CHAPTER XVI

UNIFORM CONTRACT FORM

A valid Contract exists provided only that the four essentials are present:

1. Mutual assent to the terms of the agreement.

2. Competent parties.

3. A valid consideration, actual or presumed.

4. Definite and lawful subject matter to be acted upon.

This chapter deals with the subject matter. While it is true that a Contract exists provided only that these four essentials are present, it is yet necessary, when something is to be done, that the terms should be sufficiently explicit so that exactly what is wanted is properly set forth. Experience has established many points necessary to be covered in Contracts for public work or other work of a similar character. This chapter will be devoted to a consideration of those provisions covering the subject matter which have been found essential or desirable in such work, so that there results not only a Contract, but a well drawn Contract.

In such work, the written description of what is to be done is divided into two parts, the Contract proper and the Specifications. The Contract very commonly refers to the Specifications "which are hereby made a part of this Contract," and the Specifications in turn are supplemented by plans or drawings "which are hereby made a part of these Specifications."

The Contract proper should cover the agreement and such parts of the work to be done as are general in character and applicable to almost any work, without close reference to its immediate character. The Specifications, as the name suggests, should specify the materials, workmanship and methods necessary to secure satisfactory work of any special sort, and strictly should not include any clauses of agreements.

It is sometimes found difficult to observe a clear line of demarcation between Contract and Specifications. As an outcome, it is not uncommon for the Specifications to be included within the body of the Contract, so that the signatures are subscribed at the bottom of the document of

which the Specifications form a part. On the contrary, it is also common to have the Contract a shorter document which refers to the Specifications as a part of the Contract, although these are not bodily included within its limits. In the case of most public work, the forms of Instructions to Bidders, Proposal, Bond, Contract, and Specifications are printed and bound together in a pamphlet or booklet where all may conveniently be read and considered together.

There is very little choice as to which method should be adopted. Since it is very difficult to separate completely Contract agreements from Specifications, there seems to be some theoretical advantage in having the Specifications included in the body of the Contract. On the other hand, there is a practical advantage, sometimes, in having a general Contract Form in print, and then referring to Specifications for each class of work, with a statement that these Specifications are made a part of the Contract. As a matter of experience, it is not apparent that any vital fault exists in well written Contracts in either form.

The American Railway Engineering Association has seen fit to keep the Specifications separate and has provided a general " Uniform Contract Form" which contains very much that is commendable, and which is favorably regarded by the surety companies and by many Contractors. This form, the one in use in 1917, is shown below as a standard or basis for discussion.

AGREEMENT FORM

(Copyright, by American Railway Engineering Association, 900 South Michigan Avenue, Chicago, Ill., March, 1913).

THIS AGREEMENT, made this...

in the year..

.by and between.

party of the first part, hereinafter called the Contractor, and.

party of the second part, hereinafter called the Company.

day of....

WITNESSETH, That, in consideration of the covenants and agreements hereinafter mentioned, to be performed by the parties hereto and of the payments hereinafter agreed to be made, it is mutually agreed as follows:

The Contractor shall furnish all the materials, superintendence, labor, equipment and transportation, except as hereinafter specified, and shall execute, construct and finish, in an expeditious, substantial and workmanlike manner, to the satisfaction and acceptance of the Chief Engineer of the Company,

(Here follows a statement of the work to be performed.)

in accordance with the plans hereto attached, identified by the signatures of the parties hereto, or as herein described, and the following GENERAL CONDITIONS, requirements and specifications, forming part of this contract.

The work covered by this contract shall be commenced..

.and be completed on or before the

..day of

191.. time being of the essence of this contract

And in consideration of the completion of the work described herein, and the fulfillment of all stipulations of this agreement to the satisfaction and acceptance of the Chief Engineer of the Company, the said Company shall pay, or cause to be paid, to said Contractor, the amount due the Contractor, based on the following prices:

(Here follows a statement of prices.)

CONSTRUCTION CONTRACT

GENERAL CONDITIONS

1. BOND. The Contractor shall, at the time of the execution and delivery of this contract and before the taking effect of the same in other respects, furnish and deliver to the Company a written bond of indemnity to the amount dollars, in form and substance and with surety of ... thereon satisfactory and acceptable to the Company, to insure the faithful performance by the Contractor of all the covenants and agreements on the part of the Contractor contained in this contract.

This bond shall remain in force and effect for the full amount or such smaller amount as may at any time be specified by the Chief Engineer.

2. CONTRACTOR'S UNDERSTANDING. It is understood and agreed that the Contractor has, by careful examination, satisfied himself as to the nature and location of the work, the conformation of the ground, the character, quality and quantity of the materials to be encountered, the character of equipment and facilities needed preliminary to and during the prosecution of the work, the general and local conditions, and all other matters which can in any way affect the work under this contract. No verbal agreement or conversation with any officer, agent or employe of the Company, either before or after the execution of this contract, shall affect or modify any of the terms or obligations herein contained.

