SUCCESS IN THE ENGINEERING PROFESSION

2.1 PERSONAL SUCCESS

SUCCESS in life, like success in the construction of which an engineering structure
requires a good sound foundation on which to build.
(How do you measure success?)
The highest success results from a well-balanced life, and usually includes:
1. Suitable friends and family relations - Success, does not come with
solitude. Solitude means the state of being alone.
2. Sufficient income – Sufficient income to provide for the comfort of the individual, his family,
and dependents.
3. A good reputation - A good personal, professional, and business reputation.
4. The respect of friends and associates
5. Self-respect - approval of one's own conscience resulting from the proper observance of personal
religious and ethical convictions.
Factors which are necessary to the highest personal success:
• Character - No high professional standing is ever attained without properly developed character.
• Health - greatly affects the chances of success. Poor health diverts the attention of the mind to
the condition of the body and reduces the capacity for concentrated thinking.
• Knowledge - Knowledge of personal and public hygiene and sanitary requirements is necessary
• Basic Ability - Basic ability by the individual is undoubtedly an important factor in his success
if it is properly utilized and developed.
• Education and Experience - a considerable degree the result of opportunity but are still usually
acquired principally through individual effort.
• Opportunity - Opportunity gives no permanent benefits unless the individual is prepared to take
advantage of it when it comes.
2.2 FACTORS AFFECTING PROFESSIONAL SUCCESS MUST BE RECOGNIZED
• Common Sense
• Judgment
2.3 OPINIONS OF THE ENGINEERING PROFESSION
In 1915, a study was conducted by Engineers’ Council for Professional Development (ECPD)
together with Carnegie Foundation for the Advancement of Teaching (CFAT) with the main goal
of determining the attributes which makes up success in the practice of engineering profession.
The research was conducted by Dr. C. R. Mann, and over 5,000 practicing engineers have
submitted a respond to the study. The study has concluded 6 Characteristics considered to be the
most important for success in Engineering.
CHARACTERISTICS PERCENTAGE
Character, integrity, responsibility, 24 %
resourcefulness, initiative
Judgment, common sense, scientific, attitude, 19.5 %
perspective
Efficiency, thoroughness, accuracy, industry 16.5 %
Understanding of men, executive ability 15 %
Knowledge of fundamentals 15 %
Technique of practice and business 10 %
In a more recent survey (1948), the Engineers’ Council for Professional Development (ECPD)have
listed 6 most important Characteristics for practicing engineers to achieve success. The following
are: Intelligence, Dependability, Organizational Acceptability, Energy, Emotional
Acceptability, Physical Acceptability.
2.4 JUDGMENT
“The few years spent in an engineering school cannot give complete knowledge of any of the
subjects studied.”
The very keystone of successful engineering practice is JUDGMENT.
2.5 UNDERSTANDING PEOPLE
The ability to get along with and establish harmonious working relations with all these various
people must be developed if the engineer is to attain the greatest success.
- being observant and proper handling in situations
2.6 PERSONALITY
- personal appearance (matter of dress and personal attitude)
- punctuality
- attention to business (devote one’s attention to legitimate their work)
- concentration (what is important and urgent)
- collaboration (working in harmony with organization associates.

2.7 BIAS
Prejudice in favor of or against one thing, person, or group compared with another, usually
in a way considered to be unfair.
The engineer must recognize that he may become biased because of various influences, such as:
1. Influence of Special Knowledge
- Special knowledge and special experience in a limited field of engineering unless accompanied
by a broad consideration and a considerable knowledge of related subjects, are apt to produce a
prejudice or bias in favor of the application of such means can be applied
2. Influence of Personal Experience
- Personal experience should give the engineer his most useful and exact knowledge, provided
such experience is properly considered and digested.
3. Influence of Local Experience
- The normal conditions which exist in any locality must of necessity modify the successful
solution of every local engineering problem.
4. Influence of Personal Interest
- It is important that the engineer should free himself as far as possible from the bias of personal
interest which is a constant menace to sound judgment.
5. Influence of Association
- Almost every problem is capable of a variety of solutions, although there is usually one solution
which is preferable when all things are considered.
2.8 BUSINESS AND FINANCE IN ENGINEERING
The engineer must also consider the business and financial aspects. Four of the most common
business and financial analyses which the engineer may be called upon to make are:
1. Economic selection
- The determination of the most economical design for accomplishing a given purpose.
