Standard Forms of Building and Civil Engineering

Contracts (AQS4105)
What is a Contract
 A legally binding agreement made between two or more parties, by
which rights are acquired by one or more to acts or forbearances on
the part of the other or others
 It gives rise to various rights and obligations for the parties to the
contract.
 It is therefore a promise or set of promises which the law will
enforce.
 The normal method of enforcement is an action for damages for
breach of contract, although in some cases the court may order
performance by the party in default.
 Freely entered into on terms that are freely registered.
 It establishes rights and obligations of the parties and procedures for
administration.
Essential Elements of a valid contract
 Agreement (offer & acceptance)
One party makes the offer, another party accepts the offer and both
achieve consensus ad idem (meeting of the minds).
 Consideration
Both parties must have provided consideration (each side must promise
to give or do something for the other).
You can’t get something for nothing.
 Intention to create legal relations
The parties must have intended their agreement to have legal
consequences.
The law will not concern itself with purely domestic or social
agreements
 Capacity
The parties must be legally capable of entering into a contract.
Legality
 the purpose of the agreement must not be illegal contrary to
public policy
Form
In some cases certain formalities( writing) must be observed
 Absence of vitiating factors which will invalidate the contract, e.g.
duress or undue influence, mistake, misrepresentation, illegality
Reasons for using contracts in construction
 To describe the scope of work
 To establish the time frame
 To establish cost and payment provisions
 To set forth obligations and relations between parties
 To minimise disputes
 To improve economic return on investment.
Characteristics of Construction Contracts
Construction contracts have unique characteristics, which distinguish
them from other businesses.
These characteristics make the contracting business risky, difficult to
manage and vulnerable to bankruptcy.
 Each contract is large compared to total turnover.
 There is the need to price before production.
 Contracts involve many variations and uncertainty. This can lead to
claims, disputes and litigation.
 It is difficult to measure profit of work in progress
 Characteristics of a good contract
A good contract (but not necessarily a valid one) is normally one which addresses
the following
 Written
 Show the scope of contract
 Must explain the remuneration terms, when and how-means a series
of milestones
-less frequent the milestone payments, and later the payments are
made the greater the risk of the contractor
  Treatment of variations
construction contracts have to be altered on account of changes on the
grounds
clarity about setting forth the project and terms
 Termination of contract
 Dispute resolution
 Penalties
 Give time frame
 Contract Strategy
 A contract strategy is a process of making decisions on
 appropriate method of project delivery
 contract price
 the composition of a project team
 the conditions of contract under which the team members would
operate.
 It also involves developing appropriate processes for the
administration of contracts.
 The key elements of a contract strategy are
 Management
 design
 construction
Reaching an appropriate contract strategy requires careful consideration
of:
 the choice of a project delivery method
 the choice of a contract price
 how the contractor should be selected
 the choice of conditions of contract
 the allocation of risk to the parties through the contract
documents.
 Delivery methods
 These are organisation structures that define a framework of
contractual and communication links among project team members.
 Project organisation structures define a hierarchy of the key project
team members and give the contractual and communication links
between them
 Many different terms are used to describe an organisation structure
chosen for a particular construction project
 These are commonly known as procurement, contractual or delivery
methods, or options of project delivery.
DELIVERY METHODS
 TRADITIONAL
 DESIGN AND CONSTRUCT/BUILD
 CONSTRUCTION MANAGEMENT
 MANAGEMENT CONTRACTING
TRADITIONAL (Lump Sum/ Re-measurement)
 Characterised by separation of responsibility for design and the
production/ construction of the project.
 For this method to be truly effective, full documentation (including
the design) ideally needs to be in place before the contractor can be
invited to tender for carrying out the work.
DESIGN & BUILD
 Contractor takes responsibility for both the design and the
production/ construction of a project.
CONSTRUCTION MANAGEMENT
 Employer engages the design team and a separate construction
manager who earns a fee to manage, programme and co-ordinate the
design and construction activities, and to facilitate collaboration.
MANAGEMENT CONTRACTING
 Employer engages a management contractor to participate in the
project at an early stage, contribute construction expertise to the
design, and manage the construction of the project.
 The management contractor does not carry out any construction
work, but manages the project for a fee paid on top of the
construction costs incurred by the management contractor
In choosing the most appropriate delivery method for a particular
project the following list of issues serves as a guide
 Choose a delivery method that worked well in the past.
