INTRODUCTION TO CONSTRUCTION INDUSTRY There are several participants in the construction process, all with important

roles in developing a
successful project.

UNIT OUTLINE The owner, either private or public, is the party that initiates the demand for
the project and ultimately pays for its completion. The owner‘s role in the
 Scope of construction works
process varies considerably; however, the primary role of the owner is to
-building work effectively communicate the scope of work desired to the
other parties.
-civil engineering works
The designer is responsible for developing adequate working drawings and
 Type of contractors specifications, in accordance with current design practices and codes, to
communicate the product desired by the owner upon completion of the project.
-Small
The prime contractor is responsible for managing the resources needed to carry
-Medium
out the construction process in a manner that ensures the project will be
-Large conducted safely, within budget, and on schedule, and that it meets or exceeds
the quality requirements of the plans and specifications.
-Sub-contractors
Subcontractors are specialty contractors who contract with the prime
-Speculative builders contractor to conduct a
specific portion of the project within the overall project schedule.
 Construction stakeholders
Suppliers are the vendors who contract to supply required materials for the
-Professional bodies -AAK, IEK
project within the project specifications and schedule. The success of any

-Local authorities project depends on the coordination of the efforts of all parties involved,
hopefully to the financial advantage of all. In recent years, these relationships
-Kenya bureau of Standards (KBS) have become more adversarial, with much conflict and litigation, often to the
detriment of the projects.
-Relevant ministries
TYPE OF CONTRACTORS

Introduction
SCOPE OF CONSTRUCTION
There are several firms in the construction industry

These includes;

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  Consultancy firms iv) Flood control projects
 Construction firms
 Turnkey firms #undertaking financing, design and construction v) Dredging projects etc.

then hand it over to the client/owner.

# These are the most popular types of construction projects.

Types of Construction Projects

# Construction is a big industry and there are now companies undertaking a full

a) Residential Construction Projects ~ includes houses, town houses, spectrum of construction works.

apartments, corteges, single unit dwellings and subdivisions.

The housing design are generally designed by architects and engineers and the
CONSTRUCTION FIRMS
construction is executed by the builders who hire subcontractors for structural,
electrical, mechanical and other speciality works. A contractor is an organization or an individual that contracts with another
organization or individual for the construction of a building, road or any other
b) Institutional and Commercial Buildings ~ includes hospitals and clinics,
facilities.
schools and universities, sport facilities and stadiums, large shopping centres and
retail chain stores, light manufacturing plants and warehouses, skyscrapers for Construction companies fall into different categories depending on;
offices and hotels.
 the kind of job/work they work on,
Speciality architects and engineers are often hired for designing a particular  what they are responsible for,
type of building.  whether they work on contract or on their own.

This market segment has few competitors because of the high costs and greater Main Classifications Include
sophistication involved.
i) Building contractors
c) Specialised Industrial Construction ~ usually involves very large scale
projects with a high degree of technological complexity such as nuclear power ii) Civil engineering contractors
plants, chemical processing plants, steel mills and oil refineries.
iii) General Builders
d) Highway construction ~ involves, alteration or repair of roads, highways,
iv) Specialist contractors/Trade contractors
streets, alleys, runways, paths, parking areas etc.
 Mechanical contractors
e) Heavy Engineering Constructions ~ usually involves that are not classified as
 Electrical contractors
either building or highway e.g. i) dams,
 Plumbing contractors
ii) sewage treatment plants and facilities  Carpentry and joinery contractors etc.

iii) water treatment plants and facilities i) Building contractors

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Are mainly involved in building works Engaged in the construction of roads, highways, dams, irrigation, flood control,
Petrol and chemical tunnels, dams etc.
May be large or small scale operating in national or international contracts.
v) Speciality Contractors
Building constructions include; e.g. residential, industrial, multi-storey ( high rise)
Is a contractor whose operations require special skills and whose principal
ii) General Building Contractors
contracting business involves the use of specialised building trade or craft e.g.
Electrical, Mechanical, Plumbing, IT, Air conditioning, Lift and escalators, Fibre
General building contractors usually works with land owners or companies that
optics and communications, Fire fighting, Drilling and grouting(for pilling
wants to build structures. They acts as prime contractors on projects that
foundations, grouting dams etc. ) etc.
involves a range of specialised construction activities, which they sub-contract.

CONSULTANCY FIRMS
iii) General Engineering Contractors

Most consultancy firms are service oriented firms in the constructions industry.
This is a contractor whose principle contracting business is in connection with
fixed works requiring specialised engineering knowledge and skills. They provide design, planning & supervision services to their clients.

They include; Examples; Architectural Land Surveying

Irrigation Inland water ways Civil engineering Project management

Railroads
Quantity surveying Electrical engineering
Drainage Harbours
Highways Water resources Mechanical engineering

Water power Docks Environmental Surveying and mapping

Streets and roads
Registration of consultancy firms
Water supply Shipyards & ports
Tunnels Are registered first by the registrar of societies and by respective ministries.

Flood control Dams & Hydro Electric This is especially for those who would want to participate in government projects

Overpasses
Their respective registration bodies include

Airports & runways Bridges, Waste reduction plants,

FIRM BODY
Sewerages
Architectural Board of Registration of Architects and Quantity
iv) Civil Engineering Contractors
Surveyors of Kenya (BORAQS)

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Engineering Firms Engineers Registration Board

Quantity Surveying Board of Registration of Architects and Quantity

Surveyors of Kenya (BORAQS) and the Ministry of
Public Works

Water Resources Ministry of Water and Energy Regulatory Board (ERB)

Environmental National Environmental Management Authority ( NEMA

)

*All these firms vary in sizes from the smallest to the largest.
Responsibilities of the owner

1. Obtaining work - developing contracts with new clients

CLASSIFICATION OF CONSTRUCTION FIRMS BY SIZE

2. Preparation of estimates
Classification can also be done by size e.g.

3. Planning preparations of contract programme when applicable.

a) Large firms ~employ over 600 and operate at national/international levels.

4. Coordination of suppliers and sub-contractors.

b) Medium sized construction firms ~ they operate at regional level and employ
about 300 5. Direct labour control.

c) Small construction firms ~ operate at local level, generally restricted to 6. Preparation and submission of accounts e.g. KRA
construction of single dwellings and small groups of houses.
7. Overall company control.
d) Jobbing works ~small firms confining their activities to maintenance and
repairs As expansions takes place, responsibility for various facets of the organization
may be delegated e.g. surveying and estimating functions.
e) Direct labour~ provides labour e.g. excavation.
b) MEDIUM SIZED CONSTRUCTION FIRMS
a) SMALL CONSTRUCTION FIRMS
Usually employ between 26 and 300 staff and operatives and usually have an
Employs up to 25 staff and operatives. organizational structure which does not incorporate planning department.

They base the overall contract period on past experience. The planning function is usually undertaken by the contract directors or the
contract manager.
Simple bar cart programme format meets their planning requirements.

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Here again, the bar chart form of presentation is widely adopted as it is already They often have adequate provision for in-service training courses to keep to
understood at site and management level and acceptable to the client. leep site management aware of planning and construction development.