2. Economic management
- The determination of the best methods of management and operations of a projects.
3. Economic expediency
- The advisability of a project when the best design is considered for the purpose it is desired to
fulfill.
4. Economic worth
- The determination of the physical, structural, commercial worth or value of a project for the uses
and purposes it is intended to fulfill.
2.9 FINANCIAL SUCCESS
• INVESTMENT - is an asset or item acquired with the goal of generating income or
appreciation. Appreciation refers to an increase in the value of an asset over time. The act
of investing has the goal of generating income and increasing value over time. An
investment can refer to any mechanism used for generating future income. This includes
the purchase of bonds, stocks, or real estate property, among other examples. Additionally,
purchasing a property that can be used to produce goods can be considered an investment.
• INSURANCE - e is a way to manage your risk. When you buy insurance, you purchase
protection against unexpected financial losses. The insurance company pays you or
someone you choose if something bad happens to you. There are four types of insurance
that most financial experts recommend everybody have: life, health, auto, and long-term
disability.
• PENSION OR RETIREMENT PLAN - The optional retirement age in the Philippines
is 60 while the compulsory retirement age is 65. The two main corporation in the
Philippines for retirement plan are Government Service Insurance System and the Social
Security System.
2.10 PROFESSIONAL IMPROVEMENT
• The engineer must acquaint himself with the people working on the same field as him.
• An engineer must track his work with good, properly prepared paper which describes
the development and successful completion of new work and the experiences
resulting therefrom.
• The young engineer should constantly seek information on the various phases of
engineering work with which he comes in contact.
• To see the opportunity, to develop it systematically, and to apply it intelligently
require keen foresight, an appreciation of the present and future trend of events, and
both general and special knowledge and experience.
• There is nothing stationary in nature, and the individual in his profession or business
relations is either advancing or deteriorating.
THE ENGINEER AT WORK
Section 15. Purpose and Results of Technical Training
It is not the aim of professional schools to turn out professional men because of the limited time
spent in technical schools and it does not assure that it is the purpose of the schools.
PRACTICAL KNOWLEDGE - real professional knowledge that must be gained or at least
improved largely by practical experience.
- There can be no exact measure of the factors that determine individual usefulness in life.
- One without knowledge of the subject is useless for such work.
- Making oneself value – character, judgment, efficiency, executive ability, practical ability
Section 16. The Man and The Job
- To secure the most economical and satisfactory results, it is desirable that the man best fitted for
each place should secure the position.
- Advertising for a position may prove of value where a man has acquired considerable special
experience or developed in some special line.
- For higher positions, favorable and wide acquaintance, a clean record and a good personal and
professional reputation based on satisfactory service, experience and ability, are the principal
factors.
Section 17. Influence
- Influence is the power to change or affect someone or something.
- Influence frequently brings opportunity.
- The value of the influence of family, friends, and acquaintances should not be underestimated.
- Retention of a position by influence overshadows character, undermines ability, weakens
conscience, and destroys initiative and personal reputation.
Section 18. The First Job
- Choose your first job wisely for it will predetermine your success in the future.
- Recognize your first job with pride and humility.
Section 19. Improving Opportunities
- Many young men after securing technical work soon become discontented with their prospects
and feel that they have not obtained the position for which their education has fitted them.
- When a man has accepted a position, it is his duty to himself and to his employer to do his best
to fill the position in the most acceptable manner and to develop all there is in it and in him.
Section 20. Selecting Employment
- It is evident in most cases that the future rather than the immediate present should be the objective
of the young engineer.
- Any man is fortunate who finds his professional or business life laid down on the lines he would
most gladly follow.
Section 21. Salary
- The amount of salary from a given position is naturally a matter of interest.
- Secure opportunities for a more extended experience than where his compensation is excessive.
- Services must be utilized to the greatest advantage in order to make them profitable.
Section 22. Change vs. Continuity of Service
Factors that affect the decision: Amount of the experience to be gained, financial return,
satisfaction from work, way the job fits the individual’s overall ambitions.
Section 23. The Relative Values of Various Classes of Employment
• Entrepreneurship and Business Opportunities • Public Service Corporations • Foreign Service •
Government Service • Instructional Work in Technical Institutions
Whatever the work of the engineer may be, his aim should be to properly do the work at hand, to
study, and to improve.
Section 24. Private Practice
For success in private practice, at least on the larger and more important works, extended
experience on a great variety of work is required.
