Report on customer preference Essay

History of company Nascafe The beginnings of Nescafe can be traced all the way back to 1930, when the Brazilian government, first approached Nestlà ©. The agency, Brazilian Coffee Institute seeks Nestle to preserve the huge coffee surpluses, by develop coffee that was soluble in hot water. Coffee guru, Max Mergenthaler, and his team set out immediately to find a way of producing a quality cup of coffee that could be made simply by adding water, yet would retain the coffee’s natural flavor. After seven long years of research in Nestle Swiss laboratories, they found the answer. The new product was named Nescafe – a combination of Nestlà © and cafà ©. Nestle introduced Nescafe, the first commercially successful soluble coffee, in Switzerland, on April 1st, 1938. The company applied the technology at its Hayes factory, west London. Instant coffee processing was not a new idea; it was invented by a Japanese chemist in 1901 and had been marketed and sold by other companies without success. Nestle revolutionized the way instant coffee was made. Nestle developed a new process for dehydrating the concentrated coffee which vastly improved the quality. In entailed spraying a fine mist of the solution into a heated tower where the droplets turned to powder almost instantly. For the first half of the next decade, however, World War II hindered its success in Europe. Nescafe was soon exported to France, Great Britain and the USA. Its popularity grew rapidly through the rest of the decade. It was so popular that the entire production of its US plant was reserved for military use. By the 1950s, coffee had become the beverage of choice for teenagers, who were flocking to coffeehouses to hear the new rock ’n’ roll music. Over the years the company has kept the emphasis on innovation, introducing pure soluble coffee (1952) solely using roast coffee beans, freeze dried soluble coffee (1965) and coffee granules (1967). In 1994 Nestle invented the full aroma process, which improved the quality of instant coffee. Such innovations have made sure that Nescafe has remained the world’s leading coffee. It is also the third most valuable brand in the entire drinks sector. MISSION STATEMENT: To bring Nescafe to people around the globe, providing a Nescafe to satisfy every aspect of needs. Nescafe provides good test, aromatic smells of coffee to people, providing â€Å"1 Nescafe with 1 unique moment† so that everyone can enjoy. Wherever you are, you will be able to find Nescafe around, whether in shopping complexes, supermarkets/hypermarkets or even grocery stalls. GOALS/ ACHIEVEMENTS: Giving people the unique moments (comfort, relaxations) through Nescafe. Stress, pressures, working overtime has led the people to have at least a cup of Nescafe coffee to relax them, having chit-chat with friends/colleagues as well, to prevent from emotional influences. BRU Some moments in life are special and close to heart. Bru makes these moments with loved ones even more magical†¦ It is India’s largest coffee brand that offers a range of coffee products. Its rich aroma and unique blend makes every moment come alive. Ever since its inception, Bru has been on a constant Endeavour to bring better products and formats to the consumer with every passing year. With the launch of Cappuccino in 2007, Bru pioneered the launch of instant coffee premixes in India for the youth. Then in 2010, a premium filter coffee with a blend of 85% coffee and 15% chicory was introduced under the brand name BRU Select. In 2011, BRU Lite, a light-tasting coffee with classic Mocha flavor, was launched for people who avoid coffee because of its bitter taste. In the same year BRU Exotica was launched which is premium freeze dried coffee sourced from some of the world’s best coffee-producing regions like Colombia, Brazil and Kilimanjaro. With BRU Exotica, Bru brought in ‘the world’s finest coffee experience’ for the discerning Indian consumer. Later, in the same year, BRU Gold – a 100% pure granulated coffee with an uplifting aroma and superior taste – was launched. Bru’s specially selected and freshly roasted coffee beans offer a great cup of aromatic coffee to the consumers, which makes their moments of genuine warmth and happiness even more special. Bru also has opened cafes in Mumbai under the name BRU World Cafe with world coffee experiences to be enjoyed out of home. KEY FACTS Number 1 Coffee brand in India Unilever’s only Coffee brand Enjoys a rich heritage, came into existence in 1962 under the brand name Deluxe Green Label Consistently offering better and newer products to the consumer through improved packaging solutions and innovative product formats Enjoys a strong presence at various out of home locations MISSION To earn the loyalty of customers and grew the business by developing and marketing coffee products that are leaders in quality and customer enthusiasm. VISION We envision Bru to become the coffee supplier of excellence to its customers throughout the region, by consistently delivering exciting products, sensation and experiences to an increasing number of admirers SCOPE AND OBJECTIVE OF THE STUDY SCOPE: Generally scope can be considered among two parts: 1) Regional Scope 2) Functional Scope Here our regional scope is limited up to Gandhinagar (Sector 23) OBJECTIVES: There are mainly two types of objectives: 1) Primary Objective :- To analyze the customers preference with respect to (Nescafe and Bru coffee) 2) Secondary Objectives :- To know customers suggestions and recommendation about (Nescafe and Bru coffee) To Study the Consumer Perception about the taste and availability of product. RESEARCH METHODOLOGY INTRODUCTION OF RESEARCH: Research is done to gain some knowledge so it may aid in understanding the information gathered on specific topic. It is a scientific and systematic way of understanding information on specific and particular subjects. It is a scientific investigation to understand the cause and effect as well as the reasons through investigation. It is an academic activity. Research is a process in which the researcher wishes to find out the result for a given problem and thus the solution helps in future course of action. SOURCES OF DATA COLLECTION PRIMARY DATA SOURCE: The primary data means the data gathering for first time for the problem solution directly from the sample or population as per the requirement. Interviews Questionnaires Observation SECONDARY DATA SOURCE: The secondary data consists of information that has been already exists somewhere and has been collected for some specific purpose. Books Website Journal Annual Report For this research, we used Primary data (Questionnaires) as well as secondary data (Books, Website) RESEARCH DESIGN RESEARCH INSTRUMENT: Questionnaire- Face –to –face Close ended Open ended SAMPLE SIZE: Sample Size is taken 50 out of which 8 questionnaires had been rejected due to different choice of respondent as per our research. DATA ANALYSIS Q1. What do you prefer? Particular Respondents Coffee 18 Tea 8 Both 24 TOTAL 50 Q2. How many times in a day would you prefer it? Particular Respondents One time 20 2 times 16 More than 2 times 6 TOTAL 42 INTERPRETATION = Major of the sample size use to have coffee one time in a day. Q3.How many members of your family prefer to have coffee? Particular Respondents 1 10 2 3 3 20 All 9 TOTAL 42 INTERPRETATION = From the example size we find that 50% of the family members using coffee. Q4. Which coffee brand do you prefer? Particular Respondents Nescafe 35 Bru 5 Other 2 TOTAL 42 INTERPRETATION = Majority of choice about coffee is given to Nescafe. Q5. From where did u see our product? Particular Respondents Advertisement 12 Own experience 22 Reference 18 TOTAL 42 INTERPRETATION = Majority of people are choice Nescafe from their own experience. Q6.Are you satisfied with your product and advertisement? Particular Respondents Yes 35 No 7 TOTAL 42 INTERPRETATION = 75% people of our survey are satisfied with the product and its advertisement. Particular Respondents Yes 30 No 12 TOTAL 42 Q7.Where you influenced by the brand ambassador of our product and started drinking it? Q8. How frequently do you buy it? Particular Respondents Every week 17 15 days 20 1 month 5 TOTAL 42 INTERPRETATION = The area which we have survey we found that 20 out of 50 are buying coffee in 15 days. Particular Respondents At home 20 In cafà © 10 Roadside 12 TOTAL 42 Q9.Where do you prefer drinking it? INTERPRETATION = Most of the people are prefer to drink coffee at home. Particular Respondents Caffeinated 6 De- Caffeinated 36 TOTAL 42 Q10. Which one does u prefer? INTERPRETATION = Most of to people love to drink de-caffeinated coffee. NESCAFEE BRU HS S DS NEU HS S DS NEU price 5 20 17 8 2 2 1 1 taste 5 10 7 3 1 2 1 1 quality 10 13 10 6 3 2 3 2 quantity 15 1 8 7 3 3 1 1 healthiness 10 1 10 9 1 1 2 2 Q11. Why do u prefer specific brand, rank it on the following basis: INTERPRETATION = The reason to chose Nescafe is on following basis Price – customers are satisfied with the price of product Taste – Customers like much better test of Nescafe then Bru any other brand. Qualities – Customers are satisfied with the quality of Nescafe and they are neutral at quality. Healthiness – Preference to healthiness is satisfying to the customer. RESEARCH FINDINGS On the basis of that research we find that in case of coffee people are much influenced by taste rather than Advertisements and other things. If the Buying decision of consumer is rated – 1st preference will go to Taste, 2nd will go to Availability, 3rd preference will go to schemes, 4th preference will go to likeness, and 5th preferences will go to Advertisement. LIMITATIONS OF REPORT We put our whole heart on this project. But still are certain limitations while doing the research work. Some of the limitations are as follows. As we did our project in limited area of our residents, so it becomes difficult to conduct survey. We take only 50 respondents it is too small for find out the consumer perception. There might have been tendencies among the respondents to amplifying or filter their responses under the testing. In some cases, the respondent was not giving us the proper reply. He/she might think that this is only wastage of time or this might create some problem etc. And as a result he/she has given some fake answers and fills the questionnaire very casually. CONCLUSION Coffee is a major export commodity in developing country like India liberalization of coffee market has given rise to competition and to survive in this competitive market newer and newer strategies are need to be formed to take the advantage of opportunities arising in this market. In Indian market there is a huge sector who using the Nescafe compare to Bru and other. On the basis of price, taste, quality, quantity, healthiness. BIBLIOGRAPHY INTERNET: www.nescafe.com www.brucoffee.com www.google.com www.wikipidia.com BOOKS: Magazines Research Methodology by C.R Kothari QUESTIONNAIRE Respected Sir/Madam We are MBA student of SKPIMCS. As of the course of our curriculum, we are doing the market research. Therefore, I need your valuable view for the question given below. I will be highly grateful to you. Q1. What do you prefer? Coffee Tea Both Q2. How many times in a day would you prefer it? One time 2 times More than 2 times Q3.How many members of your family prefer to have coffee? 1 2 3 All Q4. Which coffee brand do you prefer? Nescafe Bru Others Q5. From where did u see our product? Advertisement Own experience Reference Q6.Are you satisfied with your product and advertisement? Yes No Q7.Where you influenced by the brand ambassador of our product and started drinking it? Yes No Q8. How frequently do you buy it? Every week 15 days 1 month Q9.Where do you prefer drinking it? At home In cafà © Roadside Q10. Which one does u prefer? Caffeinated De-caffeinated Q11. Why do u prefer specific brand, rank it on the following basis: Nescafe Bru Others HS S D.S Neutral H.S. S D.S Neutral H.S. S D.S Neutral Price Taste Quality Quantity Healthiness

Eharmony Examination

