Monday 2 December 2013

LAW OF BUILUING CONTRACT(summarized)

CLAUSE 17-35

1.      SECTIONAL COMPLETION
valuation of relevant part within 7days from the date which the employer has taken possession of the finished part then issuing of a certificate stating the estimate of the approximate total value of the relevant part.
Issuing of certificate for practical completion for relevant part.
Insurance relevant part shall be reduced from the insured relevant part in which the employer will be at risk due to his possession of such relevant part.
Liquidated damages relevant part shall be paid for by the contractor or less the contract sum
Retention fund relevant part will be paid to the contractor within 14 days on which the employer shall have taken possession.
section.
CLAUSE 17
ASSIGNMENT OR SUB-LETTING
Assignment by the employer
17.1   The employer shall not without the written consent of the contractor assign this contract.
Assignment by the contractor  
17.2 The contractor shall not without the written consent of the employer assign the contract.
Sub-letting determination of employment of sub-contractor                                                         
17.3 the contractor not without the written consent of the architect ( which consent shall not be unreasonably withheld) sublet any portion or portions of the works which sub-letting shall not relieve  the contractor of  his obligation(s) to the employer under the  contract.
CLAUSE 18
INJURY TO PERSON AND INDEMNITY TO THE EMPLOYER.
The contractor shall be liable for any loss, claim or proceedings to person in respect of any injury or damage whatsoever to any property so far the work is in respect of the work on site.
CLAUSE 19
INSURANCE AGAINST INJURY TO PERSON’S LIFE OR PROPERTY
The contractor must have an insurance policy bond as well as the client. So that any injury, accident on the work as well as the property related will be accurately taken care ofby the insurance.
CLAUSE 20A
INSURANCE OF THE WORKS
In the insurance of work, the general aspect of the work insurance is to be insured by the work contactor, the employer and the insurer. It involves the carrying out and maintenance of the joint policy, the single policy of insurance approved by the employer and it failure by the contractor to insure, the use of annual policy maintained by the contractor, the loss of damage to the works insurance claims, contractors obligation, use of insurance monies.
After the inspection required by an insurer in respect of a claim under the policy referred to in the previous clauses has been completed, the contractor shall replace or repair such work damage, material on site which have been lost or damaged, remove and dispose of any debris and proceed with carrying out and completion of the work. He (the contractor) shall not be entitled to any payment in respect to the restoration, replacement or repair of such loss or damage and (when required) the removal and disposal under certificate of the architects issued at the period of interim certificates.
CLAUSE 20(B)
ERECTION OF NEW BUILDINGS: - ALL RISK INSURANCEOF THE WORKS BY THE EMPLOYER
This clause is all risk insurance of works by an employer, the employer is to carryout and maintain a policy for all risk insurance to cover for full reinstatement value of the works (plus the percentage, if any to cover professional fees stated in the appendix) and shall subject to clause 16, maintain such policy up to and including the date of issue of the certificate of practical completion, and failure of the employer to ensure right of the contractor, then the contractor may himself take out and maintain a policy against any risk in respect of which a default  shall have occurred and a sum equivalent to the amount paid or payable by him in respect of the premiums, therefore shall be added to the contract sum.



CLAUSE 20(C)
INSURANCE OF WORKS IN OR EXTENSIONS TO EXISTING STRUCTURES.
This include the insurance of existing structures and content-in which the employer is to take out and maintain a policy( the employer is to take  out and maintain a policy for all risk insurance in respect of the existing structures which shall include from the relevant date, any relevant part to which clause 16 refers).
works in or extension to existing structures- in which the employer is to take out and maintain joint names policy for all risk insurance between him and the contractor to cover for the full reinstatement value of the works plus the percentage, if any, to cover professional fees stated in the appendix,
Failure of the employer to insure rights of the contractor, the contractor may himself take out and maintain a policy against any risk in respect of which the default shall have occurred and for the purpose shall have such right of entry and inspection as may be required to make a survey and inventory of the existing structure and of the relevant contents.
And loss of damage to works-applicable provisions, when there is any loss or damage affecting work executed or to any part thereof or any material on site is occasioned by any one or more of the risk covered by the policy referred to in the clause 20©.2 or clause 20©3, then after discovering the said loss or damage, the shall fore with give notice in writing to the architect to the employer of the extent, nature and location thereof.


