Lexicon

BILLS

Abbreviation for bills of quantities.

BILLS OF QUANTITIES

Bills of quantities quantify the works to be carried out in detail providing a full description of the amount of work necessary for completion of works and are usually prepared in accordance with a standard method of measurement forming part of the contract. Their purpose is to put into words every obligation or service which will be required in carrying out the building project. Generally it requires express words in the articles of agreement to make the bills of quantities a contract document. In major projects, there are likely to be several volumes, and the bills will respectively deal with such matters as preliminaries, foundations, framework, etc. Bills of quantities have columns on the right-hand side of the page to allow the contractor to price the work. 

BILLS OF VARIATIONS

An account prepared at the end of the contract showing the effect upon the pre-agreed lump sum of variations to the works.

BOT

Build, operate, transfer.

BOOT

Build, own, operate, transfer.

BREACH OF CONTRACT

Under a building agreement or contract the builder is obliged to complete, say a new house, to a certain high standard with good and proper materials. He must do so strictly in accordance with the plans and specification, the planning permission granted in respect of the development and the building regulations.

If the builder fails to do this, he would be in breach of contract and, if the breach is regarded as being serious enough, he is liable to be sued for breach of contract and of the purchaser's common law rights to have the house built in a good and workmanlike manner, using good and proper materials and ensuring that the house is fit for human habitation.

These common law rights are implied into every building contract or agreement and if the builder is in breach of them, the purchaser can institute proceedings against him for damages for negligence.

BUILDING CONTRACTS

The building contract or agreement agreed between the parties. The obligations and responsibilities of both parties are detailed in it.

CAR POLICY

A contractors’ all risks insurance policy.

CAVEAT EMPTOR

The general rule of contract is caveat emptor -"the failure to disclose a material fact which might influence the mind of a prudent contractor does not give the right to avoid the contract". The maxim translates to Let the Buyer Beware. There are three well-known exceptions to this rule where non-disclosure of material facts is a ground for relief (1) where the contract requires uberrima fides or the obligation to disclose all material facts e.g. insurance contracts, (2) where a fiduciary relationship exists between the parties very often over the sale of land e.g. solicitor and client, trustee and beneficiary, and (3) where a positive representation thereby becomes distorted which is more a case of misrepresentation or misdescription than non-disclosure.

CERTIFIER

The person named in a contract as having power to issue certificates which have a contractual effect. The certifier is either the architect or engineer (Private contracts) or the supervising officer (Public-Gevernment contracts).

CHANGE ORDER

Synonym (American terminology) for Variation Order.

CLAIMS CONSULTANT

A quasi-professional person who carries on the business of drafting, negotiating and advising upon claims for the payment of money or extension of time under building contracts. Usually a quantity surveyor by training.

CLERK OF WORKS

An appointee of the employer whose duty is to act as an on-site inspector. His powers to give instructions to the contractor are usually limited. Usually an engineer or builder by training.

CLIENT

Synonym for employer.

COMPLETION

The completion of the execution of the work.

COMPLETION DATE

The agreed date for completion of the Works or the date as extended by the architect.

CONSORTIUM

In the building industry, this expression most commonly means a partnership between two or more contractors which subsists for the purpose of one project only. The expression is also sometimes used to describe a joint venture between contractors, whether or not that joint venture is strictly speaking a partnership in the legal sense of the word.

CONSTRUCTION MANAGEMENT

A procurement system whereby the contractor acts as the employer’s agent, assisting the employer to enter into a series of trade contracts, and managing the whole design and construction process.

CONTRACT

A contract is a legally binding agreement. "Agreement" denotes a meeting of the minds of two or more persons upon some matter or "consensus ad idem" as it is sometimes referred to in court. There must be consensus. All contracts to be valid must contain essential elements, for example offer and acceptance. One party must have made an offer and the other party must have accepted it. The contract comes into existence when the offer has been unconditionally accepted. The offer may be made orally, in writing or by conduct. For the contract to be valid another essential element is required: there must be an intention to create legal relations or an intention that both parties must intend their agreement to be legally enforceable. Yet another essential element is consideration or simply, the price.

Both parties must be legally capable of entering into a valid contract. For example, a person must be aged 18 years or upwards and must enter into the contract freely. In addition, the contract must not be illegal.

In addition to its legal meaning, this expression is often used to describe the project as a whole.

CONTRACT BILLS

Synonym for bills of quantities.

