Custom «An Employment Contract» Essay Paper Sample

An Employment Contract

Contract terms refer to an employment contract which defines what an individual and the employer can expect out of each other. There are several forms of contract terms, some of which do not require to be formally written down in the employment contract. There are various sources of Contract terms like for instance, some are in a written contract, verbally agreed, on company notice boards, collective agreements, implied terms, and requirements by law, offer letter from employer e.t.c. Contract terms have several terms which have various purposes and these include:

Abandonment of a Contract

In building contract, abandonment refers to an act of leaving or abandoning individual or one’s responsibilities as laid down or stated under a given contract.

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Arbitration in Contracts

Arbitration refers to a means of getting a resolution in a dispute through the use of an arbitrator or an independent umpire who considers the matter that is under dispute. In normal circumstances, an arbitrator is normally chooses by the parties in dispute, a court or a person who is nominated by both parties. Such an arbitrator can be a lawyer or an expert in the specific field that is under dispute and who is capable of conducting the arbitration process as indicated in various contracts.

Bank guarantee

Bank guarantee is certification required by any financial institution, normally banks, to ascertain that a particular amount of money has been allocated aside to guarantee that the builder will be paid like for instance a housing contract sum. Such funds that are set aside cannot therefore become accessed by the proprietor without the permission of the builder until all the contractual obligations are fulfilled.

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Breach of Contract

When one of the parties under a contract fails in his o her obligations as stated under the contract, then a breach of Contract has occurred. Unless the terms of the stated contract state otherwise, the aggrieved party is entitled towards claiming damages which have arisen out of such a breach. Such damages must be genuine if they are to be recoverable and must be ascertained to be the actual loss resulting from a probable and natural result of the breach. The builder, on the other hand, except when indicated otherwise in the contract terms is entitled to any form of compensation for any defaults or acts of the employer and vice versa (Loots, et al, 2009).  


Conciliation refers to a process of dispute resolution in which a mediator discusses the disputed matter with the aggrieved parties and tries to bring them into agreement. The facts can choose to adhere to the agreement despite the fact that such outcomes are not legally binding among the parties and the mediator cannot force an agreement.

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Contingency sum

This refers to the monetary sum that is allowed in the contract/tender for unforeseen expenses which is adjusted or changed in the final account.

Contract sum

This, in respect of most contracts in building implies that the lump sum has been accepted by the proprietor. The sum is ascertained through the calculation of the items of the rates and their equivalent quantities when the rates have been accepted by the proprietor in the schedule of rates of bills of quantities.

Defects Liability Period

This refers to the period in which the builder is requested to repair or correct any defects which may occur within a specified period of time after the building work has been completed. Defects therefore refer to a breach of contract which can affect the work’s quality.

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Determination of a Contract

This refers to the ultimate right bestowed upon each party that is subject to a contract. When one of the parties defaults regarding some specific aspects as stated in the Contract, the right is allowed when the builder defaults in some way, then the proprietor is allowed to determine the contract.

Evidence of satisfaction

This refers to any tangible evidence in the context of contracts that can be relied on by any party in a given contract confirming the satisfaction or contentment of the other party towards a contract through indicating that obligations in the contract have been met.

Extension of time

When applied to any building contract, extension of time refers to a change or alteration in the project’s completion date due to some changes in the circumstances of the project which are beyond the builder’s control.  

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General Conditions of Contract

This refers to conditions which comprise of the whole contract and which cover all matters except special conditions that may be required for catering for any specific conditions of a project in question.

Head Contract

This a contract between the Builder and the proprietor indicating the willingness or agreement of the builder to finish the specified amount of work for a sum of money agreed.

Implied Terms

These are legally sustainable conditions and terms which may exist in a given contract as being implied terms and which may not necessarily be expressed in writing. However, such terms remain to be obligations on the parties in the contract and arise from Statute Law, Tort Law, or Common law.

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Latent conditions

These are physical conditions known to have an impact on the site that may materially differ from any physical conditions which were earlier anticipated during the time of contracting.


This refers to a form of security imposed over property in which a creditor has the sole right of retaining possession of any property that belongs to the debtor until payment of the debt.  

Liquidated damages

This refers to monetary compensation which provides that a builder should pay the proprietor an amount stated as liquidated damages which are determined to be genuine estimates for the loss incurred.

Lump sum

This is a type of contract in which the Contractor accepts to work or do the job for a Lump sum. This can either be at Fixed Fee or Rise and Fall. 

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Nominated Sub-Contractor

This refers to a sub-Contractor that is nominated by the customer in order to carry out a specialized or separate section of the work that is done. A provisional sum of the cost is allowed in the contract.

Period Contract

This refers to the time or period in which the customer enters into a contract with the chosen contractor to provide materials or services or both over a specified time frame and costs.

Practical Completion

This can be defined as a stage in which the work under is complete though with minor defects or omissions, works being unable to be used for the intended purpose, failure of the builder to rectify the works, rectification that will not undermine the use of the works at convenience and others.

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Prime Cost Item (PC)

This refers to the monetary allowance allocated for the net trade price of articles of a tentative form (supply only) during the process of tendering. Products can either be stated completely or left for selection by the Architect or client.


This is a term which implies instead of the word owner or client.

Provisional Quantities

This refers to allowance in monetary forms for some components of the works especially when the exact or actual quantities are unknown during the tendering process and adjustments made based on agreed rates on the work’s performance.   

Provisional Sum

In the event the Proprietor is unable to finish specific material or detail and sets a figure to be included in the Contract Sum, then this is referred to as a Provisional Sum.












This refers to refusal or rejection of paying a lawfully contracted debt.

Schedule of Rates

This refers to a list of unit rates which are prepared and then submitted to be used by a Client or Architect in order to adjust claim variations by the builder. It is normally submitted by the Builder.


This is money that is held back by the Contract’s Proprietor to ensure that the Contract undertaken by the Builder is due and proper. A Builder’s attention towards a project is therefore provided through Security/Retention.

Special Conditions of Contract

When there are specific circumstances which relate towards a particular project which needs to be included in a Contract, then Special Conditions of a Contract can be added besides the general conditions.

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This refers to the written description of the project or works which accompany the drawings.


This refers to Architects, Building Consultant, Clerk of Works or other qualified personnel who are paid by the Client in order to honestly and fairly evaluate the Contract within a reasonable time and way.


This is the direction given by the Superintendent to the builder to suspend the works at any time due to various circumstances like for instance inability of the Proprietor to make payments as agreed in the Contract.


This is a civil injury that is actionable through a private individual unlike in a criminal wrong that is actionable through the State (Back to Basics Business Training, 2011).

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In a Building and Construction Contract, this term refers to an alteration in contractual terns on the works to be done or a change through omission or addition to the contents of the work as specified in the documents of the Contract and which is required to be performed by the Builder.


This refers to an anticipated increase over a period of time construction costs of a building. Such building costs are known to increase due to market forces and they depict an increase in the cost of materials, labour and high rates of construction activities. 

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