Typical work that is undertaken by the medium sized firms includes housing The introduction of computers make network techniques a more viable planning
modernisation work, industrial development work etc. provision both as head office and site planning tool.

One off office type development can readily be planned again using bar chart. Most forms of planning tools are now used in computer software forms.

The company has a small work division and is sometimes active in speculative
housing sections.

Planning engineers/Production contract directors are allocated major projects to

provide site based planning services to site construction managers.
c) LARGE CONSTRUCTION FIRM

Employs above 500 staff and operatives undertaking a complex multi-million

project with a large array of plants and equipments.

The planning techniques adopted by the company depends upon the techniques
which suits its planning needs.

A contractor undertaking works involving speculative and local authority housing

.................................................................,,,,,,,,,,,,,,,,,,,,,*,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,................
projects may adopt the line balance techniques may be adopted for complex one
...................................
off type projects while less complex may be planned using bar chart.

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 mesnagement (later me'nagement ) influenced the development of the English
word management in the 17th and the 18th centuries.

Basic functions of management

Management operates through various functions, often classified as planning,

organizing, staffing, leading/directing, controlling/monitoring and motivation.

 Planning:. deciding what needs to happen in the future ( today,

next week, next month, over the next five years etc. ) and
generating plans for action.
MANAGEMENT AND ORGANIZATION  Organizing:. ( implementation ) pattern of relationship among
workers, making optimum use of the resources required to
UNIT OUTLINE enable the successful carrying out of plans.
 Staffing:. involves job analysis, recruitment and hiring for
i. Meaning of management
appropriate jobs. ( acquiring appropriate staff)
ii. Principles of management
 Directing/Leading:. determining what must be done in a
iii. Functions of management
situation and getting people to do it.
iv. Motivation meaning of organization
 Controlling/monitoring:. checking progress against plans.
v. Organizational structure
 Motivation:. motivation is also a basic function of management,
vi. Office procedure
because without motivation employees cannot work effectively.
If motivation does not take place in an organization, then
employees may not contribute to the other functions ( which
MANAGEMENT are usually set by the top-level management). Motivation is the
act of improving your employees' esteem.
Management in business and organizations means to coordinate the efforts of
 Communicating:. is giving, receiving, or exchange of information.
people to accomplish goals and objectives using available resources efficiently
 Creating: ability to produce original ideas, thought the use of
and effectively.
imagination.
Management comprises planning, organizing, staffing, leading or directing and
Principles of Management
controlling an organization or initiative to accomplish a goal.
Fayol's principles of management are listed below;
Resourcing encompasses the development and manipulation of human resources,
financial resources, technological resources, and natural resources. 1) Division of work ~ when employees are specialised, output can increase
because they become increasingly skilled and efficient.
The verb 'manage' comes from the Italian maneggiare ( to handle, especially
tools), which derives from the Latin word manus ( hand ). The French word

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2) Authority ~ managers must have the authority to give orders but they must Everything should have its place.
also keep in mind that with authority comes responsibility.
11) Equity ~ managers should be fair to the staff at all times, both in maintaining
3) Discipline ~ must be upheld in organizations but the methods of doing so can discipline as necessary and acting with kindness where appropriate.
vary.
12) Stability of tenure of personnel ~ managers should strive to minimise
4) Unity of command ~ employees should have only one direct supervisor. employee turnover. Personnel planning should be a priority. Retaining productive
employees should always be a high priority of management. Recruitment and
5) Unity of direction ~ teams with the same objectives should be working under
selection costs, as well as increased product-reject rates are always associated
the direction of one manager, using one plan. with hiring new workers.

This will ensure that action is properly coordinated. 13) Initiative ~ the employees should be given the necessary level of freedom to
create and carryout plans. Management should take steps to encourage worker
6) Subordination of individual interests to the general interests ~ the
initiative, which is defined as new or additional work activity undertaken through
interests of one employee should not be allowed to become more important than
self direction.
those of the group.

14) Espirit de corps ~ organisations should strive to promote team spirit and
This includes managers.
unity. Management should encourage harmony and general good feelings among
7) Remuneration ~ employees satisfaction depends on fair remuneration for employees.
everyone. This includes financial and non-financial compensations.

8) Centralisation ~ this principle refers to how employees are to the decision

ORGANIZATION
making process. It is important to aim for an appropriate balance.

An organization is a social entity that has a collective goal and is linked to the
9) Scalar chain ~ the employees should know where they stand in the hierarchy
external environment. The word is derived from a Greek word organon, itself
or chain of command. Managers in hierarchies are part of a chain like authority
derived from the better known word ergon which means "organ".
scale.

Types of organizations
Each manager, from the first line supervisor to the president, possesses certain
amount of authorities. The president possesses the most authority; the first line there are a variety of legal types of organizations, including corporations,
supervisor possesses the least. Lower level managers should always keep the
governments, non-governmental organizations, international organizations, armed
upper level managers informed of their work activities. The existence of the forces, charities, no-profit-corporations, partnerships, cooperatives, universities
scalar chain and adherence to it are necessary if the organization is to be and various types of political organizations.
successful.
A hybrid organization is a body that operates both in the public sector and the
10) Order ~ the workplace facilities must be clean, tidy and safe for the
private sector simultaneously, fulfilling public duties and developing commercial
employees. market activities.

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A voluntary association is an organization consisting of volunteers. Such Committees are often the most reliable way to make decisions. Condorcet's jury
organizations may operate without legal formalities, depending on jurisdiction, theorem proved that if the average member votes better than a roll of dice,
including informal clubs. then adding more members increases the number of majorities that can come to
a correct vote ( however, correctness is defined). The problem is that if the
Organizations may also operate in secret/or illegally in the case of secret average member is worse than a roll of dice, the committee's decision grows
societies, criminal organizations and resistance movements.
worse, not better; therefore staffing is crucial.

Organizational structures Parliamentary procedure, such as Robert's Rule of Order, helps prevent
committees from engaging in lengthy discussions without reaching decisions.
This is the typical hierarchical arrangement of lines of authority, communication
rights and duties of an organization. Ecologies

It determines how the roles, power and responsibilities are assigned, controlled This organization has intense competition. Bad parts of the organization starve.
and coordinated and how the information flows between the different levels of Good ones get more work. Everybody is paid for what they actually do, and runs a
management. tiny business that has to show a profit, or they are fired.

