The advantage of this method is that if the client is very specific about his requirements of the final project, the contractor has no excuse but to deliver, as all consultants and their coordination are his responsibility. The disadvantage of such a contract is that if the client is not vigilant, the contractor can cut corners in order to maximise his profit, at the cost of the quality of the finished project.
This method of procurement makes the contractor a stakeholder in the project, sharing profits as well as risk. The development of such projects are increasingly been seen in large township developments, where phase wise development is done. This method makes it possible for each stakeholder to manage cash flows more easily, despite a slower return on investment.
This is a method by which very large and complicated projects requiring several consultants are executed. This is used in cases where no single entity, including architect, contractor or consultant can single handedly deliver the project on time and to specifications.
A contract is an exchange of commitments towards a common goal. ...
A contract is an exchange of commitments towards a common goal. It may be written or oral, and contains the terms and conditions according to which all participants shall work to achieve those goals in the best interests of the venture. The basic requirements that a construction contract has to fulfill are:
It needs to be compatible with the laws of the land.
It has to be formulated properly, with a clear structure so as to eliminate confusion or ambiguity as to its contents.
A contract has to consider the making of an offer and its implicit acceptance by another party, subject to the terms and conditions within it.
A contract has to mention the considerations for carrying out the job, in the form of clearly defined monetary compensation for the standard as well as deviations in the terms and conditions.
All parties entering into a contract need to have the ability to execute the contract.
No person with a criminal record, of unsound mind or under the age of 18 can be a signatory to a contract.
Performance obligations in a contract:
Every party to the contract has an obligation to complete the work set down in the contract, and to set up a self-auditing mechanism to study his own periodic performance on the project, and to rectify any delays and deficiencies in the execution that may potentially compromise the project. It is also the contractor's prerogative to check the client's satisfaction continuously.
Time obligations of a contract:
It is the contractor's responsibility to start work after a careful project timeline with realistic deadlines, and to work towards maintaining or exceeding those deadlines. It is also the contractor's responsibility to bring any repercussions of changes in design or