CONTRACT SUM

This expression is generally used to describe the pre-agreed price for lump sum building works excluding VAT. The expression is not usually used to describe the sum that the contractor is entitled to at the end of the day; this is called the “adjusted contract sum”.

CONTRACTOR’S PROPOSALS

The document in a design-and-build contract whereby the contractor sets out how he proposes to meet the employer’s requirements.

COST CONTRACT

A contract where the contractor’s final entitlement is calculated by reference to the actual cost of the works, rather than by reference to a pre-agreed lump sum.

COST PLUS CONTRACT

Synonym for cost contract.

COST PLUS PERCENTAGE CONTRACT

Synonym for cost contract.

CRITICAL DELAY

A delay that causes or contributes towards a delay in completion of building works as a whole.

CRITICAL PATH

The path of those operations that are critical to completion.

CVI

Confirmation of verbal instruction, i.e. the confirmation by the contractor in writing of a verbal instruction of the architect.

DAMAGES

An award of damages by a court is intended to compensate the plaintiff for the loss he has suffered. A breach of contract that has not been excused gives the injured party the right to bring an action for damages. If he merely proves the breach but no loss, he is awarded nominal damages. If he proves actual loss, he is awarded substantial damages as compensation. The principle upon which damages are awarded is to put the plaintiff or injured party as nearly as possible into the same position as he would have been in if he had not sustained the wrong for which the court will award him compensation or reparation. The approach to assessing damages for breach of contract, where the wrong is a failure to perform an enforceable promise, is different to that in the case of tort (a civil wrong), where the wrong is damage caused by a breach of duty. Accordingly, where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation with regard to damages, as if the contract had been performed.

Where the parties to a contract don't make any pre-assessment of any damages payable in the event of a breach, the claim is one for unliquidated damages, i.e. to put the injured party in the same position as if the contract had been performed. As a consequence of the breach any loss suffered, whether it's physical or financial, may be claimed by a successful plaintiff.

On the other hand, the parties to a contract may agree beforehand what amount of money will be payable by way of damages in the event of a breach of contract, e.g. where a builder agrees that he will pay £500 a day for every day that the building remains unfinished after the contract date for completion. It may be a genuine pre-estimate of the loss that will be caused to one party if the contract is broken by the other. In this case it is called liquidated damages and it constitutes the amount that the plaintiff is entitled to recover in the event of breach without being required to prove actual damage. It may also be in the nature of a threat held over the other party, i.e. a security to the person receiving the promise that the contract will be performed.

DEFECTS LIABILITY PERIOD

A “guarantee” period from practical completion within which the contractor must remedy any defects appearing in the works without charge.

DELAY

Sometimes means delay in the completion of the works that is the responsibility of the contractor.

DISRUPTION

Loss and expense caused to a contractor by reason of breaches or failures by the employer or his agents that do not necessarily result in prolongation of the works as a whole.

DMC

Design, manage and construct.

DOMESTIC SUB-CONTRACTOR

A sub-contractor other than a nominated subcontractor.

EMPLOYER

A person who enters into a contract with a building contractor whereby he agrees to pay for building works. The expression is not usually used to include the employing party to a subcontract.

EMPLOYER’S LIABILITY

An employee injured as a result of his employer's negligence while carrying out his duties may recover compensation for the losses he suffered because of the injury. Where death results from an injury in such circumstances, the employee's dependants may be entitled to recover damages.

For employers' liability in damages to arise, a number of things must be shown: the employer should have owed a duty of care to the plaintiff (employee); there must have been a breach of that duty or standard expected of a reasonable employer by the employer; it must be shown that what caused the employee's injury was the negligent act of the employer or his agents.

Although the employer's duty of care is an implied term of the employment contract, as well as arising in tort, generally actions for damages arising out of injuries suffered at work are brought in tort (i.e. a civil wrong). In addition, there is legislation in force the breach of which by the employer will result in him being made liable for breach of statutory duty, e.g. the Construction (Safety, Health and Welfare) Regulations.

EMPLOYER’S REQUIREMENTS

The document or document whereby the requirements of the employer in a design-and-build contract are defined. The employer’s requirements can be a simple written statement of what the employer expects the building to achieve, or a bundle of drawings, specifications and room data sheets, or anything in between.

