Construction

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(5) ways contracts are formed

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1.)Oral- verbal agreement, no written agreement
2.)By Conduct- actions of parties are such as to imply a contractual relationship between them
3.)In writing-some contracts have to be formed in writing if they are to be enforcable
4.)Under seal-???
5.) Evidenced in writing- Ex: contracts which, accoring to their terms, cannot be performed within 1 year

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Elements of a valid contract

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Basic elements to make a legally binding and enforceable contract.
1.)Offer and acceptance-offer clearly made by one party and accepted unconditionally by other party
2.)Intention-must be shown by all parties to enter into a binding contract
3.)Capacity- All paries must be legally capable
4.)Consent- must be proper and not obtained by fraud or duress
5.) Legality- contract must be formed within the boundaries of the law.
6.)Possibility-contracts to take on impossible tasks are unenforceable
7.)Consideration- each party must contribute something in consideration of the other's promise. Consideration must be: realy, not in the past, legal, and possible

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What are the advantages of arbitration? (6

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1.)Privacy-trade secrets and reputations may be shielded from the public
2.)Convenience-hearings can be held anywhere to suit the parties
3.)Speed-handled quickly, doesnt have to fit into the courts schedule
4.)Expense-potential lower cost of the hearing and speedy resolution of the dispute
5.)Informality- courtroom procedures may be dispensed of
6.)Expertise-the problem may be well understood by the arbitrator having experience in the construction field

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(7) Elements of a valid contract

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Basic elements to make a legally binding and enforceable contract.
1.)Offer and acceptance-offer clearly made by one party and accepted unconditionally by other party
2.)Intention-must be shown by all parties to enter into a binding contract
3.)Capacity- All paries must be legally capable
4.)Consent- must be proper and not obtained by fraud or duress
5.) Legality- contract must be formed within the boundaries of the law.
6.)Possibility-contracts to take on impossible tasks are unenforceable
7.)Consideration- each party must contribute something in consideration of the other's promise. Consideration must be: realy, not in the past, legal, and possible

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Ambiguity

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Doubtfulness, doubtfulness of meaning duplcity indistinctfullness or uncertainity of meaning of an expression used in written instrument. The courts interpreting a writing will permit parol evidence to clarify the writing if the writing is in fact ambiguous. However the courts will not permit parol evidence if the writing is clear, even though it may be in error.

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Addenda

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Modifications to the contract documents issued during the bid perios. Addenda become official parts of the contract documents and are legally binding to the signatorees of teh contract.

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Adversary

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Two parties to a contract are in an adversary or arms-length relationship to one another as a result of the commitment they have made to each other in the contract terms and conditions. This relationship is recognized by the courts and binds the two parties together in that relationship. In layman's language, it can be considered a relationship of mistrust.

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Antitrust Laws

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Federal and state staututes to protect trade and commerce from unlawful restraints and monopolies. In the construction industry, bid rigging is considered a violation of antitrust laws. Those found guilty of bid rigging are assesed treble damages.

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Certificate of occupancy

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A document issued by the building inspector certifying that the structure conforms to all relevant code sections and is, therefore, safe for use. An owner must obtain a certificate of occupancy before he or she can use a building. A new building cannot be considered complete untila certificate of occupancy has been inssued.

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Certificate of payment

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A document issued by the architect in which the architect certfies that the contractor has adquatly performed. The certificate is then presented to the owner for payment to teh contractor.

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Certificate of substantial completion

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The document issued by the architect when the building, or a portion thereof, is complete to the degree that the owner can use the building, or a portion thereof, for its untended purpose.

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Consideration

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The inducement to a contract; teh cause, motive, price, or impelling influences which induces a contracting party to enter into a contract; the reason or material cause of the contract.

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Deviation

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A change made in the progress of a work from the original terms, design or method agreed upon.

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Disclosure

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To bring into view by uncovering, to lay bare, to reveal, to free secrecy or ignorance, or to make known; revelation the impartation of that which is secret that which is discolsed or revealed

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Betterment

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An improvement brought upon an estate (land and or buildings) which enhances its value more that mere repairs. The improvement may either be temporary or permenant. This term also applies to denote the additional value which an estate aquires in consequences of some public improvement, such as the widening of a street.

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Certificate

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A writless assurances, or official representation, that some act has not been done, that done that some event occured, or that some legal formality is being compilied with. A written and signed document establishing that a fact is true.

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Change

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A revision to the original contract documents. A change differs from a modification is agreed to by both parties in that the modification is agreed to by both parties of the contract; however a change may be made unilateraly by the owner in spite of the contractors lack of agreement.

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Competitve Bidding

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A process whereby sealed proposals are submitted to the owner for consideration. Competive bidding is mandatory on public works projects. A private owner may choose to use competitive bidding in securing the most economical contractor for the construction of the project. However, a private owner is not legally bound to the competitive bidding process.

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Change order

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A document issued by the architect directing the contractor to erect some portion of the building in a manner different that described in the orignal plans and specifications. This change must have an effect on the price and / or time of the contract in order to constitute a change order. If the price and or time is not affected, then the change is a field order or minor change order and not a change order. The change may be requested by the architect, owner, or contractor.

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Cloak of Immunity

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Legal status granted to an architect in the quasi-judcial role as arbitrator in settling a dispute between the owner and contractor. This cloak protects the architect from liability by either party.

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Collusion

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An agreement between two or more persons to defraud a person of his or her right by the frms of law or to obtain an object forbidden by law; a secret combination, conspiracy, or concert of action between two or more persons for fraudulent or deceitful purposes.

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Design Build

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A method of organizing a building project in which a single entity undertakes the design and erection of the structure at a set fee negotiated in advanced. unlike the conventional construction contract whereby an owner hires both an architect and a contractor seperatley, in the design-build contract, the owner negotiates only one contract with one organization.

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expressed warranty

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in contract and sales a promises created by the apt an explicit statements of the seller or person to be bound

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Bidders Bond

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Obtained by the contractor from a surety company in favor of the owner to guarantee that the contractor will execute the contract if it is offered him. Bidders bonds are usually written for 10% of teh bif figure.

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Easement

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An easement is a defined portion of a lot, tract, or parcel resereved for the use of someone other that the property owners. Uses can include access, utilities, or parking by another party who holds the easement interest or easement rights.

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A deed of trust

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a deed of trust is a legal document pertaiing to property ownership and is required for real estate rights to transfer from one owner to another.