NEW ZEALAND'S CONTRACTS

New Zealand's contracts



New Zealand's contracts

Topic 1

Lump Sum contract

A contract that involves a fixed total price for a clearly defined product. The fixed price contracts may also include incentives for those who meet or exceed certain selected project objectives such as schedule compliance targets. The simplest form of a fixed-price contract is a purchase order. Also known as: Fixed Price Contract or Lump Sum (Badger & Gay, 1996). In this type of contract is called "construction contract lump sum" or the "contract work for elevation adjustment" and is a system whereby it is agreed between the parties is that one side runs a particular work in exchange for a lump sum as compensation for the service and the work is completed within a time limit, also prefixed by the contracting parties.

In other words, in this type of contract the contractor (the builder, professional manager or perhaps a business) is being charged with carrying out the work or construction, this may be total or partial, further determining that the work is at all costs. The other party would be the principal (who is responsible for construction) would have the obligation to pay the price agreed in advance with the manufacturer, without having to make any material contribution, since the price is initially fixed and defined in the agreement prior to the building (Barbulescu, 2001).

In reviewing information posted online can see that this type of contract also is referred to as contract "turnkey" as detailed below: "In this type of contract often called turnkey Builder agrees to deliver a construction completely complete and in working order upon delivery of a fixed amount divided into installments previously agreed upon, according to the progress of the work. Builder's offer is based on a study of the project provided by the Contractor, but the risks of errors in the Project are considered paid by the builder should therefore conduct a full and comprehensive project that gives the Contractor and add in whatever he believes is missing because the amount of your bid is considered "closed" once signed the Contract (Caraiani, 2008). The developer agrees to receive only the amount bid, including in it all those things you think are necessary for successful completion and operation of the facility but were not included in the project received for the study of supply.

On the issue of adjustments to contract work by lump sum in which there are differences between the contracting parties, we appreciate that the legislature has established a rule in Article 1776 of the Civil Code, which states that "The obligation to make a work for elevation adjustment is entitled to compensation for variations agreed in writing with the principal, provided that mean more work or increased cost of the work (Badger & Gay, 1996). The principal, in turn, is entitled to compensatory adjustment in the event that such changes mean less work and lower cost of the work. "

We note that in this type of procurement errors, if any, ...