1.

Key Elements for Any Contract to Be Valid in Accordance with Civil Law:

 Offer and Acceptance: Both parties must agree to the terms.

 Intention to Create Legal Relations: Both parties must intend for the contract to be
legally binding.
 Consideration: Something of value must be exchanged between the parties.
 Capacity: Both parties must have the legal ability to enter into the contract.
 Legality: The contract’s subject must be legal.

2. Difference Between Obligation and Entitlement:

 Obligation: A duty or requirement to do something, such as delivering goods or services

as specified in a contract.
 Entitlement: A right to receive something under the terms of the contract, such as
payment or specific performance.

3. Differences Between Terms and Clauses:

 Terms: The overall conditions and agreements set within a contract. They define rights,
duties, and obligations of the parties.
 Clauses: Specific provisions within the contract that deal with particular issues (e.g.,
payment terms, termination, dispute resolution). Clauses are the building blocks of the
contract terms.

4. Types of Contract Clauses:

 Payment Clauses: Specify how and when payments will be made.

 Termination Clauses: Define the conditions under which the contract can be ended.
 Liability Clauses: Set limits on a party’s liability for certain events.
 Force Majeure Clauses: Excuse performance due to extraordinary events (e.g., natural
disasters).
 Confidentiality Clauses: Protect sensitive information shared during the contract.

5. What is Meant by Quasi Contracts?

 A quasi-contract is not an actual contract, but an obligation imposed by law to prevent

one party from being unjustly enriched at the expense of another, even if no formal
agreement exists.
6. What is Meant by Novation Contracts?

 Novation is the process of replacing one party to a contract with another, with the
consent of all original parties. It effectively creates a new contract and transfers all rights
and obligations.

7. How Many Parties in Novation Contracts?

 A novation contract typically involves three parties: the original party, the new party
(taking over obligations), and the other original party who agrees to the change.

8. What is Meant by Collateral Contracts?

 A collateral contract is a secondary agreement that runs alongside the main contract. It
can be used to make a promise or guarantee that supports the main contract but is legally
separate from it.

9. Difference Between EPC vs EPCM Contract:

 EPC (Engineering, Procurement, and Construction): The contractor is responsible for

the entire project, from design to delivery of a complete facility.
 EPCM (Engineering, Procurement, and Construction Management): The contractor
manages the project, but the actual construction and procurement are handled by third
parties.

10. Talk About Subrogation in Contract:

 Subrogation refers to the process where a third party (often an insurance company)
assumes the legal rights of a party to claim damages or compensation from another party
after paying out a loss on behalf of the original party.

11. Difference Between Commencement Date and Effective Date:

 Commencement Date: The date on which actual work under the contract starts.
 Effective Date: The date when the contract becomes legally binding, even if no work has
begun yet. This could be earlier than the commencement date.
12. Difference Between Liquidated Damages and Unliquidated Damages:

 Liquidated Damages (LDs): A pre-agreed sum specified in the contract, payable if one
party breaches the contract (e.g., delays). They are meant to represent a genuine estimate
of potential losses.
 Unliquidated Damages: These are not pre-agreed. They are determined by the court
based on actual losses suffered due to the breach.

13. LDs Will Be Calculated from Commencement Date or Effective Date?

 LDs are usually calculated from the Commencement Date, which is the date when the
contractor starts work. The contract may specify otherwise, but typically the performance
or delay obligations begin from the commencement date, not the effective date.

14. What is Meant by Consequential Damage?

 Consequential Damage refers to indirect losses that occur as a consequence of a breach

of contract. For example, if machinery fails due to a contractor’s fault, the loss of
business or profits resulting from that failure would be consequential damage.

15. Difference Between Addendum and Amendment:

 Addendum: A document added to the original contract that introduces new terms or
provisions without altering the existing agreement.
 Amendment: A change or modification to the existing terms of the contract.

16. Difference Between Advance Payment and Down Payment:

 Advance Payment: A payment made before any work or services have started. It is often
used to help the contractor with initial expenses.
 Down Payment: A partial payment made as part of the total contract price, typically paid
upfront to secure the contract.
 Preference:
o Contractor: Generally prefers advance payment to cover early costs and cash
flow.
o Employer: Prefers down payment, which ensures some financial commitment
but doesn’t front too much risk.
17. Types of Provisional Sum:

 Defined Provisional Sum: Refers to works that are defined but with no fixed cost, to be
added later.
 Undefined Provisional Sum: Refers to works that are not clearly defined or specified,
often left for later definition or pricing.

