Aspects of Contracts

.1 Explain the importance of the essential elements required for the formation of a valid contract in the following situations: P1. 1 1. Temporary daily wages Worker doing work and following instructions from the supervisor 2. Tenant staying in an apartment 3. Contractor working on project site 4. Customer in an Amusement Park 5. Buyer and Seller of Consumer Product like Body Lotion Guidelines: You need to specify the essentials of the contract like written terms, verbal, implied etc, terms & conditions, validity, the area of application, acceptance & intent in each situation to achieve P1. 1 1.

2 Discuss the impact of the contract on the parties who have signed it and also on the others P1. 2 Guidelines: You need to explain how the signing of the contract between the site Owner and contractor has impact on the two parties and also on others like subcontractors, customers, site inspectors etc regarding factors like Health & Safety, compensation, non-compliance etc 1. 3 The following is a part of contract between contractor and Owner of a site “OWNER/CONTRACTOR AGREEMENT THIS CONTRACT made this 21st day of October, 2011, by and between Nakeel LLC hereinafter called “Owner” and AL Tawir hereinafter called the “Contractor.

” WITNESSETH: Mr. Imran Hussain and Mansoor Khan That the Owner and the Contractor, for the considerations hereinafter named, mutually agree as follows: ARTICLE I CONTRACT DOCUMENTS The Contract Documents shall consist of the Construction Rehabilitation Contract, Conditions of the Contract (General, Supplementary and Other Conditions), Attached Sketches and Noted Photos, Specifications, Addenda issued prior to execution of this Agreement, other documents listed in this Agreement and Modifications issued after the execution of this Agreement; these form the Contract and are as fully a part of the Contract.

The Contract represents the entire and integrated agreement between the parties and supersedes prior negotiations, representations and agreements, both written and oral. In the event of a conflict among the Contract Documents, the Documents shall be interpreted according to the following priorities: First Priority: Manufacturer’s Most Recent Installation Instructions Second priority: Construction/Rehabilitation Contract Third Priority: General Conditions of Contract, 2000 version.

Fourth Priority: Addenda to Specifications or Drawings (with later date having greater priority) Fifth Priority: Work Write-Up dated ______________ Sixth Priority: Drawings (Plans) dated _____________ “ Explain and analyze the terms in the above contract with reference to their meaning and effect P1. 3 1. 4 Explain how you can make the situation in Worker-Supervisor situation more effective in implementation and water tight from legal point of view M1 Task 2 2. 1 Apply the elements of contract in the given situations given below: P2. 1.

a) The Contractor has not trained the workers on the site in operating the heavy Equipment and there is evidence of the workers not using the equipment due to the lack of training b) The small Grocery shop in Bur Dubai has been noticed selling expired products to customers at 50% discount 2. 2 The contract awarded and signed by the Owner and the Contractor has this performance time clause and the penalty clause for non-Performance as given below: P2. 2 “ TIME OF PERFORMANCE The services of the Contractor are to commence on 21st October 2011 and shall be completed by 20th October 2013.

As time is of the essence, the Contractor will, if these services are not completed within this time period, be assessed the amount of $175 (one hundred and seventy five dollars) for each day the work is not substantially completed after 1st November_2012 unless an extension is granted by the Owner. Liquidated damages shall be deducted from the total amount of payment due the Contractor under this Contract. “ The contractor has completed just 85% of the work as certified by the Works Manager and due to this RTA has not been able to complete the Metro station work at Jebel Ali terminal.

Explain the application of this term of the contract and evaluate the other impacts to the parties and third parties the people of Dubai. P2. 2 2. 3 Evaluate the effects of the following terms in the contract between Owner and Contractor of a Project P2. 3 a) Owner/Contractor agreement b) Witnesseth c) Contract documents d) scope of services e) contract price f) progress payments g) contractor affidavit h) owner’s representatives/lender’s agents i) changes in the work j) fines k) termination of agreement l) arbitration m) assignment of contract

Guideline: You can refer to appendix A attached at the end of the sheet Assignment Guidelines: Merit: To achieve M3 your responses to the tasks in the assignment should illustrate logical, structured and coherent approach and use accurate technical language Distinction: To achieve D1, show synthesis in generating and justifying your decisions in the case studies and the scenarios throughout the assignment Appendix A OWNER/CONTRACTOR AGREEMENT THIS CONTRACT made this 21st day of October, 2011, by and between NakeelLLC hereinafter called “Owner” and AL Tawir hereinafter called the “Contractor.

