What is a construction contract agreement

1
What is A Construction Contract Agreement?
2

• A construction contract agreement is the document
  that sets a date and specifies which parties are
  going to participate in the construction process.
  Usually, the contract agreement is executed
  between the Owner of the project and the
  contractor or supplier that is providing the
  requested services and contains several sections
  of clauses defining the scope, terms, and
  conditions of such agreement.

3
Contract Agreements Sections

• Project Description- This section of the contract
  agreement contains a blurb or extract of what the
  project is about. The most important idea or
  description of the problem being addressed. It
  can be a summary of items or just a paragraph
  defining what needs to be solved.
• Contract Price  This area will describe the type
  of contract price been awarded and the total
  amount of money being contracted. It will also
  set possible additions or deductions to the
  contract and how they are going to be released.
  There are many variations and different schemes
  on how to negotiate the right pricing structure.

4

• Payment Basis- How the money is going to be paid
  to the contractor. Either on a monthly basis or
  whatever payment method is preferred, it should
  also specify what percentage of money should be
  retained on every application for payment. It
  will also define when the payment is due, the
  penalty for late payments, interest being accrued
  and other applicable situations related to the
  payment and invoicing terms.

5

• Construction Schedule or Calendar- The total of
  days or how the project schedule will be divided.
  It should describe either calendar days or
  business days and can be presented either through
  a CPM, Gantt Chart, or just a bar chart.
• Contract Document List  A list of all contract
  documents that form part of the contract
  agreement. Drawings, exhibits, specs and
  supplemental conditions can be part of this list.

6

• Construction Scope - Description of all
  construction activities including some
  descriptions of things that will form part of the
  project. The scope normally can be measured or
  quantifiable.
• Construction Conditions Responsibilities The
  section of conditions and responsibilities is the
  one that sets responsibilities for the owner and
  the contractor, and the extents of who is
  responsible for providing documents and
  information. It contains specific terms for
  liens, penalties, withholding, arbitration rules
  and specific instructions on how to process
  claims and proceed with disputes.

7

• Contract Laws- Governing laws, liens
  requirements, claims procedures, arbitration
  procedures, insurance, substantial completion
  requirements, final completion, and liquidated
  damages. It can also provide procedures on how to
  terminate or suspend the work and the agreement
  with the contractor.

8
Why a Contract Agreement Is Important?

• A contract agreement is a really important
  document that will define your scope of work and
  that will bind the owner to your services,
  including the payment terms. It is really
  important that you understand the scope of work
  specified in the contract agreement, complete the
  work as scheduled, invoice per instructed to do
  so and finally it will be the tool used so you
  can get paid.

9

• However, contract agreements must
• Be In Writing
• Contain a description of the product or service
  being offered
• Understood and clear between both parties
• Include services being contracted clearly
• Include cancellation or termination policy
• Have financial terms clear

10
Contract Agreement Types

• Contract agreements vary or could have several
  modifications depending on the contract being
  executed. For example
• Express - This type of agreement defines very
  well the purpose and scope of the agreement.
  Under this alternative, the stipulations and
  terms of the contract are understood clearly by
  each part.
• Conditional - A conditional contract agreement is
  an agreement used when services could not be
  provided at the time the contract was signed. It
  stipulates a future date when services will be
  rendered if certain conditions are met.

11

• Executed - An executed contract agreement
  provides a warranty period or malfunction. Under
  this agreement, services have been rendered, but
  the contract protects one party when the other's
  performance fails to provide the proper warranty
  for defective or incorrect installation.

12
Top Construction Companies In UAE

• AL SAHEL CONTRACTING COMPANY LLC
• Dubai, UAE.
• P.O.Box 3815,
• Phone [phone]
• FAX [phone]
• Email info_at_alsahelcon.com