What kind of a platform business is the online personals market? What kind of network effects (direct, cross-sided, positive, and negative) does it leverage? How structurally attractive is it? The online personals market is a specific niche of social networking, and it is a sole-sponsor, proprietary platform business. In terms of network effects, it could be seen as a one-sided network (users can instigate an interaction, or can have someone else instigate an interaction with them), but is better described as a two-sided market with men on one side, and women on the other (with the exception of homosexual sites which are clearly one-sided markets). Within this, there are both direct and cross-sided network effects. For direct, there are small positive effects (as a man, you want enough men on your side to attract women on the other side), but primarily negative effects (the more people on your side, the more competition you will have finding a match). For cross-sided, there are positive effects (the more of the opposite sex there are, the more likely you will find a match), and negative effects (if there are too many people on the other side, it may be hard to search through the noise to find an actual match—not to mention that there can be liars, frauds, and other undesirable people on the other side of the network). To examine the attractiveness of the industry structure, a five forces analysis will offer us insight. First, we can consider buyers’ power. In this case buyers (prospective daters) do have some power in that there are a plethora of other options online (from Match to free sites), as well as any number of venues in the real world. However, since they are individual consumers, they do not have scale power and must accept prices. Further, there is an overall opinion that meeting the right person is very hard, and thus there is a significant willingness to pay for a quality service. Second, looking at the competitiveness of rivals, it is clear that there is a significant amount of competition (though concentrated within a few main players). Match is trying to copy eHarmony with Chemistry, and they have been increasing spend on advertising. Yahoo! also boasts a strong installed base that they can funnel into their Personals site. In addition, free sites keep everyone in check in terms of the amount they can charge. Nevertheless, the main players have demonstrated price discipline, as prices have remained steady or even risen (in the case of the competition). Third, the threat of new entrants is low / moderate. There are a hundreds of niche sites starting up every year, but for the most part, the built-in network effects of the three main players, as well as multi-homing costs, have kept the three leaders consistent over the years, and each year the vast majority of new sites fail. The biggest threat would be for a behemoth like Facebook to activate its users on a proprietary site, but so far this has not materialized for a number of reasons. Fourth, the threat of substitutes is always present. In addition to the numerous ways that people can meet partners in the real world, there are also real world match services that pre-date the internet (as well as the threat of new technology and innovations changing everything). However, for the time being, online personal sites are clearly the most efficient and affordable option for the masses. And lastly, there is really no bargaining power of suppliers. eHarmony controls all of its inputs. Thus, the sum of these parts leads to a pretty attractive industry. It is not a winner-take-all market (multi-homing costs, while present, are not overwhelming, and the case mentions that many people are members of multiple dating sites), but the significantly strong network effects and stability of a few main players lead this to be a profitable industry ( primarily for the incumbent leaders). What is eHarmony's competitive advantage? What differentiates it from its competitors? How does the company create value? What is the value proposition to the customer? What kind of customer benefits the most? Can we calculate the company's competitive advantage by relying on the equation of willingness to pay minus cost, as discussed in the Google versus Microsoft session? Is the competitive advantage sustainable? The main competitive advantages of eHarmony are in its ability to offer high quality customers (which is the really the â€Å"product† they are offering), and more accurate matches with superior ensuing relationships. Just as Google’s research and continual adjustments give it an advantage in offering more relevant searches, eHarmony’s research department has created a match algorithm that greatly outperforms the results of its competitors (and arguably the traditional methods of meeting, as well). Further, their long initial setup process serves to self-select only the most serious of consumers, which leads to an increased WTP of everyone who makes it through (and additionally, this has led to more women than men signing up—an extraordinary feat since women have been the hardest customers to acquire in the online dating world). The company differs from its competitors in its guided matchmaking (though Match has recently tried to copy this). Rather than allowing free range for the users to search through the database of potential mates, eHarmony first weeds out the non-serious and non-desirable applicants with its extensive questionnaire, and then uses its patented algorithm to find the best potential match. It takes this even further by then scrutinizing each potential match with additional questions before an actual interaction can begin, and this has ensured a much more accurate product than its competitors. The company creates value by doing a lot of the work for its clients. While the initial time investment (45 minutes) may be longer than the traditional model, it then provides the service of searching through the millions of potential matches. This not only proves to be a more accurate way to find dates, but also saves a great deal of time (where most online daters spend a 7 times as much time searching for a partner as they do interacting). And for men, who are usually fighting over a scarcity of women, they benefit from the majority percentage of women who have become the core of eHarmony’s paid customers. Thus the value proposition for the customer is: better matches (and better quality people) with a much smaller time commitment. The customers who benefit most from this are people who are serious about finding a person for a long-term relationship (rather than those who are just browsing, or hoping to have flings with as many people as possible). With eHarmony’s superior product, we can calculate that their competitive advantage? (WTP-Cost)eHarmony> (WTP-Cost)Chemistry. In this case, eHarmony’s average price (of the four options) is $37. 45 versus $34. 14 for Chemistry, demonstrating the increased WTP of their customers. Further, their advertising strategy (avoiding costly broadcast networks in favor of more cost-effective national cable buys) has helped to keep costs down significantly in comparison to its rivals. By building up network effects and switching costs (including termination fees and amount of time / information invested in their platform), this can be a sustainable advantage. But as with all social media, creating insurmountable switching costs is never really possible, and there is always a risk of new competitors or a game-changing technological shift. And the uber-popularity of sites like Facebook pose a significant threat, as they could integrate a sophisticated dating platform into their current offering, and instantly have hundreds of millions of potential customers at their fingertips. How much of a threat is Chemistry to eHarmony? How could Chemistry break eHarmony's network effects (direct and cross-sided)? As with Google’s search versus Bing, eHarmony is in a very advantaged and enviable position versus Match’s Chemistry offering. The eHarmony product is clearly superior, with the eHarmony benefitting from years of learning and tweaking their algorithm (again, similar to Google’s position). Further, their ability to point to the number of successful relationships they have continues to grow, and thus feeds the virtuous circle by attracting new customers. That said, Chemistry cannot be taken lightly. Match comes in with the deep pockets of IAC, and the ability to match any investment that eHarmony makes—and we have seen this recently with their increased marketing spend. As a latecomer, Chemistry comes in with the benefit of being able to ride on eHarmony’s coattails, learning from their success and mistakes and copying their offering. Further, most of what eHarmony offers while sophisticated, is not inimitable. In terms of ways that eHarmony can break eHarmony’s network effects, they can certainly subsidize some of the switching costs (leave eHarmony and your first month or two are free). Since women are the hardest customers to attract (and wherever they go, the men will follow), they could selectively subsidize the women—e. g. – women pay half price, and once they have built up a vast network of women, they would be able to charge a premium for the male customers. They could also beef up their offering so that they not only cover meeting people, but weddings, having children, and other stages of life that would enable them to extend their customers’ lifetimes (as eHarmony has considered). Another potential idea would be to create a network of niche sites all under the Chemistry banner where there would be sub-sites focused on a number of specific niches (based on lifestyle, religion, sexuality, etc. ) and allow people to join the main site, plus one or two of the niche sub-sites for free. However, most importantly Chemistry needs to dramatically improve its matching competency. As a latecomer facing a dominant incumbent, it has to offer better results than eHarmony if it’s going to break the network effects and challenge for the top position in the market. That is not an easy task to accomplish, and it will cost a lot in research (to improve their matching skills), and then marketing (to let potential customers know about their improved product). Due to resource constraints (and need for strategic focus), eHarmony can only pursue one of the options: how would you go about ranking their relative merit? Once you have done that, choose your top-ranked option and evaluate it. To evaluate the four options on the table for eHarmony, we need to examine their merits on a number of key dimensions. First, how does the strategy fit in terms of the company’s current competencies and competitive advantage? Second, how does it serve to bolster network effects and strengthen the relationship with the current core customers? Third, how well does it address the competitive threat? And fourth, how does it position the company for future growth opportunities? {draw:frame} Upon consideration of these dimensions, it is clear to me that the best option is to grow the new business of handling life transitions. This is the most comprehensive strategy in terms of addressing the various needs of the business. If this were a winner-take-all market, then defending the niche by rapidly increasing the number of paying members would be the correct strategy, but since multi-homing costs aren’t overwhelming, we’ve established that this is not a winner-take-all market. Expanding to medium-term relationships does offer the upside of immediate growth opportunities, but more importantly, it unravels the competitive advantage and value proposition of having top-quality, like-minded individuals who are willing to pay a premium for a better chance to meet a life partner (in some ways it is almost a different business). Lastly, geographic expansion seems perfectly poised for disaster. While it would be the best opportunity for growth in both the near- and long-term, it also goes against the competitive advantage of offering the best matches based on detailed knowledge and understanding of their consumers. To do it properly, they would not be able to transplant the knowledge they’ve gained in the US, but would need to start again with new research in each country they wanted to expand into which is not an efficiently scalable model. Thus that leaves us with expanding into the new business of handling life transitions. This offers the opportunity to have balanced growth—the lifetime of the customer grows from the â€Å"finding a partner stage† to a potential for many years or even life. It also allows the company to capitalize on and build on the goodwill that they earn from their customers when they provide a positive (and life-changing) match, and diversify its revenue stream from purely subscription based into a mix of subscription and advertising. Further, the ability to keep customers longer can help to bolster the network effects as the network becomes larger and