CLAUSE21.
POSSESSION, COMMENCEMENT, COMPLETION AND POSTPONEMENT
This simply state that upon the appointment of the contractor when the site must have been handed over to the contractor, a completion date is to be fixed in other to mobilize the contractor to finish the work then or before then irrespective of any extension of time that may occur as a result of circumstances that could slow the work, and if at all the contractor fails to complete the work after such extension, the  architect may issue an instruction in regard to the postponement of any work to be executed under the provision of this contract.




CLAUSE22.
LIQUIDATED AND ASCERTAINED DAMAGES FOR NON-COMPLETION
It is said to arise when the contractor fails to complete a work by the date for completion stated in the appendix or within any extended time , fixed under clause 23 or clause 33.1.3 and the architect certifies in writing that in his opinion the same ought reasonably so to have been completed, then the contractor shall pay or allow to the employer a sum calculated at the rate stated in the appendix as liquidated and ascertained damages for the period during which the work shall so remain or have remained incomplete, and the employer may deduct  money from the money that is to be paid to the contractor to carry out the contract.  

CLAUSE 23
EXTENSION OF TIME
That at the extension of time the contractor is unable to finish the work, he shall state in a written notice  of the cause of the delay to the architect and if the opinion of the architect completion of the work is likely to be or has been delayed  beyond the date of completion stated in the appendix or beyond any extended time previously fixed under either this clause or clause 33.1.3 after considering the reasons for the delay, if the contractor is not responsible for any of the cause of delay, an extension of time and additional money shall be added to him where necessary and if he is he will pay for the delay and the contract shall be retrieve from him.

CLAUSE 24
LOSS AND EXPENSE CAUSED BY DISTURBANCE OF REGULAR PROGRESS OF THE WORK
That if duringextension of time of the contract granted in pursuant to clause 23 and if such extension of time is due to any of the reasons specified in clause 24.1.1 to 24.1.6 inclusive, any amount from time to time so ascertained in clause 24.1 shall be added to the contract sum, and if an interim certificate is issued after the date of ascertainment, such amount shall be added to the amount  which would otherwise be stated as due in such certificate and the provision of such conditions are without prejudice to any other right and remedies which  the contractor may possess.


CLAUSE 25
DETERMINATION BY THE EMPLOYER
This part of the clause is trying to explain the right of the employer. It simply states that without any opinion formed beforehand (prejudice)  to any other right or remedies which the employer may possess, if the contractor shall default in any one or more of the following sub-clause under clause 25.1, may be become bankrupt or practice corruption during the contract, the employer shall take actions base on the criminal code of the laws of the federal republic of Nigeria, then the employer shall be entitle to determine forthwith this employment of the contractor under this contract.
The rights and the duties of the employer and the contractor is also included in this clause which states that in the event of the employment of the contractor being determined as aforesaid and so long it has not been reinstated and continued, the architect shall instruct the quantity surveyor to prepare the final account for settlement in accordance with clause 30.

CLAUSE 26
DETERMINATION BY CONTRACTOR
This particular clause is indicating the right of the contractor over his employer if the employer defaults in his responsibility. The contractor in this clause determines without prejudice to any other rights and remedies which he may possess considering the possible conditions of which could arise from the employer, then the contractor may thereupon by registered post or recorded delivery to the employer and copied to the architect give 14 days’ notice of his intention to determine his employment under this contract provided that such notice shall not be given unreasonable or vexatious. Upon the expiration of the said notice, the contractor shall proceed to determine the contract. 
CLAUSE 27
NOMINATED SUB-CONTRACTOR
In nominating a sub-contractor, the opinion of both the employer and the contractor is quite important. Then the following provisions of this condition shall apply when prime cost sums are included in the contract bills or arise as a result of architects instructions given in regard to the expenditure of the provisional sums, in respect of persons to be nominated by the architect to supply and fix materials or goods or to execute work based on certain procedures.  The architect shall be the one to direct he contractor on how to pay the sub-contractor which is done due to the contractors default.
The sub-contractor is not in any way to be granted any extension of the period within which the sub-contract work is to be completed in sections.

CLAUSE 28
NOMINATED SUPPLIERS
The nominated aim is to supply material and not to fix material on site. In nominating a supplier, the architect instruction is considered very important; it is giving in regard to the expenditure of provisional sums, in respect of any materials or goods to be fixed by the contractor. In nominating a supplier, considerations such as sums deemed to include 5%cash discount, definition of the nominated supplier, treatments of defects in materials or goods supplied, materials and goods to be supplied as directed by contractor, nominated supplier to allow 5% cash discount to the contractor, materials and goods not supplied after determination of the contract( the nominated supplier shall not be obliged to make any delivery of materials or goods, except any which may have been paid for in full less only the discount for cash after the determination for any reasons  of the contractors employment under the contract.
And that all payment by the contractor for materials or goods supplied by a nominated supplier shall be in full and shall be paid within 30 days of the end of the month during which delivery is made less only a discount for cash of 5% if so paid.

