According to the Construction Review Online: The scramble for construction contracts in Africa continues. However, before you embark on a contract are some important clauses that you should ensure are incorporated into your contract.
I am sure if you have been in the construction industry for a while there are some critical clauses that you have regretted leaving out when signing a contract which would have perfectly protected your rights and minimised your liabilities and increased your profitability.
As a leading journal for the construction industry in Africa, Construction Review Online has interviewed many contractors and here are the top four clauses that they deemed necessary – especially for those embarking on construction contracts in Africa.
1. Scope of Work: This is what defines what you will do, how you will do it, what you will use, how long you will take and the criteria of the contract between the service provider (vendor) and the customer.
While some may regard the scope of work as a simple thing, as a contractor, bear in mind that it should clearly document the project requirements, milestones, deliverables, end products, documents and reports that are expected to be provided by the vendor. Make sure that both parties understand what is to be done and not to be done.
2. Indemnification: We all know that compensating for any loss keeps the business going and an indemnification clause compels one party to compensate the other party for certain losses or damages resulting from third-party claims.
This will keep you as a constructor in the game if at any stage your client moves or activities result in your loss. This compensation is unrelated to other contractual obligations and damages. An indemnification clause can help protect you against future liability.
3. Payment Conditions: After work we all expect to have our dues paid. As a contractor make sure you get into the right agreement on the mode of payment.
You should ensure that you know the conditions under which the payment will be made for the work done and for the work yet to be done.
To help determine this, you should have a cost breakdown of the entire project ready as part of the contract negotiation process.
4. ADR Clause: This can be Arbitration and/or Mediation. Although not all construction contracts have them, arbitration clauses may prove to be extremely helpful in case of a future dispute.
Arbitration and meditation can help cut costs of potential litigation. Consider what sort of arbitration suits both of your needs best and include these provisions in the contract. There are many versions of arbitration and we recommend you consult an attorney before deciding which to incorporate into your contract.
