UNIT 2: CONTRACTS | संविदाएँ

 

✅ 2.1 Definition, Objectives & Requirements of Contract | अनुबंध की परिभाषा, उद्देश्य और आवश्यकताएँ

📌 Definition of Contract | अनुबंध की परिभाषा

English:
A contract is a legally enforceable agreement between two or more parties for doing or not doing a specific act.

Hindi:
अनुबंध दो या दो से अधिक पक्षों के बीच एक ऐसा कानूनी समझौता होता है जो किसी कार्य को करने या न करने के लिए बाध्य करता है।

Example: A contractor signs a contract with PWD to build a road in 6 months.

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🎯 Objectives of Contract | अनुबंध के उद्देश्य

• Ensure mutual understanding

• Legally bind both parties

• Define scope of work and payment

• Avoid disputes and delays

उद्देश्य (हिंदी में):

• आपसी समझ सुनिश्चित करना

• दोनों पक्षों को कानूनी रूप से बाध्य करना

• कार्य और भुगतान की सीमा तय करना

• विवाद और देरी से बचाव

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📜 Requirements of Valid Contract | वैध अनुबंध की आवश्यकताएँ

1. Offer and Acceptance | प्रस्ताव और स्वीकृति

2. Lawful Consideration | वैध प्रतिफल

3. Capacity of Parties | पक्षों की योग्यता

4. Free Consent | स्वतंत्र सहमति

5. Lawful Object | वैध उद्देश्य

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🏛️ Overview of Indian Contract Act, 1872 | भारतीय अनुबंध अधिनियम का अवलोकन

• Enacted in 1872

• Applies to whole of India (except J&K prior to 2019)

• Deals with general principles of law of contracts

• Divided into:

  • General principles (Section 1–75)

  • Special contracts (like indemnity, guarantee, etc.)

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✅ 2.2 Types of Engineering Contracts | इंजीनियरिंग अनुबंधों के प्रकार

Each contract type is explained with definition, pros, cons, and suitability.

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2.2.1 Lump Sum Contract | एकमुश्त अनुबंध

• Work is completed for a fixed total price.

• Useful for well-defined, simple projects.

👍 Advantages: Easy to understand, simple billing
👎 Disadvantages: Risk of cost overrun for contractor
📌 Suitable for: Small buildings

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2.2.2 Item Rate Contract | मद दर अनुबंध

• Payment per item of work done.

• Items listed in BOQ (Bill of Quantities)

👍 Advantages: Fair for both parties
👎 Disadvantages: Costly for client if work increases
📌 Suitable for: Government civil works

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2.2.3 Percentage Rate Contract | प्रतिशत दर अनुबंध

• Contractor quotes percentage above/below standard rates

👍 Advantages: Simple for comparing bids
👎 Disadvantages: Misuse of high/low bids
📌 Suitable for: PWD contracts

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2.2.4 Cost Plus Percentage Contract | लागत + प्रतिशत अनुबंध

• Client pays actual cost + agreed profit %

👍 Advantages: Transparent
👎 Disadvantages: Encourages unnecessary expenditure
📌 Suitable for: Emergency works

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2.2.5 Cost Plus Fixed Fee Contract | लागत + निश्चित शुल्क अनुबंध

• Fixed fee irrespective of total cost

👍 Advantages: Profit fixed
👎 Disadvantages: No motivation to control cost
📌 Suitable for: Consulting services

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2.2.6 Cost Plus Variable % or Fee Contract | लागत + परिवर्ती शुल्क अनुबंध

• Fee depends on savings/overruns.

👍 Advantages: Incentivizes cost-saving
👎 Disadvantages: Complex accounting
📌 Suitable for: Projects with uncertain scope

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2.2.7 Labour Contract | श्रमिक अनुबंध

• Only labour is provided; materials are by client.