CLAUSE 29
ARTISTS AND TRADESMEN
The contractor shall permit the execution of work not forming part of the contract by artists, tradesmen or others engaged by the employer. And that every such person shall for the purpose of clause 18 be deemed to be a person for whom the employer is responsible and not to be a nominated sub-contractor.

CLAUSE 30
CERTIFICATE AND PAYMENTS
This states that at the period of interim certificate named in appendix, the architect shall issue a certificate thereby stating the amount due to the contractor from the employer, and the contractor shall be entitled to payment thereof within the period for honouring certificates named in the appendix , an if an employer fails to honour an architect certificate, within the period stated in the appendix, the contractor notwithstanding his other rights and remedies under this contract, shall be entitle to receive additional payments stated in the appendix for the period during which the certified amount remains unpaid  .
CLAUSE 31
FLUCTUATION
The fluctuation shall be entertained by the employer only in respect of approved basic wages and emoluments and certain materials or certain sections of the works listed in the appendix to the contract, the contract sum shall be deemed to have been calculated  in the manner se out below and shall be subject to variation  in the event specified as the factor that could cause the fluctuation such as : when the price contain in the contract bills are based on the rates of wages and other  emoluments and expenses, if the said rates of wages and other emoluments and expenses  which shall be increased or decreased after the date of the tender, when the price contained in the contract bills are based on the market prices of materials, and if during the progress of the works the market prices of materials used in the works varies from the basic prices thereof. Then the net difference in price thus arising shall be paid to or allowed by the contractor.

CLAUSE 32
OUTBREAK OF HOSTILITIES
During the course of the execution of the contract, there is an outbreak of hostilities which was either envisaged or not then, a notice of determination to the contractor and the employer, which states that if during the occurrence of this contract there shall be an outbreak of hostilities (whether war is declared  or not ) in which Nigeria shall be involved on a scale  involving the general mobilization of the armed forces, then either the employer or the contractor may at any time by notice ,by registered post or recorded delivery ( to the other , forthwith determine the employment of the contractor under this contract, provide that such a notice shall not be given because of
1.      Before the expiration of 28 days from the date on which the order is given for general mobilization as aforesaid or
2.      After practical completion of the works unless the works or any part thereof shall have sustained war damage as defined in clause 33.4

CLAUSE 33
WAR DAMAGE.
It states that if there is an effect of war damage in the event of the works or any part thereof or any unfixed material or goods intended for  or delivered to and placed on or adjacent to the works sustaining war damage then not withstanding anything expressed elsewhere in this contract, the occurrence of such war damage is said to be disregarded in computing any account payable to the contract under or by virtue of this contract. And the architect may issue an instruction requiring the contractor to remove or dispose of any debits and/or to execute such protective works as shall be specified.

CLAUSE 34
ANTIQUITIES.
Antiquities are any archaeological findings found on the site, it includes all fossils, antiquities and other objects of interest or value which may be found on the site or in excavating the same during the progress of the works, it is said to become the property of the employer, and upon the discovery of such an object the contractor shall forthwith, do his best to endeavour that these objects are not disturb and shall cease work if continuance of work would endanger the object or impede its excavation or removal.
The contractor shall equally take steps which may be necessary to preserve the objects in the exact position and condition in which it was found and he shall immediately inform the architect or the clerk of works of the discovery and precise location of the object so that an instruction can be issue in regard to what should be done concerning the object.

CLAUSE 35
ARBITRATION.
This is the last part of the standard form of building contract in Nigeria of 1990 version and these deals with settlement of dispute which may arise between the working teams during the construction of the contract. Provided always that in case any dispute or difference shall arise between either the employer or the architect on his behalf and the contractor, either during the progress or after the completion or abandonment of the works as to the construction of this contract or as to any matter or thing of whatsoever nature arising there under or in connection therewithor the withholding by the architect of any certificate to which the contractor may claim to be entitled or the measurement and valuation mentioned in clause 30.5.1 or the rights and liabilities  of the parties under clause 25,28,32 and 33.                                                       



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