Typical contractual obligations of construction and service contracts

Contractual Obligation Overview

Contract obligations are some legal responsibilities that each party considered when comes to a
contract agreement. “A contractual obligation is something (money, product, service,
action/inaction) you owe to another person or entity in return for something else (money,
product, service, action/inaction)”. (Narracci, 2016). When consider about the contract, each
party delivered or get something of value, that can be money, service or product. For keep that
contract both parties have their obligations. Contract is depending on the obligations. As the
example, when consider about the selling of a house, one party has obligation to transfer the
ownership of the house in right time. Another party has obligation to complete the payment. If
one of the parties among them cannot complete the contractual obligations, it can be a result for a
breach of contract.

Construction obligations of construction contract

Construction contract is an agreement between two parties which is legally binding based on
policies and conditions in a document. when consider about the obligations in the construction
contracts, every stages of the construction there have construction contracts which are each
parties’ rights and the obligations that can be enforceable by court of law. In construction, there
have parties called employer and contractor. Contractor and employer both are have their
obligations.

Contractor’s obligations

General obligations: - Contractor shall work according to the provisions of the contract and
carry out the works in diligence as stated in the contract. “The Contractor shall provide all
superintendence, personnel, materials, plant, equipment and all other items, whether of a
temporary or permanent nature required for the design, performance and completion of the
works, as well as for the remedying of any defects, insofar as specified in, or can be reasonably
inferred from, the contract” (GENERAL CONDITIONS FOR WORKS CONTRACTS).The
contractor shall take full responsibility for the stability and safety of the operations of the
construction. Also, comply with administrative instructions given by supervisors and shall
respect to the all laws and regulations. Furthermore, he shall responsible for documents and
information received in connection as private and confidential.

Superintendence of work: - The contractor shall superintend the operations himself or appoint a
person who was approved by authority. Also, contractor have full authority to take any decision
important for the work and carry out the administrative works.

Performance guarantee:- “The Contractor shall, within thirty days of receipt of the notification
of the award of contract, furnish to the Contracting Authority a guarantee for the full and proper
performance of the contract” (GENERAL CONDITIONS FOR WORKS CONTRACTS).

Staff: - The contractor shall employ human resources in sufficient number with necessary skills
and experience to ensure the works.

As built drawings: - The Contractor shall provide sets of as-built drawings of the works to the
Engineer, showing the permanent works as actually constructed.

Instead of that there have many obligations of contractors such as insurance, work programme
related obligations, sufficiency of tender prices, setting out, soil studies, exceptional risks
detailed breakdown of price likewise.

Employer’s obligations

Provide work and payment: - Employer shall pay for the work when it is completed and not
lay-off or suspend an employee without pay. Where there is a delay in the payment of wages and
salaries owed to the contractor or employees, employer may give statement to the contractor
about intend days to pay such wages.

Assistance with local regulations: - (GENERAL CONDITIONS FOR WORKS CONTRACTS)

mentioned that the employer shall provide the assistance requested to the contractor at the
contractor’s cost.

Supply of documents: - Employer shall provide to the Contractor, free of charge, a copy of the
drawings prepared for the functioning of the contract as well as two copies of the specifications
and other contract documents.

Construction obligations of service contract

Service contract is a legally binding and business agreement between contractor and customer
based on the fulfilling of maintenance aspects over the specified period. When consider about the
services sector, contract obligations of services may be much different than the other contracts.
These types of obligations can vary according to the individual details of the contract. As the
example for the contract obligations, one party is legally binding for the provide payment for
services at correct amount and before deadline. Another party is legally binding for deliver
service. The contract may state that terms of delivery dates, method etc. Also, quality of the
service may specially describe in the contract. In detail,

Contractor’s obligations

Control and Supervision of the work: - The contractor shall choose how to carry out the
service. Independence of the contractor of services is main difference in that.

Informed the client: - Before the contract, the contractor should inform the customer with
useful information. For example, (Rights and Responsibilities of Service Providers in Contracts
for Services) stated that “an accountant must give his client a fairly precise estimate of his fees.
He must also inform the client that there is a chance his fees could change and that other
professionals will work on the file, which could increase the total cost of the service”.

Supply the tools and materials: - The contractor shall provide the tools and materials for the
carry out the maintenance works.

Customer’s obligations

Payment: - The customer should pay for the service on time and he can ask for an estimate of
the costs before signing contract.

Respect the provider independence: - A provider who sign into a contract for services
can choose how to perform the service. The client therefore cannot tell him how she should
perform the service.

Instead of those obligations, keep the contractor informed, stop the contract when poor
performances of the service like obligations are comes under the customer’s obligations.