The study of organizations includes a focus on optimizing organizational Companies who utilise this organization type reflect a rather one sided view of
structure. According to management science, most human organizations falls
what goes on in the ecology. It also the case that a natural ecosystem has a
roughly into four types; natural border - ecoregions do not in general compete with one another in any
way, but are very autonomous.
 Committees or juries
 Ecologies Matrix organization
 Matrix organizations
 Pyramids or hierarchies The organizational type assigns each worker two bosses in two different
hierarchies. One hierarchy is "functional" and assures that each type of expert
Committees or juries in the organization is well - trained, and measured by a boss who is super -
expert in the same field. The other direction is the "Executive" end tries to get
These consists of a group of peers who decide as a group, perhaps by voting.
projects completed using the experts. The project might be organized by
The difference between a jury and a committee is that the members of the
products, regions, customer types, or some other schema.
committee are usually assigned to perform or lead further actions after the
group comes to a decision, whereas members of a jury come to a decision. In As an example, a company might have an individual with overall responsibility for
common law countries, legal juries render decisions of guilt, liability and quantify Products X and Y, and another individual with overall responsibility for
damages; juries are also used in athletic contests, book awards and similar engineering, quality control etc. Therefore, subordinates responsible for quality
activities. Sometimes a selection committee functions like a jury. In the middle control of project X will have two reporting lines.
ages, juries in the continental Europe were used to determine the law according
to the consensus amongst the local notables. Pyramids or Hierarchical Organizations

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A hierarchy exemplifies an arrangement with a leader who leads other individual performance. (Most employees have ideas on how they can be more efficient, but
members of the organization. This arrangement is always associated with they may not be share them with you unless you specifically ask them). To
bureaucracy. empower your employees, you need to take their advice and implement them. You
should also give them the authority to make their own decisions.
These structures are formed on the basis that there are enough people under
the leader to give him support. Just as one would imagine a real pyramid, if there 4. Offer opportunities for advancement - Your employees are more motivated
are not enough stone blocks to hold up the higher ones, gravity would irrevocably when they know they are working towards something. Motivate your employees
bring them down. by offering training that gives them the skills they need to climb their career
ladder. This also is valuable to your company because it builds your company's
reputation as a great place to work

MOTIVATIONAL MEANING OF ORGANIZATION 5. provide incentives - This includes extra paid day off, gift cards, tickets to the
movie or even cash. i.e. they don't need to be expensive.
MOTIVATION prescribes ways in which managers promote productivity in their
employees. Don't confuse happy employees with motivated employees. They may
Importance of Motivation
be related but motivation actually describes the level of desire employees feel
to perform, regardless of the level of happiness. i) It helps to keep the best of your employees.

Employees who are adequately motivated to perform will be more productive, ii) Helps in building your company's reputation.
more engaged and feel more invested in their work. When employees feel these
things, it helps them, and thereby, their managers become more successful. iii) Helps in achieving maximum production.

It is the duty of the managers to motivate their employees to do their jobs well. iv) Creates discipline among the employees.

Ways of Motivating Employees v) There is job satisfaction to both the employees and the company.

1. Better communication - Frequently communicate with your employees face -to- OFFICE PROCEDURES

face. The staff needs to know that they are valued and communicating in person
These are clearly defined practices that everyone who works in an office follows
with them is the best way to show your appreciation for their hard work.
in the event of common or uncommon situations that arise through the work day.

2. Be an example - A manager must lead by example. ( You can't expect your They include;

employees to work hard or behave the way you want yet you can't behave the
i) Employee job description
same way). Show your excitement about your company's goals, your employees
will definitely get on board and work to achieve those goals. Good moods are ii) Confidentiality protocols
always infectious - especially in the work place.
iii) Phone and inner office etiquette
3. Empowerment - Give your employees more of a say in how they do their job.
Ask for their input and get suggestions on how they can improve their iv) Hazardous materials disposal

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 v) Lateness ( time ) ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,(END),,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
,,,,,,,,,,,,,,,,,,,,
Office procedures are usually signed by the employees upon hiring and then once
a year to ensure that any changes made to the manuals are properly understood
by all the office employees.
SITE LAYOUT AND ORGANIZATION
Importance of Office Procedures
COURSE OUTLINE;
( Assignment)
 Access and traffic control
SPAN OF CONTROL  Storage
 Communication and general site facilities/ offices
Within the limit of an organization, the groups, section or department will be  Site enclosure ( security ) - fencing and hoarding
ruled and guided by a leader who will have the responsibility of ensuring that his  Sign boards/posts
section carries out its objectives to a final satisfactory conclusion with a greater  Effects of design on equipment and layout
number of person and under one control efficiency and production can be  Existing setting
affected due to: (a) Poor communication and coordination which in turn may lead
to; INTRODUCTION

i) lowering of morale and the breaking down of team spirit, or The construction of a building can be considered as the product being produced
by a temporary factory, the building site being the factory in which the building
ii) un-official sub-groups forming within the main group contractor will make the product.

(b) Lowering of the standard of work due to lack of correct supervision. To enable this activity to take place; it requires men, materials and plants, all of
which have to be carefully controlled so that the men have the right machine in
(c) Poor time keeping and lengthy breaks etc.
the most advantageous position, the materials stored so that they are readily
In normal circumstances, between Five to Seven is the maximum number of available and not interfering with the general site circulation and adequate
persons to effectively come under a person's span of control. storage space and site accommodation.

Factors to consider before assigning span of control

The following must be considered before assigning span of control

a) Method of communication
b) The speed in which decision must be made and their importance
c) Whenever the work is competitive, or complex in nature
d) The leader himself considering the load he has to carry in relation to his
character and the stability.

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 g) Access and egress abilities.
h) Materials and the type of plants to be used.
i) Contract period and note of progress needed.

In carrying out the site activities the works must not produce excessive
environmental effects and all works must be conducted safely with respect to
those on an round the site.

In setting out the site, the key aspects that needs to be considered are;

i) Access and traffic control

Figure3.0 A complex construction site

Before any initial planning of the site layout can take place, certain preliminary
works must be carried out preferably at the pre tender stage.

With given design and specifications, the best opportunity for a contractor to
prepare a competitive and economic tender is the programme and planning of the
construction activities.

A thorough study of the Bill of Quantities will give an indication of the amount
and the quality of the materials required and also of the various labour resources
needed to carry out the contract.

The following factors should be put in mind when developing a construction site
plan; A construction site is affected by the need for traffic control in two key ways;

a) Size of site; size of proposed construction and site space  In removing surplus excavated materials from the site.
b) Volume of building or structure relative to site area.  As most sites have restricted storage space, the materials

c) Amount of work above and below the ground level. needed for the job have to be brought in throught the

d) Site location construction period.

e) General site topography and environment.
f) Levelness of the site.

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A constant flow of traffic bringing materials required within a specified time at Semi-permanent roads if the job is to be of long duration.
different points on the site, materials might need to be close placed and
delivered when assembled. ( just in time management ) On traffic control during delivery of materials, consult/ lias with traffic
department.
To ensure that the contract does not suffer owing to lack of forward planning,
the following points should be considered and the plan of the site should be ii) Storage

studied in relation to the nature and volume of excavation and the method to be
Storage on site will be needed for the following,
used to excavate and remove the surplus materials.
a) Materials
i) How the equipments are to be brought in
b) Tools and equipments
ii) How the surplus materials are to be taken out,
c) Spare parts for mechanical plants
iii) Whether any other operation or work anywhere on the site affect (i)
or (ii) above. d) Manufactured goods for incorporation in the works

A decision will then be required on the following; The type of storage materials required for any particular materials will depend
on any of the following factors.
a) Traffic routs on and off the site; taking care to ensure that there
isn't danger to other traffic if the site is adjacent to any public highway. 1) Durability

b) If the excavation is deep; whether or not ramps or bridges will be -will it need protection from the elements?
used, and if so what type and where will they be situated.
2) Vulnerability to damage.
c) If roads are intrinsic to the project, whether or not do the
excavation and laying of the sub base as the first site operation so that they can 3) Vulnerability to theft.
be used to service the temporary infrastructure.
Materials represent a major component of bulk of the cost of construction
If this is done, making good towards the end of the job will have to be carried project and therefore sensible precautions and use will be needed.
out and prior to the completion when there is no danger of excessive ware or
It is important to;
damage by transport.
i. Minimise or completely avoid double handling.
If roads are not included in the contract and the conditions are such that
trouble is anticipated because of soft or difficult grounds, provision should be ii. Protect materials from damage by weather elements e.g. store cement
made in the estimates for temporary roads. in a sheltered room.

