UNIT II.

CONTRACTS
AND
SPECIFICATI
ONS

Group 2
Overview
This unit deals with contracts, specifications, technical specifications, design and specifications
for engineering works. This course shall also cover preparation of contracts and specifications.

Learning Objectives:
At the end of the unit, students will be able to:
1. read, evaluate and interpret construction plans, working drawings and revise contract
documents, estimates and technical specifications; and
2. Identify the existing local labor laws and regulation for professional services and
bidding/tendering processes, award and acceptance.
Contracts
General consideration.
Without being aware of it, each one of
us enters into a contract as often as
the need arises. When do little things
like buying a stick of cigarette or a
detergent soap nearby, or ride in a
jeep or tricycle to or from the school or
office, we in fact enter into a contract
which gives rise to rights and
obligations. Contracts of bigger scale
surely awaits us in the future specially
when we become professionals or
businessman, hence the need to study
the law on contracts to which the law
on obligation is integrated.

The law defines a contract as

a "meeting of the minds between two
persons whereby one binds himself,
with respect to the other, to give
 Contract differentiated from agreement.
Contract is often times used interchangeably with the
term agreement. A contract forms a subdivision of the
genus "agreement" from which follows that, while
every contract is based on agreement, not every
agreement is a contract. In order for an agreement to
qualify as a contract, the parties much have clearly
intended to be bound by a political. Moreover, a
contract when breached can be enforced in court, not
in the case of an agreement.
Stages of a contract. Every contract passes
through three distinct stages, namely: (a) preparation
or conception, (b) perfection or birth, and (c)
consummation or termination.? Preparation or
conception starts form the inception and negotiation
that may lead to the parties coming to the terms of
the contract, whereas, perfection or birth marks the
time the parties agree upon the object or subject
matter and the cause or consideration of the contract.
The third stage is simply the implementation of the
terms of the contract, and simultaneous
documentation in formal ones.
 Classification of contracts. From the text of the pertinent
provisions of the code, the following classes may be deduced:

Unilateral Executed and

and bilateral executory
contracts contracts

0 0 0 0 0
1 2 3 4 5
Express and Consensual Nominate and
implied and real innominate
contracts contracts contracts
Freedom in contracts. The freedom to contract as
guaranteed by the Constitution articulated by Article
1306 of the Code which provides that "the contracting
parties may establish such stipulations, clauses,
terms, and conditions as they may deem convenient,
provided they are not contrary to law, morals, good
customs, public order, and public policy."
Contrary to law. The parties cannot stipulate on
matters against the law. If the object and cause of the
contract is prohibited or against the law, the contract
will be null and void.
Contrary to morals and good customs. Contract
offending morals or good customs are void and
without effect like for instance where Mr. X entered
into an employment contract with Miss Y whereby the
former will employ Miss Y as cashier in his firm if the
latter will live with him as wife without marriage, or
walking out from marriage by a woman to comply with
her obligation with a woman whose love affair with the
supposed bridegroom did not culminate in marriage.
Contracts against public order and public policy.
Public policy is much broader than public order. It
refers to higher goals of the state for the good of all,
like free enterprise to promote the national economy
or family planning policy to arrest population growth
whereas, public order refers not essentially to peace
and order but also to existing institutions of a people,
like peaceful means of enforcing rights or grievances.
Equality of parties under the contract. The law
gives equal standing or treatment upon the parties
such that the validity or compliance with the contract
cannot be left to the sole will of one of them.
Parties bound under the contract, exception. The
rule is that only the parties to the contract and their
assigns and heirs are bound thereto unless the rights
and obligations arising there from cannot be
transferred to the heirs and assigns of the parties
because of their nature, or by stipulation, or by
specific provisions of the law.
Preparing the Contract
Points to reckon in contract writing
Before drafting the contract, the engineer should among others, be aware of the
following:

The terms and

The need of Legality of the
conditions
the client contemplated
desired
contract
including the
subject matter
and
considerations
Parts of a contract
If the one will examine well written contract, he will readily discover the following:
1. Title of Contract
The title of the contract is usually at the top of the document and generally delivered from the
agreement or dictated by the parties to the contract or their respective.