ENGINEER

The term "engineer" is used to describe a person who in relation to engineering and construction works, carries out duties analogous to those carried out by an architect in a building contract. In large modern building contracts, there is usually a team of consultants led by an architect. Such a team would normally include a structural engineer, a mechanical and electrical (or services) engineer and very often other engineers as well. These engineers often have specific contractual functions. In large contracts, in addition to a chief engineer, a resident engineer may be appointed. His or her function would be to remain continuously on site while the works were being carried out.

EOT

Extension of time.

ESTIMATOR

A person employed by a contractor to estimate the cost of proposed building works.

EXPERT

(i) A person who gives expert evidence in litigation or arbitration.
(ii) The expression is sometimes used to describe a person who decides some matter between two parties, but whose position is not that of an arbitrator within the meaning of the Arbitration Acts.

EXTENDED PRELIMINARIES

Method of calculation of a contractor’s on-site losses following prolongation. Widely thought to be fallacious.

EXTRAS

Synonym for extra work, that is to say extra work required to be carried out by the contractor, on behalf of the employer, or the architect not included within the original contract work.

FINANCING CHARGES

1. Where the cost of being kept out of money is claimed, not as interest on a debt, but as a constituent part of the debt. It is now fashionable to refer to it as financing charges, or finance charges,
2. Less delicately, a synonym for interest.
3. The expression is sometimes used to refer particularly to delay in the release of retention money.

FLUCTUATIONS

Adjustments to a contract sum that fall to be made by reason of increases or decreases in the costs of labour and/or materials. The adjustments are normally based on a agreed formula and official indices issued by the Government.

FRUSTRATION

“Frustration” occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Frustration of building contracts is very rare.

GUARANTEES AND BONDS

A contract of guarantee is a promise to answer for the debt, default or miscarriage of another. An ancillary contract of guarantee or suretyship is frequently entered into as a form of security against the default of one of the parties to the contract or a person concerned with it. The person giving the guarantee is termed a surety. The surety may guarantee performance by the contractor, payment by the employer, or the fidelity of the architect or any other person connected with the contract who may have responsibility for money. The ordinary rule is that a surety who discharges the debt is entitled to be indemnified by the debtor. The liability of the surety depends on the wording of the contract in each case.

A bond is a promise by deed under which the person giving the promise (the bondsman) promises to pay another person a sum of money. Ordinarily the bondsman only becomes obliged to make payment when called on to do so. In the construction industry, the most common kind of bond is a performance bond entered into by a bank or insurance company at the instigation of the contractor and in favour of the employer. In reality, the bondsman promises to pay up to the amount of the bond if the contractor fails to perform his contract.

HVAC

Heating, ventilation and air conditioning work.

HEALTH AND SAFETY

The Safety, Health and Welfare at Work are aimed at protecting workers from accidents and ill health in the construction industry and apply to all forms of construction work.

Responsibilities are placed in particular on the client, who is the person or company for whom the construction project is undertaken, designer and contractor. Safety begins with the client who must appoint two project supervisors, one for the design stage and the other for the construction stage. A safety file must be kept and the information in it made available to those requiring it. The project designer for the design stage must (a) take account of health and safety when overviewing the design and when estimating the time schedule for a project; (b) prepare a preliminary safety and health plan which will include information on any particular risks and (c) provide any information to the project supervisor for the construction stage which needs to be included in the safety file.
The project supervisor for the construction stage must: (a) prepare the safety and health plan before construction work starts; (b) notify the HSA, before any work starts on any project; (c) prepare and update the safety file, in the light of work during the construction stage and deliver it to the client on completion of the project; (d) co-ordinate health and safety, especially where more than one contractor is employed, in particular to make sure that health and safety is included in all organisational and technical decisions, that contractors comply with the safety and health plan and avoid unnecessary risks to others and ensure that accident records are kept and that general site safety obtains.

Designers must take into account the health and safety of those who will be constructing, maintaining or repairing the structure being designed. Although contractors will manage site safety, designers may be able to eliminate or reduce potential health and safety problems when designing the project. Designers must (a) co-operate with and take into account any directions from the project designer for the design stage and (b) promptly provide the appropriate project supervisor with information on any of the particular risks of the project.

Employees, including the self-employed and others working on the site, must co-operate to ensure worksite safety including making proper use of all safety equipment, especially helmets, harnesses, noise protection and safety footwear. In addition they must report any defects affecting health and safety and comply with the regulations.

