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Construction Contracts: Legal and Practical Aspects

Lic. Eduardo Reyes Jiménez



Within any work or project, there is a whole process in the development of the same, ranging from the renderings, architectural plans, budget and costs, purchase and supply of materials, the execution of the work, and reaching the delivery and closing of the same. Every detail within the projects is essential, every centimeter counts.


However, it is important that each project has adequate protection beyond the quality of its structures, so behind each major work, there is a legal area that is responsible for ensuring the legal protection of projects with well-structured and reinforced contracts from start to finish.


First, we must understand, what is a construction contract? A construction contract is an agreement between a client or owner and a contractor, which establishes the terms and conditions under which the execution of a construction project is to be carried out. A properly structured construction contract is essential to ensure that all parties involved understand their rights, responsibilities and obligations.



There are generally two types of construction contracts:

1. Lump Sum Work

2. Work at Unit Price


The lump sum construction contract is the most widely used type of contract in the construction industry, in which the contractor undertakes to perform a specific work or project for a fixed price, previously agreed between the contractor and the client, regardless of the actual costs incurred by the contractor to carry out the work.



On the other hand, there are unit price construction contracts, which, unlike a lump sum contract, where a fixed price is established for the entire work, in a unit price construction contract, costs are calculated on the basis of the units of work performed or materials used.


In these we can agree on labor, machinery and equipment, personnel, materials, estimates and advances, thus ensuring the correct elaboration with the correct and best quality materials.


Contracts are a valuable source of project documentation. They record agreements, communications and financial records related to the work, which is useful for audits, inspections and future reference. They must also comply with applicable laws and regulations at the construction site. This ensures that the project is carried out in accordance with regulations and legal requirements.


In summary, contracts are essential in construction to establish the basis, ensure clarity in the relationship between the parties, protect the interests of the contractors, and provide a framework for the successful execution of construction projects. Their proper drafting and management are crucial to the success and integrity of any construction project.



 

Sources consulted:

- Despacho Mata. (s.f.). Contrato a precio alzado. Recuperado de: https://www.despachomata.com/cbj/publicaciones/obra-publica/contrato-precio-alzado

- TP Legal. (2018, 10 de octubre). Contrato de obra a precio alzado. Recuperado de: https://tplegal.net/es/2018/10/10/contrato-de-obra-a-precio-alzado/

- Data Construcción. (s.f.). Análisis de precios unitarios (APUs). Recuperado de: https://www.dataconstruccion.com/blog/analisis-de-precios-unitarios-apus


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