offers more value. It also increases switching costs the more that one invests in building up a personal eHarmony ecosystem. In doing so, it addresses the competitive threat by beating the competition to further innovate and lock-in the customer base. And lastly, it builds on the current competencies and competitive advantages by leveraging the advanced research skills that are a large part of eHarmony’s success, with the collective R and knowledge serving as a barrier to entry for potential new entrants. In order to successfully execute this strategy, there will be the need for additional resources. However, this will not be overwhelming and can all happen with internal investment. They will only need to build out and expand eHarmony Labs to continue the expanded focus from forming relationships, to the ensuing events that occur in each relationship. With the project already underway and experienced research scientists already on the payroll, eHarmony is in a much better position to act on this than its competitors. There will some additional marketing and sales investment needed to attract new customers who are already involved in committed relationships, but the majority of its growth will be organic in that they will be able to keep their â€Å"matching services† customers for much longer, and greatly reduce the churn rate. In terms of the competitive threat, I believe this will be enough to stay ahead of Match / Chemistry, and Yahoo! (as well as other new entrants). The name of the game is bolstering network effects, switching costs, and multi-homing costs to carve out a significant and stable market share, and this strategy accomplishes all three. With more offerings, eHarmony should be able to capture more users (as well as keeping them longer) which will continue to feed its network effects. Additionally, having all of these services under the eHarmony banner will increase the amount of time and information supplied by the customers, and thus increase both switching and multi-homing costs. As a response, eHarmony can expect the others to copy, though eHarmony is far ahead and better positioned in this field, so this is not an immediate threat. Additionally, they may find pricing pressure as the ompetition resorts to more desperate measures of cutting price (since they will not be able to compete on the product). In regards to this, they need to be firm in their pricing, knowing that they have the superior product, and continue to build up switching costs to keep their customers captive for the long term. With a superior product and strong network effects in place, eHarmony can expect a profitable life in the near future. EXT RA CREDIT: â€Å"Yellow Submarine,† â€Å"With a Little Help from My Friends,† â€Å"Act Naturally†

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Unit 2 Discussion board - Essay Example In this assignment, I am going to discuss about the episode of Enron Company and how their leadership used power to commit one of the heinous corporate crimes in the history of the world besides discussing some of the ethical lapses being committed by the organizational of Enron as well as political leadership of the United States of America. The ENRON scandal started as an accounting scandal however behind there is a whole story of power corruption and misuse of resources and powers to conceal and misrepresent the facts. It was discovered that irregular accounting practices which can easily be characterized as fraud were adopted in order to cover up the declining performance of Enron throughout the 1990’s decade. The major players involved in this whole fraudulent activity included not only the top management of the Enron specially Mr. Kenneth Lay, the CEO of the company and Mr. Jeffery Skilling but major role was also played by Enron’s auditors i.e. Arthur Anderson. The creative accounting behind this whole episode was crafted by opening special purpose entities or limited partnerships which Enron controlled. Resultantly all debts and losses that it suffered were transferred to these SPEs and were not appeared on the financial statements of the Enron. With the help of these SPEs Enron not only got the fre edom to move the currency besides having full anonymity which basically helped them to hide the losses it suffered by dumping them into the financial statements of these Special Purpose Entities Apart from being the involvement of the top executives of the company there were reports which suggested the involvement of the Clinton administration during the 1990s era. (Smith, 2002). Not only the involvement of ENRON into concealing the facts, it was also believed that ENRON executives exceeded their original mandate to involve the company into Political affairs even

Kohlberg's Stages of Moral Development in Thank You for Smoking (2005) Essay

Kohlberg's Stages of Moral Development in Thank You for Smoking (2005) - Essay Example Some of the characters in the film swing across these moral stages, depending on their changing goals and target audiences. Characters in â€Å"Stage 1: Obedience and Punishment† display morality that comes from following authority (Crain, 1985). Nick Naylor (Aaron Eckhart) shows Stage 1 morality because he is initially focused on what his boss and company think is right. Instead of following the government or traditional social norms, Naylor follows the goals and norms of his company and boss. Naylor’s boss BR (J.K. Simmons) seeks for ideas on making smoking a more lucrative business. He tells Naylor: â€Å"We don't sell Tic Tacs, we sell cigarettes. And they’re cool, available, and addictive† (Sacks & Reitman, 2005). Naylor responds with a recommendation of product placement in the movies. He is responding to the pressure of doing what is right, based on what his company demands from him. Furthermore, Naylor displays loyalty to his boss, even when the latter does something wrong. BR steals Naylor’s idea of product placement in the movies and presents it to Captain (Rob ert Duvall) as his own. Naylor does not correct Captain anymore for fear of reprisal. Morality, in this stage, is â€Å"external† to the people, and not something they feel they must be personally responsible for, so they follow their bosses as the basis of their morality (Crain, 1985). Aside from Stage 1, characters in Thank You for Smoking exhibit morality in â€Å"Stage 2: Individualism and Exchange,† when they focus on the relativity of morals and the importance of making compromises to gain something. Naylor shifts to Stage 2, when he explains to his son that being right heavily relies on one’s argumentation skills. He tells his son: â€Å"That’s the beauty of argument, if you argue correctly, you're never wrong.† Morality is relative to the person doing the argumentation and his/her persuasiveness. Furthermore, flexible morality is another indicator of an individualistic approach to morality. Naylor admits to his son that to be in his job, he must have â€Å"flexible morals† (Sacks & Reitman, 2005). Flexible morals allow him to stay unaffected of the negative views on tobacco smoking. Jeff Megall (Rob Lowe) is another example of someone who manifests Stage 2 because he is not concerned of maintaining the social order or universal principles. Megall emphasizes that individuals have different opinions, so he calls himself a â€Å"facilitator† because â€Å"people decide for themselves† (Sacks & Reitman, 2005). He believes in the individual differences of morality and does not judge them. Heather Holloway (Katie Holmes) illustrates Stage 1 morality too because she exchanges something to gain another. She enters into a sexual affair with Naylor, so that she can access and expose his secrets as a reporter (Sacks & Reitman, 2005). These are examples of people, who believe in individualistic views of morality, as well as the flexibility needed to undergo social transactions for the purposes of personal gai n. The next stage is â€Å"Stage 3: Good Interpersonal Relationships,† and characters show this level of morality, when they do what is good based on what their family and community value as good behaviors (Crain, 1985). Naylor wants to be a better father to his son. In order to do this, he thinks that it is right to spend more time with him. Joey’s mother and stepfather are alarmed of what he is learning and inhaling from his father, but Naylor does not care, because he simply wants to have more quality time with Joey (Sacks

Buddhism 'psychological' Essay Example | Topics and Well Written Essays - 500 words

Buddhism 'psychological' - Essay Example Buddhism is typically an Eastern religion for it focuses on human suffering and offers practical solutions to counter it. Rather than dealing with the paranormal and the supernatural, it is a practical philosophy toward life. In other words, Buddhism can be seen as offering psychological insights into the workings of the human mind, an understanding of which will benefit the individual subject. Both Buddhism and psychology can be seen as systems of philosophy. The idea of detachment is a central Buddhist doctrine, which has strong resonance in modern psychoanalysis. Since much of human suffering arises from the loss of an attached object (which could be material, personal or emotional), Buddhism advices the practice of detaching oneself from such objects as a way of preventing hurt and loss. This idea is also expressed as the achievement of a state of lack of desire. But therein lies an important contradiction. If an individual sets a goal of attaining a state of lack of desire, then he/she is getting attached to the goal. This paradox also has parallels in psychology, where it is referred to as neurosis. Just as desire is what brings about most human suffering, so does neurosis the cause of most psychological disturbances such as anxiety, panic, depression, obsessive behavior, etc. In this way there are strong similarities between Buddhism and psychology. Buddhism can be considered psychological in that it recognizes the importance of the psyche in perceiving and ascertaining the material world. It says that by controlling ones mind and shaping ones thoughts a great deal of personal tranquility can be achieved. Therapeutic techniques in psychology also attempt to do the same. The only difference is that while Buddhism uses the revelatory knowledge of Gautam Buddha in teaching these techniques, modern psychology employs quasi-scientific theories about cognition and mental conditioning as part of the treatment. To the extent that prevailing

The Adventures of Huckleberry Finn and 19 century American Society Research Paper - 2

The Adventures of Huckleberry Finn and 19 century American Society - Research Paper Example Other Calvinists also explained that the salvation was held in the hands of God. In the nineteenth century evangelicals like Finney and other evangelicals were in the fore front to preach to the sinners. They focused on the sins of the human beings in action. They also preached about the hellfire in order to try and divert the sinners from the exercise. They went ahead and insisted that the sinners were supposed to repent and get away from all the sin. In the nineteenth century, the Protestants through the evangelicalism laid much emphasis on the conversion. This was obliged by ideas about the sinfulness of the human beings after the fall of Adam and also the omnipotence of God. It is said after all this that God has got mercy towards his people and he promises them salvation after all these. The evangelicalism also laid strong emphasis on the how Christ died on the cross for the sake of the sins of the humans. They tried to explain that the best thing to understand is that conversio n was just an experience and it was not hard. Many of the people did not believe the message that these evangelists gave. Believing was a very important thing and so for the evangelists I was not easy to convince the people. But still what they preached was heard by many people and though many would have not responded but they were psychologically transformed. (Claudia 2006). This did not just leave them as the ordinary people they were there before but it came to be like a transformation and most of them had changed and they had those characters of Christians deep inside them2. The evangelicals explained that what happened to them was a spiritual rebirth and death of the old someone to the transformation and the birth of another person who has gone through transformation. Conversion consisted of steps that had to be followed.  

