CONTRACT LAW AND PROCUREMENT
CONTRACT LAW AND PROCUREMENT
CONTRACT LAW AND PROCUREMENT
To formalize and bound two or more than two parties agreement for some business or mutual interest, a contract is needed. Contracts can cover a broad range of matters. It includes real property or good sale, employment terms, relationship of an independent contractor, dispute settlement and intellectual property ownership (Larson, 2003).
The governing of a relation set of rules is the law of contract. It covers the validity and content of an agreement between companies, institution and individual people.This definition does not cover the circumstances in which contract law is appropriate. The main explanation is due to the number of instances in which contracts can begin in our everyday life. Contract law is properly defined as a set of promises or promise, which imposed by the law. The definition of law of contract is somewhat competing. It is defined as a contract is an agreement, which is recognized and enforced by the law to raise the obligations to the parties. The definitions authenticate the involvement of the law by way of enforcement in agreements. It is signifying that there should be a violation after breaking the terms of the agreement then the distressed party should seek alternative via courts. The contract can begin as a surplus of state affairs. It can be started from buying a cake from the bakery or the sale of a farmhouse. The assurance is required before the court's interference to implement any agreement. The basic foundation of any agreement is a law of contract. This is apart from the essence difficulty containing the agreement enforceable by law (UK Essays, n.d).
Procurement Law
The government's or departmental process in which purchase of goods and services via private sector in the regional and national levels takes place falls under the procurement law.The process of procurement usually complies with policies and specific rules.The government officials need to follow a public procurement system as per the local laws in regard of any service. This system covers the approach to advertise forcontractor, choose a supplier and a way to implement and evaluate the necessities they put on the supplier. The usual aim is to take advantage of competition between suppliers according to this system and to reduce the corruption risk (Lister, 2010).
A procurement, construction and engineering are at fixed price contract. This is the schedule for intensive construction contract, and it also turns out as the turnkey contract. According to this, the contractor agrees to a variety of responsibilities, which includes engineering, duties to provide the design, construction and procurement of the facility. The startup procedures, creation of operational manuals, accomplishment of tests performances and train people are enabled through this contract (US Legal, n.d).
The life cycle is the extent by the public procurement process. It spans through definition and initial conception of the public service needs and ends at a contract, which is an asset of life. Conventionally these both are innovative types and more funded projects. For example, the private sector Public Private Partnership (usually called PPP) and the Private Finance Initiative arrangements. It includes the use of the private sector to deliver services. The services were previously directly delivered by the public sector which is known as contracting out and in house consortia bidding of a procurement process in public (Finance and Personnel, n.d).
The Contract Elements
The contract elements to involve the enforceable order are as follows:
Meeting of Minds or the Mutual Consent
The contract agreement or the rule is parties' understanding and this is due to their personal perceptive that covers the contract.For example, in case of a sale contract of "Ford", as per the buyer thinking, he will get a car, and seller thinks he is selling a "dog", and then in this case the contract will be unenforceable. The reason for this is there's no understanding between buyer and seller and their contract (Larson, 2003).
Offer and Acceptance
Offer and acceptance terms are
Offeror: The person who made an offer is called an offeror.
Offeree: The person who received the offer is called offeree. An offeree can propose a proposal which later can turn in an offer and can propose a counter offer. The counteroffer can withdraw the original offer.
Express Contract: The contract can be in written or oral form and when the terms are, in fact, affirmed and opposed to disguised contract.
Quantum merit, unjust enrichment, quasi contract: these terms are based on equity. It applies when a person knows that he/she will lose the claim contract after the violation of agreement. On the other hand, they think that they will win on the fairness basis.
License: it is giving for a limited time to a person with permission to use the allowed thing (Binder, 2001).
Every contract involves one or more than an offer to party who accepts the offer. For example, the sale of "guitar" contract, the offer made by the seller to the buyer is $1000. The acceptance of the buyer is mandatory to create a binding contract for the guitar. The counteroffer is not fallen in acceptance, and it will be treated as rejection. For example, if a buyer counteroffer for guitar for $800 then it will be counted as rejection for an original offer.If the counteroffer of $800 is accepted by a sellerthen thecontract will be completed.If the counteroffer is rejected by the sellerthen thebuyer is not entitled to enforce $1000 prior offer (Larson, 2003).
