Legal aspect of construction

Part 1

The calculation for the contractor’s compensation was agreed to be determined by multiplication of the construction cost times a set rate of 6 percent. The construction cost was however based on the unit price that was set for the entire process.

1,000,000 x 6 % = 60,000

60,000-25,000= $35,000

Part 2

A contract must lead to bargain like consideration for it to be valid. In the dispute regarding the enforceability of the contract, the court of law must initially determine if the agreement involve a contract. There must be a good definition of the terms in the contract for it to be enforced by the court (Hess, & American Bar Association, 2007). If the conclusion of the court is that a contract existed, it must determine whether it will be enforceable. The clause in the contract between the architect and client clearly shows that all claims will be barred unless they are presented within a period of 6 months after the maturity of the contractor’s final payment. Due to this clarification, the court would deem the clause to be enforceable if there existed no extra cost after the payment is due. If there are extra cost relating to the negligence of the contractor, the clause would thus be unenforceable. It has to be determined whether the contract formation process and the various substantive terms are fair or not. If the terms of the contract as spelled out in the clause leads to shocking the courts conscience, it may be regarded as unconscionable and thus unenforceable. Thus for the clause to be enforceable it must include the various exemptions that would lender it void. However, settlement negotiations may be entered instead of lawsuit

 

References

Hess, S. A., & American Bar Association. (2007). Design professional and construction manager law. Chicago, Ill: American Bar Association, Forum on the Construction Industry. 86-87