 The uniqueness of the contracting roles and responsibilities, this
strongly influence the choice of an appropriate delivery method.
 For example, inclusion of a construction manager on the project team
is likely to lead to the selection of construction management as a
delivery method.
 The degree of documentation available before contracts are entered into.
 Where full documentation is available, a traditional method of delivery can
be the best alternative.
 The degree of difficulty of arriving at a contract price.
 When full documentation is available and when the level of risk is low,
a lump-sum price may be a suitable option for a contract sum.
 Conversely, a cost-plus option may be a suitable alternative.

 The decision of project delivery method is followed by a decision on

the most appropriate option for the contract price
Options for contracts price
  The price payable under the contract may either be pre-ascertained in
the form of a lump sum or price rates, or determined when a project
has been completed
 The former approach is known as a fixed-price contract while the
latter is usually cost-plus
 However there are also other options that are used although less
often
Fixed-price contracts
 The contract price for specific work and services is ascertained
before any work is carried out.
 This price is said to be fixed at the start of the contract but it may
change during its execution if the contract conditions allow cost
adjustment.
Lump-sum contracts
 A lump-sum contract is the simplest form of contract. It fixes the
price to be paid for carrying out the work, before the start of the
contract.
 A lump-sum price should cover all costs, overheads, risk
contingencies and profit.
 The preparation of a lump-sum price requires access to full project
documentation including drawings, specifications and sometimes a
bill of quantities.
 The main benefit of a lump-sum price option is knowledge of the
contract price in advance
 Although contractors appear to carry considerable risk under a lump-
sum contract, the contract conditions may provide relief to
contractors for risks that are beyond their control.
Schedule contracts
 When the extent of the work (particularly quantities) is unknown
even though full documentation is available, the contractor will
often tender for the work using a schedule of prices/rates.
 Contractor will tender on the basis of firm rates
 Schedule contracts are also fixed price contracts, with the price
fixed at the start of the contract
 While it is possible to express the entire contract price in the form of
schedule prices/rates, the most common approach is to combine
schedule prices/rates and a lump-sum price
 The main limitation of schedule contracts is that the total cost of a
project is unknown until the work is completed
COST-PLUS CONTRACTS
 Cost-plus contracts are used where the true nature or extent of the
work are unknown and where the risk or contingency factor is high.
 Although the contract will have no contract price in the
 usual sense, it is most important that the basis for determining the
‘cost’ and the ‘plus’ is prescribed in the contract
 Cost’ in cost-plus contracts usually comprises direct cost to the
contractor of materials and labour.
 These ‘cost’ items constitute no risk to the contractor if they are to be
fully reimbursed by the principal.
 ‘Plus’ is the contractor’s bid price, which includes contractor’s
overhead and profit.
 The cost of preliminary items, which includes supervision, plant and
equipment, statutory costs and insurances if carried by the
contractor, may be part of either ‘cost’ or ‘plus’.
 The ‘plus’ can be a lump sum or a rate (e.g. a percentage of the
‘cost’) or a combination of both.
 Cost-plus contracts may be used in conjunction with the traditional
method of delivery, but their main application is in ‘managed’
delivery methods
 Since the contractor’s risk in cost-plus contracts is very low, the
principal needs to be aware of the possibility of the contractor’s
complacency, which could have a detrimental effect on the contract
performance
A fixed fee
 The principal and the contractor agree on a fee figure to cover the
contractor’s off-site overhead, profit and sometimes the cost of
preliminary items and on-site overheads.
 A fixed fee is usually expressed as a lump sum.
 A fixed fee remains constant even when costs vary.
 The contractor does not profit by increased expenditure unless the
nature of the work is substantially altered, which could provide the
grounds for renegotiation of the fee.
 The risk with this arrangement is that the lump sum for the fee must
be fixed with a particular quantity of work and time in mind
 The contractor’s incentive is to do the work quickly and in
accordance with the drawings and specification in order to:
 reduce the proportion of overheads, which are a factor of the duration of
the project
 The risk can be reduced for both parties by including in the contract
agreed limits of cost and time beyond which the lump sum will not
apply.
Percentage fee
 When the project period is difficult to estimate, the contractor’s fee
may be expressed as a percentage of the actual project cost.