👍 Advantages: Easy control of materials
👎 Disadvantages: Labour disputes
📌 Suitable for: Finishing works

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2.2.8 Demolition Contract | विध्वंस अनुबंध

• For dismantling old structures

👍 Advantages: Scrap recovery
👎 Disadvantages: High risk
📌 Suitable for: Renovation sites

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2.2.9 Target Contract | लक्ष्य अनुबंध

• Target cost is set; incentives/penalties apply

👍 Advantages: Shared risk
👎 Disadvantages: Complicated agreements
📌 Suitable for: Collaborative projects

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2.2.10 Negotiated Contract | आपसी बातचीत से अनुबंध

• Directly negotiated without tender.

👍 Advantages: Quick
👎 Disadvantages: Lack of transparency
📌 Suitable for: Specialized works

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2.2.11 EPC Contract | इंजीनियरिंग, खरीद, निर्माण अनुबंध

• One firm handles everything from design to construction.

👍 Advantages: Single point responsibility
👎 Disadvantages: Costly if scope not clear
📌 Suitable for: Industrial projects, expressways

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2.2.12 Annuity Contract | वार्षिकी अनुबंध

• Contractor gets fixed annual payments

👍 Advantages: Low initial cost for government
👎 Disadvantages: Long-term obligation
📌 Suitable for: Highways, bridges

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✅ 2.3 FIDIC Conditions of Contract | FIDIC अनुबंध शर्तें (परिचय)

• FIDIC = International Federation of Consulting Engineers

• Sets global standard for construction contracts

• Includes Red Book, Yellow Book, Silver Book

• Covers:

  • Employer obligations

  • Engineer’s role

  • Contractor’s rights & duties

  • Payment and claims

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✅ 2.4 Classification of Contractor by Financial Limit | वित्तीय सीमा अनुसार ठेकेदारों का वर्गीकरण

Class	Maximum Limit	Common Name
A	₹ Unlimited	High Class
B	₹ Up to 75 Lakh	Medium
C	₹ Up to 25 Lakh	Small
D	₹ Up to 10 Lakh	Entry Level

📝 Documents Required for Contractor Registration | ठेकेदार पंजीकरण के लिए आवश्यक दस्तावेज़

1. PAN Card

2. GST Registration

3. Previous Work Certificates

4. Financial Statements

5. Affidavit and Photos

6. License copy (if required)

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✅ 2.5–2.11 Special Contract Models | विशेष अनुबंध मॉडल

2.5 BOT (Build Operate Transfer) | निर्माण, संचालन, हस्तांतरण

• Private firm builds and operates, then transfers to govt.

2.6 BOT Toll

• Recovers cost by collecting tolls

2.7 BOT Annuity

• Govt pays fixed annuity instead of tolls

2.8 DBFOT

• Design, Build, Finance, Operate, Transfer

• Integrated model used in highways, metros

2.9 Hybrid Annuity

• Govt pays 40% cost, 60% recovered via annuity/toll

2.10 OMT (Operate Maintain Transfer)

• Only operate and maintain for fixed period

2.11 Operation & Maintenance Contract (Intro Only)

• Only operations/maintenance responsibility (e.g., sewage plant)

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✅ Diagram: Contract Selection Flow

Work Type → Fixed? →
Yes → Lump Sum / Item Rate
No  → Cost Plus / Target / EPC
Funding By Govt? →
Yes → Annuity / DBFOT
User Pay? →
Yes → Toll Model

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📚 Question Bank

Q1. Define contract and explain essential elements.

Ans: A contract is a legally binding agreement. Essential elements are offer, acceptance, lawful consideration, legal capacity, free consent, and legal object.

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Q2. Compare Lump Sum and Item Rate contracts.

Feature	Lump Sum	Item Rate
Payment Basis	Total project	Per item/unit
Risk Bearing	Contractor	Shared
Suitable For	Simple works	Complex works

Q3. Explain BOT and DBFOT models.

Ans:

• BOT: Private firm builds & operates then transfers.

• DBFOT: Private firm designs, builds, finances, operates, and transfers asset.

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🧠 Memory Trick: “LIC PPP DENT CHO” for Contract Types

L – Lump Sum
I – Item Rate
C – Cost Plus (3 types)
P – Percentage Rate
P – Procurement (EPC)
D – Demolition
E – Engineering
N – Negotiated
T – Target
C – Contractor Classes
H – Hybrid Annuity
O – Operation & Maintenance