A Runaway Slave on the Underground Railroad Essay Example for Free

A Runaway Slave on the Underground Railroad Essay The heat here is terrible. Sticky, thick heat that sticks to your skin and clothes and makes it hard to breathe. The mosquitoes only make it worse. They don’t even wait for nightfall to come out anymore, but buzz around all day and torment us out in the cotton fields. I’ve got welts from their bites all up and down my arms and legs, and I’m afraid it won’t be long before there’s a yellow fever epidemic. As you know, it’ll be the babies that go first if that happens, poor little things. Clara just had her fourth last month, and Ether had her third just this week. There’s no rest for them, though. No, they had to be up and in those fields again the very next day after giving birth, carrying their little babies with them. You know we have to work from dawn to dusk, with only a short break to eat in the middle of the day. The overseers are always watching us, always so quick to strike out at us with the whip if they think we’re slacking off or not working hard enough or fast enough. We get so hot and tired and thirsty in those cotton fields, but there’s little in the way of relief except for a barrel of water with a ladle we all get to share from. I wish I was one of the house slaves, then I could be out of this heat and sun beating down on my back. The house slaves are treated a lot better than we are. They get to raise the white children and cook the meals and do the laundry, and become almost a part of the family. Oh, those white children love their black nannies! But I guess I’m not smart enough or pretty enough to be kept in the house. I’ve got another baby on the way, my second. I hope this one lives. I’ve determined to get out of here. I can’t go on like this. I hear there are people who will help. You’re lucky, Aunt, that you had a kind master who gave you your freedom, and that you found a good man to marry and take you up North where you can be free. If I find a way out of here, can I stay with you until I find work and a place to live? I’ve got to go now and take this letter to the house slave from the farm next door who will mail this for me. I can’t let anyone see me go, and I can’t let anyone know I can read and write a letter. That’s illegal here, did you know. Slaves aren’t supposed to be educated. So, I’ve got to sneak over there in cover of darkness. I hope to write to you again soon. Your loving niece, Libby July 17, 1853 Charleston, South Carolina Dear Aunt Betsey, The house slave from next door I told you about, remember him? His name is Milton. He’s the father of my baby, but as you know, slaves aren’t allowed to marry here. Anyway, he tells me he knows some people who will help me escape. They’re good people, he says, white people who hate slavery. They will get me off the plantation and to a safe house somewhere. Then the people at that house will get me to another house, and so on, all the way up to the North. I’m going to tell them that I want to go to my aunt Betsey Martin’s house in New Bedford, Massachusetts. I hope that’s all right. I hear New Bedford has a large population of us colored folks, and that we live right along with the white people there, side by side (McKivigan, 1999). I also hear there are good job opportunities, and that my baby can go to school with the white children. I don’t know when all of this is going to take place, so I can’t give you a time yet that I might be there, if this all works out and I don’t get shot trying to escape, or dragged back here to be whipped nearly to death, or worse. I admit, I’m scared of what might happen, but I have to try, for me and for my baby. Milton says he will follow me, as soon as he can. Your loving niece, Libby September 23, 1853 Ashville, North Carolina Dear Aunt Betsey, Well, I did it! I escaped the plantation. Three nights ago, I snuck over to Milton’s farm like I always do. I had packed a little bundle of most of my belongings that I slung over my shoulder. It wasn’t much. Just one other dress (my good one), some handkerchiefs, a hair brush, and some hard tack to eat, that was all. I knew if all went well, I wouldn’t be coming back. I won’t miss that plantation at all. I have no ties there, as you know. No family, since I was sold from the plantation where my mama and papa and brothers and sisters were 5 years ago. They sold my brothers and sisters at the same time as me, and I have no idea where they went. I guess I should count us lucky we got to stay together until I was 13. Not many slaves are that lucky. I’ve just been living in a cramped cabin with 5 other slave women with no family on the plantation, and they don’t care much what I do. They know I have a beau next door, and they keep quiet about my comings and goings, as most of them have beaus of their own they have to sneak out to see. At Milton’s farm, there were two white men and a white woman waiting inside Milton’s cabin. Milton lives on the edge of the property, near the fence, so no one from the house was likely to see the horses standing outside the cabin, and all the lanterns were blown out to make it extra dark besides. These white people were there to take me to a safe house in North Carolina. They had a horse for me, and some food in a little basket. I said my good-byes to Milton as quickly as I could, and he promised to come to me as soon as I was settled. Then, I got on my horse (I was scared, as I’d never ridden a horse before) and followed the white people on their horses into the woods. In two days, we came to the home of a nice store keeper and his wife, and they hustled me inside, where I’ve been staying in a nice, clean, cool bedroom with a real quilt on the bed and a wash basin to wash my face in the morning and water to drink whenever I want it. The woman of the house even gave me a new dress to wear. I’ve never felt so good, so clean. I’m to stay here until a new group of people comes to take me to the next stop. The woman of the house here said I’m now on the Underground Railroad. That’s what they call these safe houses along the way to the North (â€Å"What Was the Underground Railroad? †, n. d. ). The Underground Railroad. I like the sound of that. It’s the Underground Railroad to freedom. Your loving niece, Libby October 6, 1853 Alexandria, Virginia Dear Aunt Betsey, I think I am getting closer to you. One of the children in my new safe house showed me a map of the United States and showed me where I am now and where you are. On a map, it does not look so far away, but I fear the journey is still many miles yet. There was such a commotion in North Carolina, you would not believe! About a week after I escaped the plantation, a group of armed men came riding through town, putting up signs with a drawing of me on them, announcing a runaway slave and a reward for my return. The woman of the safe house dressed me up as a man, and hid me in her attic until the men had ridden through town, just in case they should come inside looking for me. They did not come in, thanks be to the Lord, but they did ask a the door if anyone had seen me. I was so afraid I would be given up for the reward, but these were good people who were protecting me. I never went outside the house, even to go to the outhouse, so there was never any chance of being seen and recognized by one of the townsfolk (I had a chamber pot for my use, and it was the job of one of the children to empty all the chamber pots every morning). I don’t remember how many days I was in the North Carolina safe house. One night, though, two free black women came to get me, and we walked together into the woods. We walked and walked, sleeping during the day and walking at night when it was easier to be invisible. They told me I was lucky, that most slaves who escaped the plantations didn’t have anyone to help them until they got further north. They said the Underground Railroad didn’t have too many operations in the South, at least not yet, and that most slaves were on their own in getting to that first stop on the Railroad (Blackett, 2002). I was lucky to have Milton, who knew the right people. These free women lived in New York state, but they were former slaves themselves, and they made it their business to help other slaves to escape to freedom like they did. They said they made many runs along the railroad to collect people, like they were doing for me. We must have walked for a week, but I lost track of the exact amount of time. Fortunately, I’m not showing in my pregnancy yet, so I don’t have a huge belly to carry around with me, and I can still run pretty fast when I have to. We’ve been lucky in that we haven’t encountered those men who were looking for me, and the only thing we ever had to run from is the occasional skunk or wild boar. I think god is looking out for me on this journey. We got to the next safe house in Alexandria in the middle of the night, just like before. This time, it was a family of Quakers who took me in. Quakers are some of the most active Christian abolitionists involved in the Railroad (Wallis, 1983). I found that I was not the only slave waiting to be taken North. There were six others waiting, three men, a younger boy who was almost a man, and two women. We stayed all together in the barn, but it was a nice barn, clean and full of sweet-smelling straw for us to lay on, and we were fed three large meals a day. We didn’t have to do any work. The family wanted us to learn a different way of life, one where we didn’t have to do all the work all the time. They wanted us to experience getting waited on. I must admit, it was strange, but it felt strange in North Carolina, too. I liked it, but I think it’s going to take some getting used to before not doing everything myself begins to feel anything less than strange. Your loving niece, Libby

Literature Review on Contractual Issues Arising Claims

Literature Review on Contractual Issues Arising Claims Avoiding construction claims and disputes requires understanding of the contractual terms, early no adversarial communication, and understanding of causes of claims.(Cheryl Semple, Francis T. Hartman, and George Jergeas) identify some of the critical element in construction contract, and investigates the causes of claims, categories of compensation of claims and contract clauses quoted in claims by studying high-rise apartment building and institutional buildings. Construction contract determines the basis for the relationship between the parties involved in it. A contract is a promise or agreement that the law will enforce. Construction contract are very often long, complex document, consequently, disagreement or disputes can arise regarding contractual obligations or expectations, when one party feels that the contractual obligations or expectations have not been meet and they fell that they deserve monetary and/or time compensation they may submit a claim. A claim is defined as an assertation to the right to remedy, relief or property (Canadian Law Directory) Currently construction industry in UAE has number of disputes arrives because of disputed in legal document and poor coordination in general and particular condition of contract. UAE is fast growing country in terms of construction and lots of competition for getting the project because of that contractors are bidding less and claiming more amounts. A client tries to reduce the over all cost of project and contractors tries to get more profit and result is disputes arise. Every claim submitted by the contractor puts presser on client and consequently it affect increasing property price. That is why construction claim are considered as the most unpleasant event in construction industry. Claims can be reduced by proper arrangement of scope of work in contract document. Contract is the document which explains all rolls and liabilities of the parties involved in it. For the purpose of study for analyzing contractual issues literature review is divided in two parts. First part will discus s on Contract law in general and particular terms used in formation of construction contract. Second chapter will discuss on Claims under FIDIC contract and previous research in claims. 1 Introduction to contract law 1.1 Legal systems A legal system, is a system for identifying factual situations where the state will impose sanctions on a person (criminal law), where one person can seek redress from another person (civil law), and where a person can challenge decisions of the state and public bodies, such as local authorities (administrative law)1. For example: If someone takes property belonging to another with the intention of permanently depriving them of that property, this is categorized by the criminal law as a crime (theft) for which the state can seek an order for imprisonment, a fine or both. The same conduct is categorized by the civil law as a tort (known as conversion) for which the person whose property is taken can seek an order requiring the person taking the property to return it, to pay compensation (damages), or both. If the property is taken by the state or a public body in wrongful exercise of a statutory or other power, the decision to do so can be challenged in administrative law by seeking a declaration that it is invalid and should be reconsidered. 1.2 Criminal, civil and administrative law The criminal law is principally concerned with the imposition of fines and imprisonment sought by the state against persons. The civil law is concerned with awarding compensation and making orders in favor of one person against another. Administrative law is principally concerned with making orders concerning the administrative actions of the state and public bodies. 1.3 Obtaining redress The usual means of obtaining redress is in a court of law. The criminal courts, primarily the Magistrates Courts and the Crown Court, are concerned with redress in respect of criminal matters .The civil courts, primarily the County Courts and the High Court, are concerned with redress regarding civil claims. In many countries, a separate court is established to deal with claims concerning the administrative actions of the state and public bodies, but this is not the case in everywhere, where administrative law matters are dealt with by the High Court. The courts are not the only means of obtaining redress in many civil matters. 1.4 The civil law of obligations Each of the principal divisions of law criminal law, civil law and administrative law contains numerous subdivisions. The subdivision that is relevant to this publication, and to the series of which it forms part, is that part of the civil law concerned with the law of obligations. 