KONGU ENGINEERING COLLEGE, PERUNDURAI, ERODE

DEPARTMENT OF CIVIL ENGINEERING

07ME204 CONTRACT LAWS AND REGULATIONS (ANSWER KEY)
Part A
1. C!tra"t
An agreement enforceable by law in court
Contract = Agreement + Enforceability
A#r$$%$!t
The offer when accepted becomes agreement
Agreement = Offer + Acceptance of offer
2. T&'$( ) "!tra"t
nit price contract
!ump sum contract
Turn"ey contract
#tem rate contract
!abour contract
$aterial contract
%. Pr$*+a,-)-"at-! ) t$!.$r
E&perience of similar type of wor"
A'ailability of machinery
(rade of contractor
Technical persons employed
). T$!.$r-!# 'r"$((
Ad'ertise tender notice
#ssue tender forms
Assign authority for the collection of tender form
Collect the filled up tender form
Open of tender forms
E'aluate the tender
Comparati'e statement
Award of wor"
* Matt$r "a!!t /$ r$)$rr$.
+ispute being in process of hearing of court
Command on the award of court
Correct the mista"es of award of court
#ssue of award against the legal rights
,. D+t-$( ) ar/-tratr
-e neutral
.ear the argument and suggestions on both the sides
Collect and read the e'idences
/hould not ha'e direct or indirect in'ol'ement in the sub0ect matter in disputes
$ust act according to the facts and law
1. I!(+ra!"$
The amount of money spend in order to o'ercome the effects of ris" due to
uncertainity happening
0!.-!#
1
(uarantee of faithful performance of contract2 which is to ensure the owners re3uirements
12 Stat+tr& r$#+,at-!
The set of basic rules and regulations in order to go'ern and guide the problem arising due
to statutory problems
4. C!"-,-at-! ))-"$r
Cool off and reduce the temper of dispute
5now about the confidential matters of both the parties
Collect the information on issues related to dispute
/uggest about the different ways of reducing disputes
16. La/+r L$#-(,at-!
!egal enhancement 7Absent sum8
9udicial principles
!oss ratio
E&perience modification ratio
Part3 0
11. a. E,$%$!t( ) C!ta"t
A8 Offer and Acceptance
18 Offer
A person accepts his willingness to do and see"ing positi'e response to do off
E&press
/pecific
Communicated
:umber of conditions
28 Acceptance
;erson whom acceptance is made signifies his absenteeisum
;erson
Time
Communication
-8 #ntention to create legal relationship
!egal relationship between parties
Absence of seriousness
C8 Capacity parties
$inor
;ersons of unsound mind
Other dis3ualified ;ersons
+8 !awful Consideration
/ome thing in written format
+esire of promisor < others
;ast present future
E8 =ree consent
Cause when it would not be gi'en but for e&istence of undue influence fraud and mista"e
=8 !awful ob0ecti'e and consideration
=orbidden by law
+efeat the pro'isions
(8 +eclaration of 'oid agreement
Agreement under a unilateral or bilateral mista"e which restrain
2
$arriage
Trade
!egal proceedings
.8 Certainity
Agreement must be certain in definite terms. >here the terms and condition of agreement
are of certain
#8 ;erformance of contract
Contract performed accordance with the pro'isions of law of contract
E&ecuted with their respecti'e obligations
98 ;ossibility of performance
;romisor
;romisor agent
Third party
442 /2 T&'$( ) "!tra"t
The different types of contact in the #ndian construction industry are
a8 nit price contract
b8 !ump sum contract
c8 #tem rate contract
d8 #ncenti'e contract
e8 Turn"ey contract
f8 ;ercentage rate contract
g8 !abour contract
h8 $aterial contract
i8 Target contract
08 !ump sum and unit contract
"8 Cost plus fi&ed fee contract
l8 Cost plus percentage contract
L+%' (+% "!tra"t
Contactor agrees to do the 0ob for a fi&ed ;rice the price amount of money will be issued on
stage by stage le'el of completion or entire completion of wor" were done in accordance
with the drawings2 specification2 and design
Merits
/imple process
Entire responsibility lies on single contractor
?educes direct and indirect cost of indi'idual contractor
;eriodical progress of wor"
Demerits
/pecialists are not employed for all the wor"
(enerally 3uality reduces
All the items of wor" are paid constant rate
422 a2 Wr,. 0a!5 G+-.$,-!$(
The common parameters to be considered are listed below
a8 ;urpose
;ro0ect financial details
?eason for the formation of contract
b8 (eneral consideration
?esponsibilities of implementation
(eneral conditions
Technical specifications
%
c8 Applicability of guidelines
Cost of pro0ect
Compatible with the balance of pro0ect
d8 Eligibility
Account of e&penditure
E&perience
;re3ualification
e8 Ad'ance contracting and retroacti'e financing
;ro0ect implementation
;rocurement procedure
Contract documentation
f8 9oint 'entures
+e'elopment of domestic industry
E3uity status of the company
g8 -an" re'iew
?e'iews procurement2 +ocument -id e'aluation
!oan agreements
h8 ?eser'ed procurement
Open competition of appropriate procurement method
Eligibility for financing
i8 $isprocurement
-an" does not finance e&penditure of goods and wor"
E&cess remedies on loan
08 ?eference to ban" or Authorisation
!oan eligibility for contract
?eorganisation and de'elopment
12. b. E6a,+at-! 'r"$(( ) t$!.$r )r%
@ ;urchase of blan" tender form
@ /tudy of tender drawings
@ Aisit to the site of the wor"
@ ?ough 'erification of estimated 3uantities
@ Analysis of rates or cost to ascertain prime cost which includes Cost of materials2 labour