 Under this arrangement the contractor’s risk is further reduced
 The contractor may be seen as profiting from increased expenditure,
since the contractor’s fee rises when project costs rise
 A cost-plus percentage fee contract can only be satisfactory if the
contractor is selected for integrity, ability and financial stability
A fixed fee/percentage fee plus a bonus or penalty
 This type of arrangement is used to offer incentives to the contractor
to facilitate better performance and to keep the project cost and time
within the overall budgets.
 The contractor will be paid as a bonus an agreed percentage of the
saving, if the saving was realised.
 Conversely, if the final cost is higher than the agreed estimate (also
known as a ‘target price’ or a ‘guaranteed maximum’), the contractor
would incur a ‘penalty’ by having the fee reduced accordingly
Principles of standard forms of construction contract
 The construction industry has an extensive portfolio of standard
contracts to structure the relationships between organisations and
implement the employer’s chosen procurement route.
 These standard contracts have been authored over many years to
incorporate lessons learnt from the industry’s history of litigation so
that problems are not repeated.
 It is therefore common practice for the construction contract between
the employer and the contractor to be based on a ‘standard form
construction contract’.
 Standard forms have established appropriate and effective ways to
manage organisational relationships, risk, processes, and
construction documentation.
 Because these matters arise in all construction projects, all contract
forms address the same issues, but do so differently according to the
principles of the employer’s chosen procurement route.
 The term “form of contract” refers to a pre-authored standard
contract.
 When considered together, all the standard particulars, clauses,
appendices, and so forth in the standard contract are intended to
create a pre-defined legal relationship between two parties, in which
each other’s rights, responsibilities and liabilities are familiar and
understood beforehand.
 They are called “forms” of contract because everyone knows what is
in them and how they should be used on a project.
 Contractual difficulties can be largely avoided by ensuring that the
correct standard form is used and that it is followed when activity
starts on site.
 Standard contracts are a default solution which is taken “off the
shelf” and applied to the project.
 The construction industry uses standard forms of contract to:
 save time in writing new contracts
 provide a checklist of issues to agree
 incorporate previous judicial decisions
 promote familiarity
 Standard forms have been subjected to close scrutiny by lawyers,
courts and the contracting parties themselves, with the result that
most uncertainties have been systematically removed.
 They offer greater certainty of the meaning of the conditions
However their main drawback is that they tend to cover all possible
contingencies across all project types and may not be totally applicable
to a particular project.
 This leads to minor or major modifications of some contract
conditions, which unintentionally alter the meaning of the contract
 Although it is advisable not to amend standard forms, they are
frequently amended by employers (by deleting certain clauses and
adding new clauses that are designed for specific requirements an
employer may have).
 Publishing Bodies and Standard Forms of Contract families/ suites
 The Joint Contracts Tribunal (JCT) – United Kingdom
 The New Engineering Contract (NEC) – Institution of Civil Engineers,
UK GC/Works – UK Government
 FIDIC – International Federation of Consulting Engineers
 ACA – Association of Consultant Architects
  IChemE – Institution of Chemical Engineers
The suites have generally emerged for historical reasons and tend to
provide contract forms intended for use on a particular type of
construction work or to reflect a particular working philosophy.
 Agreement and schedule of conditions of building contract
(approved and recommended by institute of architects of Zim, the
Zimbabwe institute of Quantity surveyors and construction industry
employer’s association of Zimbabwe
 NJPC2000
 ZGCC4
 All contract forms are continually updated to respond to the evolving
needs of the construction industry
Selecting general conditions of contract
 In selecting general conditions of contract important issues to be
considered are as follows:
 the method of project delivery
 the participants
 the type and size of the project
 The manner in which the contract sum is expressed.