1.5 Obligations in contract and tort The law of obligations has, in turn, two parts: the law of contract and the law of torts. In the law of contract, a persons obligations are primarily founded on agreement and are, in general, owed only to the other party to the agreement, not to persons generally. Because obligations owed in contract are founded on agreement, they can be as prescriptive and detailed as the parties wish and their agreement requires. For example, agreed obligations can concern the development of an office block in accordance with detailed requirements, or the structuring of a long-term business relationship, such as a partnership. It would be impossible to regulate such relationships using only the law of torts, since obligations in tort are too generalized. In the law of torts, a persons obligations are primarily determined by general principles of law and are, ordinarily, owed to persons generally. Since obligations owed in tort are imposed as part of the general law, they are expressed in the form o f general standards of conduct. For example: the obligation to exercise reasonable skill and care so as not to cause injury or damage to others forms the basis of the tort of negligence; the obligation not to unreasonably interfere with a persons use or enjoyment of their land forms the basis of the tort of nuisance. Both parts of the law of obligations are significant for the construction industry. Work on a building project, such as the provision of consultant services, construction or materials, will ordinarily be carried out under a contract since this is the only way that obligations having the required definition and precision can be given legal force. But the work provided may, if defective, cause damage not only to the person with whom those obligations are agreed but to others, such as adjacent landowners, users and subsequent owners of the project. While the person or persons with whom the contract is made will, ordinarily, be able to seek redress in the law of contract, t hose who are not parties to that contract will have to seek redress in the law of torts. The law of contract is of fundamental importance for the construction industry because the contract is the principal vehicle for those working on a project to be engaged, their obligations are regulated and redress assessed if things go wrong. The law of torts has a subsidiary importance if things do go wrong. 1.6 Rights and obligations The law is often discussed in terms of obligations, there is, in general, for each obligation a corresponding right .Thus, an obligation not to unreasonably interfere with a persons use or enjoyment of land can be seen, from the perspective of a landowner, as a right to enjoy and use their land free from such unreasonable interference. An obligation to perform the terms of an agreement can be viewed from the other partys perspective as a right to have those obligations performed. In contract law, these rights and obligations are often referred to as the benefits and burdens of the contract. 1.7 Defining a contract There are various definitions that attempt to encapsulate the essential nature of a contract. The definition that is most readily understandable in a commercial context is that a contract is an agreement that gives rise to obligations, and corresponding rights, that the law will recognize and enforce. Since a contract is founded on agreement, the parties are free, within wide limits, to agree the obligations to which they wish to be bound. This is known as the doctrine of freedom of contract. It means, at any rate in a commercial context, that the parties to a contract will ordinarily be bound by the agreement they make, however inappropriate, one sided or even ruinous that agreement may turn out to be for one of them. The corollary of the doctrine of freedom of contract is that a person cannot be forced to contract. In a commercial context this means that, if terms cannot be agreed, either party to the negotiations can walk away, however inconvenient or costly, in terms of wasted time and money, this is for the other party. It may be possible to break off negotiations and walk away even if work has commenced in anticipation of a proposed contract. Once a contract is concluded, it binds the parties in law. If a party to a contract fails to comply with its obligations under the contract, the other can seek redress for that failure. This can be done, as appropriate, by enforcing a right to payment (a claim in debt), by seeking financial compensation for losses suffered as a result of the failure (a claim in damages for breach of contract) or, in certain circumstances where financial compensation does not provide adequate redress, by an order that the defaulting party perform its obligations (a claim for specific performance) or stop acting in breach of its obligations (an injunction). For example, if a consultant fails to perform services he or she has contracted to provide, the client can seek damages based on the additional cost of obtaining substitute performance from another consultant. If an employer fails to pay for work provided by a contractor, the contractor can recover that payment as a debt. If a person contracts to se ll land, such as an office or house, but refuses to complete the sale, the purchaser can seek an order that the land be conveyed to it. 1.8 Categories of contract The categories of contract is most relevant to the construction industry include the following. Contracts made by deed and simple contracts (the rest). Contracts entered into by deed do not require consideration; simple contracts do. For example, a promise of a gift will be contractually binding only if it is given by deed. Contracts made by deed also attract a longer limitation period (the period during which proceedings for redress must ordinarily commence) than simple contracts. The period is 12 years from breach for contracts made by deed, 6 years from breach for simple contracts. Contracts for estates or interests in land (such as a contract for the sale or lease of a house or office). Such contracts are governed by the Law of Property Acts and related legislation and by that branch of the law known as the law of real property. Most of such contracts are subject to the code for payment and dispute resolution provided for in that Act. Arbitration agreements (an agreement that provides that disputes will be determined by a private tribunal sitting as arbitrator, not by the court). Such agreements are subject to the detailed code set out in the Arbitration Act 1996. Consumer contracts (certain categories of contract, principally contracts for goods, for work and materials and for services where one of the parties is contracting for purposes that are outside the scope of its business, if any, and the other is contracting in the course of a business). Such contracts are subject to various statutory controls that may invalidate certain types of unfair or unreasonable terms imposed to the determent of the consumer. 1.9 The importance of contracts in the construction industry: Contract is only the forming agreements that are recognized as binding by the law of contract that the parties can regulate their rights and obligations in the knowledge that these rights and obligations can, if necessary, be enforced. Given the importance of contract law in structuring commercial relations, it is surprising that those procuring and providing work in the construction industry often deal inadequately with the formation of their contracts. This leads not only to uncertainties about what was agreed and when, but also to disputes about whether a binding agreement was concluded at all and whether legally enforceable obligations are created to provide work or to pay for it. Such disputes can arise during the work as well as after it is completed. 1.10 Contractual terms used in formation of contract The obligations that the parties accept when they conclude a contract are contained in its terms. The terms may be express or implied or, more usually, a combination of both. 1.10.1 Express terms Express terms are those that the parties expressly state when making their contract. Express terms may be written or oral. Oral terms may be evidenced in writing. * Written terms set out in documents forming the contract for example, where a client and builder execute a copy of a standard form building contract, such as a copy of the FIDIC condition of contract setting out all of the terms they have agreed, or where, as is often the case in a contract for the sale of goods, all of the terms are set out in a letter of offer, accepted by the purchaser orally or by conduct. * Written terms contained in documents referred to (incorporated by reference) in the exchange of communications forming the contract * Oral terms agreed at a meeting or over the telephone. It is preferable for oral terms to be recorded (evidenced) in writing so that there can be no dispute about what was said, for instance by making and circulating a note of what was agreed. But failure to do this will not affect the validity of such terms, unless the contract is of a type whose terms must be made or evidenced in writing. 1.10.2 Implied terms Implied terms are those that are included in a contract even if the parties do not expressly refer to them at the time the contract is concluded. * Contract terms are implied by law or by statute if the contract is of a type in which such terms are ordinarily implied and the implication of those terms is not contrary to the express terms of the contract. For example, terms are ordinarily implied by the Sale of Goods Acts into contracts for the sale of goods, and by the Supply of Goods and Services Acts and law into contracts for work and materials or for services. * Terms implied to reflect the parties presumed intention if, having regard to the words used in the contract and the circumstances at the time it was concluded, they are necessary to give business efficacy to the contract or are so obviously a part of the contract that both parties would, if asked at the time, have said that they go without saying. For example, a contract to use a wharf will be subject to an implied term that it is safe for the ship to lie at that wharf. But a term will not be implied on this basis if it is inconsistent with the express words of the contract. * Terms may be implied by custom where the custom is a certain and general incident of a particular trade or place, and the use of the term is well known, reasonable and not contrary to law or to the express words of the contract. * Contract terms implied by course of dealing where the parties have contracted on the same terms on a number of previous occasions and they make another contract of similar type without expressly referring to those terms. 1.10.3 Exemption clauses An exemption clause is a contract term by which one party, usually but not invariably the party proposing the terms of contract, seeks to avoid or exempt itself from what would otherwise be its obligations or liability under the contract (an exclusion clause), or seeks to restrict or limit its liability in some way (a limitation clause).An exemption clause can work indirectly by, for instance, restricting the enforcement of obligations under a contract, or by making enforcement unusually onerous. Exemption clauses are commonly found in standard terms of business. For example, a seller of goods may seek to limit its obligations by providing in its standard terms that they form the whole agreement of the parties, and no terms are to be implied at law. The purpose of such wording is to exclude the implied terms of quality and title that would otherwise apply to the contract. A consultant provides in its terms of appointment that any liability, whether for default under the contract or in negligence, is limited to a specific sum. The purpose of such a provision is to cap the consultants potential liability to its client. Because exemption clauses exclude or limit what would otherwise be a partys obligations or liabilities under a contract, they must be clearly incorporated and clearly worded if they are to be effective. There are also various statutory controls over the effectiveness of such provisions, and, in a few instances, criminal sanctions are imposed on those who seek to include such clauses in their contracts. 1.11 Most Commonly Used Types of contract in UAE construction industry There are various types of conditions of contracts used all over the world. Most commonly used conditions of contracts in the past are FIDIC in Middle East JCT NEC in United Kingdom. In United Kingdom mainly JCT NEC conditions of contract is in practice in various forms. The conditions of contracts are listing the legal structure to be refereed to in case of any dispute or ambiguity arises. It also establishes a common basis to both the contractor and the client in understanding each partys commitments and rights against the other party. Understanding the rights and obligations are important prior to the agreement of a contract between the parties. 1.12 Key contract clauses used in condition of contract 1.12.1 Audit This clause typically outlines an owners right to perform reviews (audits) of contractor costs or records. Such clauses ordinarily outline what costs or records are subject to audit, when and under what circumstances. In cost plus contract this clause is very useful to client to restrict the overall project cost 1.12.2 Changes This clause is critical. This is the clause that allows the owner to direct changes to the work, including plans, specifications, and time of performance, means, and methods. Absent a change clause, an owner is precluded from making changes to the work. Of particular importance in this clause is whether the clause allows the owner to unilaterally direct changes to the work (in which case, if the contractor refuses to comply with the directives, they are in breach of the contract). Alternatively, the clause requires the owner and the contractor to mutually agree on the change (a bilateral change). On the other hand if there has been any discrepancy in specification or drawing this clause will help contractually to change this discrepancy with required adjustments. However changes can result positive or negative variation in construction industry. 