and machinery < e3uipment
@ +eciding the percentage of the basic or prime cost wor"ed out for the o'erheads and
profit e&pected
@ >or"ing out the lump sum or item rates or percentage rate to be tendered
@ Chec"ing of the rates so wor"ed out for omissions2 errors and units of measurement in
particular
@ Copies of documents re3uired to be attached are "ept ready and are cross chec"ed
@ Earnest money to be paid in the form of ban" guarantee or ++ to be obtained
@ /ecrecy is maintained about the final sum2 rates or percentages to be tendered
@ Care should be ta"en so that no error creeps in the rates2 or in totaling
@ The en'elope7s8 are sealed and handed o'er before the appointed time on the last date or
dropped in the bo& "ept for the purpose
@ The sealed tenders recei'ed are to be opened in the presence of the contractors or their
representati'es tendering for the wor" at the time and place already notified
@ The officer opening the tenders has to read out the rates offered in case of #tem rate and
percentage rate tenders and amount in the case of !ump /um tenders for information of
all those present
)
@ The tenders which are not in proper form duly filled in or signed or are not supported by
the re3uisite Earnest $oney are to be summarily re0ected and a record of such cases to
be "ept in the register of tenders recei'ed
472 a (-) C!.-t-!( ) ar/-trat-! a#r$$%$!t
The arbitration agreement should be in the form of written statement which indicate the
in'ol'ement of both the parties in sol'ing the dispute
They are generally decided by the following "ey factors such as
Aalid agreement
!ist out the issues of disputes
Conditions of arbitration
?eferred to either present or future disputes to arbitration
Appointment of arbitrator should be done with reference to the conditions of arbitration act
E'idence should be collected in a lawful manner
+ispute should be 'alued to the cost of e&pense the respecti'e stamp 'alue should be
ascertained in the arbitration agreement
-oth the parties should sign and register which becomes enforceable by law
472 a (--) Pr6-(-!( ) ar/-trat-! a#r$$%$!t
The pro'isions of the arbitration agreement are of the followingB
+egeneration of parties which left the parties loss of time and money
EngineerC arbitrator is of lac" of "nowledge of technical reasons of arbitration act
To bring interacti'e legal ob0ections
Alternati'e to legislation method of sol'ing the problem
:ew law for sol'ing the dispute
.elpful in sol'ing the technical problems apart from law
(enerally ha'e guide line in correcting the mista"es of the contact document
They also ha'e role to play for the free cosecant for bringing towards lawfulness
The e'idences should be collected 'iewed an it should be mentioned in the summariDed
form
The legal pro'isions should be gi'en for assigning the 'alue of dispute which plays a
'ital role in fi&ing the stamp 'alue of the agreements
-oth the parties in'ol'e in sol'ing the disputes under mutual concern of willingness
472 / (-) P8$r( a!. .+t-$( ) ar/-tratr(
D+t-$(
#mpartial act without pre0udice
/tudy the e'idence and then study the case of opportunities
:ot allow to be influenced by the parties
/hould not go beyond the authorities gi'en to him
/hould act as a neutral 0udge
/hould not in'ol'e in the sub0ect of matter
P8$r(
>itness appearing
Award conditional or in the alternati'es
Correct the errors and mista"es due to clerical mista"e arising
Opinion of arbitrator for interrogatories
472/ (--) M.$( ) ar/-trat-!
The mode of arbitration can be broadly classified as followsB
N$#t-at-!
*
-iparty settlement of disputes
/it across and short the problem
?e3uires deal of thrust and confidence
M$.-at-!
/ee"ing third party to sol'e dispute
Clarifies the issue
$ediation rule will be framed by the (o'ernment
C!"-,-at-!
Conciliators to sol'e the dispute
Aoluntary method to sol'e contractual problems
Conciliators are bring to sol'e as E&perts
A.9+.-"at-!
+ispute resolution by 0udicial authority
Tribunal or similar bodies
442 (a) C:ara"t$r-(t-"( ) I!(+ra!"$ C!tra"t
?is" and liabilities connected with construction wor" are matter of importance based on the
responsibilities of
Engineers
Owners
Contractors
/pecification should be e&plicit depending upon the type of insurance
To safe guard against the damages
/atisfactory completion of wor" and payment of all contractor e&penses
?is" losses generally occur due to the following cases such as
Occupational in0uries
Accident while wor"
#llnesses due to wor"
+eath due to occurrence of accidents
?obbery and theft
The conditional contact where the insurance company agrees to pay the insured beneficiary
and li"ely the contract policy must meet the essential re3uirements as to the agreement
sub0ected to matter of consideration. The insurance ha'e the conditions of contract to the
contractor and the amount of potential attainable
The amount of insurance policy re3uired to protect the insurance policy re3uired to protect
the policy many of liabilities arises out of construction #nsurance need to co'er and protect
them
;roperty damages
!oss of damage of e3uipment
Contractor public liability
Automobile and truc" liability
>or"men compensation liability
442 (/) P+r":a($ a!. +($ ) +r/a! ,a!.