18. Define the Optional Scope:

 Optional Scope refers to parts of the work or services that the employer may or may not
choose to execute. These are typically included in the contract but are not guaranteed to
be used.

19. Define the Performance Bond:

 A Performance Bond is a financial guarantee provided by the contractor, usually

through a bank or insurance company, to ensure they will fulfill their contractual
obligations. If the contractor fails to complete the project, the bond compensates the
employer.

20. Difference Between Void Contract and Voidable Contract:

 Void Contract: A contract that is not legally enforceable from the start, often due to
illegal subject matter or lack of essential elements.
 Voidable Contract: A contract that is valid but can be invalidated by one party (e.g., due
to misrepresentation or coercion).

21. Talk About the Limitation of the Contract to the Party:

 Contract Limitation refers to the specific constraints and boundaries within which the
parties must operate. These may include time limits for claims, financial caps on liability,
or obligations that define the extent of each party’s rights and duties.
22. Difference Between Liquidated Damages and Unliquidated Damages
(Detailed):

 Liquidated Damages: Fixed in the contract, calculated and agreed upon upfront as
compensation for specific breaches (e.g., delays).
 Unliquidated Damages: Determined after the breach, calculated based on actual loss or
injury suffered by the non-breaching party, without prior agreement on the amount.

23. Is a Programme a Contract Document? Why?

 Answer: No, a programme is typically not considered a formal contract document unless
specifically referenced in the contract. However, it is an important project management tool
used to track progress, identify delays, and ensure compliance with timelines.

24. Talk About the Variation, Types of Instructions, and Basis of Valuation:

 Variation: A variation is a change to the contract scope, such as modifying the design,
materials, or timing.
 Types of Instructions:
o Written Instructions: Issued formally to request a change.
o Oral Instructions: Sometimes accepted but must be followed by written confirmation.
o Revised Drawings or Specifications: Instruction through updated designs or specs.
 Basis of Valuation:
o Agreed Rates: Based on the rates set out in the contract.
o Daywork: Payment for actual time spent, materials used, and labor employed.
o Pro-rata: Similar works priced using existing rates.

25. On What Basis Can the Contractor Reject to Carry Out a Variation?

 Answer: The contractor can reject carrying out a variation if:

o The variation is outside the scope of work.
o The variation significantly impacts project timelines or safety.
o No mutual agreement is reached on payment or costs related to the variation.

26. Talk About the On Account and How It Is Calculated in the IPC:

 On Account Payment: These are interim payments made to the contractor during the project
to cover work done so far.
 Calculation in IPC (Interim Payment Certificate):
o Based on the percentage of work completed.
o Deducted from any advances, retention money, or previously paid amounts.
o Includes valuation of work done, variations, and materials on-site.
27. Difference Between JV and Consortium:

 JV (Joint Venture): A legal entity formed by two or more parties sharing risks, profits, and
responsibilities. They act as a single entity.
 Consortium: A temporary collaboration where parties maintain their individual identities and
responsibilities, sharing certain project responsibilities without forming a new legal entity.

28. Difference Between IFC and IFT:

 IFC (Issued for Construction): Final drawings and documents ready for construction, with all
approvals in place.
 IFT (Issued for Tender): Preliminary drawings issued to contractors for bidding purposes but
subject to changes before final approval.

29. Difference Between Payment Application and Payment Certificate:

 Payment Application: A request made by the contractor to the employer for payment based
on work done.
 Payment Certificate: Issued by the engineer or employer, confirming the amount due based
on the contractor's payment application and approval of work completed.

30. Difference Between E1 Log and E2 Log:

 E1 Log: Typically refers to logs related to instructions issued by the client or engineer, detailing
all communication and instructions given.
 E2 Log: Refers to logs detailing errors or omissions discovered during the project, often
requiring rectification or additional instructions.

31. Difference Between Free Issue Item and May Be Items:

 Free Issue Item: Items provided by the employer at no cost to the contractor, often materials
or equipment needed for the project.
 May Be Items: Optional items that may or may not be included in the final contract, usually
depending on the client’s decision during the project.

32. Talk About Early Procurement in Construction Contracts:

 Early Procurement: Refers to ordering and purchasing materials or equipment early in the
project timeline to avoid delays and ensure availability when needed.
 Importance:
o Prevents delays in critical materials delivery.
o Reduces risk of price increases.
o Helps manage long lead-time items, ensuring they are available when required during
construction.