” WITNESSETH: That the Owner and the Contractor, for the considerations hereinafter named, mutually agree as follows: ARTICLE I CONTRACT DOCUMENTS The Contract Documents shall consist of the Construction Rehabilitation Contract, Conditions of the Contract (General, Supplementary and Other Conditions), Attached Sketches and Noted Photos, Specifications, Addenda issued prior to execution of this Agreement, other documents listed in this Agreement and Modifications issued after the execution of this Agreement; these form the Contract and are as fully a part of the Contract.

The Contract represents the entire and integrated agreement between the parties and supersedes prior negotiations, representations and agreements, both written and oral. In the event of a conflict among the Contract Documents, the Documents shall be interpreted according to the following priorities: First Priority: Manufacturer’s Most Recent Installation Instructions Second priority: Construction/Rehabilitation Contract Third Priority: General Conditions of Contract, 2000 version.

Fourth Priority: Addenda to Specifications or Drawings (with later date having greater priority) Fifth Priority: Work Write-Up dated ______________ Sixth Priority: Drawings (Plans) dated _____________ ARTICLE 2 SCOPE OF SERVICES The Contractor shall do all the work and provide all the materials, tools, machinery, supervision, relocation and site security, necessary for the rehabilitation of the property located at ____ all in accordance with the Contract Documents which are attached hereto and expressly incorporated herein by reference and made a part hereof.

The contractor shall perform the entire rehabilitation of the residential structure as described in the contract documents except as indicated as follows to be the responsibility of others: Work Not Included In Contract Contractor ___ ___ ___ ___ ARTICLE 3 TIME OF PERFORMANCE The services of the Contractor are to commence on __21st October 2011 and shall be completed by 20th October 2013. As time is of the essence, the Contractor will, if these services are not completed within this time period, be assessed the amount of $175 (one hundred and seventy five dollars) for each day the work is not substantially completed after _15th.

November_2013 unless an extension is granted by the Owner. Liquidated damages shall be deducted from the total amount of payment due the Contractor under this Contract. ARTICLE 4 CONTRACT PRICE In consideration of the terms and obligations of this Contract, the Owner agrees to pay the Contractor $___________________________________________________Dollars. The Contract Sum is based upon the following alternates, which are described in the Contract Documents and are hereby accepted by the Owner:

#1__________________________________________________________________ #2__________________________________________________________________ #3__________________________________________________________________ ARTICLE 5 PROGRESS PAYMENTS The Contractor agrees that the total contract price shall be paid in one or more progress payments based upon the value of the work satisfactorily completed at the time the progress payment is made.

Such progress payments shall be disbursed on a monthly basis, after inspection and approval of the work by the Owner and Our Program, or its duly authorized representative, less a retain age of 10% of the price of the work completed. Prior to receiving any progress payment, the Contractor shall furnish the Owner with Application and Certificate for Payment Owed To Date, for the materials and labor procured under this Contract.

Upon completion of the whole Contract and acceptance of the work by the Owner and Our Program, and compliance by the Contractor with all Contract terms, the amount due the Contractor shall be paid including any retainage. The Owner and Our Program shall approve a final disbursement of all amounts withheld from prior disbursements upon the completion of the construction of the Project as evidenced by the final approval by all code agencies and a field inspection by Our Program. Our Program and the Owner may withhold from such disbursement up to two hundred percent (200%) of any amounts required to complete the scheduled value of “punchlist” items so-called, and seasonal work such as landscaping.

ARTICLE 6 CONTRACTOR AFFIDAVIT Prior to each payment by the OWNER, the CONTRACTOR shall affirm in writing that there are no liens or claims filed against the CONTRACTOR or Owner related to materials, labor or services supplied on this or any other project in which the CONTRACTOR was or is currently involved. No payment shall be made to the Contractor if a lien has been filed with respect to the work which Is the subject of this Contract.

