02. BQS 406 [Standard Forms of Construction Contracts]_Lecture 2.pdf - 4TH YEAR BQS_2ND SEMESTER[BQS 406 STANDARD FORMS OF CONSTRUCTION CONTRACTS

02. BQS 406 [Standard Forms of Construction Contracts]_Lecture 2.pdf

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11/15/2016 1 4 TH YEAR BQS_2 ND SEMESTER [BQS 406] STANDARD FORMS OF CONSTRUCTION CONTRACTS LECTURER: QS. NYAGAH B. KITHINJI GRADUATE ASSISTANT: QS. BELIS O. OCHIENG SEMESTER: SEPTEMBER - DECEMBER 2016 1 LECTURE 2: CONTRACTS 2 CONTRACTS What is a Contract? What is a Construction Contract? What are the Essentials of a Valid Contract? What are the means and ways of discharging a contract? 3 CONTRACTS What is a contract? A legally binding agreement between two or more parties in which legal rights and obligations are created and are enforced by a court. Where contracts are made by use of a deed (special seal) or follows a special requirement stating that the agreement is a deed, then a special contract is formed. 4 CONTRACTS Contracts Defined? A. Promise or set of promises, for breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty. 5 CONTRACTS Contracts Defined? B. Except where special rules apply, formation of a contract requires a “bargain” to which the contracting parties give “assent” and a “consideration , which can take the form of either a return promise or an actual performance. 6
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11/15/2016 2 CONTRACTS Contracts Defined? C. Seeking an efficient outcome want the exchange to be beneficial to both parties. 7 CONTRACTS Contracts Defined? D. Assumed common attributes for a bargain i. Free will no coercion ii. Self-knowledge one knows their own preferences iii. Modicum (Small Amount) of practical information can distinguish among alternative goods and services 8 CONTRACTS What is a contract? Where contracts are made by use of a deed (special seal) or follows a special requirement stating that the agreement is a deed, then a special contract is formed. 9 CONTRACTS What is a contract? Where contracts are made by use of a deed (special seal) or follows a special requirement stating that the agreement is a deed, then a special contract is formed. A deed and simple contract differ mainly in the limitation period (period within which claims and suits can be made). The limitation period for a deed is 12 years whereas for a simple contract / ordinary contract is 6 years from the date of breach. 10 CONTRACTS What is a contract? The limitation act states that if a claim is not stated within a certain amount of time, then the claim is barred. The deed therefore doubles the limitation period but it also doubles the liability period. The deed also makes all types of agreement enforceable in the law. 11 CONTRACTS What is a construction contract? There is no Construction Act in Kenya which offers a definition for construction work Section 104 of the Housing Grants, Construction and Regeneration Act (1996) defines a construction contract as: 12
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