- Critical Thinking Engineering - requires analytical thinking to solve complex problems.
- Leadership - Leadership skills are essential for engineering positions.
- Composed - You must be able to perform well under pressure.
- Effective Communicator - Civil engineers need the ability to communicate effectively.
Section 25. Duties to Subordinates
The engineer should be advised and assist his subordinates and give them every reasonable
encouragement and incentive to excel in their work. The promotion of subordinates should be
made on the basis of actual merit and not on the basis of capricious preference.
Section 26. Duties to Clients
The relations of the engineer to his clients are fiduciary in nature and therefore involve, both legally
and morally, obligations which must be exercised even at the sacrifice of personal interests. The
client must place his trust in the personal honesty, business integrity and professional ability of his
engineer.
Section 27. Consultation
Consultation means asking for and considering employees’ views when making decisions.
Section 28. Duties to the Profession
Every professional man is greatly indebted to his profession.
Section 29. The Engineer in Business
Engineering businesses are related to building and implementing an engineered solution to a real-
world problem. An engineering training provides a solid foundation for professional work and a
training before entering the field of contracting.
Section 30. The Engineer as a Citizen
No man should become so engrossed in his business or profession that he forgets or neglects his
duties as a citizen. Engineers should provide valuable service to the public through their training
and practical experience. Efficient and effective service will help the public and it will boost the
reputation of the profession in the minds of the people.
Section 31. Conduct of Professional Practice
1. Architect’s Status - The architect's relation to his client is primarily that of professional adviser;
this relation continues throughout the entire course of his service.
2. Preliminary Drawings and Estimates - It is the duty of the architect to make or secure preliminary
estimates when requested, but he should acquaint the client with their conditional character and
inform him that complete and final figures can be had only from complete and final drawings and
specification.
3. Superintendence and Expert Services - The experience and special knowledge of the architect
make it to the advantage of the owner that these persons, although paid by the owner, should be
selected by the architect under whose direction they are to work..
4. The Architect’s Charge - The locality or the nature of the work, the quality of services to be
rendered, the skill of the practitioner or other circumstances frequently justify a higher charge than
that indicated by the schedule.
5. Payment /or Expert Service - The architect when retained as an expert, whether in connection
with competitions or otherwise, should receive a compensation proportionate to the responsibility
and difficulty of the service.
6. Selection of Bidders or Contractors - The architect should advise the client in the selection of
bidders and in the award of the contract.
7. Duties of the Contractor - As the architect decides whether or not the intent of his plans and
specifications is properly carried out, he should.
8. Engaging in the Building Trades - The architect should not directly or indirectly engage in any
of the building trades.
9. Accepting Commissions or Favors - The architect should not receive any commission or any
substantial service from a contractor or from any interested person other than his client.
10. Encouraging Good Workmanship - Intelligent initiative on the part of craftsmen and workmen
should be recognized and encouraged and the architect should make evident his appreciation of
the dignity of the artisan's function.
11. Offering Services Gratuitously - The seeking out of a possible client and the offering to him
of professional service on approval and without compensation, unless warranted by personal or
previous business relations, tends to lower the dignity and standing of the profession and is to be
condemned.
12. Advertising - Advertising tends to lower the dignity of the profession and is therefore
condemned.
13. Signing Buildings and Use of Titles - The display of the architect's name upon a building under
construction is condemned, but the unobtrusive signature of buildings after completion has the
approval of the Institute. The use of initials designating membership in the institute is proper in
connection with any professional service and is to be encouraged as helping to make known the
nature of the honor they imply.
14. Competitions - An architect should not take part in a competition as competitor or professional
adviser or juror unless the competition is to be conducted according to the best practice and usage,
of the profession as formulated by the institute.
15. Injuring Others - An architect should not falsely or maliciously injure directly or indirectly,
the professional reputation, prospects, or business of a fellow architect.
16. Undertaking the Work of Others - An architect should not undertake a commission while the
claim for compensation or damages, or both, of an architect previously employed and whose
employment has been terminated remains unsatisfied, unless such claim has been referred to
arbitration or issue has been joined at law; or unless the architect previously employed neglects to
press his claim legally; nor should be attempt to supplant a fellow architect after definite steps
have been taken toward his employment.
17. Duties to Students and Draftsmen - The architect should advise and assist those who intend
making architecture their career.
