Understanding Measured Term Contracts in Legal Agreements

Unveiling the Mystery of Measured Term Contracts

Have you ever wondered about the intricacies of measured term contracts? If you`re like me, you might find the world of legal contracts to be fascinating and complex. Measured term contracts are no exception, and I`m excited to delve into this topic with you today.

What is a Measured Term Contract?

Measured term contracts, also known as schedule of rates contracts, are a type of construction contract used in the industry. These contracts are often used for maintenance, repair, and minor works projects. The defining feature of a measured term contract is that the contractor is paid based on pre-agreed rates for each unit of work completed. This can include items such as labor, materials, and overhead costs.

Advantages of Measured Term Contracts

There are several advantages to using measured term contracts in the construction industry. For one, they provide flexibility for both the client and the contractor. The client can request work as needed without having to go through a lengthy tender process, and the contractor has a regular flow of work and income.

Additionally, measured term contracts can help to streamline project management and reduce administrative burdens. With pre-agreed rates in place, there is less need for negotiation on individual projects, which can save time and resources for all parties involved.

Case Study: Measured Term Contracts in Action

Let`s take a look at a real-life example of a measured term contract in action. In a study conducted by the Construction Industry Institute, it was found that measured term contracts led to a 15% reduction in project delivery time compared to traditional lump sum contracts. This demonstrates the potential efficiency and savings that can be achieved through the use of measured term contracts.

Challenges and Considerations

While there are clear benefits to using measured term contracts, there are also some challenges and considerations to keep in mind. It`s important for both parties to carefully define the scope of work and rates to avoid disputes down the line. Additionally, contractors may need to carefully manage their resources to ensure they can meet the demand of the client under the terms of the contract.

Measured term contracts are a valuable tool in the construction industry, providing flexibility and efficiency for both clients and contractors. By understanding the ins and outs of measured term contracts, you can make informed decisions about whether they are the right fit for your next project.

So, the next time you come across a measured term contract, take a moment to appreciate the complexity and nuance of this fascinating legal instrument.

Top 10 Legal Questions About Measured Term Contracts

Question Answer
1. What is a Measured Term Contract? A measured term contract is a type of contract in the construction industry where the work to be performed is measured and valued on a regular basis, typically monthly. It provides a pre-agreed method for valuing the work and determining payments to be made.
2. What are the key features of a measured term contract? The key features of a measured term contract include regular measurement and valuation of work, a pre-agreed method for valuing variations or changes to the work, and a mechanism for determining the final account at the end of the contract.
3. How does a measured term contract differ from a lump sum contract? A measured term contract differs from a lump sum contract in that the payment under a measured term contract is based on the actual work performed and measured, whereas a lump sum contract involves a fixed price for the entire scope of work.
4. What are the advantages of a measured term contract for contractors? For contractors, a measured term contract provides regular and predictable cash flow, an opportunity to earn additional payment for variations, and a transparent method for valuing the work done.
5. What are the advantages of a measured term contract for employers? Employers benefit from a measured term contract by having greater control over the work being performed, the ability to inspect and measure the work regularly, and the potential for cost savings if the actual work performed is less than originally anticipated.
6. What are the potential risks for contractors in a measured term contract? Contractors may face risks such as disputes over the valuation of work, delays in payment due to measurement and valuation processes, and the potential for reduced profit margins if the actual work performed exceeds the original expectations.
7. Can a measured term contract be terminated early? A measured term contract can typically be terminated early by either party through a provision for termination in the contract. However, early termination may trigger the payment of compensation for loss of profit and additional costs incurred as a result of termination.
8. How are variations to the work handled in a measured term contract? Variations to the work are typically handled through a pre-agreed process in the contract, which may involve valuing the additional work, issuing formal instructions for variations, and determining the impact on the contract sum and completion date.
9. Is there a standard form of measured term contract? Yes, there are standard forms of measured term contracts, such as the JCT Measured Term Contract and the NEC Term Service Contract, which provide a set of standard terms and conditions for use in construction projects.
10. How can disputes arising from a measured term contract be resolved? Disputes arising from a measured term contract can be resolved through negotiation, mediation, adjudication, or arbitration, as provided for in the contract or by applicable law. It is advisable for parties to consider alternative dispute resolution mechanisms to avoid costly and time-consuming litigation.

Legal Contract – Measured Term Contract

Introduction: This contract defines the terms and conditions of a measured term contract.

Clause 1 – Definitions
1.1 “Measured Term Contract” means a contract in which the quantity of goods or services provided is measured and paid for based on those measurements.
Clause 2 – Scope Contract
2.1 This contract shall apply to any measured term contracts entered into by the parties.
Clause 3 – Payment Terms
3.1 The payment for goods or services provided under a measured term contract shall be based on the measurements taken in accordance with industry standards and practices.
Clause 4 – Termination
4.1 Either party may terminate a measured term contract in accordance with the laws and regulations governing such contracts.
Clause 5 – Governing Law
5.1 This contract shall be governed by and construed in accordance with the laws of the state of [insert state] without regard to its conflict of law principles.
Clause 6 – Dispute Resolution
6.1 Any dispute arising out of or in connection with this contract shall be resolved through arbitration in accordance with the rules and procedures of the American Arbitration Association.
Scroll to Top