2. Salutation
This part is merely placed for the purpose of style: and usually to impress the parties and the public
who may glance or read the contract. Often this worded in bold letters at the left top, reading. KNOW
ALL MEN BY THESE PRESENTS:

3. The BODY.
The body is that part which identifies the contracting parties, whether natural or judicial persons, as
well as their intention to be bound on the obiects and cause as well as to the other terms and
conditions, and usually presented in the following order;
 a.) Introduction of the parties and the agreement. This part which is usually worded "This
Agreement or Contract of entered into by and between Linda C. Hiron and Jenesis L.
Huillon, etc. "describe the parties and states what the agreement is all about. In difficult and
complicated multiparty transactions or agreement, however, and to provide a better and easier
understanding of the identify and intention parties and what the contract is," WHEREASES"
are provided to serve as a preamble to the contract.

b.) Terms and conditions. This specifies in detail the terms and conditions as intended by
the parties, usually covering the following:

b.1 the subject matter which may be determinate things, rights, or

services and the cause or consideration of the contract

b.2 the mechanics of what, where, when and how, and why in some
cases, and other details regarding the object to be delivered or
the services to be rendered, i.e. construction of a house or
installation of a machine. In connection with engineering
contracts, the more technical ones are usually embodied in the
specifications as well as other documents like plan and
design, which are incorporated in the contract by reference, hence, becoming
part and parcel of the contract.
 c.) Dispositive Clause. This part usually reading "IN WITNESS WHEREOF, we have hereunto
set our signatures etc." is affirmation of the parties to be bound by the contract.

d.)Date and place of execution. The date and place of execution is the reference to when
and where the contract has been perfected. These are necessary for purposes of prescription of
actions upon the contact and to determine jurisdiction and venue of the courts in the event of legal
dispute of the contract.

4. Signatures of the parties. The signatures of the parties or their legal representatives are proofs of
their consent and give binding effect thereto as without the same the instrument would just be an
ordinary writing. The signature of the instrumental witnesses of the parties sometimes appear therein,
but unless required by law, ie., wills and testaments. the same may be dispensed with.
Notarial acknowledgement
The acknowledgement is not a part of the contract and may
be omitted in the document especially if the parties are personally
and intimately known to and trust each other. It is called notarial
acknowledgement because the parties acknowledged their identity
as parties to the contract, and the act as their free act and deed
before a Notary Public who signs and affixes his seal on the contract
after administering an oath or affirmation, thus, converting it into a
public instrument. He also states the document, its number, the
book number, page number and series of what year, to facilitate its
identification when registered or filed in the Notarial Registry.
Matters usually embodied in engineering contracts.
Basic is the rule that the contracting parties may stipulate on terms and conditions that they may
deem fir and convenient as long as they are not contrary to law, morals, customs, public policy and policy
order. Guided by this, the engineer preparing the contract must always take note, among others, of the
following which are generally contained in many engineering contracts:

01 02
Workmanship according to Materials which must be the
agreed plans and agreed quantity and quality or
specifications the average if none is specified
or available in the market
03 04
Responsibility on compliance Control and supervision of the
with legal requirements, i.e. work by the engineer to fairly
licenses, permit and posting of insure the accomplishment of
legal abstracts in the premises the project
Matters usually embodied in engineering contracts.
Basic is the rule that the contracting parties may stipulate on terms and conditions that they may
deem fir and convenient as long as they are not contrary to law, morals, customs, public policy and policy
order. Guided by this, the engineer preparing the contract must always take note, among others, of the
following which are generally contained in many engineering contracts:

05 06
Bonds that must be put up to secure Contract modifications of the
the performance of the contract and contract
other liabilities to which the client-
owner may be exposed
07 08
Risk or additional cost or penalty Mode and conditions for
by reason of defective payment
workmanship
 0 0
Other engineering documents
There are variety of documents that usually complement an engineering transaction.
Typical examples of these, in addition to the contract, are:

1
0
Specifications proper
2
0
Advertisements or
invitation to bidders

3 Proposals
4 Plans and designs and
performance bond
Specifications
Concept of specification. Specification
is the act or process of making specific
through supplying particular details. It
aims at decreasing the generality or
vagueness of something by determining
or supplying some characteristics that
delimit it to a more precise coverage. In
the engineering parlance, specification is
a written or printed description or
presentation of something or a plan or
proposal for some thing.
Purpose of specifications. The
preparation of specifications needed to
understand the nature of the machinery,
supplies or materials to be furnished or
work to be done under a contract should
be given extra time and effort.
Language of specifications. In writing contracts and specifications
the language which may be in the official or prevailing language in
the locality should be clear, accurate and exact. So when using
technical terms common to the trade to which the specifications
apply, they must be used in the sense accepted in common and local
usage as this use is also persuasive to the courts which may rule on
the conflict.
 Requirements of good specification. For specification to satisfactorily fulfill its
purpose, the same must meet the following test:
Clarity in all details, both
Should be
clear 01 in plans and specifications
is a protection to the
owner and the contractor.
The description in the
specification should be brief
Should be
because specification is not a
treatise nor a novel for
impressing the client of the
02 brief
Indefinite specifications
engineer.
are most often the
Should be
definite
When the amount of the
03 result of carelessness
and ignorance of the
detailed requirements
material or work to be done
by the maker
under the contract is small, it is
Should be
customarv for some engineers
to state it with a brier clause in 04 determinate
which the work to De done and
the materials to be furnished
shall be "as the engineer shall
 Requirements of good specification. For specification to satisfactorily fulfill its
purpose, the same must meet the following test: Unnecessary or
unreasonable
requirements are always
Should not be
Although itambigous
is necessary for
05 ambiguous and uncertain
as to what is really
desired, and what actually
the engineer to be able to will be needed by the
exercise control over the work Should not be
engineer.
to secure proper pertormance
and completion, the exercise
06 arbitrary
and control of this prerogative Fairness in specification
should not be arbitrary. does not mean protection
Should be
fair 07 only of the engineer's
client in every legal way
but also protection of the
In writing specifications for a
material, only the average Should not be
contractor.
requirement which
characterizes a good material 08 unnecessarily
of the class desired should be severe
usually embodied
Technical Specifications The quantity, quality
and characteristics of
various materials to be
used including the
possible lifetime of the
Knowing the nature of the material.
The usual and
material, the machine, and the
practicable methods of
processes involved in each case executing the work to
as well as other relevant factors be done at the cheapest
like commercial and physical without sacrificing the
constraints is a must for every ends to be achieved.
The methods ordinarily
engineer making a technical employed in the
manufacture of the
specification. In addition, he
product or the machine
should be able to detail for and in the construction,
appropriate guidance and operation maintenance
appreciation of the following: of the plant or
structure.
Need of preparing an outline
In the preparation of technical specification for
engineering and architectural works, the materials and
processes are so numerous that some materials,
process or part thereof may be overlooked if special
precautions are not observed. Memory will surely fail to
retain these matters.
Restoring to published specification
In preparing specifications on lines different from
the line of an engineer, the most common is to select as
a basis similar ones that have been used on more or
less similar work which in the discretion of the engineer
is relevant and satisfactory.
Simple and detailed specifications
A simple specification is advisable only to simpler
forms of labor and simpler kinds of materials or supplies
and machines which have become standard. If the
specification is simple, no special knowledge in the
preparation is necessary provided that the writer must
be able to explain the manner and method in which
Modifying the requirements in the
specification
It is important that provisions for modification
of the method and materials to be used and the
ideal quality for specific conditions should be
prescribed in each case. Also, if specification
changes may alter the cost of the work, provisions
for adjustment of the contractor's compensation
should: be made.
Use of standard material and methods
Specifications not only bind the contractor to
perform the work in the manner provided therein or
to furnish the materials of a certain grade, but also
to the cost of the work and the materials. In
ordinary practice it is desirable to specify only the
type of machines, materials, supplies or the
methods which are available in the market or
general use. Neither the best nor the cheapest is
advisable and the ideal test for specific conditions
should be the test in each case.
Standard specifications prescribed by technical
societies
Various technical societies have from the time
adopted "standard specification" for certain materials,
processes, and structures. Since they have been
considered as experts who have much experience in the
manufacture and use of the material, and have originated
from free and full discussions of various practicable
requirements of such manufacture and use, a departure
from such standards should therefore be made with
extreme care and for a good reason.
Technical Specifications: Materials and Process
Outlining technical specifications of
construction work. Construction work now a days is
undertaken into trade lines with each trade specifying in a
particular type of work with the workers therein adequately
unionized. Trade unions had encouraged this trend, such
that for instance the mechanics, unionized as they are, will
work on their own specific line activity, and the same will
be true for other line trades, i.e. plumbing and masonry,
electrical installations, airconditioning, etc.
The following may serve as examples of the title of the
trade divisions taken from the specification for a
hydroelectric planet:
 Cofferdams, Earthwork
 Erection and Millwright Service
 Concrete Work
 Painting
 Masonry
 Plumbing, Drainage, Piping and Swamp Pumps
 Carpentry and Hardware
 Electrical Work
 Metal Windows
 Ventilation
 Glass, Glazing and Caulking
 Tainter Gate Moist
 Sheet-Metal Work
 Penstock Head Gates Hoists
 Roofing and Roof Insulation
 Earth Dam
 Structure Steel and Miscellaneous Metals
 Granty Crane
In a school building construction, the following may serve
as examples of title in each trade division:
 Excavation, Filling Grading
 Concrete Construction
 Masonry Work
 Structural Steel and Miscellaneous Metals
 Carpentry and Millwork
 Finish Hardware
 Roofing and Waterproofing
 Sheet-metal Work
 Lathing and Plastering
 Insulation and Acostic Tile
 Resilient Flooring
 Cramic Tile
 Painting
 Gas and Glazing
 Plumbing and Sewerage
 Heating and Ventilating
 Electrical Work and Fixtures
Outlining trade technical specifications. When all the works for the project has
been identified, each of the trade technical specifications should be prepared.
The trade technical specifications are further divided into sections, each of which
presents in detail the information needed. For guidance, the following will
illustrate the various section titles of a heating, ventilating and air-conditioning
specification for a small building:

