Coming up with a precise definition of a construction contract is a rather difficult task. However, different authors have tried to formulate a universally accepted definition of construction contracts. Generally speaking, a construction contract is one type of ordinary contracts; it’s only different from ordinary contracts in that it deals with the construction of various infrastructures. A major distinguishing feature between construction contracts and ordinary contracts is that the latter is bilateral, affecting only two parties, whereas the former involves more than two parties.
The different definitions given by the different authors are considerably similar. For instance, Hudson defines a construction contract as "an agreement under which a person, called variously the builder or contractor, undertakes for reward to carry out for another person, variously referred to as the building owner of employer, works of a building or civil engineering character." Similarly, Keating defines a construction contract as "any contract where one person agrees for valuable consideration to carry out building or engineering works for another."
According to the General Conditions of the Contract for Construction, a construction contract represents:
The entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. The contract may be amended or modified only by modification. The contract documents shall not be construed to create a contractual relationship of any kind (1) between the architect and contractor, (2) between the owner and sub-contractor or (3) between any persons or entities other than the owner and contractor. The architect shall, however, be entitled to performance and enforcement of obligations under the contract intended to facilitate performance of the architect's duties.
Article 2610 of the Civil Code of Ethiopia defines a construction contract as "a contract of work and labor is a contract whereby one a party, the contractor, undertakes to produce a given result, under his own responsibility, in consideration of a remuneration that the other party, the client, undertakes to pay him."
Article 2876 goes further to elaborate that a contract whereby one of the parties undertakes to deliver to the other party a house, a flat or another building which does not yet exist, is a contract of work and labor relating to immovable.
From this, it can be understood that a construction contract, wether in our country or in any other country, covers the relationship between the parties to the contract. It, therefore, stipulates the rights and obligations of each party and addresses the issue of remuneration and payment that is rightfully due to a party.
Pre-Contract Preparatory Works
Before a person (be it physical or legal) signs a construction contract, there are certain pre-contract preparatory works that need to be undertaken. These pre-contract preparatory works include soil tests, site surveys, securing of building permits as well as consideration of various rights of different parties. Soil tests and site surveys are needed before a person can plan a suitable design for the construction he/she intends to undertake. In addition to these, it is necessary to get a building permit from an authorized organ of the government of the country where the construction takes place, before starting any type of construction whatsoever. Moreover, a person needs to consider the various rights of different parties so that the construction he/she considers to undertake will, in no way, infringe upon other's rights.
Soil testing is usually required for securing of building permits. While conducting soil tests, the soil engineers conduct a thorough investigation into the soil’s interaction with the construction that is sought to take place. Soil tests will help to identify and clean up contaminated areas within the proposed construction site prior to the construction. The soil engineers investigate the site for the construction, analyze the site as well as the subsurface conditions and make recommendations for work to take place. Once the soil testing is successfully undertaken, the builder moves on to request a building permit from the authorized agency of the area (country) where in which the construction takes place. A building permit is a document you receive from a local building department actually allowing persons to do the construction they seek to undertake. In order to secure a building permit, a builder is expected to submit plans, sign-offs from the architect and engineer, and soil reports showing the condition of the construction site. In our country, a builder wishing to undertake a construction in a certain sub-city has to secure a building permit from the sub-city administration where the construction work is to be undertaken.
Once a builder secures a building permit for the construction, he/she wishes to undertake, he/she proceeds to have the construction site surveyed. The American Congress on Surveying and Mapping defines surveying as
the science and art of making all essential measurements to determine the relative position of points and/or physical and cultural details above, on, or beneath the surface of the earth, and to depict them in a usable form, or to establish the position of points and/or details.
Land surveying includes the study and inspection of legal instruments and data analysis in support of planning, designing and establishing of property. Accordingly, land surveying includes services such as mapping and construction layout surveys. Construction layout surveys refer to the process of establishing and marking the position and detailed layout of the new structures of building constructions.