18. Duties to the Public and to Building Authorities - An architect should be mindful of the public
welfare and should participate in those movements for public betterment.
19. Professional Qualifications - The public has the right to expect that he who bears the title of
architect has the knowledge and ability needed for the proper invention, illustration, and
supervision of all building operations which he may undertake.
Obtaining Employment
The difficulty of obtaining engineering employment depends on the general economic condition
of industry: economic depression and high industrial activity:
Steps to obtain employment:
• Take several interviews
• In the application papers and during interview, the applicant should place the greatest emphasis
on the most outstanding abilities he possesses.
• The applicant should select his references with care.
• For higher positions, favorable and wide acquaintance, a clean record, and a good personal and
professional reputation based on satisfactory service, experience, and ability, are the principal
factors.
Types of Engineering Work
Administration – human problems and business decisions
Planning and Design - highly technical function, 20 percent of all engineers are engaged in this
field. (Characteristics: Expertise in Technical Knowledge, Creative Problem -Solving Ability,
Team Player)

Sales and Consulting - Consulting Engineers - Sell their services and experience to clients who
need engineering projects planned, supervised, and executed. About 5% of all engineers work as
consulting engineers either independently or for consulting firms.
Construction and Installation - Engineers must supervise purchase of materials and organization
of construction and installation crews. When the structure or system is designed, construction and
installation will take place. Engineers turn the plans and specifications into reality.
Production and Operation - Engineer organizes an operating crews and materials to run the plant
and system. Engineer must continuously study and monitor the performance of his project to make
it more efficient and effective.
Research and Development - Civilization advances by the discovery of new knowledge. This
activity uncovers new scientific principles or a better understanding of known phenomena. About
18% of engineers work in this activity.
Teaching - To train young men and women for the profession a staff of engineering teachers must
be available. Often engaged in research or consulting activities. Less than 3% of engineers work
as teachers.
ELEMENTS OF CONTRACTS
9.1 Contracts - an agreement between parties, creating mutual obligations that are enforceable by
law. The basic elements required for the agreement to be a legally enforceable contract are: mutual
assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality.
9.2 Classification of Contracts
1. As to Origin
1.1 Express Contract - is a bilateral or multilateral contract in which the promises and assent of
each party are expressed in speech or in writing.
1.2 Implied Contract - is unilateral contract where either the act of acceptance or both the act of
acceptance and promise are inferred as a matter of fact from the conduct or acts of the parties.
1.3 Quasi Contract - is not strictly speaking, a contract but a legal obligation which is similar to
a contract, and which is created by implication of law.
2. As to Participants
2.1 Two Party Contract - is a common type in which only two parties are involved.
2.2 Joint Contract - is one in which parties merge, to greater or less extent, their interests to enter
into a contract with another party or parties.
2.3 Several Contract - is one in which two or more persons enter into a contract as promisors or
promisees but keep their liability more or less separate.
2.4 Joint and Several Contract - has some of the nature of each of the two preceding types.
2.5 Third-Party Beneficiary Contract - is one in which two parties enter into a contract for the
protection of the interests of a third person who is not a party to the contract.
3. As to Obligation Status
3.1 Bilateral Contract - is one in which one party agrees to perform or refrain from performing
some certain acts in return for which the other party agrees to perform or refrain from performing
certain acts.
3.2 Unilateral Contract - is one in which there is a promise by one party to perform certain acts
provided the other party does certain things, the acceptance to be accomplished by the act.
4. As to Completion Status
4.1 Executory Contract - is one in which an obligation is assumed by one or both parties to do or
refrain from doing a certain act at some time in the future.
4.2 Executed Contract - is one in which everything is done at the time of making the contract and
no obligation for future acts is assumed by either party.
5. As to Form
5.1 Contract under Seal - is one with a seal wax on the document and making some distinctive
impression in the wax.
5.2 Contract of Record - are those which exist as a consequence of court judgments.
5.3 Parol Contract - is one which is less formal than sealed contract.
1 Required to be in some specified form.
2. Required to be in writing but not in any special form.
3. Without requirement as to form or writing.
6. As to Legal Status
6.1 Valid Contract - is one which is in full force and enforceable by court action.
6.2 Void Contract - is one which is binding on one party but may be either binding or nonbinding
on the other party at his option.
6.3 Voidable Contract – is one which is binding on one party but may be either binding or
nonbinding on the other party at his option. Contracts with infants (minors) are usually voidable
at the option of the infant.