Final payment shall be made within fourteen (14) days after the request for payment by the CONTRACTOR, provided that the Work of the Contract be then satisfactorily performed, subject to the provisions of the Contract Documents, and further subject to receipt by the OWNER of the same Affirmation relative to existing liens or claims against the CONTRACTOR as set forth above. Upon such final payment, the CONTRACTOR shall provide to the OWNER a Final Release of Lien stating that the CONTRACTOR has no further claims or liens against the Owner for materials or labor supplied under this Agreement.

ARTICLE 7 OWNER’S REPRESENTATIVES/LENDER’S AGENTS The Owner’s Representatives shall be: (Construction Manager) (Neighborhood Director) The Owner’s Representatives will provide administration of this Contract during construction and throughout the warranty period. The Owner’s Representatives will visit the site at intervals appropriate to the stage of construction to determine if the Work is proceeding in accordance with the Contract Documents.

Based on Owner’s Representative’s evaluation of Contractor’s invoices for payment, the Owner’s Representative will determine the amounts owing to the Contractor. The Owner’s Representatives will have authority to reject Work that does not conform to the Contract Documents. If the Contractor fails to correct defective Work or persistently fails to carry out the Work in accordance with the Contract Documents, the Owner’s representatives, by a written order, may order the Contractor to stop the Work, or any portion thereof, until the cause for such order has been eliminated. ARTICLE 8.

CHANGES IN THE WORK After this agreement is executed by the Owner, any changes to the scope of Work, budget or time schedule, if any, must be agreed upon in writing by the Owner and Contractor and approved by the lender’s representatives. ARTICLE 9 FINES The Contractor is responsible for the means and methods of executing scope of work. The Contractor is specially trained in the safe work practices in lead hazard reduction and therefore agrees to hold the owner and the agency harmless in the event of any fines from federal or local agencies controlling the lead hazard reduction work.

The Contractor agrees to immediately satisfy any and all fines or judgments presented by OSHA, EPA, the local or state health department, the state office of lead hazard control and any other governmental agency having jurisdiction over the lead hazard reduction work. ARTICLE 10 TERMINATION OF AGREEMENT This agreement may be terminated by either party upon seven days’ written notice should the other party fail substantially to perform in accordance with its terms through no fault of the party initiating the termination.

This agreement may be terminated by the Owner upon at least seven days’ written notice to the Contractor in the event the project is permanently abandoned. In the event of termination not the fault of the Contractor, the Contractor shall be compensated for all services performed to the termination date. ARTICLE 11 ARBITRATION All claims, disputes and other matters in question between the parties to this agreement, arising out of or relating to this agreement or the breach thereof, shall be decided by arbitration in accordance with the Construction

Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise. No arbitration arising out of or relating to this agreement, shall include, by consolidation, joinder or in any manner, any additional person not a party to this agreement except by written consent containing a specific reference to this agreement and signed by the Rehabilitation Specialist, the Owner, and any other person sought to be joined.

Any consent to arbitration involving an additional person or persons shall not constitute consent to arbitration of any dispute not described therein or with any person not named or described therein. This agreement to arbitrate and any agreement to arbitrate with an additional person or persons duly consented to by the parties to this agreement shall be specifically enforceable under the prevailing arbitration law. Notice of the demand for arbitration shall be filed in writing with the other party to this agreement and with the American Arbitration Association.

The demand shall be made within a reasonable time after the claim, dispute or other matter in question has arisen, in no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim dispute or other matter in question would be barred by the applicable statute of limitations. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. ARTICLE 12 ASSIGNMENT OF CONTRACT.

This agreement may not be assigned to any other Contractor or Agent of Contractor without the written approval of the Owner and Our Program. IN WITNESS WHEREOF, the parties hereto executed this Agreement the day and year first above written. Contractor Acceptance By Owner Name of Contractor Name of Owner(s) Signature of Contractor – Title Signature of Owner Name of Owner Signature of Owner Witness: _________________________________ Subscribed and sworn to before me by the above: This ______ day of ____________, 200___ Notary Public.