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Top 5 Secrets You Need to Know About Contracts
By Michael Emerzidis
- Scope of works & Scheduled inclusions
- Progress claim Breakup
- Construction Programme
- Requirements & Formalities
- Liquidated Damages
Scope of Works
When you are considering entering into a contract for works, it is critically important that you read and understand the scope of works and scheduled inclusions and exclusions. This is because you may be liable to undertake works that has not been excluded from the contract. You should not always rely upon your tender submission or quotation as this may not be accurate. It is important to do your due diligence and check that everything that you are required to do is included in the contract. If it is not, then you may need to negotiate with the other party to have this included or risk being in breach of contract. Michalis & Associates can assist you with this process to ensure that you are fully informed of your rights and obligations under the contract.
Progress Claim Breakup
Cash flow is one of the fundamental problems that contractors face. It is essential to have a healthy cash flow to be able to cover the costs of materials, wages, and other associated costs. One way to ensure a healthy cash flow is to correctly submit progress claims. This means providing an accurate breakdown of the line items for your costs. Often times, contractors underestimate their costs when putting together a progress claim, which can lead to cash flow issues down the line. By taking the time to correctly itemize your costs, you can avoid cash flow problems and ensure that your business remains healthy.
Construction Programme
Construction programmes are an essential part of any construction project. They help to ensure that all work is completed on time and to the required standard. Without a well-designed construction programme, it would be easy for work to fall behind schedule, which could lead to significant delays and cost overruns. In addition, programmes help to coordinate the work of different trades and contractors, so that everyone is working towards the same goal. If you are working on a construction project, it is important that you sign up to a programme that you are comfortable with and that you follow the notification clauses carefully. By doing so, you can avoid being liable for any delays and ensure that the project is completed on time.
Requirements & Formalities
Requirements in a construction contract related to notice period are important to avoid delays that could put the project behind schedule. These requirements typically stipulate that both parties must communicate within the Notice Period to avoid any disruptions. This communication should include, but is not limited to, any potential delays that may occur, as well as an extension of time needed for the completion of the works. In some cases, a variation to the scope of work may also be required, it is important to remember that your communication needs to be in writing and ensure you follow the notice periods to prevent being time barred.
Liquidated Damages
When drafting a contract, it is important to always place a cap on your liquidated damages percentage. This will ensure that you are not held liable for more damages than what was originally agreed upon. Your contract will generally have a clause that includes liquidated damages. Be sure to protect your business by setting the amount per day that you are willing to pay. Always cap the amount so that the total amount for liquidated damages can not be exceeded. This will safeguard your business in the event that something goes wrong and you are held liable for damages.
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