This can be either temporary roads of various types depending on ground iii. Prevent the damage arising from careless or proximity to building
conditions and the sort of traffic anticipated. operations without suitable protection.

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 iv. Prevent loses arising through careless stacking and handling. There are two types of layouts for site offices;

iii) Communication and site control i. Provision of separate office for site manager with the rest of the staff
housed in one large open plan office.
On a small site, the constructions manager lias with other site personnel through ii. This has the advantage of making easy communication and is obviously
site meetings, posting notices on the notice boards etc. economical from the point of view of cost and utilisation of space.
iii. The major disadvantage is that it may tend to destruct people and
On large construction sites, its challenging to communicate with the numerous
encourage wasting of time.
personnel engaged on one on one basis. The contract manager communicates with
iv. Provision of offices divided into small units with each specialist function
the rest of the construction team through walkie talkies, mobile phones, and
housed in its own office. Qs, Site engineer(s), planning, Supervisory
mounted loud speakers. Information may also be relayed through regular site
staff etc.
meetings with department and section heads who later on relay information
gotten to other employees falling in their department/section. Site office buildings should be portable so that upon project completion, they
can be dismantled and transported to a new site.
Site control - Site managers delegate some duties and responsibilities to
department/ section heads. Site offices should be away from concentration distracters i.e. extreme noise,
dust, machine and plant fumes etc. They should be positioned near the main
v) Administrative and general site facilities
access road/ point of entrance to easily monitor outflow and inflow of works.
It is well recognised that physical conditions on construction can be sometimes
f) Site enclosure ( Fencing and hoarding )
very poor with inadequate facilities being provided on short time works.

The contractor is required to erect fences and hoardings either by virtue of

If the labour force is to be stabilised and the standard in general raised, it is
local regulations or because of a specific clause to the BQ to this effect.
imperative that improvements are made in this respect.

Site enclosure provides a secure means of bordering off the site.

Particular facilities needed are;

Local authorities always have regulations governing;

i) Canteens ~ minimise time wastage during lunch and
breaks. i) the type, height, and lighting of hoardings.

ii) Drying and changing rooms. ii) the circumstances a covered way or and handrail is required for
protection of pedestrians.
iii) Shelter from increment weather and rest.

g) Quality control
iv) Washing arrangements and adequate toilet
facilities There are four aspects of control of quality which have to be catered for in a
construction site;
vi) Site offices

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i) Materials delivered to the site The causes of accidents can be grouped into;
Physical causes
Provisions should be made for the inspection and checking of all the materials Relating to machines
delivered on the site to determine whether or not they conform to the  Due to small working machines
specifications laid down in the contract documents.  Use of unsuitable machine for the job
 The machine being improperly guarded
ii) Components delivered to the site
 Improper insulation of electric circuits.
All components should be checked to see whether they; Relating to tools
 Tools being brittle and breaks suddenly
a) meet the specification requirements as to materials  Tools worn out thus bends or breaks
 Tools with loose handles
b) are of the correct dimensions,
Relating to materials
c) have been manufactured in a sound and workman- like manner.  Materials being inflammable
 Explosive materials
iii) Materials produced or components manufactured on site  Hot materials
Psychological causes
The site manager should introduce inspection procedures and control systems to
 Mental
ensure compliance with specifications. This may involve for example setting up of
 Emotional
a complete testing laboratory.
 Overconfidence
iv) Workmanship  Carelessness
Physiological factors
The contract should introduce a system of independent inspection of quality in  Due to old age
order to safeguard his good name and make sure that standards of workmanship  Due to poor hearing
are high.  Due to poor health
 Due to tiredness
v) Site safety and security
 Due to poor sight

Objectives of accident prevention

Engage reputable security firms/guards to guard the site.
i. To reduce human life loss
Minimise entry and exit points to the site and ensure that all these points are
ii. Reducing injury to workers
guarded around the clock.
iii. Reduce loss of materials
iv. Reduce loss of time
Install adequate lighting systems within the site. Install alarms and CCTV(s) to
v. Reduce loss of money in compensation.
detect site intruders and outbreak of fire within the site.

Causes of accidents

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Provide security notice/rules in a visible location to all. e.g. The method of excavation and the means of transporting the surplus materials
a) No unauthorised persons allowed on the site. are important when considering the layout of offices, entrance, exit etc.
b) All visitors should report to the site office first. It may in some circumstances be advisable to make do with temporary
c) All sub-contractors and suppliers must adhere to the rules imposed. accommodation and site facilities until completion of excavating and concreting
of the basement slab and then move to a permanent site.
h) Sign posting/Boards If it is inevitable that the site installation be moved, then the final location and
In urban areas, erect sign boards next to the site access points or where the transfer should be considered and planned in the initial stages of the job.
public can view its content. ii) Concreting
The main problems are the location of mixers, in relation to the size of the site
In rural areas, erect several sign posts directing potential site visitors to where and the proposed method of distributing concrete. The method of distribution is
construction is on-going. also an important factor i.e. by dumper, mono rail, pneumatic pump etc. and will in
each case warrant consideration in relation to layout because trucks, pipe routes
On large sites, internal sign posting will tend to assist in avoiding unnecessary
and the like will limit free passage on the site.
movement on the site and waste of time by people and transport looking for
iii) Lifting and handling
particular officials or unloading.
The main factors here are the use of crane and hoists which will very often
affect the location of the following;
 mixing plant
 unloading points for the lorries
 pre-casting yard
Effects of Design on Equipment and Layout
These decisions are crucial in that they limit the size for location of other
Items of plant work based on specific conditions and are limited by various facilities. Where cranes are considered, the limitations imposed should be
factors. clearly seen by plotting an on-site plan. The position of the crane and its
If plants are to be fully and economically utilised, one has to consider; maximum and minimum radii within which one must position all the unloading
a) whether the conditions and circumstances dictate the type of plant to be and the lifting points otherwise, the crane cannot be fully utilised.
used by virtue of limitations on size, reach, power etc. #*****************#
b) whether its position in relation to the work expected will enable the
anticipated output to be achieved.
CONTRACTS
Generally there is a major influence in the r/ship between the design and
mechanisation of construction. COURSE OUTLINE
Each of the major faces of the constructions have to be considered.
Information that is supposed to be contained in the project method statement i. Parties to a contract
includes; ii. Types of contracts
i) Excavation iii. Contract documents
iv. Tendering methods
v. Law of contract

Baraka D. (Construction Management I for Diploma II) Page 15

 Consultant

A contract is a promise or set of promises that are legally enforceable and, if A party engaged by the owner, architect, engineer or contractor to render
violated, allow the injured party access to legal remedies. Contract law professional assistance regarding a particular aspect of the work. For example,
recognises and governs the rights and duties arising from agreements. an architect might hire a specialty engineer; a contractor might hire a
remediation consultant; a design-builder might hire an MEP (mechanical-
PATIES TO A CONTRACT
electrical-plumbing) engineer; an owner might hire a construction manager to
Depending on the type of project, and the project delivery method selected by oversee the entire project or a professional to provide expertise regarding a
the owner, the main parties to a construction or engineering contract include the specialized project, such as a water park, golf course, or manufacturing facility.
following: Several consultants may render professional services on a single project, each
engaged by and responsible to a different party.
Owner
A party who owns or develops a project, engages parties to design and construct
the project, and compensates those parties for their services and work.
Architect or engineer
A party engaged by the owner to design the project. An engineer is required to
design and engineer specialized projects, such as public works (ie bridges, Supplier

highways) or plants (ie manufacturing facilities, utilities).

