3 Contracts•Contractis any formal agreement to do work, provide services, or deliver materials or products.•A contractual agreement may be spokenbut is recommended to be writtenif for significant monetary sums.•A prime contract is between two principal parties. A subcontractis between a principal party and a subsidiary parties.•Offer, acceptance, and consideration (money) are viewed as the key elements in a legally binding contract.33
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•General contract: –Agreement for total project construction–To deliver the building as described in the contract documents•Prime construction contract:–An agreement directly between a contractor and an owner–General contracts typically are prime contracts–Sometimes mechanical contracts and specialty trade contracts are also prime, depending on PDS and local statutory requirements.•Subcontract:–An agreement between a prime contractor and a trade of specialty contractor•Sub-subcontract:–Agreement between a subcontractor and another specialty contractor (second-tier subcontractor)34