Contract Administration Procedures

Extension of time is applied in the building contract, which indicates the change of the time of completion of the project that emanate from events beyond control. There are three categories of the completion project delay. They are events which can not be avoided by both parties, events that can be prevented by the builder, and event that can be controlled by the client. The first event has ongoing for compensation to one another, and, thus, extension of time for completion of the project which relieves the liability of the builder’s late completion. In the instance where the events can be controlled by the builder there is no compensation, but compensation for the builder is when the cause for delay could have been avoided by the client.

Variations take two dimensions in construction, as it denotes the changes in the terms of the contract in which relevant tasks have to be performed, and the other instance is the alteration to the contents specified in the contract document by means of omission or addition between the parties of the contract.

Retention is the sum amount which is held back by the client to ensure the constriction conforms to the specification of the contract. It is normally 50 percent released by the client when the project reaches a critical completion, and the remainder is released when the project has been evaluated to ensure all defects have been dealt with by the contractor.

Progress claim is the fixed amount in which the contract is financed by the builder after receiving payment from the client of materials delivered and work done periodically. The payment is the estimation of work done by the builder under the supervision of a superintendent to satisfy the due payment.

Practical completion is the work which has been completed as per the contract except for minor rectification of defects, which can not prevent the use for the purpose designed in relation to the builder’s reasonable grounds for completion and the test for practical completion have been carried out. Practical completion allows the builder to hand over the necessary documents to the client as required under the contract.

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Suspension of work implies that circumstance under which the process of work is suspended by the superintendant due to failure of the client to honor payments. This right of suspension is employed when one of the contracting parties breachs the contract.

Statutory warranties arte the affirmations which are implied by law though they are not part of the contract for the work performed in accordance to plans and specifications, and with suitable materials supplied for the purpose. The work must be done with diligence and within the time stipulated, and resort to a structure fit to live.

Defective Work by Sub Contractor/Supplier – Not Defects Liability this include the breach of the contract which has the effect of work quality which is caused by the faulty materials used and or the workmanship. The defects needs to be noticeable during the stipulated period, but those appearing afterwards are not within the scope. It is the obligation of the client to ensure that all the defects that appear within the defect liability period are rectified before retention is fully paid.

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Liquidated damages are the monetary compensation which is paid to the client by the builder’s failure to honor the contract within the specified timeline as this prompts the client to claim damages for extension of the contract date. The estimated sum relists the possible truth and the damages are ascertained in good faith and written in the contract.

Defects liability involves the liability by which the builder must be liable after the completion of the contract. Certain duration is given by the client for the builder to be responsible to any defects which appear within the stipulated time line, and, thus, the builder is liable for defects that appear within the period and must rectify them without additional payments.

Subcontract document is a document by which the main contractor enters into an agreement with a subordinate contractor to work within the time period as stipulated by the main contractor, but not the terms in the main contract. This document is a sub-contract which is agreed upon by the two contractors.

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Procedure if the Sub Contractors Default is a situation by which the subcontractor defaults the completion of the work stipulated. Therefore the main contractor needs to consult with another contractor if the first subordinate proves impossible to complete the work. A reorganization to engage another contractor to complete the work while the main contractor will have to lose financially due to default of the subcontractor (Basics Business Training, 2011).

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