73 / 116
www. e l e c t r i c a l c o nn e c t i o n . c om . a u
7 3
with
Brian Seymour
CONTRACTUAL ASPECTS
The project manager is faced with possible legal pitfalls
throughout the life of the contract.
However, before the project manager gets involved, the estimator
must clarify what the project will (and will not) deliver in order to
avoid future shifts in accountability.
The estimator will state what is specifically excluded from the
project and will clarify what the customer may expect to be included
– for example, any training of the customer’s maintenance staff.
The estimator must review such contractual aspects as:
>
agreements with clients and third parties;
>
reporting requirements;
>
technical specifications;
>
project review dates;
>
resource requirements;
>
estimated project expenses; and,
>
overhead and fixed charges.
COMMERCIAL INTERFACE
An agreement must contain four essential elements to be
regarded as a contract (offer, acceptance, intention of legal
consequences and consideration).
If any one is missing, the agreement will not be legally binding.
OFFER
There must be a definite, clearly stated offer to carry out works as
stated in the tender documents for a definite price.
An offer does not include ‘ball park’ estimates, expressions of
interest or letters of intent.
An offer will lapse:
>
when the time for acceptance expires;
>
if the offer is withdrawn before it is accepted; or,
>
after a reasonable time in the circumstances (generally the greater
the value of the contract, the longer the life of the offer).
ACCEPTANCE
Only what is offered can be accepted, so there cannot be any
additional conditions.
If any new terms are suggested, this is regarded as a counter-offer
that can be accepted or rejected.
There can be several offers and counter-offers before an
agreement exists.
LEGAL ASPECT
A contract requires that the parties intend to enter into a legally
binding agreement.
That is, the parties must intend to create legal relations and must
understand that the agreement can be enforced by law.