Contractors are responsible for ensuring the health and safety of their employees and others on the site. Specific and detailed safety measures must be put in place for high risk areas including working at heights, demolition and excavations and for general site safety. The preliminary safety and health plan will help contractors identify specific safety measures. Contractors must supply necessary information to take account of directions from and report all fatal and notifiable accidents or dangerous occurrences to the project supervisor (construction stage) as well as to the Authority.

In addition, contractors must appoint a safety officer, provide employees (and/or their safety representative) with all information and training relating to health and safety at work. They must also be consulted on these matters and arrangements made for co-ordination between the employees of different contractors.

It should be remembered that the relevant official Authority has wide powers to enforce compliance with the regulations, including power to impose criminal sanction and to apply to the Court for an injunction prohibiting building operations from continuing until certain health and safety measures are put into effect.

INDEMNITY

An indemnity clause is one where one party, e.g. an insurer, agrees to make good a loss suffered by another. One of the parties may indemnify the other against certain losses, i.e. he may promise to make good any loss suffered by the other party in respect of damage or claims arising out of various matters such as injury to persons or property. An indemnity can be expressed to apply to liabilities occurring before as well as after the date on which the indemnity itself is given.

INSURANCE

Insurance cover is a common and very important feature of construction matters. A contract of insurance is one whereby the insurer undertakes to pay a sum of money to the insured on the happening of a particular event. The consideration for the contract is the premium. An essential element of every contract of insurance is that the insured has an insurable interest, i.e. some foreseeable loss or liability. A fundamental principle of such contracts is uberrimae fidei (of the utmost good faith) which requires disclosure of all material facts. Non-disclosure of such a fact makes the policy voidable at the option of the insurer, thereby repudiating the policy.

It is standard practice to insurance buildings and their contents in respect of loss. Insurance is also an essential feature of every construction project, not only in respect of the works themselves but also in respect of third party claims. The three basic insurance requirements are: the contractor must take out insurance against any loss or damage to property; he must also insure against injury to persons, including public liability and employer's liability insurance, and thirdly, insure the works.

Professionals such as architects, engineers and surveyors should be covered by professional indemnity insurance.

N/A

N/A

L&AD

Liquidated and ascertained damages.

LATENT DEFECT

A defect that is hidden.

LETTER OF INTENT

A letter, usually written by or on behalf of an employer to a contractor, evincing an intention to enter into a contract with the contractor at some time in the future. The usual features of a letter of intent are that it makes clear that the parties are not at this stage entering into contractual relations, and that the employer will pay for any work carried out by the contractor in reliance upon the letter.

LIABILITY OF BUILDERS

In the absence of express terms to the contrary there is an implied condition in a contract by a builder to construct a house on specified instructions and fixed specifications: that he will do his work in a good and workmanlike manner; that he will supply good and proper materials and that the house will be reasonably fit for human habitation.

In addition, under the law of tort, a contract builder would have liability for negligence in that he would be liable for defective premises which cause injury to the purchaser.
The "spec" or speculative builder, who builds a house or houses without having a definitive buyer in mind, is also answerable in tort to the ultimate buyer for, at least, quality defects, dangerous defects and inconvenience.

LIST OF RATES

Usually, the pre-agreed rates in a re-measurement contract.

LUMP SUM

The pre-agreed consideration in a lump-sum contract.

LUMP-SUM CONTRACT

A contract to execute work for a pre-agreed lump sum.

M & E

Mechanical and electrical work, such as plumbing, ventilation, electrical and lift installations.

MAINTENANCE PERIOD

Synonym for defects liability period.

MANAGEMENT CONTRACTING

This expression is generally used to mean the procurement system whereby the main contractor, paid on a cost plus basis, will subcontract the whole of the works.

MANAGEMENT CONTRACTOR

1. A party which does not undertake any part of the works itself, but which contracts with the employer to act as an organiser of other contractors.
2. A contractor who undertakes works, usually on a cost plus basis, with the intention of subcontracting the whole of the works.

MEASUREMENT

Usually means the measurement of the amount of building work done.

MEASUREMENT AND VALUE CONTRACT

Synonym for re-measurement contract.

MEDIATION

An ADR technique whereby an independent third party, usually called a neutral, facilitates a settlement between the parties by techniques including caucus sessions, in which the neutral will talk to the parties independently of each other.