An entity from whom materials are obtained that will become part of the
project; for example, those who supply the steel, cement, wood, glass, tiles, and
electrical and plumbing fixtures.

TYPES OF BUILDING CONTRACTS

General contractor and subcontractor

A construction contract is a mutual or legally binding agreement between two

A general contractor is a party engaged by the owner to construct the project.
parties based on policies and conditions recorded in document form. The two
The general contractor typically hires subcontractors to perform and complete
parties involved are one or more owners, and one or more contractors. The owner
separate parts of the project. Those subcontractors, in turn, may hire sub-
has full authority to decide what type of contract should be used for a specific
subcontractors to perform a portion of the part of the project for which the
development to be constructed and to set forth the legally-binding terms and
subcontractor is responsible.
conditions in a contractual agreement

Design-builder Construction Contract Types

A party engaged by the owner to design and construct the project. A design- Lump Sum Contract
builder takes responsibility for both the design and construction functions,
either with respect to the entire project or a portion of the project.

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A lump sum contract, sometimes called stipulated sum, is the most basic form of where the scope of work is highly uncertain or indeterminate in addition to the
agreement between a contractor and a customer. types of labour, material, and equipment being similarly uncertain in nature. Here,
the contractor's profit is set at a fixed amount. If actual costs are lower than
A lump sum contract or a stipulated sum contract will require that the the estimate, the owner keeps the savings. If actual costs are higher than the
contractor agree to provide specified services for a stipulated or fixed price. In estimate, the owner must pay the additional amount. The advantage of a cost plus
a lump sum contract, the owner has essentially assigned all the risk to the
contract is that, generally speaking, the project will result in the building that
contractor, who in turn can be expected to ask for a higher mark-up in order to was envisioned, even if costs run high. The builder is less likely to cut corners or
take care of unforeseen contingencies. A contractor under a lump sum agreement argue for less expensive materials because his profit is not in jeopardy. Three
will be responsible for the proper job execution and will provide its own means key types of cost plus contracts are:
and methods to complete the work. This type of contract usually is developed by
estimating labour costs, material costs, and adding a specific amount that will  Cost + Fixed Percentage Contract - Compensation is based on a
cover contractor‘s overhead and profit margin. If the actual costs of labour and percentage of the cost
materials are higher than the estimate, the profit will be reduced. If the actual  Cost + Fixed Fee Contract - Compensation is based on a fixed sum
costs are lower, the contractor gets more profit. Either way, the cost to the independent the final project cost. The customer agrees to reimburse
owner is the same. the contractor's actual costs, regardless of amount, and in addition pay
a negotiated fee independent of the amount of the actual costs.
A lump sum contract is a suitable if the scope and schedule of the project are  Cost + Fixed Fee with Guaranteed Maximum Price Contract –
sufficiently defined to allow the contractor to fully estimate project costs. Compensation is based on a fixed sum of money. The total project cost
will not exceed an agreed upper limit.
Unit Price Contract

In a unit price contract, the work to be performed is broken into various parts,
usually by construction trade. This contract type is based on anticipated Incentive Contracts
quantities of items which are counted in the project in addition to their unit
prices. The final price of the project depends upon the quantities required to Compensation is based on the contracting performance according an agreed
carry out the work. For example, painting is typically done on a square foot basis. target - budget, schedule and/or quality.
Unit price contracts are seldom used for an entire major construction project,
but they are frequently used for agreements with subcontractors which involve The two basic categories of incentive contracts are

accurate identification of different types of items, but not their numbers, in the
 Fixed Price Incentive Contracts
contract documents. They are also often used for maintenance and repair work.
 Cost Reimbursement Incentive Contracts

Cost Plus Contract

Fixed Price Incentive Contracts are preferred when contract costs and

Cost plus contract – The cost plus contract is an agreement which involves the performance requirements are reasonably certain.

buyer‘s consent to pay the complete cost for material and labour in addition to
Cost Reimbursement Contract provides the initially negotiated fee to be
the amount for contractor overhead and profit. This contract type is favoured
adjusted later by a formula based on the relationship of total allowable costs to

Baraka D. (Construction Management I for Diploma II) Page 17

total target costs. This type of contract specifies a target cost, a target fee, When this type of contract is awarded to a contractor, he must hire all
minimum and maximum fees, and a fee adjustment formula. After project architects and engineers required to complete the design work. The owner is still
performance, the fee payable to the contractor is determined in accordance with given the right to approve or reject design options, but is no longer responsible
the formula. for coordinating or managing the design team. Once the owner approves the
design, the same contractor then oversees the construction process, hiring
Guaranteed Maximum Price Contract
subcontractors as needed. Most of these contracts are awarded through
negotiation rather than through a bid process.
A Guaranteed Maximum Price (also known as GMP, Not-To-Exceed Price, NTE, or
NTX) contract is a cost type contract where the contractor is compensated for
actual costs incurred plus a fixed fee subject to a ceiling price. The contractor
is responsible for cost overruns, unless the GMP has been increased via formal Integrated Project Delivery Contract
change order (only as a result of additional scope from the client, not price
overruns, errors, or omissions). Savings resulting from cost under runs are Integrated Project Delivery (IPD) contracts represent the latest trend towards

returned to the owner. This is different from a lump-sum contract where cost a more collaborative approach to delivering construction projects. IPD contracts

savings are typically retained by the contractor and essentially become additional are unique in that they require the involvement of owners, designers,
contractors, and key stakeholders on a project as early as possible— sometimes
profits. Sometime, savings are shared between the owner and the contractor as
an incentive to keep costs down. even at the conceptual stage. This contract type results in more transparency
among all the parties involved on a construction project. Additionally, both risk
Design-Build Contract and reward are shared by the parties who enter into the IPD contract, resulting
in greater integration of resources, processes, and expertise than would be
A design-build contract is appropriate when the project delivery method is possible under more traditional contract arrangements, as well as maximizing
design-build. Traditional contracts are awarded using a design-bid-build system, efficiency through all phases of design, fabrication, and construction.
where the project owner starts by hiring an architect. Once the architect has
finished the design phase, the project is put out for bid to general contracting CONTRACT DOCUMENTS
companies. The contractor with the lowest bid is awarded the project and is
Construction ―Contract Documents‖ are the written documents that define the
responsible for completing the job according to the plans created by the
roles, responsibilities, and “Work” under the construction Contract, and
architect.
are legally-binding on the parties (Owner and Contractor).
With a design-build contract, the owner awards the entire project to a single
company. It is typically awarded to a contractor, though architects or engineers The National Building Code (2006) defines contract documents as including the
following:
may be awarded one in some specialized cases. Once the contract is signed, the
contractor is responsible for all design and construction work required to
complete the project. This system allows the owner to deal with a single source i. Contract drawings and specifications prepared by registered architects
throughout the duration of the job, rather than coordinating between various and registered engineers;
parties. ii. Priced bill of quantities prepared by a registered quantity surveyor;