 Interpretation of contracts

Interpretation:
The activity of determining the linguistic meaning (or semantic
content) of a legal text
Or it can be described as the process of endeavoring to ascertain
the meaning or symbolic expressions used by the parties to a
contract
When interpreting a written contract the primary concern is to
ascertain and give effect to the mutual intent to the parties at
the time of contracting
General rules of interpreting contracts
 Establish the intention of both parties, as this is important
 Words to be given normal everyday meaning
 Contract must be considered as a whole with the meaning taken from
the entire context rather than portion of a clause or agreement
 All provisions of contract must be given effect when possible
(provision is construed in harmony with others to give each provision a reasonable meaning)
 If words have more than one meaning, word which makes the
contract effective is used (reasonable meaning is adopted)
  An ambiguous clause is interpreted so as to be in harmony
with the whole contract (if it has more than one
interpretation)
 Words written at a later date take precedence over those
written at an earlier date
 Specific provisions in a contract is given preference over
general one
Where general provisions conflicts with more specific provisions-
specific provisions should be followed
 Writing vs printing
 When a contract is partly printed or typed and partly hand written
and the printed portion cannot be reconciled with the hand written
portion, the letter will prevail
 Words vs Figures
In the event of inconsistency between words and figures
appearing in a contract, the words will govern
 The eiusdem rule/Ejusdem generis rule
The phrase means ‘of the same type’.
This means that where words of a particular class of words are
followed by general words, the general words are treated as
referring to matters in the same class.
 Interpretation of contracts
example is the presence of a clause that entitled the contractor to an
extension of time if the works were ‘delayed by reason of any
alteration or condition ... or in the case of a combination of
workmen, or strikes, or by default of sub-contractors ... or any
other cause beyond the contractor’s control’.
The clauses were held to be limited to those ejusdem generis within
the clause described. It will not therefore, include
The employer’s default in failing to give the contractor possession
of the site.
 Contra proferentem rule
This simply means that where the words are ambiguous they are
construed against the preferer, the person who drafted the
document.
Where the representative bodies or committees have drafted a
standard form of contract the rule has no application.
 The parole evidence rule
It’s a rule that prevents a party to a written contract from
presenting additional evidence outside of the contract that
contradicts or adds to the written terms of the contract.
However, there are many exceptions where evidence can be
admitted
 Standard building forms of contracts
The Articles of Agreement section
 It is the most important part of the contract.
 It is the core statement of what the parties have agreed;
without it, and in the absence of some other contractual
arrangement, there is no contract.
 The section state the formal agreement between the
Employer and the Contractor to execute the work according
to the contract documents for a stated contract sum.
 The section begins by recording the names and addresses of
the parties, who are introduced immediately as the Employer
and the Contractor.
 The parties may be companies or individuals.
 The Articles set out the essentials of the contract: the Works;
the Contract Sum; the Date of the Agreement, and the
Contract Documents
 They identify the Employer’s agents: the Architect and the
Quantity Surveyor and set out arrangements for replacing
them.
 The Works are typically described in very basic terms
Article One
 states the Contractor’s duty, to build
Article Two
 states the Employers corresponding duty, to pay
Articles Three and Four
 identify the Architect and the Quantity Surveyor. The
Contractor is entitled to object to a re-nomination of the
Architect or Quantity Surveyor, but an Arbitrator must
considered that there is a valid reason for such objection
The Appendix
 The purpose of the appendix is to gather together the various
items which might vary from contract to contract, and
thereby to simplify the task of reference.
 The Annexure
The Conditions of Contract.
 The Conditions of Contract represent the terms under which
the work is to be undertaken.
 They are the detailed arrangements which regulate the
relationship between the employer, architect, quantity
surveyor and contractor and describe their powers, duties and
responsibilities.
 Contract clauses
Scope of Contract
 The contractor must complete the works in accordance with the
Contract Documents to the satisfaction of the Architect.
 The contractor must also comply with Architects Instructions
regarding;
 modifying the design, quality or quantity of the works;
 correcting discrepancies between the contract documents;
 removing materials from site,
 opening up covered work,
 condemning work and having it redone,
 postponing work,
 Instructions may involve variations or loss and expense. The cost
implications of these are added to or deducted from the Contract
Sum.
 If the Contractor doesn’t comply with an Instruction the Employer
can arrange for someone else to do it and charge the Contractor for
it.
 Although an Architect can issue instructions he cannot materially
change the scope of the works without contractors consent.
 The instructions given should be in writing, or verbal to be
confirmed within seven days
 Architect’s instruction cannot be rejected by the employer
 Interpreting clauses
Clause 2 Contract documents
The contractor is required under this clause to furnish before
signing a copy of a fully priced Bill of Quantities
The contract documents to remain in custody of the Architect
i.e drawings, specifications as well as the copy of the Bill of
Quantities
The Architect is required to produce these documents when
they are required by the parties to the contract
Neither part is allowed to divulge the information contained in
the Priced Bill of Quantities.