6.4 Unenforceable Contract – is one which is valid in all respects except that it is unenforceable
through court action.
Agreement vs. Contract
“Agreement” means that the accomplishment relies solely upon the free will of the parties. In
other words, you can define agreement by saying that it’s any arrangement about something
between two or more parties with a common goal in mind.
Contract suggests that it takes an agreement to a new level, with specific rules and boundaries
that are legally binding. Signing a contract means that you need to adhere to its terms; otherwise,
there will be legal repercussions.
9.3 Essentials of a Contract
1. There must be two or more competent parties.
2. There must be a mutual agreement on the part of all parties to the contract to assume new
obligations which each party understands, and which are possible for the parties to perform.
3. There must be a valuable consideration for each of the parties to the contract, and the
considerations must be reasonably equal in value.
4. The obligations which the parties to the contract undertake must be for legal acts which are not
contrary to sound public policy.
5. The contract must be set forth according to the form and executed in the manner prescribed by
law.
9.4 Competency of Contracting
1. Infants (minors) - Any person who is below the age at which one assumes certain legal
obligations and privileges such as voting and competency to contract are competent to sign
contracts for necessities, although exactly what constitutes a necessity may be subject to question.
Article 38 of the New Civil Code of the Philippines – provides restrictions on capacity to act.
Republic Act No. 6809 – An act lowering the age of majority from 21 to 18 years.
2. Persons of Unsound Mind - A contract entered into by an insane person, or a person of unsound
mind is not a void contract but is voidable at the option of the insane person, or at the option of his
legally appointed guardian.
3. Drunken Persons - Contracts made by a drunken person when in such a state of intoxication
as to be entirely unable to understand its nature and effect are voidable in his favor.
4. Persons under Legal Guardianship – limited in their ability to enter into contracts (Reasons
of Feeble-mindedness, Habitually Drunkards, Spendthrifts)
5. Corporations - It is an artificial person created by law and is limited in its ability to enter into
contracts by its articles of incorporation and by laws.
6. Convicts – competency to contract suspended and have a trustee appointed to supervise their
property
7. Enemy Aliens - They cannot sign contracts without the permission of the government.
8. Federal and State Governments - Government may, with certain restrictions, enter into
contracts. A contract with the government is signed by an official who is specifically authorized
to perform this function, and contracts outside his specific authorization are void even if he signs
it.
9. Foreign Countries and Their Sovereigns - Sovereigns and countries and their representatives
may make contracts and may enter suit under these contracts in our domestic courts.
10. Professional Persons - Persons practicing the skilled professions where the health, safety, or
welfare of the public is involved are required by law to register and obtain a license as a
prerequisite to practice of their profession.
9.5 Agency - Individual cannot always be present at the many places necessary to make numerous
bargains required in modern business and modern living; so, he contracts through an agent and
authorized to act for him. (Ex: A clerk in a store has authority to sell goods carried in stock but
would have none to sell the owner’s pleasure boat at a different location.)
9.6 Mutual Agreement - It is essential to the validity of a contract that the parties to the contract
agree, and they must agree to the same thing. There must be an actual agreement and not simply
an apparent agreement.
- Where there is a mistake as to the nature of the transactions, in the absence of negligence on the
part of the parties to the contract, or as to the existence or identity of the subject matter of the
contract, the parties have not agreed to the same thing, and the contract is not binding and can be
avoided on this ground. It cannot be avoided on the ground that a person was mistaken as to the
law, for the laws are accessible to all, and they can ascertain what they are.
1. Offer and Acceptance Identical - In order to create contractual relations, there must be an offer
on the part of one of the parties to the contract and acceptance by other party . This offer must be
accepted without qualification and without change, or there is no contract.
Ex: If A offered to enter into a contract with B, whereby A was to pay B $ 500 to design a drainage
system for A’s farm, the said designs to be completed by March 1, and B accepted this offer with
the provision that he would design such drainage system for $600, the same to be completed by
April 1.
2. Time of Acceptance - The offer must be accepted within a reasonable time, and where a time
limit is fixed in such offer, it must be accepted before such time limit expires.
Ex: A wires offering B 1,000 bushels of winter wheat at $2.75 a bushel f.o.b. Minneapolis. B waits
a week until the price of winter wheat has gone to $3.00 a bushel and wires an acceptance of the
offer.
