Construction Contracts

Contracts are an essential part of the construction industry. Since construction is an index of any nation’s progress, it is necessary that every citizen must be equipped with knowledge of at least the basics of construction contracts.A construction contract can be termed as an agreement entered into by two parties, under the terms of which one party agrees to perform a specific job, in this case a construction job, for which the other party agrees to pay. Construction contracts come with additional terms and conditions which form an integral part of the entire contract.For a construction contract to be deemed competent, both the parties must be legally capable of playing their part in right earnest. Another important aspect of construction contracts is to clearly define the subject matter of the contract, while entering into the agreement. A construction contract should have a proper proposal from one party and its unqualified acceptance by the other party.Whenever a party fails to perform its duties according to the interpretations of the same in the contract, they are said to have breached the contract. However, not every failure can be termed a breach legally, as parties can always find an excuse for not performing a specific job assigned to them under the agreement.Construction contracts can be terminated due to many reasons. The entire construction process may have been over to the complete satisfaction of both parties, for example. Or there could have been a breach of contract by one party, citing which the other party could be released from the contractual obligations. Both the parties can even mutually agree to terminate the contract. Sometimes unforeseen circumstances, beyond the control of either party, can lead to the termination of the contract. There are several types of construction contracts, which could be entered into by parties like lump sum contract, unit piece contract, percentage rate contract or target cost contract, to mention only a few. One can get extensive information on construction contracts by visiting online resources dedicated to the subject.