A procurement contract is an agreement between a contractor and a client that lists the rights and obligations of both parties in relation to a work to be carried out by the contractor. While it is true that all service providers should have clients sign a contract before any work is carried out, this is especially important for construction contractors. To write a procurement contract, simply follow the steps below.
Steps
Step 1. Give the contract a title
Your title should describe the purpose of the contract, for example "Contract for the Construction of a Property", "Contract for the Renovation of an Apartment", or simply "Contract for the Construction of a Property".
Step 2. Indicate the names of the parties to the contract
It specifies who are the parties to the contract and designates each as "Contractor" or "Client". For example, ABC s.r.l. ("Contractor") and Mario Rossi, ("Client") enter into this Tender Agreement for the Renovation of an Apartment.
Step 3. Enter the address where the job will be done
This is essential for the exact identification of the object of the contract.
Step 4. Describe the work that will be done
You need to be as clear as possible in outlining which job exactly is in the contract. Some things to consider:
- Incorporate another document into the contract. You may need to refer to an appraisal report, template set, or other document in the job description section of the contract, and then attach the document to the contract to include it as part (or as a full) job description. that will be realized.
- Unexpected issues and problems. Make sure you formulate the job description so that it is clear how the job will be done in case unforeseen problems arise. For example, instead of writing, "repair of the wall" write "removing the plaster and sub-plaster in the south wall of the living room, and replacing it with plasterboard". In this way, if you find moisture inside the wall, you are not obliged to repair the damage caused by this because you have not simply written 'repair' of the wall.
- The materials that will be used. Unless otherwise agreed, the materials must be provided by the contractor. In this case it is best to specify the types of material that will be used. So, for example, you should specify in the contract whether you will cover the bathroom mostly with plasterboard, to avoid extra work in case the client changes his mind and wants tiles instead.
Step 5. Describe the time frame in which the work will be completed
This should include the start and finish date of the work. For example, "The works will start on June 3, 2015 and will be completed by approximately June 10, 2015". It may be useful to indicate foreseeable events that may prevent the completion of the work by the completion date, such as certain weather conditions or delays in the delivery of material by suppliers.
Step 6. Provide your payment details
This section of the agreement should include the total amount of consideration to be paid, the date each payment is due, the amount of each payment, how the payments are to be made, and whether there are any penalties for late payment, such as these are calculated and when they will be charged. If there are other consequences for late payment, such as suspension of work, be sure to write them down in this section as well.
Step 7. Describe how any changes to the artwork will be handled
Contractors who want a written agreement signed by both parties to change the commissioned work, may write, for example, "Any changes to the commissioned work described in this agreement must be put in writing and signed by both parties.".
Step 8. Enter other clauses
So far we have analyzed the necessary content of the procurement contract. Another essential thing to add is the indication of the costs of security. The indication must be analytical, i.e. indicated item by item (for example, costs of means of protection, costs for consultancy, etc.). Check with your security advisor if you are unsure what costs to include. Other useful clauses to include include:
- Guarantees. In Italy it is not mandatory to insert specific guarantee clauses, because the legal guarantee for defects in the work operates. However, you could, for example, include specific provisions for the guarantee of the materials supplied.
- Dispute Resolution. It is possible to provide that if there is a disagreement between the parties on any matter, the dispute between the parties will be resolved through arbitration, mediation, assisted negotiation or other alternative dispute resolution tools.
- Notice of withdrawal. The Italian Civil Code grants the client the right to withdraw from the contract, even after the start of the work, as long as he reimburses the contractor for the expenses incurred for the work carried out and the loss of earnings. However, it is possible to regulate the exercise of the withdrawal differently, excluding it or placing limitations (for example, a term). If the contract says nothing, the discipline of the civil code will apply.
Step 9. Decide whether to include standard clauses
Standard clauses that can be included in a procurement contract include:
- Choice of applicable law. An applicable choice of law clause identifies the law that will be used in the event of a contractual dispute. When the contract is concluded between parties who both reside in Italy and which must be carried out in Italy, the choice of applicable law is not necessary. Otherwise, if you do a job, for example, in Switzerland, it is advisable to specify which law you want to be applied (normally, you will prefer the Italian one).
- Transferability of the contract and succession. A contract transferability clause allows parties to assign the contract to another person, for example, a company transfers the contract to another company and / or makes the contract binding on both parties' successors, or their heirs.
- Safeguard clause. A safeguard clause states that in the event that a clause of the contract is found to be void or unenforceable by a court, all other clauses will remain effective as they are, or will be changed as little as possible.
Step 10. Create the signature line
The signature line should include space for each party's signature with the name, address and telephone number listed below.