1.12.3 Contractor Responsibilities This clause lays out, in general form, the duties, obligations and responsibilities of the contractor in performance of the work. This clause assigns specific risks to the contractor, including customarily the risk of adequate labor and equipment to accomplish the work within the required timeframe, the obligation to perform work safely, to perform work in strict accordance with the terms and conditions of the plans and specifications, and to be responsible for the work of subcontractors and suppliers, etc. This clause is very important in construction for clients points of view. As such client investing a large amount of money in the project so because of this clause he will get relief and guaranty for the works which has to be executed. 1.12.4 Delays This is, ordinarily, a risk allocation clause with respect to delays in the work. â€Å"Excusable delay† under a contract results in time extensions but no time related damages. That is, a contractors performance time is extended because of excusable delay situation, but the contract is not entitled to collect time extension costs nor is the owner entitled to impose late completion damages for this time. â€Å"Compensable delay†, on the other hand, results in both a time extension as well a time excusable and compensable to the contractor while contractor caused delay is the responsibility of the contractor (to either make up the lost time or pay the contractually stipulate late completion damages). Third-party caused delay (sometimes referred to as force majeure delay) is, most often, excusable and no compensable to the contractor. 1.12.5 Differing Site Conditions or Changed Conditions This clause normally provides an equitable adjustment to the contract in the event the contractor encounters a materially different condition at the site during performance of the work. This is the clause which will give relief to the contractor when he will get differ in site condition e.g. Non stop rain for few month. Differing site conditions are unforcing events no one can predict these events. In this situation this clause is very important in construction industry to restrict unnecessary claims 1.12.6 Dispute Resolution This clause customarily sets forth the mechanism to resolve disputes during the performance of the work. Most dispute clauses contain some form of a stepped resolution system. For example, the clause may require on site negotiation between project managers, followed by an appeal to project executives, followed by 3 days of mediation, followed by binding arbitration under a formal set of rules. Often, the location (jurisdiction) of the disputes resolution will be set forth. In construction industry there are several methods of dispute resolution like negotiation, mediation, Conciliation natural evaluation, adjudication, arbitration, and litigation. However each of then having its own framework to resolve the dispute. These are the primary steps of resolving the the disputes on claims in construction industry. 1.12.7 Force Majeure Some contracts contain a force majeure clause or a clause dealing with delays to the work caused by unforeseeable events beyond the control of both the owner and the contractor. Such clauses often provide lists of examples of force majeure events acts of God, acts of the government, civil disorder, acts of war, adverse weather, fires, floods, strikes, etc. Other contracts provide for such events in the excusable delay clause. In construction to get the relief to the parties involved in the contract from the unforeseen event. This will help to gain loss or expense due to unforeseen event. 1.12.8 Governing Law The contracts involve parties from differing locations with subcontractors and suppliers from even more locations. Accordingly, contracts often specify which law applies to a dispute, regardless of where the dispute is handled. 1.12.9 Indemnification To indemnify another is to protect them against loss or damage either by paying for the loss or standing in their place in the event of legal dispute. An indemnification clause in a contract typically requires a contractor to indemnify the owner against all loss resulting from contractor errors, omissions, accidents, third party property damages in construction industry. 1.12.10 Insurance This clause requiring the owners and contractors to furnish multiple insurance policies prior to commencing work, among which are the following: builders risk/all risk; workmans compensation; automobile, aircraft, and/or marine liability; general liability; bodily injury; broad form property damage; completed operations; personal injury; etc. Generally in UAE construction industry Third party insurance and professional indemnity insurance are covered in the contract document. 1.12.11 Late Completion Damages This clause specifies the damages for late completion. In general terms, there are two types of late completion damages actual and liquidated. Actual damages are those damages an owner actually suffers when a contract is completed late and may include loss of revenue, increased engineering, architectural or inspection services, increased financing costs etc. Liquidated damages, on the other hand, is a pre-agreed upon amount the contractor will pay the owner in the event the project is completed late due to no excusable delay cause-that is, due solely to the contractors fault. Such damages are typically expressed in terms of a daily cost and need not be proven as actually incurred if the project is completed late. 1.12.12 Limitation of liability In order to cap (or limit) a contractors risk from late completion damages, performance penalties, etc., under a contract, many contracts contain a clause limiting maximum liability to a percentage of the value of the contract. However this clause is very important UAE construction industry. UAE is fast growing country and maximum contracts are on lump-sum basis. Contractors have to bear all risk involved in the construction. 1.12.13 Order of Precedence This clause intended to provide guidance to both the owner and the contractor in the event of conflicting provisions. Typically, specifications have precedence over general provisions, and so on and so forth. The legal concept is to provide guidance to people on projects in the event there are two or more conflicting provisions relating to a topic. In UAE construction industry most preferable contract is FIDIC and the order of precedence used is Contract document, ant amendment to contract document, drawing, specification and Bill of Quantity. However if any disputes arises the above mentioned order is used to settle the disputes in construction 1.12.14 Owner Responsibilities Similar to a contractor responsibility clause, an owner responsibility clause ordinarily sets forth the obligations of the project owner, including adequate project financing, all required and necessary permits, appropriate site access, etc. These are the responsibilities covered in the contract document to run the project without any disturbance from the client/owner side. These clauses bound the owner in contractual framework to take any action during the execution of works 1.12.15 Payments This is key contract clause in terms of project cash flow. This clause sets forth how often the contractor is to be paid, in what manner, and what are the conditions precedents to the issuance of payment. In construction it helps the contractor to manage the finance before the commencement of project. 1.12.16 Quantity Variations The contracts contain estimated quantities to be installed. In the event as-bid quantity estimates vary substantially (+/- 10 percent or more) many contracts (both unit price and lump sum) contain a quantity variation clause which allows either the owner or the contractor to request a predetermination of the as-bid unit price on affected portions of the work. 1.12.17 Schedules A schedule clause typically sets forth the requirement for contractor scheduled , including format (bar chart vs. CPM), level of detail, submittal requirements, frequency of schedule updating, damages for failure to submit, delay or time extension analysis requirement, actions to be taken in the events of forecasted late schedule, etc. 1.12.18 Suspension of Work This clause habitually allows a project owner to suspend or stop all or some of the work, with or without clause. Such clauses normally provide for some adjustment to the terms of the contract in such events, including a time extension and payment of delay costs. However, recovery of time and cost limited by the terms of contract. Often, if the actual clause of the suspension order is something for which the contractor is responsible (i.e., unsafe work conditions, work not in compliance with contract requirement, etc.) no recovery time or cost is allowed. This clause gives the owner choice to delete the some or whole part of work with legal manner 1.12.19 Termination Almost all contracts have a provision allowing the owner to end, in whole or in part, performance of the work prior to project completion. There are, typically, two types of termination; termination for convenience and termination for default. Termination for convenience usually occurs when a project owner decides, for their own reasons, not to complete the project as designed. Such situations might arise if the owners needs change, if project financing fails, or if the underlying project economics change substantially. In such a circumstance, the owner may elect to terminate the contractors performance for the convenience of the owner and pay off the contractor in accordance with the terms of the clause. Termination for default arises only when a contractor is found to be in material breach of the contract, has been provided with a cure notice form the owner outlining the material breach, and has failed to remedy the breach in a timely manner. Usually the owner will terminate the co ntractor from the project and call upon the contractors financial guarantees to complete the work (i.e., letter of credit or surety bond). Some contracts also provide a contractor the right to terminate their participation in a project. Under certain carefully proscribed circumstances (such as, failure to make payments, bankruptcy of the owner, suspension of the work for more than a defined period of time, etc.) the contractor is allowed to terminate their own involvement in the project. 1.12.20 Time of the Essence/Time of Performance- Timely project completion is normally important, most contracts contain a clause stating that â€Å"Time is of the essence of this contract. â€Å"Such a clause must be included to make enforceable a time of performance clause and collection of late completion damages. Absent such a clause, the time of project completion is considered unenforceable. The time of performance clause, typically expressed either in work or calendar days after issuance of notice to precede, sets froth when the work must be completed and the consequences of failure to meet these dates. 1.12.21 Warranty A warranty clause, which ordinarily continues in existence for some specified period of time after project completion, guarantees the contractors work after project acceptance. It is not uncommon for warranty clauses to require a warranty for 1 year after project completion, during which time, if any portion of the project fails, the contractor is obligated to return to the project and make it right or agree to some commercial settlement of the issue. 1.13 Strengths and Weaknesses of contract in construction industry Various advantages and disadvantages in the usage of contracts. The contracts are imposing a better control over the contractors and always state the penalties for non-compliance. Punishment used as a tool for guidance of the projects for timely completion and it is not working always successfully. 1.13.1 Strengths * Firmly laid down rules and regulations Rules and regulations are made up to follow the instruction in the same way contract provides rules and regulation for the parties. It provides instruction to the parties what should have to be done at each stage of the projects. Such as health and safety requirement in document for each construction project. * Pre agreed procedural commitments Contract includes the procedure which should have to follow by the parties involved in it. It provides what should be done by the parties in the initial stage of the proj Literature Review on Contractual Issues Arising Claims Literature Review on Contractual Issues Arising Claims Avoiding construction claims and disputes requires understanding of the contractual terms, early no adversarial communication, and understanding of causes of claims.(Cheryl Semple, Francis T. Hartman, and George Jergeas) identify some of the critical element in construction contract, and investigates the causes of claims, categories of compensation of claims and contract clauses quoted in claims by studying high-rise apartment building and institutional buildings. Construction contract determines the basis for the relationship between the parties involved in it. A contract is a promise or agreement that the law will enforce. Construction contract are very often long, complex document, consequently, disagreement or disputes can arise regarding contractual obligations or expectations, when one party feels that the contractual obligations or expectations have not been meet and they fell that they deserve monetary and/or time compensation they may submit a claim. A claim is defined as an assertation to the right to remedy, relief or property (Canadian Law Directory) Currently construction industry in UAE has number of disputes arrives because of disputed in legal document and poor coordination in general and particular condition of contract. UAE is fast growing country in terms of construction and lots of competition for getting the project because of that contractors are bidding less and claiming more amounts. A client tries to reduce the over all cost of project and contractors tries to get more profit and result is disputes arise. Every claim submitted by the contractor puts presser on client and consequently it affect increasing property price. That is why construction claim are considered as the most unpleasant event in construction industry. Claims can be reduced by proper arrangement of scope of work in contract document. Contract is the document which explains all rolls and liabilities of the parties involved in it. For the purpose of study for analyzing contractual issues literature review is divided in two parts. First part will discus s on Contract law in general and particular terms used in formation of construction contract. Second chapter will discuss on Claims under FIDIC contract and previous research in claims. 