3. Method of Acceptance - If a method of acceptance is specified in the offer, the acceptance must
be by the specified method. If an offer of a contract is made and specifies that the acceptance must
be by wire, an acceptance in person or by letters does not constitute a contract; and if the offer
specifies a place of acceptance, acceptance at any 3other place is not sufficient.
Ex: A writes a letter to B on January 18, offering him 10,000 bushels of wheat at $2.75 per bushels
f.o.b. Minneapolis. B wires back to A on January 19, stating: “Your offer in letter of January 18
accepted. Letter follows.” He then writes A the same day accepting his offer of 10,000 bushels
wheat at the specified price.
4. Revocation - An offer is revoked by the death or insanity of the person making the offer; but if
the offer is accepted prior to death or insanity of the person making the same, this constitutes a
contract which is binding on the executors, administrators, guardian, or heirs of such person,
provided the contract was not for personal services.
5. Misinterpretation - If one party to a contract makes a statement which is in fact untrue but
which he believes to be true, and this fact is a material fact or element in the contract, and the other
party, believing the statement to be true and relying on the truth of it, enters into the contract, it
may be avoided on the grounds of misrepresentation.
6. Fraud - Fraud is a false representation of a material fact or nondisclosure of a material fact
under such circumstances that it amounts to a false representation, made with the knowledge of its
falsity or in reckless disregard of whether it is true or false, or as of personal knowledge, with the
intention that it shall be acted upon by other party and which is acted upon by him to his injury.
Essential Elements of Fraud:
a. A false representation of a material fact. It is not sufficient that there be just a nondisclosure of
a material fact unless the relation between parties of the contract makes it duty of the party to
disclose such fact or unless he took active measures to prevent knowledge of the facts from getting
to the other party.
b. The representation must be as to a past or present fact. A mere expression of opinion,
expectation, or an expression of intention unless such intention does not as a matter of fact exist s
not sufficient to constitute fraud.
c. It must be of a material fact, and a misrepresentation of an immaterial fact. Even if made with
fraudulent intent, does not constitute fraud.
d. The party making the statement must know it to be false. If it is said with reckless disregard as
to its truth or falsity, the person making the representations had the means of ascertaining its truth
or falsity and made the statement his own knowledge w/o endeavoring to find out its truth or
falsity.
e. It must be made with intention that will be acted on by the other party. It need not be made to
the party himself, but it must be intended to reach him and form a motive for his actions.
f. It must be relied upon by the other party and induce him to act for no matter how fraudulent the
representation, if the other party did not believe them and act on the, he has not been defrauded.
g. The other party must have suffered damage thereby.
7. Duress - If a person is compelled to sign a contract at the point of a gun or through threats of
violence to him or someone whom he holds dear , he cannot be said to have consented to the
contract but has been caused to enter into it by duress . The test as to whether or not there has been
duress is whether the person really exercised a choice and exercised his own free will.
8. Undue Influence - Taking advantage of a special trust or confidence which is reposed in one to
cause or induce the person so trusting or having confidence in him to enter into a contract which
is unfair to such person, in taking advantage of the weaknesses, superstition, or necessities, and
distress of another. A contract induced by undue influence is avoidable at the option of the party
injured.
9.7 Lawful and Sufficient Valuable Consideration
1. VALUABLE CONSIDERATION - law holds that there has been something equivalent given
for the act or promise, such as money, labor, a deed to land, exchange of promises to do something
of value, etc.
GOOD CONSIDERATION - based on love, affection, or blood relationship, and is founded on
generosity or natural duty; a good consideration has been held not sufficient to support an
executory contract.
2. What constitutes a Valuable Consideration?
- A promise to do what one is already bound to do, or a promise founded on a thing already done,
a past consideration, will not as a rule be a valuable consideration.
- To constitute a valuable consideration a person must give or promise to give something of value,
or he must give up, or promise to give up some legal right, as a promise not to sue or a promise to
extend the time of payment of a note, in exchange for some other thing of value.
Ex: For if A promises to extend the time of payment of a note without anything of value coming
to him, the agreement is without consideration on the part of the other party. A promise of
something or an act of value in exchange for a promise of another thing or act of value is a valuable
consideration. A compromise of a matter in dispute is a valuable consideration.
3. Gift - A mere promise of a thing of value is simply a promise of a gift as it is not founded on a
valuable consideration unless there is something of value given in return; but if the promise is
carried out and completed by the delivery of the thing, this amounts to a gift which, as between
the parties, cannot be reclaimed.
