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What are the standard clauses for a Construction Contract?
Introduction
In Kenya, construction contracts are governed by various laws and regulations, including the Constitution of Kenya, the Law of Contract Act (Cap 23), the Building Code, and other relevant statutes. Construction contracts typically include several standard clauses to ensure that the rights and obligations of all parties involved are clearly defined and legally enforceable. This comprehensive guide will outline the standard clauses commonly found in construction contracts in Kenya.
Table of Contents
Governing Law and Jurisdiction
Scope of Work
Contract Price and Payment Terms
Time for Completion
Variations and Changes
Quality of Workmanship and Materials
Insurance and Liability
Performance Bond and Guarantees
Termination and Suspension
Dispute Resolution
Force Majeure
Health and Safety
Environmental Protection
Confidentiality
Miscellaneous Provisions
1. Governing Law and Jurisdiction
Governing Law: This clause specifies that the contract will be governed by the laws of Kenya. It ensures that any legal issues arising from the contract will be resolved according to Kenyan law.
Source: Law of Contract Act (Cap 23)
Jurisdiction: This clause designates the courts or arbitration bodies in Kenya as the forums for resolving disputes.
Source: Arbitration Act, 1995
2. Scope of Work
Description of Work: This clause provides a detailed description of the work to be performed, including specifications, drawings, and any other relevant documents.
Source: Building Code
Responsibilities: It outlines the responsibilities of the contractor, subcontractors, and the client.
Source: Law of Contract Act (Cap 23)
3. Contract Price and Payment Terms
Contract Price: This clause specifies the total amount to be paid for the work, including any applicable taxes.
Source: Law of Contract Act (Cap 23)
Payment Terms: It outlines the schedule of payments, including any advance payments, progress payments, and final payment.
Source: Law of Contract Act (Cap 23)
4. Time for Completion
Completion Date: This clause specifies the date by which the work must be completed.
Source: Law of Contract Act (Cap 23)
Delays and Extensions: It outlines the conditions under which the completion date may be extended.
Source: Law of Contract Act (Cap 23)
5. Variations and Changes
Change Orders: This clause outlines the procedure for making changes to the scope of work, including how changes will be documented and approved.
Source: Law of Contract Act (Cap 23)
Cost Adjustments: It specifies how changes in the scope of work will affect the contract price.
Source: Law of Contract Act (Cap 23)
6. Quality of Workmanship and Materials
Standards: This clause specifies the quality standards that the work and materials must meet.
Source: Building Code
Inspections: It outlines the procedures for inspecting the work and materials to ensure they meet the required standards.
Source: Building Code
7. Insurance and Liability
Insurance Requirements: This clause specifies the types and amounts of insurance that the contractor must carry.
Source: Insurance Act (Cap 487)
Liability: It outlines the liability of the contractor for any damage or injury caused during the performance of the work.
Source: Law of Contract Act (Cap 23)
8. Performance Bond and Guarantees
Performance Bond: This clause requires the contractor to provide a performance bond to guarantee the completion of the work.
Source: Law of Contract Act (Cap 23)
Guarantees: It specifies any guarantees or warranties provided by the contractor for the work and materials.
Source: Law of Contract Act (Cap 23)
9. Termination and Suspension
Termination for Convenience: This clause allows the client to terminate the contract for any reason, subject to certain conditions.
Source: Law of Contract Act (Cap 23)
Termination for Cause: It outlines the conditions under which either party may terminate the contract for cause, such as breach of contract.
Source: Law of Contract Act (Cap 23)
Suspension of Work: This clause specifies the conditions under which the work may be suspended.
Source: Law of Contract Act (Cap 23)
10. Dispute Resolution
Negotiation: This clause encourages the parties to resolve disputes through negotiation.
Source: Arbitration Act, 1995
Mediation: It outlines the procedures for resolving disputes through mediation.
Source: Arbitration Act, 1995
Arbitration: This clause specifies that any disputes that cannot be resolved through negotiation or mediation will be resolved through arbitration.
Source: Arbitration Act, 1995
11. Force Majeure
Definition: This clause defines what constitutes a force majeure event, such as natural disasters, war, or other events beyond the control of the parties.
Source: Law of Contract Act (Cap 23)
Consequences: It outlines the consequences of a force majeure event, such as extensions of time or termination of the contract.
Source: Law of Contract Act (Cap 23)
12. Health and Safety
Health and Safety Requirements: This clause specifies the health and safety requirements that the contractor must comply with.
Source: Occupational Safety and Health Act, 2007
Safety Inspections: It outlines the procedures for conducting safety inspections.
Source: Occupational Safety and Health Act, 2007
13. Environmental Protection
Environmental Requirements: This clause specifies the environmental requirements that the contractor must comply with.
Source: Environmental Management and Coordination Act, 1999
Environmental Inspections: It outlines the procedures for conducting environmental inspections.
Source: Environmental Management and Coordination Act, 1999
14. Confidentiality
Confidential Information: This clause defines what constitutes confidential information and specifies how it must be protected.
Source: Law of Contract Act (Cap 23)
Disclosure: It outlines the conditions under which confidential information may be disclosed.
Source: Law of Contract Act (Cap 23)
15. Miscellaneous Provisions
Notices: This clause specifies how notices must be given under the contract.
Source: Law of Contract Act (Cap 23)
Entire Agreement: It states that the contract constitutes the entire agreement between the parties and supersedes any prior agreements.
Source: Law of Contract Act (Cap 23)
Amendments: This clause specifies how the contract may be amended.
Source: Law of Contract Act (Cap 23)
Conclusion
Construction contracts in Kenya are comprehensive documents that cover a wide range of issues to ensure that the rights and obligations of all parties are clearly defined and legally enforceable. The standard clauses outlined above are essential components of any construction contract and are designed to provide a framework for the successful completion of construction projects. By including these clauses, parties can minimize the risk of disputes and ensure that any issues that do arise can be resolved in a fair and efficient manner.
Answered by mwakili.com