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CONTRACT MANAGEMENTUNIT 6
Outline Fundamentals of contract lawContract termsConditions of contract and breachesLaw of AgencyAuthority of the Procurement OfficerReducing 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 approvalsThe 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 ContractOffer 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 RejectionCounter – offer RevocationLapse of TimeDeathFailure 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 acceptanceKnowledge of the offereeSilence is not acceptanceAcceptance can be by conductMode of communicationOught to be in the form stipulated by the offerorCommunication of acceptance must be received by the offeror to make it valid.If acceptance is by post, it occurs when the letter is posted.