1 Introduction to contract law 1.1 Legal systems A legal system, is a system for identifying factual situations where the state will impose sanctions on a person (criminal law), where one person can seek redress from another person (civil law), and where a person can challenge decisions of the state and public bodies, such as local authorities (administrative law)1. For example: If someone takes property belonging to another with the intention of permanently depriving them of that property, this is categorized by the criminal law as a crime (theft) for which the state can seek an order for imprisonment, a fine or both. The same conduct is categorized by the civil law as a tort (known as conversion) for which the person whose property is taken can seek an order requiring the person taking the property to return it, to pay compensation (damages), or both. If the property is taken by the state or a public body in wrongful exercise of a statutory or other power, the decision to do so can be challenged in administrative law by seeking a declaration that it is invalid and should be reconsidered. 1.2 Criminal, civil and administrative law The criminal law is principally concerned with the imposition of fines and imprisonment sought by the state against persons. The civil law is concerned with awarding compensation and making orders in favor of one person against another. Administrative law is principally concerned with making orders concerning the administrative actions of the state and public bodies. 1.3 Obtaining redress The usual means of obtaining redress is in a court of law. The criminal courts, primarily the Magistrates Courts and the Crown Court, are concerned with redress in respect of criminal matters .The civil courts, primarily the County Courts and the High Court, are concerned with redress regarding civil claims. In many countries, a separate court is established to deal with claims concerning the administrative actions of the state and public bodies, but this is not the case in everywhere, where administrative law matters are dealt with by the High Court. The courts are not the only means of obtaining redress in many civil matters. 1.4 The civil law of obligations Each of the principal divisions of law criminal law, civil law and administrative law contains numerous subdivisions. The subdivision that is relevant to this publication, and to the series of which it forms part, is that part of the civil law concerned with the law of obligations. 1.5 Obligations in contract and tort The law of obligations has, in turn, two parts: the law of contract and the law of torts. In the law of contract, a persons obligations are primarily founded on agreement and are, in general, owed only to the other party to the agreement, not to persons generally. Because obligations owed in contract are founded on agreement, they can be as prescriptive and detailed as the parties wish and their agreement requires. For example, agreed obligations can concern the development of an office block in accordance with detailed requirements, or the structuring of a long-term business relationship, such as a partnership. It would be impossible to regulate such relationships using only the law of torts, since obligations in tort are too generalized. In the law of torts, a persons obligations are primarily determined by general principles of law and are, ordinarily, owed to persons generally. Since obligations owed in tort are imposed as part of the general law, they are expressed in the form o f general standards of conduct. For example: the obligation to exercise reasonable skill and care so as not to cause injury or damage to others forms the basis of the tort of negligence; the obligation not to unreasonably interfere with a persons use or enjoyment of their land forms the basis of the tort of nuisance. Both parts of the law of obligations are significant for the construction industry. Work on a building project, such as the provision of consultant services, construction or materials, will ordinarily be carried out under a contract since this is the only way that obligations having the required definition and precision can be given legal force. But the work provided may, if defective, cause damage not only to the person with whom those obligations are agreed but to others, such as adjacent landowners, users and subsequent owners of the project. While the person or persons with whom the contract is made will, ordinarily, be able to seek redress in the law of contract, t hose who are not parties to that contract will have to seek redress in the law of torts. The law of contract is of fundamental importance for the construction industry because the contract is the principal vehicle for those working on a project to be engaged, their obligations are regulated and redress assessed if things go wrong. The law of torts has a subsidiary importance if things do go wrong. 1.6 Rights and obligations The law is often discussed in terms of obligations, there is, in general, for each obligation a corresponding right .Thus, an obligation not to unreasonably interfere with a persons use or enjoyment of land can be seen, from the perspective of a landowner, as a right to enjoy and use their land free from such unreasonable interference. An obligation to perform the terms of an agreement can be viewed from the other partys perspective as a right to have those obligations performed. In contract law, these rights and obligations are often referred to as the benefits and burdens of the contract. 1.7 Defining a contract There are various definitions that attempt to encapsulate the essential nature of a contract. The definition that is most readily understandable in a commercial context is that a contract is an agreement that gives rise to obligations, and corresponding rights, that the law will recognize and enforce. Since a contract is founded on agreement, the parties are free, within wide limits, to agree the obligations to which they wish to be bound. This is known as the doctrine of freedom of contract. It means, at any rate in a commercial context, that the parties to a contract will ordinarily be bound by the agreement they make, however inappropriate, one sided or even ruinous that agreement may turn out to be for one of them. The corollary of the doctrine of freedom of contract is that a person cannot be forced to contract. In a commercial context this means that, if terms cannot be agreed, either party to the negotiations can walk away, however inconvenient or costly, in terms of wasted time and money, this is for the other party. It may be possible to break off negotiations and walk away even if work has commenced in anticipation of a proposed contract. Once a contract is concluded, it binds the parties in law. If a party to a contract fails to comply with its obligations under the contract, the other can seek redress for that failure. This can be done, as appropriate, by enforcing a right to payment (a claim in debt), by seeking financial compensation for losses suffered as a result of the failure (a claim in damages for breach of contract) or, in certain circumstances where financial compensation does not provide adequate redress, by an order that the defaulting party perform its obligations (a claim for specific performance) or stop acting in breach of its obligations (an injunction). For example, if a consultant fails to perform services he or she has contracted to provide, the client can seek damages based on the additional cost of obtaining substitute performance from another consultant. If an employer fails to pay for work provided by a contractor, the contractor can recover that payment as a debt. If a person contracts to se ll land, such as an office or house, but refuses to complete the sale, the purchaser can seek an order that the land be conveyed to it. 1.8 Categories of contract The categories of contract is most relevant to the construction industry include the following. Contracts made by deed and simple contracts (the rest). Contracts entered into by deed do not require consideration; simple contracts do. For example, a promise of a gift will be contractually binding only if it is given by deed. Contracts made by deed also attract a longer limitation period (the period during which proceedings for redress must ordinarily commence) than simple contracts. The period is 12 years from breach for contracts made by deed, 6 years from breach for simple contracts. Contracts for estates or interests in land (such as a contract for the sale or lease of a house or office). Such contracts are governed by the Law of Property Acts and related legislation and by that branch of the law known as the law of real property. Most of such contracts are subject to the code for payment and dispute resolution provided for in that Act. Arbitration agreements (an agreement that provides that disputes will be determined by a private tribunal sitting as arbitrator, not by the court). Such agreements are subject to the detailed code set out in the Arbitration Act 1996. Consumer contracts (certain categories of contract, principally contracts for goods, for work and materials and for services where one of the parties is contracting for purposes that are outside the scope of its business, if any, and the other is contracting in the course of a business). Such contracts are subject to various statutory controls that may invalidate certain types of unfair or unreasonable terms imposed to the determent of the consumer. 1.9 The importance of contracts in the construction industry: Contract is only the forming agreements that are recognized as binding by the law of contract that the parties can regulate their rights and obligations in the knowledge that these rights and obligations can, if necessary, be enforced. Given the importance of contract law in structuring commercial relations, it is surprising that those procuring and providing work in the construction industry often deal inadequately with the formation of their contracts. This leads not only to uncertainties about what was agreed and when, but also to disputes about whether a binding agreement was concluded at all and whether legally enforceable obligations are created to provide work or to pay for it. Such disputes can arise during the work as well as after it is completed. 1.10 Contractual terms used in formation of contract The obligations that the parties accept when they conclude a contract are contained in its terms. The terms may be express or implied or, more usually, a combination of both. 1.10.1 Express terms Express terms are those that the parties expressly state when making their contract. Express terms may be written or oral. Oral terms may be evidenced in writing. * Written terms set out in documents forming the contract for example, where a client and builder execute a copy of a standard form building contract, such as a copy of the FIDIC condition of contract setting out all of the terms they have agreed, or where, as is often the case in a contract for the sale of goods, all of the terms are set out in a letter of offer, accepted by the purchaser orally or by conduct. * Written terms contained in documents referred to (incorporated by reference) in the exchange of communications forming the contract * Oral terms agreed at a meeting or over the telephone. It is preferable for oral terms to be recorded (evidenced) in writing so that there can be no dispute about what was said, for instance by making and circulating a note of what was agreed. But failure to do this will not affect the validity of such terms, unless the contract is of a type whose terms must be made or evidenced in writing. 1.10.2 Implied terms Implied terms are those that are included in a contract even if the parties do not expressly refer to them at the time the contract is concluded. * Contract terms are implied by law or by statute if the contract is of a type in which such terms are ordinarily implied and the implication of those terms is not contrary to the express terms of the contract. For example, terms are ordinarily implied by the Sale of Goods Acts into contracts for the sale of goods, and by the Supply of Goods and Services Acts and law into contracts for work and materials or for services. * Terms implied to reflect the parties presumed intention if, having regard to the words used in the contract and the circumstances at the time it was concluded, they are necessary to give business efficacy to the contract or are so obviously a part of the contract that both parties would, if asked at the time, have said that they go without saying. For example, a contract to use a wharf will be subject to an implied term that it is safe for the ship to lie at that wharf. But a term will not be implied on this basis if it is inconsistent with the express words of the contract. * Terms may be implied by custom where the custom is a certain and general incident of a particular trade or place, and the use of the term is well known, reasonable and not contrary to law or to the express words of the contract. * Contract terms implied by course of dealing where the parties have contracted on the same terms on a number of previous occasions and they make another contract of similar type without expressly referring to those terms. 1.10.3 Exemption clauses An exemption clause is a contract term by which one party, usually but not invariably the party proposing the terms of contract, seeks to avoid or exempt itself from what would otherwise be its obligations or liability under the contract (an exclusion clause), or seeks to restrict or limit its liability in some way (a limitation clause).An exemption clause can work indirectly by, for instance, restricting the enforcement of obligations under a contract, or by making enforcement unusually onerous. Exemption clauses are commonly found in standard terms of business. For example, a seller of goods may seek to limit its obligations by providing in its standard terms that they form the whole agreement of the parties, and no terms are to be implied at law. The purpose of such wording is to exclude the implied terms of quality and title that would otherwise apply to the contract. A consultant provides in its terms of appointment that any liability, whether for default under the contract or in negligence, is limited to a specific sum. The purpose of such a provision is to cap the consultants potential liability to its client. Because exemption clauses exclude or limit what would otherwise be a partys obligations or liabilities under a contract, they must be clearly incorporated and clearly worded if they are to be effective. There are also various statutory controls over the effectiveness of such provisions, and, in a few instances, criminal sanctions are imposed on those who seek to include such clauses in their contracts. 