MRDSK (ΜΕΔΣΚ)

The standard form of contract used in Cyprus in the private sector is that published by the MEDSK (The Joint Committee of Architects, Engineers, Quantity Surveyors and Building Contractors of Cyprus). It deals principally with the three variable items in the contract, i.e. the works, the time factor to complete and the contract sum.

MEP

Mechanical, electrical and plumbing work.

METHOD STATEMENT

A statement by the contractor as to the method he proposes to adopt for the carrying out of the works. The use of method statements is more common in civil engineering contracts than building contracts.

MISTAKE

"Mistake" in contract law bears a more restricted meaning than when used in a popular sense. A contract may be void where both parties to a contract sign it under a fundamental mistake of fact. There are three possible types of mistake: common, mutual and unilateral.

In common mistake, both parties make the same mistake. Each knows the intention of the other and accepts it, but each is mistaken about some underlying and fundamental fact, e.g. they are unaware that the subject matter of their contract has already perished. In mutual mistake, the parties misunderstand each other and are at cross-purposes, e.g. John intends to offer his Toyota car for sale, but Peter believes that the offer relates to the Rover also owned by John. In unilateral mistake, only one of the parties is mistaken. The other knows, or must be taken to know, of his mistake.

MPTC

Maximum Price Target Cost. A pricing structure particularly used in Prime Contracts whereby a target cost is established, and overspends against that are shared, subject to a maximum price arrangement.

NAMED SUB-CONTRACTOR

A sub-contractor that is chosen by or on behalf of the employer, but who is treated as a domestic and not a nominated sub-contractor for the purposes of his contract with the main contractor. The procedure appears in some contracts.

NEGLIGENCE

Negligence is a tort, i.e. a civil wrong, and it has four elements: (1) the existence of a duty of care, (2) breach of that duty, (3) actual loss or damage was suffered as a result of the breach and (4) a causal connection between the conduct and resulting injury to the plaintiff. Therefore, to establish a claim in negligence, a plaintiff must show that the defendant owes him a duty of care and that there has been a breach of that duty causing actionable damage.

A contractor will be liable if a plaintiff suffers a personal injury because of the contractor's negligence.

Professional persons owe contractual duties to their clients. They have a concurrent potential liability in negligence as well. It has been judicially decided that an architect or engineer who issues instructions which he knows or ought to know are likely to cause injury to persons or property may be liable in negligence if injury results. He may also be liable if he fails to issue appropriate instructions to prevent such injury in circumstances where he ought to have done so.

NOMINATED SUB-CONTRACTOR

Generally, a sub-contractor with whom a main contractor enters into contract pursuant to the instructions of the architect.

NUISANCE

Nuisance is a tort and constitutes unreasonable interference with another person in the exercise of his rights. If the rights interfered with belong to the person as a member of the public, the act or omission causing the nuisance is a public nuisance but if the rights relate to the ownership or occupation of land, or some easement, profit (i.e. benefit from the land) or other right enjoyed in connection with the land, then the act or omission amounts to a private nuisance.

A public nuisance is a crime, e.g. creating an obstruction on the highway. Such obstruction could be digging a trench in the highway or building a structure which obstructs a road. In addition a person who suffers personal injury as a consequence will have a right of action.

On the other hand, a person who creates a private nuisance will be liable, whether or not he is in possession of the land, e.g. a person who constructs a building that constitutes a nuisance will be liable, and will continue to be liable, for the nuisance even where he has no power to abate it.

OMISSIONS

Items of original contract work required not to be carried out by the employer or the architect on the employer’s behalf.

PACKAGE DEAL CONTRACT

Synonym for design and build contract.

PATENT DEFECT

A defect that is not hidden. 

PERFORMANCE BOND

This expression has various meanings. In the building industry it usually means the kind of “on demand” banker’s guarantee in the ordinary sense of the word by a surety, that the contractor will perform his obligations under the contract.

PERFORMANCE SPECIFICATION

A specification which defines the physical characteristics required of building works, e.g. the air temperature to be attained by a central heating system given an ambient temperature or the rate of air change to be attained by a ventilation system.

PERIOD OF FINAL MEASUREMENT

The period referred to a contract within which the quantity surveyor must prepare and deliver a statement of all the final valuations of extra work, etc.

PFI

Private Finance Initiative. A means of procuring public assets using private capital.

PLANT

1. Equipment such as cranes, earthmoving equipment, generators and other equipment used in the execution of building works.
2. Machinery installed in a finished building.

