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Contract Analysis
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Contract Analysis
A contract is a written agreement by two parties on terms of service or work. There are
many types of contracts including employment, and sales contracts. A contract is valid and
legally binding if it contains some distinct elements. Some of the main features of a contract
include the intention to create a legal relationship, an offer and acceptance of the offer, and
certainty in terms. The contract must contain the full names of the parties involved and state the
specifics of the terms. For example, a construction contract agreement between the owner and
the contractor will include terms like the description of work, materials and labor, contract price
and payments, certificate of completion, and other details of the construction industry. The legal
terms of the contract include conditions and warranties.
Paragraph 2: Contract Price and Payments
Paragraph 2 highlights contract price and payments. In the construction industry, the
construction owner mandates the contractor to make all decisions regarding the purchase of
materials and worker pay. The owner and the contractor agree on the project cost. This clause
discusses the agreed amount of payment and the mode of payment. It highlights whether there
will be installment payments or if the payment will be upfront. The payment plan includes a
deposit, installments, and the balance due in this particular contract. There are checkboxes to
indicate the terms of the agreement. The other detail in this clause is the mode of payment, where
checkboxes indicate whether the payment will be through a personal check, cash, cashier’s check,
money order, wire transfer, or credit or debit card. The agreed contract price and payments are
legally binding, and failure of either party will lead to a breach of contract.
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Paragraph 7: Supervision of Construction
This clause is binding to the contractor, as it states that the contractor is singly mandated
to supervise the project. They are responsible for everything that will be done in the project.
They are also legally bound in this clause to ensure the safety of all then employees and the
public at the property. This is a sensitive clause, and the contractor should take reasonable
precautions. They must ensure that they only employ competent and suitable personnel to
perform the work and maintain work discipline.
Paragraph 11: Warranty
A contract warranty is a clause that means that if the contract is breached, the aggrieved
party cannot terminate the agreement but can claim damages. The warranty in this contract binds
the contractor to payment of damages caused by poor workmanship, use of defective materials,
and material structural differences.
A contract ensures that there will be efficiency by both parties. It is an essential document
as it legally binds all the agreements made without favoring either party.
State of __________
CONSTRUCTION CONTRACT AGREEMENT
This Construction Contract Agreement (this “Agreement”) is made as of the ___ day of ___________,
20___ by and between __________, a(n) ☐ Individual ☐ Business Entity located at __________,
__________, __________ __________, (“Owner”) and __________, a(n) ☐ Individual ☐ Business
Entity located at __________, __________, __________ __________ with contractor’s license number
__________ (“Contractor”). Owner and Contractor may each be referred to in this Agreement individually
as a “Party” and collectively as the “Parties.”
The Parties agree as follows:
1. Description of Work. Contractor shall perform the following described work at __________,
__________, __________ __________ (the “Property”), in accordance with Owner’s contract plans and
specifications, this Agreement and any Change Order, as defined herein, (collectively, the “Contract
Documents”): __________________________________________
_____________________________________________________ [Description of work] (the “Work”).
Industry terminology used in any Contract Documents which are not defined shall be interpreted as
having the same meaning as that recognized in the construction industry in the area where the Property
is located.
2. Contract Price and Payments. Owner agrees to pay Contractor the total amount of $________ (the
“Contract Price”). Payment of this amount is subject to additions or deductions in accordance with any
mutually agreed to changes and/or modifications in the Work. Payment will be made by (Check one)
☐ cash ☐ personal check ☐ cashier’s check ☐ money order ☐ credit card or debit card ☐ wire
transfer ☐ other: __________, according to the following schedule:
Deposit (Check one)
☐ A deposit is NOT required.
☐ $__________ deposit, due upon the execution of this Agreement.
Installments (Check one)
☐ There will be NO installment payments.
☐ Installmen…
