Contract Law Principles

Implied Contracts

• Terms are not explicitly stated in words
• To establish an implied-in-fact contract, the plaintiff must have furnished some service or property, expected to be paid, and the defendant knew or should have known that payment was expected, and had a chance to reject the service or property and did not.

Formal vs. Informal Contracts

• Formal contracts require a special form or method of formation to be enforceable.
• Formal contracts are usually sealed with a corporate/ company seal.
• Informal contracts, also called simple contracts, are not required to have any special form.

Written vs. Oral Contracts

• Written contracts are generally preferred.
• Oral contracts may be valid if:
  • They are confirmed in writing
  • Goods are made specifically to the purchaser's order
  • Both parties behave as if a contract exists
  • The party against whom the contract is being enforced admits in a legal proceeding that a contract exists

The Uniform Commercial Code (UCC)

• Covers US domestic transactions for “goods”.
• All US states have codes which model the UCC, except for Louisiana, which has “legislative law” modelled after French law.
• Does NOT apply to service contracts; however, may apply to contracts for mixed goods and services.
• Goods can include equipment or inventory; and consumer goods are covered.

Merchants

• A merchant is someone who routinely deals in the particular goods involved, or who appears to have special knowledge or skill in those goods, or who uses agents with special knowledge or skill in those goods.
• The UCC frequently holds a merchant to a higher standard of conduct than a non-merchant.

Statute of Frauds

• UCC §2-201 requires a writing for any sale for goods worth more than 500(NewUCCis500 (New UCC is 500(NewUCCis5,000).
• Contracts for Goods over 500(500 (500(5,000): The writing must be signed by the defendant.
• Enforceable Only to Quality Stated: Under the UCC, a court may enforce a bargain even though one or more terms were left open.

Payment Bond

• Designed to provide security to subcontractors and materials suppliers to ensure payment for their work, labor and/or materials on the project.

e-Procurement

• Tender notices are uploaded and available on a website
• Firms can get registered at the portal free of cost
• Bidders/Indenters need to obtain Digital Signature Certificates (DSC) from any certified agency.
• Tender offers are submitted online
• Tenders are opened inline
• All accompanying documents are scanned and submitted online after certification by digital signature

Advantages of e-Procurement

• All the documents pertaining to work will be available on the portal for ready reference to contractors
• Wide publicity of Works, because the moment the work is uploaded, it becomes Global
• No chances of biasing of officials of the municipality towards any agency
• Maximum participation of agencies
• Due to maximum participation, rates will be reasonable and compatible
• No need to visit the office
• Roles are defined as required – Tender Creator, Publisher, Bid Opener & Evaluator

Tender Management

• The process involves tender creation, tender publishing, providing clarifications, corrigendum creation and publications.

Tender Creation

• Preparation of tender documents
• Finalization of dates
• Formation of committees
• Define general information such as tender type, class of contractor, validity period, duration

Tender Documents

• Forms
• Instruction to Bidders
• Declaration by the Bidder
• Conditions of the Contract
• Technical Specs
• Drawings
• Spl & Addl Terms & Conditions
• Spl & Addl Conditions of the Contract
• Qualification Criteria
• BOQ (item rate % rate tender)
• Financial Bid
• Proforma for Documentary Evidence

Tender Committees

• BID opening
• Technical Evaluation
• Financial Evaluation
• Tender Committee which includes all the members involved in publishing/bid opening should have a DSC

Tender Publications

• These require DSC
• Should be done online by filling up the form
• DSC should be attached if available/later
• Password by mail