PPP

Public/private partnership.  A means of procuring public assets using private capital.

PRACTICAL COMPLETION

Generally, means the stage at which the works are sufficiently complete to be fit to hand over, albeit there may be minor defects or omissions.

PRELIMINARIES

Work and materials necessary for the execution of building works, but not actually forming part of the completed works themselves. Examples are site huts, scaffolding, site clearance, plant and temporary lighting.

PRIME COST

In broad terms, the cost to a contractor of executing building work, usually excluding overhead costs that are not exclusively referable to that work. Sometimes it is more exactly defined.

PRIME COST CONTRACT

A contract where the price is fixed after the work is done by reference to the prime cost of the work. Synonym for cost-plus contract.

PRIME COST SUM

In a bill of quantities, the price placed against an item requiring the contractor to enter into a nominated subcontract. The expression is to be distinguished from other uses of the expression prime cost; the tenuous connection is that under the usual nomination system the main contractor is, in respect of that work, paid whatever he (the main contractor) must pay the nominated subcontractor.

POSSESSION OF SITE

The employer repudiates the contract if he fails to give possession of the site at all, or without lawful excuse ejects the contractor from the site before completion. Delay on the part of the contractor where time is not of the essence of the contract does not amount to a repudiation unless it is such as to show that he will not, or cannot, carry out the contract.
Where time is of the essence either by the terms of the contract, or as a result of a notice making it of the essence, and the contractor fails to complete to time the employer is entitled to treat the contract at an end and to dismiss the contractor from the site.

PROGRAMME

An intended sequence of construction operations. 

PROLONGATION

Usually delay in the completion of the works that is the responsibility of the employer.

PROLONGATION COSTS

Loss and expense caused to a contractor by reason of prolongation.

PROVISIONAL SUM

(i)   An item in a bill of quantities designed to approximately estimate the cost of work yet to be particularised.
(ii)  The expression is sometimes loosely used to describe any approximate estimate of the cost of building work.

QUANTITY SURVEYOR

Quantity Surveyors are employed by or on behalf of employers to estimate the quantities of the proposed works and set them out in the form of bills of quantities to enable builders to calculate the amounts needed to execute the plans. Their duties also include other works of measurement such as taking measurements for the purpose of certificates and preparing a bill of variations.

The quantity surveyor is normally employed by the employer to whom he owes a duty of care but in some cases, he may be employed by the contractor, e.g. where he is engaged by the contractor to take out quantities for the purposes of tender where quantities do not form part of the contract.

Generally, he advises building owners and architects on probable cost of construction schemes and on the cost of alternative designs. They also prepare cost plans for projects which enable the design team to arrive at practical designs for projects and stay within budget. They are sometimes known as construction cost consultants. Chartered quantity surveyors represent one of seven categories of chartered surveyors who belong to the Royal Institute of Chartered Surveyors.

QUANTUM MERUIT

If a party to an entire contract performs part of the work he has undertaken and is then prevented by the fault of the other party from proceeding further, the law does not allow him to be deprived of the fruits of his labour. While he is entitled to recover damages for breach of contract, he may as an alternative recover reasonable remuneration on a quantum meruit basis for the work that he has done.

It has been decided in a number of English cases that when entire completion of a contract is a condition precedent to payment, the contractor cannot recover anything either under the contract or on a quantum meruit if he has failed to complete in every detail. For an ordinary lump sum contract, the contractor cannot recover anything either under the contract or on a quantum meruit unless he shows substantial completion. These propositions are subject to exceptions.

RE-MEASURABLE (RE-MEASUREMENT) CONTRACT

In a re-measurable contract, the final value of the works is not predetermined. Instead, it is based on the actual quantities of work carried out as per the contract's rates. The rates for the works are usually provided in a bill of approximate quantities.

All works are subject to remeasurement. Hybrid between lump-sum contract and cost contract.

RETENTION

The money deducted and retained by the employer from sums that would otherwise be due to the contractor, usually 5 per cent. The retention fund is usually released as to half upon practical completion and as to the other half upon the architect’s certificate of completion of making good defects.

SERVICES

This expression is usually used to describe the installations that provide central heating, air conditioning, hot water, drainage, electric power, lifts, etc.

SNAGGING LIST

A list of minor defects and omissions usually prepared when works are nearing completion.

SPECIALIST CONTRACTOR

This expression is generally used to describe a subcontractor (usually nominated) who is responsible for some specialised part of the works, such as services.

