CONTRACT and ENFORCEMENT

Post 232 – by Gautam Shah

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A neat contract is one where things are delivered for consideration, and strictly in a one-way transaction. Contracts, however, are very complex documents, and the relationship sought in it even more complicated.

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For a contract to be clean, it must have one-way transfer of compensation and another way of object deliverance. Yet certain jobs require clients to provide information, materials, equipments, facilities or services to the contractor (as per the terms of a contract or job specifications). Even if such things are offered with or without a consideration and, the contracting parties get tied up in a Reverse Transaction. A client, failing to deliver as promised, takes the blame for missed schedules and cost overruns. Specifications causing such Reverse Transactions are prone to enforcement difficulties.

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ACCURACY AND COMPLETENESS OF CONTRACT SPECIFICATIONS

A Contract is in force the moment it is signed, or dated to be effective. Once a contract comes into force, any thing that has been left-out, or not properly defined, can be only corrected through a Negotiated Supplementary Agreement. A Contract and Specifications must not leave out any aspect, as something to be agreed or determined later on (e.g. a clause like: paint of x quality, but colour shade to be approved later).

Specification Writing is a last moment compilation, and as a result it is common to see specifications of items that no longer exist, or have been eliminated from the project. Specifications of only intended items and required quantities of work should be provided to the contractor. Otherwise, the bids will reflect the necessity of being prepared to handle Intended items and Quantified work.

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SPECIFICATIONS AND FAIR TRADE PRACTICES

Avoid specifying a particular product, agency, tool, equipment, or a patent process. Favouring one, to the exclusion of others would mean Unfair Trade Practice. It is a good business sense to encourage competition to achieve better prices and quality. Competition also provides optional and reliable sources of supply. Mentioning a particular product, provides an unintentional warranty of its suitability for the purpose. It is better to confine Specifications to Requirement Statements.

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PROPERTY DISPOSAL

When Writing Statements of Work, the Contractor must be told How to dispose of residual materials, garbage, sewage, emissions, etc. Such Disposal Procedures have to follow the local regulations, often at cost. The liabilities arising out of compliance and the cost operations need to be specified. If the residual materials are to be handed back to the client, then handling and storage must be specified. If disposal of such items is likely generate an income, who takes the money must be mentioned. The Tax liabilities of expenditure, income generated, or sales done for disposal, also requires clarification.FAA_O'Hare_Diagram.svg

VALID CLAIMS

A Designer and Client realize shortcomings of the work being executed, and request alterations or corrections. Such changes are not executed unless formally requested. The cost of such constructive changes is to be paid by the client and is considered a Valid Claim. Contractors also make mistakes. A contract specifies modalities for notifying mistakes and what is considered to be improper communication of information or reportage by the contractor. Contracts also list modalities for corrective action and settlement of costs.

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DATA for PROFESSIONALS

Post by Gautam Shah

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Work of a Professional begins with the mandatory data / prime information provided by a Client. When a professional comes to know of a potential client with job, a specific “schedule of data requirements are presented. Some of the required data items are obvious and easily available, yet it helps to know the sincerity of the client. In the first or first few encounters a professional must check out the capacity of the client to furnish such data. Such demands also make a client aware that a professional has begun the assignment, and the stakes involved in design-making.

 

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In exceptional cases, where the client is invisible and represented by a ‘Statutory Body’, very little data is likely to be available. Here the client is incapable of providing the data, and so it is up to the professional to get the same collected, but with the client’s consent and cost.

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A professional may not have the right to use the data collected for, and paid by a client, for any other client or purposes. It always remains property the client. Whenever a client provides a crucial data like sizes, technical requirements, permissions etc. the transfer of information should be formal and well recorded.

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In some cases it is only the client that can provide the necessary input, and a professional must make the client aware of the situation. A client should also be made formally aware of data that is being procured by the designer as part of a chargeable service or courtesy. Whenever a chargeable service is provided, a formal pre-approval / consent of the client is necessary. 

A professional cannot challenge a client’s right to procure the data from other professionals or sources. As a matter of fact, it is considered a professional decency to make a client aware of own right.

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A professional, however, competent will require the services of other professionals. A professional remains responsible for the delivered data where the main professional pays for such data. And here the main professional must exclusively appoint such agencies and receives the output. Often the main professional has no role, or only an advisory role in such appointments. If an external agency is retained by the client to procure data, all the resultant output becomes the exclusive property of the client. The client has a right to make that available, to a professional, only the relevant parts of such information.

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Normally the person who pays, receives the output, and has the first and exclusive right to the data. The party that pays for data, also acquires the inherent risks and liabilities.

When a professional, directly hires another professional, the risks and liabilities increase manifold. However, if a client, retains other agencies, the risks and liabilities of the main professional are diluted. Contributions from independent professionals should be favoured, because these provide greater clarity, a counter check, division of responsibilities and dilution of risks.

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