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32 Cards in this Set
- Front
- Back
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difference between agreement and contract
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contract: legally binding writing agreement: verbal, less strict language, less formal Enforceability depends on ability to prove MUTUAL AGREEMENT in any form |
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3 basic and 3 supplementary requirements for agreement to be binding(enforceable)
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Basic: - clear/specific -conditional future consideration -acceptance of offer Supplementary: -voluntary -parties must have legal capacity -purpose of agreement is legal |
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letter of agreement vs formal document vs purchase order
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Letter of Agreement -for small projects. On one party's stationary Formal Document- for larger complex projects Purchase Order-clients preference if all contract requirements are met |
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13 features contract should include
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Introduction/Preface, contact information, signature date of agreement, duties/obligations of parties, deadlines, fee amount, fee schedule, agreement expiration date, standard boilerplate clauses, signatures, declaration of authority of signatories, supporting documents(not subcontracts) |
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owner, agent, fiduciary responsibility
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Owner (principal): Original decision-making authority that transfers right to others such as agent Agent: acts on behalf of principal, however has some limitations on what they do. Have fiduciary responsibility (loyalty/honesty) to Owner |
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boilerplate causes
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Common phrases in contracts that almost never change. (ex: "The Contract Document is the complete agreement, superseding all prior verbal and written agreements")
-Without some of them, certain claims cannot be made and can limit owner's ability to win claims |
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subcontract
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When a party of a contract agreement reaches out to a third party to take responsibilities/tasks from the contract. The contract with the third party is a subcontract. The Contract's Assignment Clauses specifies how to do deal with subcontracts to third partys |
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owner
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Owner: Person/partnership/corporation that owns the land, takes financial risk, and recieves the completed project |
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Developer |
Developer: contracts with A/E and with general contractors (construction) |
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Owner-Developer |
When Owner is also Developor
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Contractor (general contractor, prime contractor, subcontractor) |
General Contractor: works directly under owner and sometimes hires subcontractor (when hiring they are called prime contractor) |
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Architect and Engineer |
Architect designs project according to established codes and guidelines and leaves calculations to engineer. Sometimes engineer works for engineer, vice verse, or both work for developer -Generally only has contractual obligation to developer/owner but not to contractor |
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4 possible standard contract relationships
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Engineer-Client Engineer-Architect Engineer-Contractor Owner-Construction Manager All establishes clarity for overall project |
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8 Payment concepts between Owner and Engineer |
Lump Sum Fee: One predetermined fee (profit included). Unit Price: Based on quantities (profit included). Cost plus fixed fee: All costs will be covered by client plus a predetermined fee(for profit). Per Diem Fee: Per day basis payment to engineer. Salary Plus: client pays employees on engineer's payroll plus percent surcharge for indirect and profits. Retainer: minimum guaranteed for engineer and any additional work paid on item basis. Incentive: Formula with mins and maxs and target costs. % of Construction Cost: Pays engineer % of Construction costs |
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mechanic's liens
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Contractors and Providers have the right to file a Mechanic's Liens when recieved is not paid (or paid adequately). Property acts as colloteral until issue is resolved (or will be sold off and paid to liens-holder) |
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discharge of contract
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Discharge of Contract: Normally -when all parties have satisfied their obligations Also include -all in agreement for early termination -impossibility for performance (death of party) -illegality, fraud, material breach, failure of consideration (does not include extreme difficulty) |
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breach of contract
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When one party fails to satisfy all of its obligations under contract Include: -willful and unwillful -material (party is compensated less than what contract intended, most likely due to owner being insolvent) |
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injured party, specific performance
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Injured Party can demand breaching party to provide specific performance (satisfy remaining contract provisions and pay for damages) |
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negligence vs comparative negligence
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Negligence: any action (willful or unwillful) that results in damages to person or property, w/o taking proper care. This is used to prove cases and rule on them. Comparative Negligence: When plaintiff is partially at fault, defendant has to pay for damages caused by defendant |
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misrepresentation vs fraud
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Misrepresentation: false statement known to be false at the time Fraud: misrepresentation at a contract -requires beyond reasonable doubt. (results in punitive damages) Compensatory Fraud: fraud where damages are available for proof |
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tort, tort action, compensation
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Tort: civil wrong committed that leads to damage to a person's property, emotional well being, or reputation Tort Action brought upon by plaintiff must show injury.(strict liability in tort means must prove that lead to damage) Compensation: may be specific, punitive, or exemplary |
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5 required proofs for defective products (in tort cases)
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-product was defective in manufacture, design, labeling etc -product was defective when used -defect rendered product unreasonably dangerous -defect caused injury -was reasonably foreseeable |
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case law difference between design professionals and manufacturers of consumer products
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-Case law assumes design professional (A/E) have clients who are intelligent enough, so that design professionals do not have to be perfect (however standard of care is expected). Design errors are covered in tort but breach of contract requires proof of negligence -Consumer manufactures have more strict law on them and are expected for perfection. |
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general or compensatory damages
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-To make up for injury that was sustained |
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special damages
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-For direct financial loss due to breach of contract |
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nominal damages
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When responsibility is established but actual punishment very slight and inconsequential |
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liquidated damages
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Amounts that are specified in the contract document itself for nonperformance |
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punitive or exemplary damages
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(Usually for fraud or tort). Used to punish and make an example of. |
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consequential damages
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Provide for indirect losses but not related to contract |
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Errors and Omission insurance
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Errors and Omission insurance Design firms make use this insurance to protect themselves against liability, but is very expensive |
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What qualifies for value engineering |
-Must help the owner safe money -Performance, safety, appearance, and maintenance must be improved (or kept neutral) for any VE |
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Sharing of Value Engineering Advice |
If a contractor has a value engineering clause (in which a cost savings suggestion arises). The contractor may share the advice one time and recieve a fixed additional compensation |