The Architect is also required to furnish the contractor with the
required contract documents for no charge
The contractor is required to keep a copy of these contract
documents at the works such that the Architect and the
Quantity Surveyor or their representatives have access to
these documents
Upon full payment of the contractor he is required to return all
the drawings and specifications
All these documents highlighted before shall not be used by
either part for any other purpose other than this contract
Clause 3 Contractor to provide everything necessary
The Contractor is required to provide all, including that not
expressly shown.
Contractor as an expert is required to provide everything that
will enable him for proper execution and completion of
works
This clause refers to plant and equipment not expressly
described in the documents.
What is not clearly described in the drawings and bills of
quantities but is required is treated as a variation
Clause 4 Local and other Authorities notices and fees
Contractor required to comply with all rules and regulation as
laid by the authorities that have jurisdiction with regard to
the works
The contractor is required to pay and indemnify against any
fees or charges legally required by the authorities
if these fees and charges are not included in the contract ,these
are added to the contract sum and included in the next
payment certificate
 The contractor is required to give a written instruction to the
Architect if they are any variations necessitated by
compliance to regulations or by laws.
 If the Architect did not respond within the stated period the
contractor is required to proceed with the works in
compliance to the regulations and bylaws and such variation
are treated as variation under clause 10 consensual
 Interpreting clauses
Clause 5 : Setting out of works
It is the duty of the architect to provide drawings or personnel
supervision at the time of setting out of works
If any error arises from inaccurate setting out by the contractor the
amendments are done at his own cost
Clause 6 : Materials and workmanship to conform to description
The contractor is required to provide Materials and workmanship as
stated in the contract.
The architect has power and authority to authorise any tests and the
cost of such tests are added to the contract sum unless provided for
in provisional sum
Clause 7: Foreman
The contractor is required to have a foreman on site at all times
to receive instructions on behalf of the contractor
Clause 8 : Access to works
Under this clause the architect and his team are given right of
access to the works and workshops and other places of the
contractor or subcontractor(domestic or nominated) where
work is being prepared for the contract
 Interpreting clauses
Clause 9: Clerk of works
The employer is required to appoint a clerk of works - This is
an inspector working under the direction of the architect he
inspects and reports to the architect.
He is not an agent of the architect and therefore can not give
instructions
The contractor is required to provide facilities to the clerk of
works to enable him to carry out his duties
Clause 10 Ascertainment of prices for variations
This clause is essentially concerned with (a) defining what
constitutes a variation (b)defining the methods in which
variations are to be ordered (c) laying down the rules for
valuing variations 
 The clause sets out the following guidelines:
No variation vitiate the contract.
Under this clause, the architect is to make variations with
resemblance to contract works and any other work shall be
governed by a new agreement.
All variations shall be measured and valued by the quantity
surveyor.
The contractor shall be afforded the opportunity to be present
during the site measurement of variations. 
The main aim of the clause is to set out basic rules for the
measuring of variations, which are as follows;
The clause states that the rates in the bills of quantities may be
used to value variations if the extra work is similar in
character and is carried out in similar conditions as that
referred to in the contract bills.  
Where work is not of similar character Subclause (b) states that
the rates may be used as far as reasonable, failing which a
fair valuation is made.