Mutual Consideration
A bargain for giving, getting an exchange something of roughly equal value in return is called consideration. The past consideration is not valid. For example, a person saved someone's life, then that person promised you money after you rescue action which accord previously.The other equitable term is promissoryestoppels. This is when a consideration is not established. Promissory estoppel is also known as a consideration substitute. The parties to a contract must exchange something valuable. In case of the guitar sale, the buyer receives a guitar as something of value and the seller receives money. The validity of consideration may be a subject to attack on the illusory basis. For example, one party receives something which the other party was already obligated to provide and then there is a failure of consideration because the consideration received by one party is worthless. The party cannot escape the contract escape because of the bad negotiation consequences. For example, if sellers made a contract to sell the guitar in $100 and receives the $1000 offer later than the seller can't revoke the contract.The seller can't say that the value of guitar was $1000, and it is a lot as compare to the received bargained (Larson, 2003).
Performance or Delivery
The action must be considered as per the contract, and it must be completed in order to be enforceable.For example, the amount of $1000 is paid by the purchaser of a guitar on the purchase price, and then he can impose the contract to necessitate the delivery of the guitar, unless the contract provides the delivery before payment.
If the payment is not done and without payment delivery is not mentioned in the contract then the buyer is not able to force or demand the delivery of the guitar.The breach of contract typical action is when the alleging party recites and performs all his duties as per the contract. On the other hand, the other party fails to fulfill his requirements as per the contract.
Good Faith
It is understood that all parties' contracts are acting in good faith. For example, if the "Ford" seller knows that the buyer thinks he is purchasing a car, but instead he secretly intends to sell the buyer a "dog", then the seller action is not in good faith, and the contract will not be enforceable (Larson, 2003).
No Violation of Public Policy
The public policy cannot be violated in the contract in any case. In case of the contract matter subject is illegal then it cannot be enforced.The drug sale contract is illegal and this is the violation of the public policy, and it cannot be enforceable. It is also necessary to remember that public policy can be shifted.For example, gambling is not honored in many states on public policy ground authority. On another side, gambling is permitted in many states within their borders.Gambling policy is abandoned and from legal point of view gambling debts are enforceable. For example, a debt might not be enforcing by a bookie, but a legal casino can enforce a debt.The switchbladekitssale was legal via the United States main, but it's illegal now and the process cannot be continuing legally. The interstate contract to sell is no longer enforceable after the change in law.
Oral Contracts
It is very difficult to prove a verbal or oral contract. In this case, a party is unable to enforce or force a contract to settle original bargain. It is better to write all contracts as compare to the verbal acceptance. The parties should always make the contract in written and should get it signed. This habit helps both parties to remember key terms of the agreement and in case of violation no one will say that what is there and what is missing. In case of under most circumstances, the oral contract term can be admitted or proved by other party then it is enforceable same as written. In the statute of fraud, the laws on some contracts cannot be reduced or enforced by writing and should be signed by both parties. Sometimes an oral contract is referred as a verbal contract.The expression oral means spoken andverbalcan also mean same in words. As per the definition, all contracts areverbaltechnically.
Essentials of a Contract
Man is a social animal and tends to spend his life according to his set standards. Human beings need laws to make them obey the other person freedom and to spend their life.In our daily life, money is necessary and economy up and downs to vary on the situations. The whole economy is based on individual freedom, system of laws and contract.One of the biggest issues is that many people do not know the fundamentals which are necessary for any contract and intention to enter in a binding contract.The parties reached for an agreement by an objective standard or each party believes that other party acceptance is not the determining factor. If an objective bystander is reasonably acting, considering all the relevant questions that conclude the parties to an agreement with intent to form a legally binding relationship is a contract between two parties (E-Law, n.d).
It is not necessary to follow the traditional words for binding a contract used by the parties. The important thing is an offer by one side and an acceptance from other sides.If offer and acceptance is missing, then contract can't be made. The essential for any contract is offer and acceptance. An offer is a statement or indication that the individual is prepared to enter a contract with another on certain terms and conditions.The offer must be expressed in an acceptance manner without the further requirement of the person who is receiving the offer other than the acceptance indication.It is important that a person who made the offer is ready to be bound by the terms and conditions of the accepted offer. For example, if someone offers to cut the lawn in $10.00 then this is considered an offer and after acceptance it will be a contract (Ollek, n.d).
Law on Public Procurement Contracts
As per the law of contract and public procurement the purpose, scope, definitions and principles are following:
Purpose
The reason of Law of contract and procurement is to lay down the procedures and rules which are applicable to the conclusion and implementation.
Scope
The Law of contract and procurement would apply to make contracts pursuant to tendering processes.These tendering processes are carried out by public individual and institutions, which are subject to the Public Procurement Law in accordance with the provisions.