3. INTENT OF PLANS AND SPECIFICATIONS. All work that may be called for in the specifications and not shown on the plans, or shown on the plans and not called for in the specifications, shall be executed and furnished by the Contractor as if described in both these ways; and should any work or material be required which is not denoted in the specifications or plans, either directly or indirectly, but which is nevertheless necessary for the proper carrying out of the intent thereof, the Contractor is to understand the same to such any be implied and required, and shall perform all such work and furnish material as fully as if they were particularly delineated or described.

4. PERMITS. Permits of a temporary nature necessary for the prosecution of the work shall be secured by the Contractor. Permits for permanent

structures or permanent changes in existing facilities shall be secured by the Company.

5. PROTECTION. Whenever the local conditions, laws or ordinances require, the Contractor shall furnish and maintain, at his own cost and expense, necessary passageways, guard fences and lights and such other facilities and means of protection as may be required.

6. RIGHTS OF VARIOUS INTERESTS. Wherever work being done by Company forces or by other contractors is contiguous to work covered by this contract, the respective rights of the various interests involved shall be established by the Engineer, to secure the completion of the various portions of the work in general harmony.

7. CONSENT TO TRANSFER. The Contractor shall not let or transfer this contract or any part thereof (except for the delivery of material) without consent of the Chief Engineer, given in writing. Such consent does not release or relieve the Contractor from any of his obligations and liabilities under the contract.

8. SUPERINTENDENCE. The Contractor shall constantly superintend all the work embraced in this contract, in person or by a duly authorized manager acceptable to the Company.

9. TIMELY DEMAND FOR POINTS AND INSTRUCTIONS. The Contractor shall provide reasonable and necessary opportunities and facilities for setting points and making measurements. He shall not proceed until he has made timely demand upon the Engineer for, and has received from him, such points and instructions as may be necessary as the work progresses. The work shall be done in strict conformity with such points and instructions.

10. REPORT ERRORS AND DISCREPANCIES. If the Contractor, in the course of the work, finds any discrepancy between the plans and the physical conditions of the locality, or any errors or omissions in plans or in the layout as given by said points and instructions, it shall be his duty to immediately inform the Engineer, in writing, and the Engineer shall promptly verify the same. Any work done after such discovery, until authorized, will be done at the Contractor's risk.

11. PRESERVATION OF STAKES. The Contractor must carefully preserve bench marks, reference points and stakes, and in case of willful or careless destruction, he will be charged with the resulting expense and shall be responsible for any mistakes that may be caused by their unnecessary loss or disturbance.

12. INSPECTION. All work and material shall be at all times open to the inspection, acceptance, or rejection of the Engineer or his duly authorized representative. The Contractor shall give the Engineer reasonable notice of starting new work and shall provide reasonable and necessary facilities for inspection, even to the extent of taking out portions of finished work;

in case the work is found satisfactory, the cost of taking out and replacement will be paid by the Company. No work shall be done at night without the previous approval of the Engineer.

13. DEFECTIVE WORK OR MATERIAL. Any omission or failure on the part of the Engineer to disapprove or reject any work or material shall not be construed to be an acceptance of any defective work or material. The Contractor shall remove, at his own expense, any work or material condemned by the Engineer, and shall rebuild and replace the same without extra charge, and in default thereof the same may be done by the Company at the Contractor's expense, or, in case the Chief Engineer should not consider the defect of sufficient importance to require the Contractor to rebuild or replace any imperfect work or material, he shall have power, and is hereby authorized, to make an equitable deduction from the stipulated price.

14. INSURANCE. The Contractor shall secure in the name of the Company, policies of fire insurance in amount, form, and companies, satisfactory to the Chief Engineer, upon such structures and material as shall be specified by the latter, payable to the Company for the benefit of the Contractor or the Company as the Chief Engineer shall find their interests to appear.

15. INDEMNITY. The Contractor shall indemnify and save harmless the Company from and against all losses and all claims, demands, payments, suits, actions, recoveries and judgments of every nature and description brought or recovered against it, by reason of any act or omission of the said Contractor, his agents or employes, in the execution of the work or in consequence of any negligence or carelessness in guarding the same.

16. SETTLEMENT FOR WAGES. Whenever, in the opinion of the Chief Engineer, it may be necessary for the progress of the work to secure to any of the employes engaged on the work under this contract any wages which may then be due them, the Company is hereby authorized to pay said employes the amount due them or any lesser amount, and the amount so paid them, as shown by their receipts, shall be deducted from any moneys that may be or become payable to said Contractor.

17. LIENS. If at any time there shall be evidence of any lien or claim for which the Company might become liable and which is chargeable to the Contractor, the Company shall have the right to retain out of any payment then due or thereafter to become due, an amount sufficient to completely indemnify the Company against such lien or claim, and if such lien or claim be valid, the Company may pay and discharge the same, and deduct the amount so paid from any moneys which may be or become due and payable to the Contractor.

18. WORK ADJACENT TO RAILROAD. Wherever the work embraced in this contract is near the tracks, structures or buildings of this Company or of other railroads, the Contractor shall use proper care and vigilance to avoid injury to persons or property. The work must be so conducted as not to interfere with the movement of trains or other operations of the railroad; or, if in any case such interference be necessary, the Contractor shall not pro