Where works can not be properly measured and valued in
accordance with the provisions of sub- paragraphs (a) and (b)
The contractor is allowed daywork price at rates stated in the
bill of quantities
If no such rates have been stated, then at a rate calculated upon
the cost of material used at the then current market value, plus
transport, plus 25% plus the actual amount of labour which
include payment on account of NEC, holiday fund, medical
fund, general fund and government levy, plus 40% which shall
be the total amount recoverable by the contractor for
performing the work
If the Architect or his representative need to verify, vouchers
specifying the time spent daily upon the works as well as
the vouchers of materials used shall be issued to them not
later than the end of the week following that in which work
has been executed
CLAUSE 11:Bills of Quantities
 The quality and quantity of work in the contract sum is
assumed to be as laid in the bills of quantities
 The bills are deemed to have been prepared in accordance
with the current edition of the systems of measurement as
adopted by the institute of quantity surveyors
 Error in BQ to be rectified and treated as variation
 No rectification of errors in pricing is allowed after signing of
the contract
Clause 12:Unifixed materials
 The contractor is allowed to claim for the value of unfixed
goods or materials whether on building site or stored at
some other approved places
 Unfixed materials when taken into account to be the property
of the Employer
 The Architect should not unreasonably refuse provided the
contractor furnishes the Architect a written
acknowledgement that the said materials/ goods are the
property of the employer
 The contractor is responsible for any loss of or damage
 If the architect include the value of such unfixed materials,
payment is done in accordance with clause 22
CLAUSE 13:Defects after completion
 The contractor is required to attend to all defects which
appear within the defects liability period at his cost
 Any damage due to actions of elements which appear after
completion are not done at contractor’s cost unless the
Architect decide otherwise
 Any leakage or damage due to poor workmanship or
materials which is not in accordance with the contract is
made good by the contractor at his own cost
 The works are supposed to be exposed to heavy rains and as
such defect liability period should be extended to enable test
by heavy rain
CLAUSE 14:Assignment or subletting
 The contractor is not allowed to assign or dispose the
contract or any of his rights or obligations or to sublet any
portion of the works without the consent of the Architect
In sub contracting, main contractors right remain
unaffected
Main contractor will remain responsible for the
performance of subcontractor
CLAUSE 15: Damage to persons and property
 The contractor is required to indemnify the employer in
respect of any death, injury to any person arising from
execution of works
 Contractor not liable if the cause is because of negligence of
the employer or any person for whom the employer is
responsible
 The contractor is required to insure against any injury or
damage to property (movable or immovable) which resulted
or which is in connection with the execution of the works
 The contractor is only liable to damage caused by persons
for whom he is responsible or to circumstances within his
control
 The contractor is required to insure himself and to make sure
that every sub contractor is insured
 He is authorised to request polices or receipts showing
payment of premiums by subcontractors as when required by
the Architect
 If the contactor fails to comply, then the employer may
insure against any risk with respect to which the default may
have occurred and may deduct the premiums paid from any
monies due or to become due to the contractor
Clause16: insurance
 The contractor and client in joint names are required to
insure against works
 Specified perils (specified cause of loss) insurance
This provide for insurance against fire, lightning, riot civil
commotion, strike, storm etc refer (clause 16 part a) this is
covered to full value plus 12% to cover for professional fees
 The insurance cover is taken to cover up for the works
including materials up to completion
 The insurances are supposed to be by an approved company
If the contractor defaulted then, the client may insure the works
as aforesaid and deduct the premiums paid from the monies
which are due or to become due to the contractor
 The contractor is required to proceed with repairs or to
rebuild works destroyed upon settlement of any claim
 The contractor is entitled to the extension of time in terms
and subject to provisions of clause 19
 All the monies received under the policies (less 12%) are to
be paid to the contractor by installments under the certificate
 The contractor is not entitled to payment for rebuilding or
repair of the works other than the monies received under the
said policies
For existing structures the employer is responsible for the
risk(see clause 16b for details)
 Clause17:Date for possession and completion Employer
to give contractor site on or before contract start date
 Contractor to progress with due diligence and complete
the works on or before the date stated in the appendix
subject to provision contained in clause 19
 
Clause18: Damage for Non Completion
The contractor is required to complete the works within the
period stated in the appendix or any extended date
 Employer entitled to deduct damages for late completion
only;
If architect certifies that works are not complete
 The rate which is stated as LAD in the appendix is used
Clause19:Delay and extension of time
Contractor to notify of delay, stating cause of delay, take
remedial action and claim extension of time
 Grounds for extension of time are as stated in the contract
 The architect to make reasonable assessment and give
extension of time for the completion of works
Clause 20: Nominated sub contractors
All specialists and other executing works or supplying
goods for which provisional sums are included in the bills of