Baraka D. (Construction Management I for Diploma II) Page 18

 iii. Construction program, project quality management plan, project health Management Plan. A sample outline of the Project Quality Management Plan is
and safety plan prepared by a registered builder; referred in the appendix.
iv. Conditions of contract;
v. All risk insurance for the building works, personnel and equipment. Project Health and Safety Plan:
Contract Drawings: The Project Health and Safety Plan is a document developed to secure the
The contract drawings include the architectural drawings, the health, safety and welfare of persons who will work or visit the site. It was also
structural/geotechnical engineering drawings and the building services developed to control the emission of toxic substances into the atmosphere and
engineering drawings. These drawings provide information regarding the control the keeping and use of substances that might be hazardous to health. An
arrangement of spaces, structural components, electrical and mechanical outline of the Project Health and Safety Plan is contained in the appendix.
installations.
Specifications: Conditions of Contract:
The conditions of contract define the terms, under which the work is to be
undertaken, the relationship between the client, architect and contractor, the
This amplifies the information given in the contract drawings and bill of
duties of the architect and contractors, and the terms of payment (Seeley and
quantities. It describes in details the work to be executed under the contract
Winfield, 2005)
and the nature and quality of materials, components and workmanship.

All Risk Insurance:

Priced Bill of Quantities: This is a contract document that is developed and shows that all the personnel
A priced Bill of Quantities is a Bill of Quantities that has its rate and amount and equipment associated with a construction project has been insured against
column filled by a contractor. A Bill of Quantities consists of a schedule of items loss or damage. By insurance, all the risks associated with personnel and
of work to be carried out under the contract with quantities entered against equipment in a construction project is transferred to a third party.
each item, prepared in accordance with the Standard Method of Measurement of
Building Works (Seeley and Winfield, 2005) TENDERING METHODS
Construction programme:
This is a document that is prepared in order that the project participants may 1. Construction bidding is the process of submitting a proposal (tender) to
have a thorough appreciation of the work involved, to allow the site production undertake, or manage the undertaking of a construction project. Bids are not
team to sort out its main constituent and decide how, in what order and at what only chosen on cost alone. Sometimes contractors submit lower tenders to win
time to do them; and to ensure adequate co-ordination of the labour, materials the contract and win the work.
and machinery requirements. 2. A tender is a submission made by a prospective supplier in response to
an invitation to tender. It makes an offer for the supply of goods or services.
Project Quality Management Plan:
The Project Quality Management Plan defines the various quality related In construction, the main tender process is generally for the selection of
activities and procedures which will be implemented on the project. It sets down the contractor that will construct the works. However, as procurement
requirements, gives guidelines, provides information and indicates to appropriate routes have become more complex, so tenders may be sought for a wide range
personnel, the procedures to be followed with respect to the Project Quality of goods and services (for example, on a construction management

Baraka D. (Construction Management I for Diploma II) Page 19

contract the works are constructed by a number of different contractors each Selective tendering only allows suppliers to submit tenders by invitation. A pre-
contracted to the client) and contractors may take on additional functions such selected list of possible suppliers is prepared that are known by their track
as design and management. record to be suitable for a contract of the size, nature and complexity
required. Consultants or experienced clients may maintain ‗approved‘ lists of
There is also an increasing tendency for suppliers to be aggregated into prospective suppliers and then regularly review performance to assess
single contracts, for example, 'integrated supply teams' on public projects may whether suppliers should remain on the list.
include; the main contractor, designers, sub-contractors, suppliers, facilities
managers, and so on. Selective tendering can give clients greater confidence that their requirements
will be satisfied and should reduce the wasted effort that can be involved
Irrespective of the nature of the goods or services that are being sought, the in open tendering. It may be particularly appropriate for specialist or
process for securing tenders may take a number of different basic forms: complex contracts, or contracts where there are only a few suitable firms.
However, it can exclude smaller suppliers or those trying to establish themselves
in a new market.

Open tendering
Negotiated tendering

Open tendering allows anyone to submit a tender to supply

Negotiating with a single supplier may be appropriate for
the goods or services that are required. Generally, an advert will be placed
highly specialist contracts, or for extending the scope of an existing contract. It
giving notice that the contract is being tendered, and offering an equal
can reduce the costs of tendering and allow early contractor involvement, but
opportunity to any organization to submit a tender.
the competitive element is reduced, and unless the structure of the negotiation
is clearly set out there is the potential for an adversarial atmosphere to develop,
On larger projects, there may then be a pre-qualification process that produces
even before the contract has been awarded.
a short-list of suitable suppliers who will be invited to prepare tenders. This sort
of pre-qualification process is not the same as selective tendering (see below).

Open tendering has been criticized for attracting tenders / expressions of

interest from large numbers of suppliers, some of whom may be entirely
unsuitable for the contract and as a result it can waste a great deal of time,
effort and money. However, open tendering offers the greatest competition and
has the advantage of allowing new or emerging suppliers to try to secure work. Serial tendering
Serial tendering involves the preparation of tenders based on a typical
or notional bill of quantities or schedule of works. The rates submitted can then
be used to value works over a series of similar projects, often for a fixed period
Selective tendering of time following which the tendering procedure may be repeated.

Baraka D. (Construction Management I for Diploma II) Page 20

Serial tendering can reduce tender costs, and may encourage suppliers to submit
low rates to secure an ongoing program of work.

Framework tendering LAW OF CONTRACT

Clients that are continuously commissioning work might reduce timescales,
Contract;
learning curves and other risks by using framework agreements. Such
arrangements allow the client to invite tenders from suppliers of goods and
 It is an agreement between two parties which is enforceable by law.
services to be carried out over a period of time on a call-off basis as and when
 A contract is a legally binding agreement between two or more parties
required.
which is enforceable by the court of law.
Framework tender documents are likely to include a request for
a schedules of rates and time charges and a breakdown of resources Types of contract
and overheads to be applied (including any proposed subcontractor or sub-
consultant details). i) Speciality contract;

