SECTION to entering into a legally binding

SECTION 1

 

1.1       Clearly explain
what particular requirements must be in place for a Contract to exist between
two parties

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There must be three particular requirements in
place for a contract to exist between two parties: an intention, a
consideration and an agreement.

 

There must be an intention, whereby both parties
consent to entering into a legally binding relationship. This can be determined
via a Letter of Intent (usually the employer) in which one party confirms their
intention to enter into a contract. In the US, a Memorandum of Agreement can be
used to similar effect.1
While the letter itself is not contractually binding, the act and remuneration
contained within it is enforceable by the Courts.

 

There must also be a consideration, payment for the
promised work. This is usually involves money but ‘can be anything of value’.2
The consideration enforces the contract, and must be offered and accepted
before the intention becomes contractually binding. Both parties must be in
agreement and all terms of the offer made must be accepted.

 

In most
cases, it is not necessary for the contract to be provided as a written
document. An oral contract is also considered legally binding as long as the
aforementioned requirements have been met. However, there are obvious legal
complications that can be easily avoided by documenting all promises made.
Written contracts, when well-drafted, are better able to describe the precise
terms of the agreement in conjunction with each party’s rights and obligations.
This therefore lessens the risk of dispute.

 

 

 

1.2       Explain what is
meant by the term ‘Duty of Care’ and what are the implications upon the
architect?

           

The Architects
Registration Board (ARB) outlines this duty in Standard 6 of its Code of
Conduct, requiring that architects ‘carry out their work with skill and care
and in accordance with the terms of their engagement’.3
Failure to meet this Standard would result in disciplinary action.

 

The Duty of
Care requires the Architect to exercise reasonable skill care and diligence in compliance
with the normal standards of the Architect’s profession.  It is the Prime Duty of the architect in relation
to the client. Since the Client is contractually bound by the decisions of the
Architect, for which the Architect is responsible, and so a Duty of Care is
owed to the Client.

To be in
breach of this is to be found in Negligence. An action in Negligence means that
the Architect is liable in the Law of Tort, which is imposed automatically by
the general Law regardless of the existence of a contract. Where a careless
infliction of harm or damage is thought to have occurred, a cause of action in
Negligence may arise. For this to happen:

 

·        
There must be a Duty of Care owed by the Architect
to the injured person (a professional relationship needs to have existed).

·        
A breach of this duty must have taken place and
damage must have arisen directly from it, causing the injured person to have
suffered loss or damage.

·        
The breach must have been foreseeable.

 

 

 

1.3       With reference to
the RIBA Standard Form for the Appointment of an Architect explain the purpose
of the Net Contribution Clause.

 

The Net
Contribution Clause ensures that all parties of a construction project are held
responsible where a problem has arisen. It holds each party jointly liable for
the same loss or damage, where the liability of each party is to be limited to
an amount deemed appropriate by the Courts.4

 

It is
defined by the RIBA Standard Conditions of Appointment for an Architect 20105
with three assumptions:

·        
The contractual actions of all others providing
work or services for the Project are no less onerous than those of the
Architect. 

·        
No exclusions or limitations of liability exist;
nor do any joint insurance provisions between the Client and any other
providing work or services for the Project.

·        
All those responsible for the project have paid to
the Client a reasonable sum in accordance with their level of responsibility
for the loss or damage in question.

 

Without
this clause, it would be possible for a Client to recover 100% of its loss or
damages from the Architect alone, even if the Architect and a Contractor are
both liable for the same problem. The Civil Liability Act 1978 would allow the
Architect to attempt to reclaim some of the damages from the Contractor. The
Net Contribution Clause means that the Architect’s liability is limited to the
value of the works for which the Architect is responsible.

 

Such is the
benefit of this clause that insurers of professional indemnity often request
Net Contribution to be included within a collateral warranty.

1 US
Legal, Memorandum of Agreement Law and
Legal Definition, https://definitions.uslegal.com/m/memorandum-of-agreement/,
Accessed 06/01/18

2 Harold
Stock & Co., When Is A Contract
Legally Binding?, 2013, https://www.haroldstock.com/contracts/contract-legally-binding/,
Accessed 06/01/18

3
Architects Registration Board, The
Architects Code: Standards of Professional Conduct and Practice, 2017, http://www.arb.org.uk/wp-content/uploads/2016/05/Architects-Code-2017.pdf,
Accessed 06/01/18

4 Thomson
Reuters Practical Law, Net Contribution
Clause, https://uk.practicallaw.thomsonreuters.com/4-362-5960?transitionType=Default=(sc.Default)=true=1,
Accessed 06/01/18

5 RIBA, Standard Condition of Appointment for an Architect,
RIBA Publishing, 2010, p.12