ABSTRACT
This chapter discusses contracts and contract types principally from a functional viewpoint and specifically from the viewpoint of the project manager. The types of contracts include cost plus contracts, lump sum contracts, guaranteed maximum contracts and unit price contracts. The contract negotiation process will define the basis for the principal considerations: the services to be rendered by one party, and the costs and fees to be paid by the other party. Unless certain essential items have been agreed, the contract, oral or written, cannot be enforced because no one, including the courts, will be able to determine the essential terms. The contract should be clear, concise, and complete. There is nothing wrong with the use of well-prepared standard contract forms. Forms are essential for many aspects of the project, such as multiple purchase orders and subcontracts, where the same "legal" terms are generally applicable.