1.11 Most Commonly Used Types of contract in UAE construction industry There are various types of conditions of contracts used all over the world. Most commonly used conditions of contracts in the past are FIDIC in Middle East JCT NEC in United Kingdom. In United Kingdom mainly JCT NEC conditions of contract is in practice in various forms. The conditions of contracts are listing the legal structure to be refereed to in case of any dispute or ambiguity arises. It also establishes a common basis to both the contractor and the client in understanding each partys commitments and rights against the other party. Understanding the rights and obligations are important prior to the agreement of a contract between the parties. 1.12 Key contract clauses used in condition of contract 1.12.1 Audit This clause typically outlines an owners right to perform reviews (audits) of contractor costs or records. Such clauses ordinarily outline what costs or records are subject to audit, when and under what circumstances. In cost plus contract this clause is very useful to client to restrict the overall project cost 1.12.2 Changes This clause is critical. This is the clause that allows the owner to direct changes to the work, including plans, specifications, and time of performance, means, and methods. Absent a change clause, an owner is precluded from making changes to the work. Of particular importance in this clause is whether the clause allows the owner to unilaterally direct changes to the work (in which case, if the contractor refuses to comply with the directives, they are in breach of the contract). Alternatively, the clause requires the owner and the contractor to mutually agree on the change (a bilateral change). On the other hand if there has been any discrepancy in specification or drawing this clause will help contractually to change this discrepancy with required adjustments. However changes can result positive or negative variation in construction industry. 1.12.3 Contractor Responsibilities This clause lays out, in general form, the duties, obligations and responsibilities of the contractor in performance of the work. This clause assigns specific risks to the contractor, including customarily the risk of adequate labor and equipment to accomplish the work within the required timeframe, the obligation to perform work safely, to perform work in strict accordance with the terms and conditions of the plans and specifications, and to be responsible for the work of subcontractors and suppliers, etc. This clause is very important in construction for clients points of view. As such client investing a large amount of money in the project so because of this clause he will get relief and guaranty for the works which has to be executed. 1.12.4 Delays This is, ordinarily, a risk allocation clause with respect to delays in the work. â€Å"Excusable delay† under a contract results in time extensions but no time related damages. That is, a contractors performance time is extended because of excusable delay situation, but the contract is not entitled to collect time extension costs nor is the owner entitled to impose late completion damages for this time. â€Å"Compensable delay†, on the other hand, results in both a time extension as well a time excusable and compensable to the contractor while contractor caused delay is the responsibility of the contractor (to either make up the lost time or pay the contractually stipulate late completion damages). Third-party caused delay (sometimes referred to as force majeure delay) is, most often, excusable and no compensable to the contractor. 1.12.5 Differing Site Conditions or Changed Conditions This clause normally provides an equitable adjustment to the contract in the event the contractor encounters a materially different condition at the site during performance of the work. This is the clause which will give relief to the contractor when he will get differ in site condition e.g. Non stop rain for few month. Differing site conditions are unforcing events no one can predict these events. In this situation this clause is very important in construction industry to restrict unnecessary claims 1.12.6 Dispute Resolution This clause customarily sets forth the mechanism to resolve disputes during the performance of the work. Most dispute clauses contain some form of a stepped resolution system. For example, the clause may require on site negotiation between project managers, followed by an appeal to project executives, followed by 3 days of mediation, followed by binding arbitration under a formal set of rules. Often, the location (jurisdiction) of the disputes resolution will be set forth. In construction industry there are several methods of dispute resolution like negotiation, mediation, Conciliation natural evaluation, adjudication, arbitration, and litigation. However each of then having its own framework to resolve the dispute. These are the primary steps of resolving the the disputes on claims in construction industry. 1.12.7 Force Majeure Some contracts contain a force majeure clause or a clause dealing with delays to the work caused by unforeseeable events beyond the control of both the owner and the contractor. Such clauses often provide lists of examples of force majeure events acts of God, acts of the government, civil disorder, acts of war, adverse weather, fires, floods, strikes, etc. Other contracts provide for such events in the excusable delay clause. In construction to get the relief to the parties involved in the contract from the unforeseen event. This will help to gain loss or expense due to unforeseen event. 1.12.8 Governing Law The contracts involve parties from differing locations with subcontractors and suppliers from even more locations. Accordingly, contracts often specify which law applies to a dispute, regardless of where the dispute is handled. 1.12.9 Indemnification To indemnify another is to protect them against loss or damage either by paying for the loss or standing in their place in the event of legal dispute. An indemnification clause in a contract typically requires a contractor to indemnify the owner against all loss resulting from contractor errors, omissions, accidents, third party property damages in construction industry. 1.12.10 Insurance This clause requiring the owners and contractors to furnish multiple insurance policies prior to commencing work, among which are the following: builders risk/all risk; workmans compensation; automobile, aircraft, and/or marine liability; general liability; bodily injury; broad form property damage; completed operations; personal injury; etc. Generally in UAE construction industry Third party insurance and professional indemnity insurance are covered in the contract document. 1.12.11 Late Completion Damages This clause specifies the damages for late completion. In general terms, there are two types of late completion damages actual and liquidated. Actual damages are those damages an owner actually suffers when a contract is completed late and may include loss of revenue, increased engineering, architectural or inspection services, increased financing costs etc. Liquidated damages, on the other hand, is a pre-agreed upon amount the contractor will pay the owner in the event the project is completed late due to no excusable delay cause-that is, due solely to the contractors fault. Such damages are typically expressed in terms of a daily cost and need not be proven as actually incurred if the project is completed late. 1.12.12 Limitation of liability In order to cap (or limit) a contractors risk from late completion damages, performance penalties, etc., under a contract, many contracts contain a clause limiting maximum liability to a percentage of the value of the contract. However this clause is very important UAE construction industry. UAE is fast growing country and maximum contracts are on lump-sum basis. Contractors have to bear all risk involved in the construction. 1.12.13 Order of Precedence This clause intended to provide guidance to both the owner and the contractor in the event of conflicting provisions. Typically, specifications have precedence over general provisions, and so on and so forth. The legal concept is to provide guidance to people on projects in the event there are two or more conflicting provisions relating to a topic. In UAE construction industry most preferable contract is FIDIC and the order of precedence used is Contract document, ant amendment to contract document, drawing, specification and Bill of Quantity. However if any disputes arises the above mentioned order is used to settle the disputes in construction 1.12.14 Owner Responsibilities Similar to a contractor responsibility clause, an owner responsibility clause ordinarily sets forth the obligations of the project owner, including adequate project financing, all required and necessary permits, appropriate site access, etc. These are the responsibilities covered in the contract document to run the project without any disturbance from the client/owner side. These clauses bound the owner in contractual framework to take any action during the execution of works 1.12.15 Payments This is key contract clause in terms of project cash flow. This clause sets forth how often the contractor is to be paid, in what manner, and what are the conditions precedents to the issuance of payment. In construction it helps the contractor to manage the finance before the commencement of project. 1.12.16 Quantity Variations The contracts contain estimated quantities to be installed. In the event as-bid quantity estimates vary substantially (+/- 10 percent or more) many contracts (both unit price and lump sum) contain a quantity variation clause which allows either the owner or the contractor to request a predetermination of the as-bid unit price on affected portions of the work. 1.12.17 Schedules A schedule clause typically sets forth the requirement for contractor scheduled , including format (bar chart vs. CPM), level of detail, submittal requirements, frequency of schedule updating, damages for failure to submit, delay or time extension analysis requirement, actions to be taken in the events of forecasted late schedule, etc. 1.12.18 Suspension of Work This clause habitually allows a project owner to suspend or stop all or some of the work, with or without clause. Such clauses normally provide for some adjustment to the terms of the contract in such events, including a time extension and payment of delay costs. However, recovery of time and cost limited by the terms of contract. Often, if the actual clause of the suspension order is something for which the contractor is responsible (i.e., unsafe work conditions, work not in compliance with contract requirement, etc.) no recovery time or cost is allowed. This clause gives the owner choice to delete the some or whole part of work with legal manner 1.12.19 Termination Almost all contracts have a provision allowing the owner to end, in whole or in part, performance of the work prior to project completion. There are, typically, two types of termination; termination for convenience and termination for default. Termination for convenience usually occurs when a project owner decides, for their own reasons, not to complete the project as designed. Such situations might arise if the owners needs change, if project financing fails, or if the underlying project economics change substantially. In such a circumstance, the owner may elect to terminate the contractors performance for the convenience of the owner and pay off the contractor in accordance with the terms of the clause. Termination for default arises only when a contractor is found to be in material breach of the contract, has been provided with a cure notice form the owner outlining the material breach, and has failed to remedy the breach in a timely manner. Usually the owner will terminate the co ntractor from the project and call upon the contractors financial guarantees to complete the work (i.e., letter of credit or surety bond). Some contracts also provide a contractor the right to terminate their participation in a project. Under certain carefully proscribed circumstances (such as, failure to make payments, bankruptcy of the owner, suspension of the work for more than a defined period of time, etc.) the contractor is allowed to terminate their own involvement in the project. 1.12.20 Time of the Essence/Time of Performance- Timely project completion is normally important, most contracts contain a clause stating that â€Å"Time is of the essence of this contract. â€Å"Such a clause must be included to make enforceable a time of performance clause and collection of late completion damages. Absent such a clause, the time of project completion is considered unenforceable. The time of performance clause, typically expressed either in work or calendar days after issuance of notice to precede, sets froth when the work must be completed and the consequences of failure to meet these dates. 1.12.21 Warranty A warranty clause, which ordinarily continues in existence for some specified period of time after project completion, guarantees the contractors work after project acceptance. It is not uncommon for warranty clauses to require a warranty for 1 year after project completion, during which time, if any portion of the project fails, the contractor is obligated to return to the project and make it right or agree to some commercial settlement of the issue. 1.13 Strengths and Weaknesses of contract in construction industry Various advantages and disadvantages in the usage of contracts. The contracts are imposing a better control over the contractors and always state the penalties for non-compliance. Punishment used as a tool for guidance of the projects for timely completion and it is not working always successfully. 1.13.1 Strengths * Firmly laid down rules and regulations Rules and regulations are made up to follow the instruction in the same way contract provides rules and regulation for the parties. It provides instruction to the parties what should have to be done at each stage of the projects. Such as health and safety requirement in document for each construction project. * Pre agreed procedural commitments Contract includes the procedure which should have to follow by the parties involved in it. It provides what should be done by the parties in the initial stage of the proj