Every contract to be valid must be founded on valuable consideration. When a contract is
founded on a valuable consideration, the courts will not inquire into the sufficiency of the
consideration. That is, it is not necessary to the validity of the contract that the exchange which
constitutes the consideration would be things, acts, or promises of equal value, except where a
contract is for exchange of sums of money. In such case the courts will require that the exchanges
be practically equivalent.
However, it should be remembered that a decided difference in the value of things
exchanged may be strong evidence of fraud, and, if the question of fraud is raised, may be the
controlling or deciding element in setting aside the contract.
9.8 The Subject Matter of the Contract Must be Lawful and not Contrary to Sound Public
Policy
If a contract is to be enforceable at law, the thing sought to be accomplished by the contract must
be lawful and not contrary to sound public policy. The courts refuse to enforce a contract to do
something that is not lawful.
The principal classes of contracts opposed to law or to public policy are:
1. Contracts for the sale of public office, public contracts, or for the bribing of public officials
2. Contracts which tend to deprive the court of jurisdiction or to compound a crime.
3. Contracts which tend to encourage litigation. (Ex: A, knowing that B has a good case against C,
contracts with B that if B will bring suit against C, A will furnish the funds to prosecute the suit
and share whatever is received from C as a result of such suit.)
4. Contracts for the committing of a crime or a tort.
5. Agreements tending to promote fraud and breach of trust. (Ex: A, an engineer, agrees with B, a
contractor, that A will use his position as engineer of a large project to have the contract awarded
to B, and that he, A, is to get a commission for such influence.)
6. Contracts which affects the freedom or security.
7. Contracts in unreasonable restraint of trade and which tend to suppress competition at letting or
sale by auction. (Ex: An agreement not to bid at a public auction, if made for the purpose of stifling
competition, is unlawful.

8. To pay a usurious rate of interest. (Ex: The laws of a state provide that no greater rate of interest
shall be agreed upon or received that 10% per year. A and B agree upon a rate of interest of 12%
per year. This contract is void as it is usurious, and the court will not enforce the contract.)
9. Any agreement the object of which is to injure the public health.
10. Agreements to establish unlawful monopolies, trusts, etc.
9.9 Legal Requirements as to Form
There are legal requirements in most jurisdictions as to the form which certain contracts must take.
Certain information which must be included may be specified, or the requirement may only be that
the contract shall be in writing. Negotiable instruments consist primarily of promissory notes, bills
of exchange, bank drafts, and bank checks. These in general must be in writing and must include
the signature of the maker or drawer and an unconditional promise to pay a fixed sum of money.
A CONTRACT BE PLACED IN WRITING IF IT INCLUDES ANY OF THE FOLLOWING
MATTERS:
1. A special promise by an executor or administrator to render himself personally liable for the
debts of the deceased.
2. Any special promise to answer for the debts of another person.
3. Any agreement made upon the consideration of marriage.
4. Any contract the terms of which cannot be performed within one year.
5. Any contract for the sale of any interest in land or for the leasing of land for a period of more
than one year.
6. Contracts for the purchase of goods, wares, or merchandise for a price equal to or higher than
an amount fixed by statute. This amount was formerly $50 but is now usually $500.
9.10 Interpretation of the Contract
Interpretation of a contract is the determination of the meaning of the terms or words used by the
parties in their contract. It is a cardinal rule in the interpretation of contracts that if the terms of a
contract are clear and leave no doubt upon the intention of the contracting parties, the literal
meaning of its stipulation shall control.
9.11 Penalties and Liquidated Damages
Contracts often provide that in case of a breach of the contract, the party aggrieved may collect
from the other party a certain specified amount as liquidated damages, or simply damages.
A liquidated damages example would be a contractor that failed to complete a construction project
on time and is charged daily until the project has been finished.

BASIS FOR COMPARISON LIQUIDATED DAMAGES PENALTY

Meaning Liquidated Damage is an Penalty refers to the sum
amount that the contracting determined in the contract to
parties fix during the be paid in case of a breach, but
formation of a contract, which the amount is not
 is a fair prior estimate of the proportionate to the damage
probable loss that would occur likely to occur
as a result of the breach.
Estimation of Loss Estimation of loss that may No such estimation
arise due to the breach of
contract.
