Learning Objectives:

Upon successful completion of this module, you will be able to:

• Understand the global nature of the project delivery process, giving particular attention to professional design, documents and administration of a contract.

• Acquire insight into developing a personal, professional bearing and career ethics.

• Grasp the intent and nature of contracts, and relationships between contracting parties.

• Develop skills in critical thinking and analytical judgment related to the development and execution of consultant and agreements.

• Comprehend the general aspects of the conditions of a contract for engineering and their effect on the process.

• Recognize the purpose, structure and interfacing of specifications with the contract documents, and their importance to a project.

• Know the various roles and responsibilities for those participating in the administration of a contract.

• Develop participatory skills and comprehend the details about professional engineering design in relationship to the contract documents and administration.

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An agreement is any understanding or arrangement reached between two or more parties. A contract is a specific type of agreement that, by its terms and elements, is legally binding and enforceable in a court of law.
Agreement is an arrangement (usually informal) between two or more parties that is not enforceable by law. An agreement that lacks any of the required elements of a contract has no legal effect.

A contract is a formal arrangement between two or more party that, by its terms and elements, is enforceable by law. A contract is legally binding. In order to reach an agreement, parties need only come to a common understanding as to their relative rights and responsibilities, what is often termed a “meeting of the minds.” The requirements for the formation of a contract are more precise and comparatively stricter. A contract must contain the following essential elements:

• Offer and Acceptance: Every contract must include a specific offer, and the acceptance of that specific offer.

• Mutual Consent: The offer and acceptance must be freely consented to by the parties, without coercion. All parties must agree to the same terms, and all must intend for a binding agreement to be formed.

• Consideration: This is something of value that is exchanged between the parties. Consideration can take the form of money, goods, or services, but both parties must provide something of value for a contract to be formed. If only one side provides something, it is a gift, not a contract.

• Competence: Both parties must comprehend the situation and understand what the contract will entail. Thus, no party can be a minor, under the influence of drugs or alcohol, or mentally deficient in a way that would prevent them from understanding the terms of the contract. A non-competent party to a contract may disavow the contract, which would render it void.

• Legal Purpose: The purpose of the contract must fall within the confines of lawful conduct. In other words, a court would never enforce a contract regarding.

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