Entire Contract Principle in Construction Industry

Wally, business owner of Windy City Watches is located in downtown Chicago, IL. Business is booming and Wally needs to buy a large quantity of Rolek watches which sell for $50 apiece. He calls Randy Rolek, the wholesaler located in Milwaukee WI. They discuss terms on the phone for a while before coming to an agreement in which Wally offers to buy 100 watches for $25 each. Randy sends over an order form in which Wally states that he is agreeing to purchase watches from Randy for $25 each, but does not include the quantity in which he will buy. Randy sends 50 watches the following week with a note included stating that he has sent 50 watches and will send the other remaining 50 watches within a few days but includes the bill for the full

A’s promise to B can only be enforced by B if B has given consideration for that promise;

8.  When is a buyer considered to have accepted performance regarding goods that are delivered pursuant to a contract?

The following case American Agricultural Chemical Co. v. Kennedy & Crawford, 103 Va. 171 (Va.1904) it is expressed that; where the consideration for the promise of one party is the promise of the other party, there must be absolute mutuality of engagement, so that each party has the right to hold the other to a positive agreement. Both parties must be bound or neither is bound. A party making a promise is bound to nothing until a promisee, within a reasonable time, engages to do, or else do or begins to do, the thing which is the condition of the first promise. Until such engagement or such doing, the promisor may withdraw his promise, because there is no mutuality, and therefore no consideration for it.

…in every compact between two or more parties, the obligation is mutual; that the failure of one of the contracting parties to perform a material part of the agreement, entirely releases the obligation of the other; and that where no arbiter is provided, each party is remitted to his own judgment to determine the fact of failure, with all its consequences.

This case illustrates the presence of conditions precedent, implied conditions, substantial performance, and breach of contract (material).

Two basic types of competitively bid construction contracts are lump-sum and the unit-price contract. The lump-sum contract is when the contractor agrees to complete all work for a pre-determined price including profit and the contract. The unit-price contract is when the contractor quotes work on units separately instead of entire project. Price is based on units of work performed, and cost varies depending on the quantities of units. Building the piers to support a large suspension bridge will

The government should pay the contractor the exact contract price as specified in the contract.

Charles Fried asserts that enforcing promises is the main purpose of contract law. One initiates a contract by invoking the practice of promising, and the other party can reasonably trust him or she will perform as promised in the future. If one fails to fulfill the promises, he or she then damages or ruins the trust, and exhibits disrespect for the other party. This behavior is morally wrong and condemned by the society. To enforce promises, the social practice of promising should be supplemented with additional rules or standards. The role of contract law is to provide rules and standards to further that purposes. When the promise principle under Fried’s theory does not provide a ground for relief, other contract law principles may still fill the gap. For example, the principle of benefit requires compensating others for non-gift benefits received from them. Additionally, contract law also enforces promise by awarding expectation

These areas should be noted and monitored by industry practitioners during all stages of the construction process. The most common contributing factors in claims were increase in scope of the work, weather, restricted access, and acceleration. Categories of claims that were mentioned in the largest number of claims were site overhead, loss of productivity, loss of revenue, and financing costs. Contract clauses that were quoted in the claims were most commonly in the areas of delays, scheduling, and increase in the scope of work. The special consideration should be given to contract clauses dealing with changes/extras, disputes, soil/site conditions, and delay.

In construction projects, mostly the firms (in this case the firms become client) do not have the skills or develop skills inside the firms to undertake the projects due to amount of the projects should be conducted or the complexity of the projects (Reve and Levitt, 1984). Therefore, the economic decision to conduct the projects is to procure them to third parties. However, more commonly the client agonize the final quality of the projects will meet standard requirements. Thus, impacts to involvement of complex contracts of construction procurement.

Section 12(2) of the act defines a condition as “a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.” Conditions is called an ‘express condition’ when a condition is expressed clearly in writing. A condition is a stipulation essential to the main purpose of the contract. It is very vital to the

Introduction: In this assignment I will go over a few legal terms in relation to contract law. I will also talk about a few precedents that help explain the law.

When engaging in a construction contract, time is of the essence and running over time projections can cause literally millions of dollars in additional non-contract costs. Therefore, construction contracts that can provide incentives to complete the project on time or early are beneficial because they effectively penalized contractors who fail to deliver on-time performance. With a CPIF contract, the

The terms of a contract refer to the obligations of the parties entering into the contract. These terms are the contents of the contract, which determine the parties’ rights and obligations. Consequently, the law classifies the terms in two ways. Firstly, the law can look at the terms according to the consequences of breach involving the nature of each term as a condition, warranty or innominate. Secondly, they may investigate the method through which the terms got into the contract, explicitly or implicitly. Courts have the option to examine these two methods to reach an understanding of the obligations of each party in the contract breached by one party.