Construction Contract Agreement in Kenya: Everything You Need to Know
A construction contract agreement is a legal document that outlines the terms and conditions of a construction project. It is a critical document that governs the relationship between the client and the contractor. In Kenya, construction contract agreements must comply with the country`s construction laws and regulations.
In this article, we will provide you with everything you need to know about construction contract agreements in Kenya, including the key elements, the legal requirements, and the types of contract agreements commonly used in the country.
Key Elements of a Construction Contract Agreement
A construction contract agreement should include the following key elements:
1. Scope of work: This section outlines the work to be done, including details such as the project`s location, project timeline, and project budget.
2. Payment terms: This section outlines how and when the contractor will be paid. It includes details such as the payment schedule, the method of payment, and any payment deadlines.
3. Change orders: Change orders refer to any changes made to the original contract agreement. This section outlines how change orders will be processed, what the change orders` costs are, and how they will affect the project timeline.
4. Warranties: Warranties are guarantees made by the contractor for the quality of the work and materials used. This section outlines the warranties provided by the contractor.
5. Termination clause: This section outlines the grounds for termination and the process for terminating the contract agreement.
Legal Requirements
In Kenya, construction contract agreements are regulated by the Construction Contracts Act of 2013. The act outlines the key legal requirements for construction contracts in the country. Some of the key legal requirements include:
1. Written contracts: All construction contracts must be in writing.
2. Payment schedule: The payment schedule must be set out in the contract.
3. Progress payments: The contractor is entitled to progress payments based on the work completed.
4. Dispute resolution: The contract should provide for dispute resolution, including mediation and arbitration.
Types of Construction Contract Agreements
There are several types of construction contract agreements commonly used in Kenya. These include:
1. Lump sum contracts: This type of contract agreement provides a fixed price for the entire project. The contractor is responsible for all costs associated with the project.
2. Cost-plus contracts: This type of contract agreement reimburses the contractor for all costs associated with the project, plus a fixed percentage for profit.
3. Time and materials contracts: This type of contract agreement involves paying the contractor based on the time and materials used for the project.
In conclusion, construction contract agreements in Kenya must comply with the country`s construction laws and regulations. Key elements of a construction contract agreement include the scope of work, payment terms, change orders, warranties, and termination clauses. The legal requirements for construction contracts in Kenya include written contracts, payment schedules, progress payments, and dispute resolution. Finally, the types of construction contract agreements commonly used in Kenya include lump sum contracts, cost-plus contracts, and time and materials contracts.