined as a misunderstanding of or erroneous belief about a

matter of fact or a matter of law.
• Fraud means a false representation, by means of a statement, conduct
made knowingly or recklessly in order to gain a material advantage.
• Duress means a threat of imminent danger, which may be a future, or
immediate danger posted against the contract himself or his nearest
relatives.
 CONTRACTS AND SPECIFICATIONS
• Object of Contract

• The object of contract is the very obligations of the contracting parties e.g., in
the construction contract, the obligations of the employer and the contractor.
The possible objects, i.e. the obligations of the contracting parties, of contract
are:-

• Obligation to do (perform);
• Obligation not to do; or
• Obligation to deliver;
• The obligations of the contracting parties could be divided in to two broad
terms: Promises; and Considerations;

• The object of contract (i.e. both promises & considerations) shall be:-
Sufficiently defined; Possible; Lawful; Not immoral. The object of a construction
contract shall be sufficiently defined. The object of contract, even though
sufficiently defined, it has to be possible or capable of performing. It shall also
be lawful. Contract agreements cannot serve to achieve illegal objectives.
 CONTRACTS AND SPECIFICATIONS
• Object of Contract

• The object of contract (i.e. both promises & considerations) shall be:-
Sufficiently defined; Possible; Lawful; Not immoral. The object of a construction
contract shall be sufficiently defined.
• The object of contract, even though sufficiently defined, it has to be possible
or capable of performing. It shall also be lawful. Contract agreements cannot
serve to achieve illegal objectives.

• Form
• Form may mean types of contract. Form may also mean the making of the contract
orally or in writing. The contract is to be made in certain prescribed form; it means
that contract should be made in writing. In this case, form is related with the
validity & proof of the contract itself. By form, under these circumstances, we mean
the making of the contract in writing, if the law imperatively prescribes so or if the
parties voluntarily wish to do so.
 CONTRACTS AND SPECIFICATIONS
• Why Use Contracts in Construction?

• The purposes of a contract in construction are:

• To describe scope of work
• To establish time frame
• To establish cost & payment provisions
• To set forth obligations & relationships
• To manage multiple risks
• To establish control mechanisms
• To minimize disputes
• To improve economic return on investment
 CONTRACTS AND SPECIFICATIONS
• Why Use Contracts in Construction?

• The purposes of a contract in construction are:

• To describe scope of work
• To establish time frame
• To establish cost & payment provisions
• To set forth obligations & relationships
• To manage multiple risks
• To establish control mechanisms
• To minimize disputes
• To improve economic return on investment
 CONTRACTS AND SPECIFICATIONS
• Contracts
• Pay items – the specifications establish the pay items under which the
Department will pay the Contractor for work completed.
• Materials – this part either specifies the materials requirements the work of
this section must meet or refers to subsection in the materials details sections.
• Construction Requirements- this part consists of the required construction
procedures or end results of the work to be performed under this section of the
standard specifications.
• Method of measurement- this part describes the methods and the units by
which the work under this section of the standard speficifications, will be
measured for payment to the contractor.
• Basis of payment – this part establishes the pay items for work accomplished
under this section of the standard specifications, and when necessary, explains
what is included in the payment for those pay items.