quantities
 The contractor is responsible for the performance of all
subcontractors including nominated subcontractors
 Tender and acceptance of subcontractor
 Subcontractor to indemnify main contractor
 Payment to nominated subcontractors should be done
within 7 days of his receipt of payment
 Final payment to subcontractors may be made even before
final certificate is issued
 Clause 21: PC Sums, nominated suppliers

 The definition of PC is
 Adjustment of PC sums
 Profit and attendance for any additional works allowed
 Execution of works by artist and tradesman engaged by
the employer
 Contractor’s consent of such employment
 Contractors tender for specialist work
 
Clause 22: Certificates and Payment
 Period of valuation stated in the appendix
 Contractor is given a certificate showing the amount due to
him
 Contractor entitled to payment within the period named in
the appendix
 Failure of the employer makes him liable to the contractor for
any legitimate claim submitted by the contractor
 The amounts payable by the employer are as specified
 Value of materials only included if the materials are
adequately protected
 Prematurely delivery of materials not allowed
 Retention monies held up to a limit which shall not exceed
10%
 Payment of retention fund is as specified in the contract
Clause 23: Determination of contract by the employer
Condition for determination of contract are stated in the contract
and are as follows;
(i) Contractor suspends whole works
(ii)contractor fails to proceed with works with
reasonable diligence
(iii) Failure to carry Architect’s instruction given in
accordance with the contract
 Insolvency of the contractor also results in determination
The procedures for such determination also specified
Rights and duties of contractor upon determination are outlined
as follows
  The employer may employ and pay another person or persons
to carry out and complete the works
 The newly appointed contractor or person is given the right to
use all materials and goods, temporary buildings, plant,
machinery and appliances
 Purchase all materials necessary for carrying out and
completion of the works
 The contractor shall if so required by the employer or
architect assign to the employer without further payment the
benefit of any contract for supply of material and or works
 The employer shall pay for such materials or works supplied under
such agreement
 The contractor is required to remove from site during or
after completion of the works as may be specified by the
architect in writing any temporary buildings, plant,
machinery, appliances goods or materials belonging to him or
hired by him
If contractor fails the employer may remove and sell the
above and recover his costs
All payments to the contractor are stopped until completion of
the works and final settlement of accounts
Clause 24: Determination of contract by the contractor
Reasons for determination
 Failure to pay monies which are due
 Interference or obstruction of the issuing of any certificate
 The employer is insolvent or commit any act of insolvency
 If the employer repudiates the contract
 If the contractor is delayed for no apparent reason for 3
months
Procedures to be followed
1st notice of specified event or default, then if default
continues or is repeated then notice of determination
without considering any rights or remedies of other party or
any liabilities
The contractor shall remove his or their temporary building,
plant, machinery, appliances, goods or material
The clause also outlines the rights and liabilities of the
contractor and the employer and they are outlined as follows
 Remove all his temporary buildings, plants, machinery,
appliances, goods or material and should give his
subcontractors the same facility but subject to sub – clause (b)
section (iii)
 The contractor shall be paid by the employer
 The contract value of the works completed at the date of
determination
 The value of work commenced but not yet completed the
value being ascertained mutatis mutandis (taking into
consideration changes)
 The cost of materials or goods properly ordered or delivered
for works actually paid for by the contractor or those
materials which he is legally bound to accept delivery and
upon payment becomes property of the employer
 The reasonable cost of removal under sub – clause (a)
 Any loss or damage caused to the contractor owing to
such determination
In addition to all other remedies the contractor may take
possession of and shall have lien upon all unfixed
material and or goods intended for the works which may
have become the property of the employer under this
contract until payment of all monies due to the contractor
from the employer
 Clause 25: Arbitration
The clause lays the procedures to be followed in the event of
any dispute which might arise between the client and the
contractor in terms of this contract
The architect determines such matter or difference and makes
a decision
The decision given is final and binding unless the contractor is
against the decision
 The contractor is allowed to protest against the decision
within 14 days of the written notice and the case thereof shall
be referred to arbitration
The architect is required to respond within 14 days of written
notice if the he fails to respond, the dispute or difference is
referred to arbitration
The arbitrator is chosen in mutual agreement between the
parties,
If they fail to agree, the arbitrator is chosen by mutual
agreement between the president of IAZ and the president
of the construction industry employer’s association of
Zimbabwe
If they fail to agree again the arbitrator to be chosen by the
contractor from two persons nominated by the president of
IAZ provided it will not be someone who was previously
nominated when the two presidents failed to agree
The arbitrator is given powers to open up , review and revise
any certificate, opinion, decision, requisition or notice that
will have been given
also gives decision in terms of cost of reference and as how such
costs can be borne and paid for
The arbitrator has the power to give an award