General condition
Cooperation with other contractors
Scope of the work
Coordination of subcontractors
Manufacturer's name and
Air-conditioning plenum room numbers
Heating, ventilating and
Air-conditioning fans airconditioning drawings
Air filters
Description of the system
Heating, cooling and reheating
Steam and condense piping coils system
Duck work
Reheat piping system
Registers, grills, and ceiling
Steam and condense pipe fittings outlets
Refrigeration condensing units
Pipe hangers and support
Refrigeration piping and
Valves accessories
Refrigeration system testing and
Traps and strainers charging
Refrigeration condenser
Zone-reheat circulator pump and temperature control valve
Boiler
Wall-fin radiation, unit heaters, and connectors
Smoke breeching and barometric draft-control damper
Hot-water tank heater
Oil burner
Temperature controls
Oil tank and piping
Pipe, duct, hot-water tank, and breeching insulation
Vacuum heating and boiler feed pump
Exhaust ventilation and pumps
Kitchen hoods
Connections with the electrical trade
Guarantee
Final clean-up and inspection
 Before making a design of any plant or structure, a
thorough investigation and study should be mad of the nature
of the materials which must be excavated or moved, the
foundation upon which the structure must rest, and also of the
materials through which the tunnels, foundation piles,
channels, caissons etc., must be driven. Most often, the
construction is needed immediately and so thorough
examinations of the surrounding conditions become
impossible.
Failure to make investigation of these conditions and
secure desired information for the engineer's use in designing
and estimating the cost of the work, and that of the bidder
contractor in preparing his proposals sometimes result to false
ideas that lead to wrong economy of the owner of the work to
be constructed. So when the engineer fails to get these
informations, he should be blamed for troubles and expenses
resulting there from.
Preliminary information should be secured at least to
permit somehow the drawing of plan most fitted to local
conditions, instead of assumed conditions which do not
actually exist. This way both the contractor and the owner are
 A common practice now is to require the contractor to assume
all risks and responsibilities concerning the character and the
relative amounts of different materials.
Good sense seems to confirm the conclusion that in dealing
with intelligent men, something cannot be secured for nothing. So,
an intelligent contractor will not bid on plans and specifications
which are uncertain and unfair, otherwise, he will, to protect him,
add an adequate sum to recompensate the uncertainless and
unfair treatment.
Basis to designs
In every technical endeavor the primary consideration is the
accomplishment of the objectives or end at the least possible
expense. If the structure is to be built, both utility and beauty are
involved. Always, a permanent structure should not be unsightly. In
each case, the purpose is to achieve maximum utility for a
minimum expense. But the structure must be safe. Factors of
safety may be introduced and are made necessary by varieties of
strength of materials, by strains to which the structure may be
subjected and the contingencies to which it may be exposed. In
short, safety must be balanced against expense and results, and
the technical man is responsible for establishing a proper
 To design properly any structure or plant, the designer must be familiar
with the methods which must be used in the construction. The design should
not involve unreasonable requirements that will add expense without the
corresponding benefit. In making a design, cost of maintenance and cost of
operations in certain cases should be taken into account. It is not enough that a
plant be well and economically designed and carefully constructed. It must also
be easily maintained and readily operated by the class of men that can be
secured for the purpose.
Estimating the structure
Estimating the cost of structure and materials is an important duty of the
engineer. But the question that must be determined is how much would be the
difference of the actual cost of the construction and the estimated cost? Would
10%, 20% and 30% be reasonable?
Engineering structures are sometimes built in locations where they are
subject to considerable hazards due to conditions that cannot be predetermined
and contingencies of storms and floods which could not be foreseen. In such
cases, a greater percentage of difference of the actual and estimated cost is
excusable but this should not deter the engineer to exhaust all possible
resources and anticipate factors and contingencies of the project.
Taking all things together, the estimated cost should be liberally prepared
especially when the financial feasibility is based on a limited budget, otherwise,
Assessing Learning
1. Students will be given individual/group activity based on
the discussed topic.
2. Optional oral recitation and presentation. If needed, the
presentation may be done per group as instructed by the
instructor.
3. Schedule a quiz covering the concepts in basic courses.
It can be a combination of different forms of examination
that might be applicable to the topic.
Thank you for
listening!