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Formation of Construction Contracts

Satisfactory Essays

Table of Contents
Table of Contents 1. Outline of the NEC Contract a) Summary of the ethos & key aims of the Contract i. Stimulus to good management ii. Variations iii. Clear and simple language b) Strengths c) Weaknesses 2. Main Option Clauses a) List of main Option Clauses b) Summary and Comparison of Option Clauses c) Recommendation 3. Secondary Option Clauses a) 15 ‘X’ Secondary Options b) Two ‘Y’ Clauses c) Discussion of ‘Z’ Clauses d) Recommendation 4. Conclusion 5. References

1. Outline of the NEC Contract
‘The NEC Engineering and Construction Contract (ECC) (previously the New Engineering Contract) has been developed to meet the current and future needs for a form of contract to be used in the engineering, building and …show more content…

Option D: ‘Main option D follows the same approach as main option C, except that a bill of quantities is used against which the final total of the prices is re-measured.’ (Rowlinson, 2011). Option E: ‘The employer pays for all the resources utilised by the contractor to carry out the works, following a formula employing various tendered rated and percentages, subject only to the disallowing of costs resulting from the contractor’s inefficient use of resources.’ (Rowlinson, 2011). Option F: ‘Provides a management contract option under which the contractor is paid a fee for carrying out prescribed duties.’ (Rowlinson, 2011).











The main difference between each option clause is the risk associated with each one however; the risk for the contractor and client will differ for each option clause. The contractor faces high risk if option A is used decreasing to low risk if option F is used. The client is the opposite where they face low risk if option A is used and high risk if option F is used.

c) Recommendation
The use of main option clause A should be adopted in the contract document for this project. This option minimises the risks associated with the project for the client and all responsibility is then placed on the contractors to complete the project on time and for the agreed price.

Aled Rhys Hughes 200714325

3. Secondary

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