Definitions
The Law of contract and procurement provided definitions would apply in the Public Procurement Law.
Principles
The contracts which are to be made pursuant to the Law of contract and procurement have no requirements and may be integrated in a contract opposing to the affectionate documents. The contractual and supplementary contracts may not be amended than those that are specified in law.
The parties have equal obligations and rights to contract of public procurement in implementing the provisions contractually. The articles which are contrary would not be included either in contract or tender documents in provisions.
Necessary information in Contracts
The mandatory information in the contracts is listed below the Law of contract and procurement:
The title of the contract, category, specification, description on work and quantity in procurement of services.
Contracting authority name and address.
The contractor name, notification address and business titles.
The contract duration, category and price should me mentioned.
If any payment has to be made, then set the place and terms of payment, place of advance payment and amount.
For contractual works, payment mode and price difference should be mentioned.
The cost items are to be included in contract price from insurance, taxes, transportation, payable charges and duties.
The parties' statements to pay for taxes, payable charges, duties and other contractual expenditure.
To set the auxiliary terms and conditions as installation, training, commissioning, maintenance repair and spare parts.
10. In case of return amount of performance and conditions should be mentioned.
11. If guarantee is required, then period, requirement and pertaining conditions should be mentioned.
12. The performance place, conditions and procedure of delivery and receipt.
13. Applicable penalties in case of delays.
The Law lies down as the conditions, manner and the procedure for procurement of services, goods, and works. The procuring entity is an organization, state organ, institution or some other legal person ascertained by the Law of contract and procurement (Google, n.d).
References
Binder, P.Z., 2001. BINDER ON CONTRACTS. [Online] Available at: HYPERLINK "http://www2.gsu.edu/~rmipzb/contracts.htm" http://www2.gsu.edu/~rmipzb/contracts.htm [Accessed 25 November 2010].
Duhaime.org, n.d. Contract Law. [Online] Available at: HYPERLINK "http://www.duhaime.org/LegalDictionary/C/ContractLaw.aspx" http://www.duhaime.org/LegalDictionary/C/ContractLaw.aspx [Accessed 24 November 2010].
E-Law, n.d. Essentials of a Contract. [Online] Available at: HYPERLINK "http://webcache.googleusercontent.com/search?q=cache:http://www.e-law.bc.ca/art_essential.html" http://webcache.googleusercontent.com/search?q=cache:http://www.e-law.bc.ca/art_essential.html [Accessed 25 November 2010].
Finance and Personnel, n.d. Overview. [Online] Available at: HYPERLINK "http://www.dfpni.gov.uk/cpd-procurement-policy-overview" http://www.dfpni.gov.uk/cpd-procurement-policy-overview [Accessed 25 November 2010].
Google, n.d. Public Procurement Law. [Online] Available at: HYPERLINK "http://webcache.googleusercontent.com/search?q=cache:http://www.sigmaweb.org/dataoecd/3/62/40511974.pdf" http://webcache.googleusercontent.com/search?q=cache:http://www.sigmaweb.org/dataoecd/3/62/40511974.pdf [Accessed 25 November 2010].
Larson, A., 2003. Contract Law - An Introduction. [Online] Available at: HYPERLINK "http://www.expertlaw.com/library/business/contract_law.html" http://www.expertlaw.com/library/business/contract_law.html [Accessed 24 November 2010].
Lister, J., 2010. What Is Public Procurement? [Online] Available at: HYPERLINK "http://www.wisegeek.com/what-is-public-procurement.htm" http://www.wisegeek.com/what-is-public-procurement.htm [Accessed 24 November 2010].
Ollek, S.S., n.d. ESSENTIALS OF A CONTRACT. [Online] Available at: HYPERLINK "http://webcache.googleusercontent.com/search?q=cache:http://www.e-law.bc.ca/art_essential.html" http://webcache.googleusercontent.com/search?q=cache:http://www.e-law.bc.ca/art_essential.html [Accessed 24 November 2010].
UK Essays, n.d. Contract Law. [Online] Available at: HYPERLINK "http://www.ukessays.com/essays/law/contract-law.php" http://www.ukessays.com/essays/law/contract-law.php [Accessed 24 November 2010].
US Legal, n.d. Engineering, Procurement, and Construction Contract Law & Legal Definition. [Online] Available at: HYPERLINK "http://definitions.uslegal.com/e/engineering-procurement-and-construction-contract/" http://definitions.uslegal.com/e/engineering-procurement-and-construction-contract/ [Accessed 24 November 2010].
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