!and accusation is literary means of ac3uiring of land for some specific purpose by
(o'ernment or (o'ernmental agencies as authoriDed by law from the indi'idual land owner
after paying a (o'ernmental fi&ed compensation in lie of losses included by land owner in
surrendering of his land to the go'ernment concerned agency Authorities of agencies
in'ol'ed in land ac3uisitions areE
nion go'ernment
,
/tate go'ernment
;ublic authorities li"e
++A
:O#+A
C#+CO
Companies li"e
?eliance
Tata
4;2 a (-) C:-,. La/+r A"t
;rohibit the engagement of children in the industry
Conditions of wor"er age should not be less then 1) years
According to the act the occupation are categorised into 2 types namelyE
;artCA #ndustry
;artC- #ndustry
;art A includes the following industry
Transport
;ort
Construction
=ire wor"s
The childrenFs are strictly not allowed to wor" in this "ind of industry
;art - includes the following industry
/oap
Carpet ma"ing
>ool washing
According to the act the childrenFs are allowed to wor" under this "ind of industry under
the restriction of aid of family or certificate of go'ernment recogniDed school
R$(tr-"t-!(
The childrenFs are not allowed to wor" during time of 1 pm to G am
The are not allowed wor"ing for o'ertime
They are restricted to wor" for % hours continuously at 1 hour rest
>ee"ends should be compulsorily declared as holidays
(--) Wr5%a! C%'$!(at-! A"t
The main aim of the act is to create social security in which the cost of the product is to the
blood of the wor"er. An accident which ine'itably leads to miseries to the person2 who has
unfortunately met with the mishap and all those who are related to himE be it his family
members or the organiDation where he wor"s .Act to pro'ide for the payment by certain
classes of employers to their wor"men of compensation for in0ury by accident
A$O:T O= CO$;E:/AT#O:
>here death results from the in0ury = an amount e3ual to *6H of the monthly
>ages or ?s *62666
;ermanent total disablement = ,6H wages & ?ele'ant factor or
?s. 462666
(---) I!.-a! Fa"tr& A"t
#n order to ensure industrial and occupational haDard to ensure safety and health condition
Wr5 <+r( a!. A!!+a, 8a#$(
The general conditions of them areE
1
Appro'al license and ?egistration
:otice of occupation
#nspection staff and certification
.ealth and safety of wor"ers
-asic amenities such as drin"ing water and sanitary
4;2/ (-) Wa#$( a!. -!.+(tr-a, .-('+t$(
Wa#$(
They generally ensures the minimum pay for the wor"ers which shall include un authorised
delay for the wor" and scale should not be less than ?s2*66I$
Pa& 8a#$( -!",+.$( t:$ ),,8-!# (+": a(
/alary and wage
Allowances
O'er time
Termination
E=",+.$( ) t:$ ),,8-!#
-onus
.ouse rent
;ension
/ocial welfares
D$.+"t-! 8-,, -!",+.$
=ine
Absenteeism
+amages
!osses
#ncome ta& clearance
#nsurance
The minimum wages act ser'es as a floor line and are scheduled by the state go'ernment.
They also generally ta"es into account of cost of li'ing inde& as noted in the gaDettes
The re'iew of the wages should be done by * years based on the following such as
mentioned belowB
;iece rate
#tem rate
+ifference in schedule of employment
I!.+(tr-a, D-('+t$(
They are applied to industrial wor"man employment see"ing pre'ention of industrial
employment and disputes
;rocess and responsibility in ascertaining stri"es
+ispute o'er ready material and ser'ices
(enerally ensures proceeding between employee and wor" man
+ismantling of retirement in connection to disclosures
(--) La8 R$,at$. t Sa)$t& a!. R$#+,at-!
They generally regulates the employment and the condition of ser'ice of the building and to
pro'ide safety and healthy atmosphere
The wor"er should ha'e completed the age of 1G years and should not e&ceed the age of ,6
years similarly he should wor" not less than 46 days which will generally include the
followings such as
-uilding wor"er
>ages
G
=und
The are generally applicable when there are more than 26 wor"ers are wor"ing in the field
interim and casual natural e&ceed the scheme
(---) S"-a, S$"+r-t& ! ,a/+r r$#+,at-!(
/a'ing of the wor"er for draw after retirement and maintain themsel'es to depend on
wor"ers. They are generally applicable to establishments. The wor"manFs generally aggress
to wor" himself and employee his own labour
+isablement caused by physical in0uries and causes after a period of absent from wor" and
recei'e medical care resumes in general accident arising out of casual

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