CONTRACT
MANAGEMENT
UNIT 6
Outline
Fundamentals of contract law
Contract terms
Conditions of contract and breaches
Law of Agency
Authority of the Procurement Officer
Reducing risk exposure and
protecting organisation’s interest
CONTRACT FORMATION
Contract Award Process
Once the Internal Procurement Committee
has completed the evaluation of bids, the
procuring entity should promptly proceed to
award the contract to the lowest evaluated
bidder subject to any required approvals
The procuring entity sends a notice of
acceptance to that effect to the successful
bidder within the period of validity of its bid
If the successful bidder fails to sign
the contract or to provide the
performance security within the time
stipulated in the notice of
acceptance, the award is nullified
and the procuring entity may then
re-award the contract to the next
lowest evaluated bidder who meets
the qualification requirements.
What is a contract?
The term “contract” is generally
regarded
as a form of agreement,
specifically one which is
enforceable by law.
In other words, contract is an
agreement between two or more
parties with intention to create
legal relationship.
Essential Elements of a Valid Contract
Offer and Acceptance
The first step towards creating a contract is that one
person shall signify or make a proposal or offer to the
other, with a view to obtaining the acceptance of that
another person to whom the offer is made.
What is an offer?
An offer, in law, is both a statement of the terms
upon which a party is willing to contract and an
expression of willingness to do so if an acceptance
is given of those terms.
An offer when accepted becomes a promise.
An offer may come to an end in one of
these seven ways:
Acceptance
Rejection
Counter – offer
Revocation
Lapse of Time
Death
Failure of a Precondition
Termination of Offers
Acceptance
A contract comes into being when
the offer has been validly and
unconditionally accepted by the
offeree.
Communication of
acceptance
Knowledge of the offeree
Silence is not acceptance
Acceptance can be by conduct
Mode of communication
Ought to be in the form stipulated by the offeror
Communication of acceptance must be received by
the offeror to make it valid.
If acceptance is by post, it occurs when the letter is
posted.