SPECIFICATION

(i) Generally, any description of building works.
(ii) The expression is sometimes particularly used to describe a document containing special requirements as to the works, e.g. as to which Standards the materials are to conform.
(iii) The expression is sometimes used to describe an informal or short document in lieu of a bill of quantities.

SUB-CONTRACTOR

Subject to any term to the contrary the contractor is normally liable to the employer for any default by the sub-contractor in carrying out the terms of the main contract. The contractor is securing the vicarious performance of his own obligations. However, an employer may in certain circumstances have a claim in negligence against a sub-contractor for physical injury to his person or property. He may also have a claim in respect of negligent advice given by the sub-contractor.

The contractor has no liability for the consequences of any design fault in situations where the nominated sub-contractor has a design input relating to his part of the work. However, the legal opinion is that the contractor remains responsible for the standard of the sub-contractor's work.

STRUCTURAL ENGINEER

An engineer whose principal responsibility is the load bearing structure of building works.

SUBSTANTIAL COMPLETION

That degree of completion which is ordinarily necessary for the contractor to recover anything under a lump-sum contract. It is usually a lesser degree of completion than practical completion or entire completion.

TARGET CONTRACT

There are various forms of complex arrangements whereby the method of calculation of the contractor’s final entitlement depends upon whether the final cost of the works exceeds a pre-agreed target sum. The scheme is sometimes used where the employer and the contractor wish to share between them any saving in the anticipated cost of the works.

TARGET COSTING

A procurement approach whereby the outturn specification of a structure is established, together with the acceptable cost. The designers and constructors are then required to design and build the work so as to achieve those requirements at that cost.

TENDER
In contract terms a tender is the contractor's offer to carry out the works. However, the employer may be the party who makes the offer after negotiation between the parties. In order to amount to an offer, the statement must be definite and unambiguous. The rules applying to the formation of a contract, including offer, acceptance, consideration and intention to create legal relations apply to the tender process.

An invitation to tender would not normally be an offer binding the employer to accept the lowest or any tender but an express offer to accept the lowest tender could be binding and have the effect of turning the invitation to tender into an offer. To constitute an offer in legal terms, an invitation to tender must be construed as a contractual offer capable of being converted by acceptance into a legally enforceable contract.

An offer capable of being converted into an agreement by acceptance, must consist of a definite promise to be bound provided that certain specified terms are accepted. The offerer must have completed his share in the formation of a contract by finally declaring his readiness to undertake an obligation upon certain conditions, leaving the offeree the option of acceptance or refusal. He must be prepared to implement his promise, if that is the wish of the other party.

If a purported acceptance is expressed to be "subject to contract", or some other such words which show that further negotiations or events are contemplated, there is no concluded contract or agreement.

TIME AT LARGE

1. Time at large' means there is no date fixed time for completing the building works or time period set out for completing the works, or such times and dates as agreed no longer apply.
2. When someone says the phrase time is at large on a construction project it means that there is no fixed time for completion, or that the date for completion has become invalid and that the contractor is not bound by the obligation to complete the works by a certain date,

TIME OF THE ESSENCE

Time being of the essence means that one or more stipulations as to time are conditions of the particular contract. The question is whether time is of the essence of a particular term. It normally arises in the context of failure to complete a contract on the date specified in the contract. However, it may also arise in relation to other terms of the contract, e.g. the giving of notices.

If the contractor fails to comply with the terms of the contract as to the time specified, he is in breach of contract and therefore liable in damages. Whether or not the breach allows the employer to treat the contract at an end requires a consideration of the principles of repudiation of contracts and of time being of the essence of the contract.
In building contracts, the normal rule is that time is not of the essence, unless the contract expressly provides it to be so.

TURNKEY CONTRACT

An expression sometimes used to describe a design and build contract where the contractor not only designs and builds the building but also designs and installs any plant necessary. The idea is that all the employer has to do is to turn the key to the front door and start using the building.

UNECONOMIC WORKING

The disruptive effect upon the contractor of architect’s instructions or interference via the employer. Often one head of a loss and expense claim by the contractor.

VALUATION

This usually means the valuation of building work carried out by the quantity surveyor upon which the architect makes his interim certification of payment to the contractor.

VARIATION

This expression usually means a variation required by the employer or the architect on the employer’s behalf.

WORKS

An abbreviation for building works, meaning both the work and the materials required for the building.

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