One or more suppliers are then selected and appointed. When

These are contracts which the law insist that they must be in written form
specific projects arise the client is then able to simply select a
They must be embodied in a formal document e.g. hire purchase agreement, sell
suitable framework supplier and instruct them to start work. Where there is
of land, construction project etc.
more than one suitable supplier on the framework, the client may introduce a
secondary selection process to assess which supplier is likely to offer best
ii) Contracts requiring written evidence;
value for a specific project. The advantage of this process to the client is that
they are able instigate a selection procedure for individual projects without Are contracts which must be evidenced by some note or memorandum.
having to undertake a time-consuming pre-qualification process. This should also Such memorandum must;
reduced tender costs.  Describe the parties sufficiently to identify them
 Describe the subject matter ( What the contract is all about )
 State the consideration ( What is payable i.e. the gain )
 Contain the signature of the parties e.g. insurance contracts.
Single-stage and two-stage tendering
Single-stage tendering is used when all the information necessary to calculate a iii) Simple contracts
realistic price is available when tendering commences.
An invitation to tender is issued to prospective suppliers, tenders are prepared These are contracts where formations are not subject to any legal formalities.
and returned, a preferred tenderer is selected and following negotiations they
The contract may be oral, written or implied from the conduct of the parties.
may be appointed.
Two-stage tendering is used to allow early appointment of a supplier, prior to Their examples include partnership agreements.
the completion of all the information required to enable them to offer a fixed
price. In the first stage, a limited appointment is agreed to allow work to begin Elements of a valid contract
and in the second stage a fixed price is negotiated for the contract

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All agreements made in a contract out of free consent of parties competent to  An offer must give rise to legal obligation
the contract with lawful considerations, lawful objective and which are ot  Terms of offer must be definite and certain i.e. an offer should not be
thereby declared void. vague, uncertain or ambiguous
 An offer must be distinguished from an invitation to offer or
These elements make a contract to be enforceable by the court of law. declaration of intention e.g. advertisement.
 The offer must be communicated.
 Offer
 The offer may be express or implied.
 Agreement/acceptance
 An offer may prescribe the method of communication of acceptance (
 Legal intention
agreement ) thus becomes conditional offer i.e. indicate the mode of
 Consideration
reply e.g. through post, online, email, sms etc.
 Legal purpose ( lawful objective )
 An offer should not impose unnecessary obligations to communicate non
 Free/Legal consent
acceptance. e.g. if the acceptance is not communicated by next Sunday,
 Legal capacity/ Capacity to contract
I shall presume that you have accepted.
a) OFFER
Types of offer
A contract comes into existence when a definite offer has been unconditionally
i) Counter Offer
accepted.

This is a change, variation or modification of the terms of the offer by the

An offer can be made orally, in writing or implied provided that the mode of
offeree.
offer or acceptance is in tandem ( hand in hand ) with any statutory
requirements e.g. the sale of land in writing. It is a conditional acceptance and therefore not acceptance in law.

When a person signifies his willingness to do or to abstain from doing anything If a counter offer is accepted, an agreement arises between the parties.
with the view of obtaining the consent of the other, to such act or abstinence,
he is said to make a proposal or an offer. ii) Cross Offer

The person promising or giving an offer is called an offerer or the promiser. This is when two parties make similar offer to each other without knowing that
Offeree is the party receiving the offer. that same offer has been made by the other party.

The existence or otherwise an offer may be sometimes be a source of acute In such case, no binding contract would have been created since no one has
disputes between parties. specified acceptance to the other.

This has often occurred in case where the person did or said something which iii) Standing Offer/tender
another understood to be an offer and consequently proceeded to accept.
A continuous offer is called a standing offer or tender.
Characteristics/requirements/legal rules regarding offer

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When a tender for supply of goods, for instance, is accepted, it still doesn't It remains at the option of the proposer to welcome the acceptance otherwise
become a tender. It simply means that, when goods are required, an order would he may revoke by sending message to that effect in reasonable time.
be placed. Placing of such orders becomes acceptance. i.e. the offer of supply
stands ( waits ) until the supply before becoming a contract.

Thus a standing offer does not become a contract until when an order, according b) LEGALITY OF PURPOSE / LAWFUL OBJECT

to terms of the tender is placed with the party which accepted the tender.
A contract undertaken by any two or more parties must be a legal one that which

When the tenders are accepted, it becomes a contract of a specific tender. is enforceable by the court of law.
The purpose of which the contract is signed or entered into should not violate
iv) Auction Offer the law.
Those which violate the law are referred to as illegal contracts and are regarded
At auction sell, the auctioneer invites offers. as null and void e.g. drug trafficking.

The offer is made by the bidder and the auctioneer accepts the offer at the fall
of the hammer. c) ACCEPTANCE/AGREEMENT

Offer termination/ termination Acceptance takes place when the offeree accepts the offer with all its due
conditions.
Revocation means withdrawal or taking back the offer or acceptance.
A contract comes into existence when a definite offer has been accepted
1. An acceptance can be revoked at any time before the communication of unconditionally.
acceptance is complete. If an offer has been accepted subject to some conditions, then this in effect
becomes a counter offer; which leaves the offerer the option of either revoking
2. It can also be revoked as a result of lapse of time. or accepting.

3. If death of either parties occur. Counter offer destroys the original offer.

4. It can lapse depending to the facts of the case.

5. By notice - this is by sending a revocation message before acceptance is Q ( © 2008 The Kenya National Examinations Council, Dip. Quantity Surveying )
complete as against the offer.
"On the 11th day of October 2016, M/s Kavirondo Construction Company
6. By the failure of the acceptor to fulfil the conditions as regards to received an offer from Mr. Gitwamba for the sale of his Back actor. On 13th day
acceptance e.g. be a Kenyan. of October, Mr. Gitwamba posted a letter revoking his offer and stated that he
had sold the Back actor to Zubedi. M/s Kavirondo Construction Company's letter
7. By not accepting the offer in the mode prescribed e.g. if it was to be
of acceptance was posted on 14th of October ( including the Bankers cheque )
communicated by telegram but instead the acceptor chose to communicate his
and received on the 16th day of October 2016 while Mr. Gitwamba's letter of
acceptance by ordinary mail.

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revocation reached M/s Kavirondo Construction Company on the 17th day of Misrepresentation is a false statement of the fact made innocently without an
October." intention to deceive the other person. Mostly it is innocently made as it has no
purposeful intent to deceive the other party. e.g. in family agreements.
Explain the legal position of the parties with regard to acceptance by post.

( 7 marks )
f) CONSIDERATION
d) LEGAL CAPACITY/CONTRACTUAL CAPACITY
This the value of gain that both parties will get from the contract.
Contractual capacity means that both parties entering into a contract should be
legally allowed. It usually in the form of money or satisfaction.

Capacity refers to both chronological age as well as mental soundness. In consideration, it means that a person must show that he has done something in
return for the promise of the other.
Individuals who have the capacity to contract are known as competent parties
and the vice versa. Categories of Consideration

Incompetent parties include; 1) Executory consideration

Where there is exchange of promise to perform an act in the future e.g. supply
i) Under age v) Drunkards of goods.
In the case "A" promises to deliver good to "B" at a future date and "B" promises
ii) Aliens vi) Non - Citizens
to pay on delivery. ( ...also known as standing offer )
iii) Co-op societies vii) Compelled persons If "A" fails to deliver, then "B" can sue and if "A" delivers the then his
considerations becomes executed.
iv) Trade unions 2) Executed consideration
If one party makes a promise in exchange for an act by the other party, when
that act is completed; it is executed consideration.
e) FREE CONSENT / LEGAL CONSENT
Example; in a unilateral contract, where "A" offers Ksh. 200 for her lost
This means that a contractual agreement should not contain fraud, innocent handbag, if "B" finds it and returns it; then B's consideration is executed.
misrepresentation or mistakes.
Rules Governing Consideration
Both parties in a contract must have an intention of making it known to the legal
i)Forbearance to sue
authorities otherwise any party with a hidden agenda will not have an intention to
have the contract known. If one person has a valid claim against another ( in contract or tort ) but
promises to forbear from enforcing it, that will constitute valid consideration if
Fraud is deception with intention of misleading another person. Silence can
made in return for a promise by the other to settle the claim.
sometime constitute to fraud and its mostly intentional.

