Contract Law and Administration in Construction
Expert-defined terms from the Postgraduate Certificate in Construction Law and Arbitration course at London School of International Business. Free to read, free to share, paired with a globally recognised certification pathway.
Contract Law and Administration in Construction Glossary #
Contract Law and Administration in Construction Glossary
AIA Contract Documents #
The American Institute of Architects (AIA) produces a set of standard form contracts widely used in the construction industry in the United States.
Adjudication #
A process for resolving construction disputes whereby an independent third party, known as an adjudicator, makes a binding decision on the parties involved.
Alternative Dispute Resolution (ADR) #
Methods of resolving disputes outside of traditional court proceedings, including mediation, arbitration, and adjudication.
Arbitration #
A form of dispute resolution where the parties agree to have their dispute resolved by one or more arbitrators, whose decision is usually binding and enforceable.
Assignment of Contract #
The transfer of rights and obligations from one party to another under a contract.
Attornment #
The act of agreeing to recognize a new owner of the property as the landlord under a lease agreement.
Bid Bond #
A financial guarantee provided by a contractor to a project owner with a bid to secure the contractor's commitment to perform the work if awarded the contract.
Bid Documents #
The documents provided by the project owner to potential bidders, including the invitation to bid, instructions to bidders, and the bid form.
Bid Shopping #
The practice of disclosing a subcontractor's bid to other subcontractors in an attempt to obtain a lower bid.
Change Order #
A written agreement between the parties to a contract to modify the scope of work, price, or time for completion.
Claim #
A demand or assertion by one party seeking compensation or other relief for alleged breach of contract or other wrongdoing by another party.
Collateral Warranty #
A separate contract between a party not directly involved in the main contract and one of the parties to that contract, usually providing additional rights or protections.
Common Law #
The body of law developed through judicial decisions in English-speaking countries, as opposed to statutory law.
Compensation Event #
A term used in some forms of contract to describe events that may entitle the contractor to additional time or money.
Completion Certificate #
A document issued by the project owner certifying that the work has been completed in accordance with the contract.
Confidentiality Agreement #
A contract between parties to protect sensitive information shared during the course of their relationship.
Consequential Damages #
Damages that arise as a foreseeable result of a breach of contract but are not the direct result of the breach.
Consideration #
Something of value exchanged between the parties to a contract, essential for the contract to be legally binding.
Construction Management #
A professional service that involves overseeing the planning, design, and construction of a project on behalf of the project owner.
Contract #
A legally binding agreement between two or more parties that creates obligations to perform certain actions.
Contract Administrator #
A person responsible for the overall administration of a contract, including interpreting contract terms, issuing instructions, and managing disputes.
Contract Documents #
The written agreement, specifications, drawings, and other documents that form the contract between the parties.
Contractor #
The party responsible for carrying out the construction work under a contract.
Counterclaim #
A claim brought by a defendant against a plaintiff in response to the plaintiff's claim.
Defects Liability Period #
The period after completion during which the contractor is responsible for rectifying any defects in the work.
Delay Damages #
Compensation paid by a contractor to the project owner for delays in completing the work beyond the agreed-upon schedule.
Design #
Build: A project delivery method where the design and construction services are provided by a single entity.
Dispute Resolution Board (DRB) #
A panel of neutral experts established to resolve disputes that arise during the course of a construction project.
Drawings #
Graphic representations of the work to be performed, including plans, elevations, sections, and details.
Due Diligence #
The process of conducting a thorough investigation and assessment of a project before entering into a contract.
Estoppel #
A legal doctrine that prevents a party from asserting a right or defense that is inconsistent with a previous position or representation.
Express Warranty #
A specific promise made by one party to another regarding the quality or performance of the goods or services provided.
FIDIC Contracts #
The International Federation of Consulting Engineers (FIDIC) produces a widely used set of standard form contracts for construction projects worldwide.
Force Majeure #
An unforeseeable event beyond the control of the parties that prevents or delays the performance of a contract.
Guarantee #
A promise by one party to be responsible for the performance of another party under a contract.
Indemnity #
An agreement by one party to compensate another party for losses or damages incurred as a result of the contract.
Insolvency #
The inability of a party to pay its debts when they become due, leading to potential termination of the contract.
Interim Payment #
Payments made to the contractor at regular intervals during the course of the project, based on the work completed to date.
Joint Venture #
A business arrangement where two or more parties agree to combine their resources and expertise to undertake a specific project.
Liquidated Damages #
A predetermined amount of damages specified in the contract to be paid by one party to the other in the event of a breach.
Material Breach #
A serious violation of the terms of a contract that goes to the heart of the agreement, potentially entitling the innocent party to terminate the contract.
Mediation #
A voluntary process where a neutral third party assists the parties in reaching a mutually acceptable resolution of their dispute.
NDA (Non #
Disclosure Agreement): A contract between parties to protect confidential information shared during the course of their relationship.
Novation #
The substitution of a new party for one of the original parties to a contract, with the consent of all parties involved.
Offer and Acceptance #
The basic elements of a contract where one party makes an offer and the other party accepts it, forming a binding agreement.
Performance Bond #
A financial guarantee provided by a contractor to a project owner to ensure the completion of the work as specified in the contract.
Privity of Contract #
The relationship between the parties to a contract that gives them the right to enforce its terms.
Procurement #
The process of obtaining goods and services for a construction project, including sourcing, tendering, and contracting.
Quantum Meruit #
A legal principle allowing for the recovery of a reasonable sum for work done or services provided, even in the absence of a formal contract.
Retention #
A percentage of the contract sum withheld by the project owner to ensure the contractor's performance and the rectification of any defects.
Subcontractor #
A party engaged by the main contractor to perform specific aspects of the work under the main contract.
Termination #
The ending of a contract before all obligations have been fulfilled, either by agreement or due to a breach of contract.
Time Bar #
A provision in a contract that sets a deadline for giving notice of a claim or other contractual event.
Value Engineering #
A systematic process of analyzing the functions of a project to achieve the required performance at the lowest possible cost.
Variation #
A change to the contract documents initiated by the project owner or contractor that alters the scope, price, or time for completion.
Waiver #
The voluntary relinquishment of a right or claim under a contract, usually done through an express statement or conduct.
Withholdings #
Payments deducted from the contractor's invoices for reasons such as defects, non-compliance, or failure to meet contractual requirements.
Workmanship #
The quality of labor and skill applied in the construction of a project, including the standard of materials used and the execution of the work.
Written Notice #
Formal communication required by the contract to inform the other party of a specific event, claim, or change in the project.
This glossary provides a comprehensive overview of key terms and concepts relate… #
This glossary provides a comprehensive overview of key terms and concepts related to contract law and administration in construction, essential for professionals in the field to navigate the complexities of construction contracts effectively.