Contracts And Their Management

This third edition of Contracts and their Management focuses on the concepts and principles behind each clause in a contract, supporting them with case law to explain the practical side of the subject and the judicial interpretation. The appendices to the book contain specimen clauses in a contract, tendering procedure as prevalent in India, Central Vigilance Commissions guidelines on tender procedure, salient features of the World Bank procedures for procurement and for appointment of consultants (revised up to October 2006). The book provides an insight into the legal issues involved, without making it too legalistic and serves as a handbook of reference to those who are engaged in negotiating contracts and to help them avoid the pitfalls involved. The book has given significant coverage to important decisions of the Supreme Court explaining the lessons to be drawn therefrom. It will prove to be an invaluable aid to all those interested in this subject.

Preface ....................................................................................................... v
Preface to the Second Edition .................................................................... vii
Preface to the First Edition ......................................................................... ix
Contents .................................................................................................... xi
Table of Cases .......................................................................................... xvii
CHAPTER 1
Contracts—General Principles ..................................................... 1
INTRODUCTION ............................................................................. 1
GENERAL PRINCIPLES ...................................................................... 8
TWO ROUTES TO A CONTRACT ....................................................... 9
CHAPTER 2
Structure of a Contract ................................................................ 13
CHAPTER 3
Preamble ..................................................................................... 15
CHAPTER 4
Interpretation and Definitions ................................................... 17
CHAPTER 5
Scope and Technical Specifications .............................................. 19
CHAPTER 6
Price ............................................................................................ 21

CHAPTER 7
Terms of Payment ....................................................................... 23
CHAPTER 8
Price Variation ............................................................................. 27
INTRODUCTION ........................................................................... 27
PRICE VARIATION VERSUS PRICE ESCALATION .................................. 28
CHAPTER 9
Bank Guarantees ......................................................................... 37
EXPIRY OF BANK GUARANTEES AND THE LAW OF LIMITATION ........... 77
SAFEGUARDS TAKEN BY BANKS ....................................................... 78
EXTENSION OF A BANK GUARANTEE ............................................... 79
PROCEDURE FOR CUSTODY AND REVIEW ........................................ 80
STAND-BY LETTERS OF CREDIT ...................................................... 80
CHAPTER 10
Letters of Credit .......................................................................... 83
CHAPTER 11
Taxes and Duties ......................................................................... 87
CHAPTER 12
Scheduled Delivery Date ............................................................. 89
CHAPTER 13
Force Majeure ............................................................................. 91
CHAPTER 14
Defaults, Liquidated Damages and Penalties .............................. 95
CHAPTER 15
Export Licence ............................................................................147

CHAPTER 16
Inspection and Acceptance .........................................................149
CHAPTER 17
Shipment ....................................................................................151
CHAPTER 18
Passing of Title and Risk ............................................................153
CHAPTER 19
Warranty ....................................................................................155
LATENT DEFECTS ........................................................................ 155
CHAPTER 20
Patents and Copyrights...............................................................157
CHAPTER 21
Indemnities ................................................................................159
CHAPTER 22
Spares and Spares Policy.............................................................161
CHAPTER 23
Options ......................................................................................163
CHAPTER 24
Resolution of Disputes ...............................................................165
INTRODUCTION ......................................................................... 165
UMPIRE VERSUS PRESIDING ARBITRATOR ....................................... 167
SPEAKING AWARD VERSUS NON-SPEAKING AWARD ......................... 167
FINALITY OF AWARD AND APPEALS ............................................... 168
FILING AWARD IN COURTS VIS-À-VIS DIRECT ENFORCEMENT ........... 171
INTEREST ON AWARD .................................................................. 172

INTERNATIONAL ARBITRATION AND FOREIGN AWARDS ................... 172
OTHERS .................................................................................... 175
CONCILIATION ........................................................................... 175
INSTITUTIONAL ARBITRATION ...................................................... 175
ARBITRATION AGREEMENT ........................................................... 176
CASE LAW ................................................................................. 177
CHAPTER 25
Termination ...............................................................................319
CHAPTER 26
Assignment ................................................................................321
CHAPTER 27
Amendments ..............................................................................323
CHAPTER 28
Confidentiality ...........................................................................325
CHAPTER 29
Notices .......................................................................................327
CHAPTER 30
Governing Laws .........................................................................329
CHAPTER 31
Survival .......................................................................................331
CHAPTER 32
Effective Date .............................................................................333
CHAPTER 33
Contract Management ...............................................................335

APPENDIX I
Specimen Clauses in a Contract .................................................339
APPENDIX II
Tendering Procedure ..................................................................371
APPENDIX III
Guidelines Issued by the Central Vigilance Commission
(CVC), Government of India ...............................................403
APPENDIX IV
Salient Features of World Bank Procurement Procedures ..........429
APPENDIX V
Salient Features of World Bank Procedures for Selection
and Employment of Consultants ..........................................461
Index .............................................................................................. 495