Baraka D. (Construction Management I for Diploma II) Page 24

ii) Existing public duty a) A promise request - If the promisor has previously asked the other
party to provide goods or services, then a promise made after they are
If someone is under public duty to do a particular task, then agreeing to do that provided will be treated as binding.
task is not sufficient consideration for a contract.
b) Business situation - If something is done in a business context and it
If someone exceeds their public duty, then this may be valid consideration. is clearly understood by both sides that it will be paid for, then past
consideration will be valid.

c) The bills of exchange act - Any antecedent debt of liability is valid

iii) Existing contractual duties
consideration for a bill of exchange.
If someone promises to do something that they are already bound to do under a
For example; A mows B's lawn and a week later, B gives A a cheque for
contract, that is not valid consideration.
Ksh. 50. A's work is valid consideration is exchange for the cheque.
If the performance of an existing contractual duty confers a practical benefit
on the other party, this can constitute a valid consideration.

VITIATING ELEMENTS OF A CONTRACT

iv) Existing contractual duty owed to a third party

These are factors that render a contract null and void.

If a party promises to do something for a third party, but is already bound by a
contract to do this for a third party, this is a good consideration. They include mistakes, Misrepresentation, Duress, Undue influence.

a) MISTAKES #misunderstood statements

This happens when it is discovered that some things has happened and is likely to
destroy the consensus of which is the basis of a contract and the parties are not
v) Consideration must not be past
to have agreed of anything e.g. if the parties misunderstood each other on some
If a party voluntarily performs an act and the other party then makes a promise, fundamental facts so that there was no true agreement between them and where
the consideration of the promise is then said to be in the past. only one party is mistaken in the sense that the other party is aware of the
mistake, s/he fraudulently induced.
The rule is that past consideration is no consideration, so it is not valid and
cannot be used to sue on a contract. b) MISREPRESENTATION

For example; A gives B a lift home in her car, on arrival, B promises to give A Ksh. This is untrue statement of the fact which is made by the contracting party to
20 towards the petrol. A cannot enforce this promise as her consideration, i.e. the other before or at the time of contracting which is intended to induce and
giving B a lift is past. actually induces the person to whom it is made to enter into the contract.

Exceptions

Baraka D. (Construction Management I for Diploma II) Page 25

 i) Innocent misrepresentation - this is untrue statement made in the This is where both parties in a contract sits down and agreement by substituting
honest believe that it is actually true. There is no remedy for this ...that is, the the original contract with a new one.
offerer didn't know that s/he is misrepresenting the other.
ii) Fraudulent misrepresentation - it is an untrue statement made Agreement can be effective in the following ways

knowingly or recklessly of falsely with the intention to mislead the other party.
a) The doctrine of waiver; A waiver is an agreement where one party
agrees to give up his rights under the contract. i.e. Party A decides to
c) DURESS # threats/ violence
relieve party B

This the use of threats or actual violence against a contracting party to enter
It means the party will have nothing to do with the contract anymore,
into a contract e.g. btw an employer and employee, parent and child e.t.c.
such a party is said to be waivered.

The threat is usually illegal in the sense that it must be a threat to commit a
b) Release under seal; This occurs where one party who has rights under
crime.
the contract agrees to release the other party of any other further

d) UNDUE INFLUENCE # pressure from authority obligations by entering into a speciality contract.

This is pressure exerted by one person over the other simply because he has The new contract must be in writing, signed and sealed.

moral authority over him/her.

c) Accord and satisfaction; Accord is an agreement by which an

This happens when one person enters into a contract without being left to obligation is discharged. The satisfaction is the consideration which

exercise his/her own judgement and free will but just relying on the advice of makes the agreement operating.

the other party.

d) Ovation; This where the contracting parties decides to enter into a

It deals with contracts entered into without free consent of the weaker party. new contract thereby releasing the other from entire obligations which
were from the previous contract.
Methods of discharging a contract
Novation is same as substituting a contract.
These refers to ways through which a contract can come to an end/completion
iii) Merger
i) Performance
This happens when one contract is extinguished by being integrated or merged
A contract is discharged by performance where both parties have complied fully into another e.g. merging of a simple contract into a speciality contract.
with the terms and conditions of the contract such that there is nothing left to
iv) Frustration
be done i.e. fully completing the work, ...all the obligations are fulfilled.

ii) Agreement Happens when the contract entered into becomes impossible to carry out
because of being frustrated by the act of natural calamities e.g. Earthquakes,

Baraka D. (Construction Management I for Diploma II) Page 26

floods, Sickness, Political instabilities etc. They are termed as doctrine of As an alternative of claiming damages, the plaintiff can sue upon Quantum meruit
frustration. to recover the amount earned by his partial performance of contractual
obligations.
v) Breach of contract

iii) Specific performance

This is when one party to a contract fails to carry his contractual
This is a remedy which is only declared when damages are inadequate remedy e.g.
obligations/responsibilities.
a contract of sale of land where for some reasons the contract is liquidated, the
The party who breaches the contract would be compelled to compensate the buyer may not be compensated by monetary value as he requires the land.
other party who did not breach the contract.
iv) Injunction
This damage for compensation may be in monetary form as would be determined
Order of injunction is another equitable remedy and it is only planted by the
by the court of law or an arbitrator.
court of law.
vi) Lapse of time It is meant to restrain the defendant from breaking his contractual agreement
e.g. if the employer had employed somebody on contract basis and he wants to
This is when the contract duration is exhausted. dismiss the employee before the end of the contract period, the employee will
sue the employer and the court can grant him an injunction; preventing him (
Remedies to breach of contract
employer ) from dismissing his employee from the contract.
These are actions to be taken in case a contract has been breached v) Rescission
This is an order of equitable remedy which cancels a contract and restores all
i) Damages the parties to their original state or position. It is appropriate where a person
has been induced to enter into a contract through innocent or fraudulent
These are remedies that can be claimed by the injured party as a right.
misrepresentation.

The damage for breach of contract is just to place back into the financial
Example; A contractor used fake documents to prove his qualifications and
position the injured party to which s/he would have been if the contract could
competency to win the tender. Just before the completion or the tendering
have not been broken/breached.
process, the client realised misrepresentation and called for a rescission.

The person claiming the damage would be compensated as would be ruled out by
E
the court of law or the industrial court.
E N D
ii) Quantum meruit ( As much as it deserves )
D
This is a claim based upon the amount which has been earned under a contract.
This happens when the plaintiff has partly performed his contractual obligations
under the contract and then the defendant has liquidated the contract thereby
preventing the plaintiff from further performance.

Baraka D. (Construction Management I for Diploma II) Page 27