Objective To determine the maximum To discourage parties to break
amount of compensation or the contract.
loss.
Imposed For compensation For punishment
Order Pay the actual amount of loss Pay the actual amount of loss.
but within the limited pre-
specified.

9.12 Discharge of Contracts

It is probably just as important for the engineer to understand how a contract may be discharged
as it is for him to know how to enter into a valid, binding, and legal contract.
1. Discharge by Performance - If the contract is fully performed by all parties, all rights and all
obligations under the contract cease to exist for the parties.
Tender of Performance
Ex: A contractor agrees to purchase a motor from an electric company, the motor to be of a special
design and to be ready for delivery at a specified date. The motor is not ready on the date agreed
upon and the contractor who was to have received it refuses to accept the motor when it is finished
later and sues the electric company for damages.
2. Impossibility of Performance - The impossibility of performance enables a party to be excused
from performing his obligations under the contract due to an occurrence that is beyond his control.
Ex: A, an engineer contractor, contracts with B that he will construct the foundation for a general
structure of a general type and of approximately a given depth. In making excavations for the
foundation, he finds soil conditions which makes it necessary, in order to ensure the safety of the
foundation, to enlarge the planned foundation greatly by increasing the depth to which the
foundation is laid, and this increase practically doubles the cost. The question now is: What is the
effect of this unforeseen condition which practically renders the contract as originally
contemplated impossible of performance? (If he agreed in the contract without reservation to build
the foundation to a certain depth to ensure the safety of the structure, he must go ahead and
complete the contract as originally contemplated. However, if he provided in the contract that in
case of conditions such as these he was to receive extra pay or that a new contract was to be entered
into relative thereto when the conditions were found, he then is excused from any further
performance of the contract in that particular.)
- If a contract is made for personal services and the person whose services were contracted for
died, then the contract is discharged by the death of the person because of the impossibility of his
rendering such services.
- If the subject matter of the contract or the thing whose continued existence is essential to the
carrying out of the contract is destroyed through no fault of the promisor, as by an act of God, then
the contract is discharged.
- Where the performance of the contract is rendered impossible by a change in existing law, then
the contact is discharged.
3. Substantial Performance - Substantial performance means the practical completion of the
work so that no material parts thereof remain to be done or so that there have been no material
alterations from the original contract.
4. Discharged by Agreement - If contract has not been performed by either party, it may be
discharged by the mutual agreement of the parties, the consideration of the discharge being the
mutual release of each party by the other.
- It should be remembered that contracts under seal can be discharged only by agreement or release
also under seal, and any contract under the statute of frauds which is thereby required to be in
writing must be released by an agreement in writing. If the statute of frauds does not require the
agreement to be in writing, it may be released either orally or in writing even though the original
agreement was in writing.
5. Discharged by Operation of Law - Contracts may be discharged by operation of law either by
the merger of one contract into another, alteration of the contract by one party thereto without the
consent of the other party, or by the bankruptcy, either voluntary or involuntary, of one of the
parties of the contract.
Alteration of Written Instrument - If one of the parties to a written contract alters, or causes to
be altered, material parts of the contract without the consent of the other party, the other party to
the contract will be discharged of all liabilities under the contract but will be entitled to any benefit
accruing therefrom.
Discharged by Bankruptcy - Any person who has been declared bankrupt and whose estate has
been administered and who has received discharge in bankruptcy will be relieved from all
liabilities and contracts prior to being declared bankrupt.
6. Discharged by Breach of Contract - A breach of contract is a failure, without legal excuse, to
perform any promise that forms all or part of the contract.
7. Discharged by Statute of Limitations - A statute of limitations is the length of time a civil or
criminal case can be brought to legal proceedings. After the statute of limitations has passed, the
parties in dispute can no longer take legal action.
Ex: If A gives a note to B for $50 payable one year after date, B acquires the right to sue A at the
end of the year on the note. If the statutes of the state provide that the action on such note must be
commenced within six years after the cause of action accrued and if the action is not commenced
within six years from that time, then B cannot recover from A the money lent on the note.
9.13 Remedies for a Breach of Contract
Where there has been a breach of contract, certain rights are acquired by the injured party.
ACCORD AND SATISFACTION - Accord and satisfaction refers to the agreement (accord)
between two contracting parties to accept alternate performance to discharge a preexisting duty
between them and the subsequent performance (satisfaction) of that agreement. The new
performance is called the accord.