The Contractor | Types, Responsibilities, and Conditions You Need To Know

Last Updated on June 6, 2023 by Eng Katepa

The Contractor is a person or firm that undertakes a contract to provide materials or labor to perform a service or do a job.

There are three major parties engaged in each construction project:

  • the owner,
  • the contractor,
  • as well as the management team.

A building contractor is always responsible for planning and coordinating construction activities, as well as ensuring that the project is completed on time and within budget.

There are different types of contractors for each specific work because every work needs different skills and execution standards. In the Construction industry, the contractors are responsible for the whole construction phase as well as must select the most effective techniques for completing the project according to the specifications.

What Is A Contractor?

The word “contractor” is derived from a legal agreement between the owner and builder, there will be a legal contract. The contractor is an organization or, in certain cases, a person engaged by a client to carry out the work which is necessary to complete the project.

The Contractor

The contractors, on the other hand, don’t always have the skills or trades which is required to complete all construction work on their own. As a result, they are generally in charge of hiring subcontractors to execute certain sections of a project. In most cases, the construction project will engage a large number of subcontractors.

The contractor’s position is multi-faceted, as they are responsible for a variety of activities. It is extremely difficult to carry the project from a set of drawings to a finished building without the help of a group of these various types of contractors, with the exception of extremely small construction projects.

Types Of Contractors

Big construction projects may need the involvement of a greater number of contracting firms to complete. Many various categories of contractors may be on the site at the same time, conducting the same task in different places.

Even a simple residential house project might need the involvement of a few or more contractors as well as subcontractors before the job is certified as complete.

There are many different types of contractors in the construction industry, each with its particular specialization as follows:

1. Trade Contractor

A trade contractor is a subcontractor who focuses on a specific aspect of a construction project. The trade contractors perform a wide range of tasks in a variety of locations, including repair, renovation, and construction.

In the construction industry, the word trade contractor can refer to a variety of jobs, including electricians and plumbers, that are both relatively common. Every registered trade contractor focuses on a distinct area of expertise.

Several types of contractors trade specialize in the installation of ventilation, heating, and air conditioning systems, as well as anything else related to managing a building’s temperature and environment.

Some are more concerned with the establishment of building safety systems. Sprinklers, Alarm systems, and attention to the building’s fire rules are examples of these systems.

2. Management Contractor

Management contracting is a procuring approach in that a management contractor contracts with a number of different work contractors to do the task.

The client often appoints the management contractor early in the design phase so that their expertise may be applied to improving the cost as well as buildability of concepts as they grow, and also providing packaging advice and risks of interfaces.

3. Approved Contractor

The types of contractors have proved that they possess the knowledge, ability, resources as well as desire to tender for the project.

4. Prime Contractor

The prime contractor is indeed the project’s main contractor. The prime contractor, also known as the general contractor, is responsible for all aspects of a project and works on it continuously throughout its duration.

The project must be completed on time as well as within budget. They employ and lead other contractors, referred to as subcontractors, although they are not better than them.

When a project owner doesn’t want to get directly engaged or needs someone with more expertise than a project manager, they can employ a prime contractor to handle the project’s leadership as well as coordination.

Several of its responsibilities are equivalent to those of the project manager, such as maintaining work on time.

5. Work Package Contractor

The specialist contractor focuses on certain parts of maintenance as well as replacement work.

For example, Servicing specialist installation including building management networks as well as fuel installations; finishes and fittings, structure, Building fabric, furniture and equipment maintenance; grounds maintenance activities and landscape management; or labor only.

These types of contractors can always be hired immediately by the Employer or through the Maintenance Contractor, based on the contract approach.

Also Read: What is Civil Engineering? | History and Functions 

6. Integrated Supply Team

The phrase “integrated supply team” refers to the integration of the entire supply chain engaged in a project’s delivery. The main contractor, subcontractors, designers, facility managers, suppliers, and others may be included.

The phrase “integrated supply team” varies from “integrated project team” in that the former refers mainly to the principal contractor as well as their supply chain (subcontractors, designers, suppliers, and so on), while the latter includes a client with, if applicable, a project manager.

7. Design And Build Contractor

The design and build is a procurement approach for which the main contractor is selected to design as well as execute the works, as contrasted to a standard contract for which the client chooses experts to design development, and later the contractor is engaged to execute the work. These types of contractors are responsible for both the design as well as the construction of a project.

8. Design, Build, And Manage Contractor

The contractor is hired not just to design and construct the works, but mainly to manage them while they are in operation, often giving operational support in addition to building maintenance, including such as staff, cleaning, and so on.

9. Sub-contractor

The subcontractor is a contractor engaged by the general contractor or main contractor or prime contractor, to complete a certain work as an element of a larger project, and who is generally paid for activities supplied to a project by the original general contractor.

The subcontractor is a business or someone who performs work for another firm as part of a bigger project. The subcontractors perform the activities which the contractor is unable to complete but is still responsible for within a company’s contract.

The subcontractors are not really a part of the firm; you do not even monitor or control them, give them directions about how to do their tasks, or have line management duties on them. These types of contractors can be hired as fixed-term contracts, task-based contracts with no defined end date, or lengthy projects.

10. Domestic Subcontractor

The domestic subcontractor is a subcontractor who works with the main contractor to provide or fix materials or products, as well as to do work that is a portion of the main contract.

Because construction has become more difficult well as much more specific construction methods have been invented, firms are increasingly common for contractors to subcontractors instead of hiring a huge workforce directly.

11. Construction Manager

The construction managers are responsible for overseeing as well as leading a variety of construction projects from start to finish.

A construction manager is usually hired earlier in the design phase so that their knowledge may be applied to optimize the cost as well as constructability of projects as they improve, and to provide guidance on packaging, package interface hazards, and trade contractor selection.

The construction managers are in charge of establishing and maintaining schedules, monitoring funds, as well as ensuring that everyone is performing their tasks on a daily basis.

The construction managers generally engage with so many working relationships which exist on a construction site as well as help ensure that the workplace is free of safety concerns.

12. Nominated Subcontractor

The nominated subcontract is one that is chosen by the consumer to complete specified sections of the project, which is forced on the main contractor, as well as the main contractor having no control over who the selected subcontractor can be.

Thus, the employment of nominated subcontractors creates a direct contractual connection between the consumer as well as the subcontractor.

The main contractor may still benefit from the usage of nominated subcontractors on site, but have to give ‘presence,’ which is often the supply of water, electricity, restrooms, as well as other supplies, to allow the nominated subcontractor to accomplish his work.

13. Named Subcontractor

The named subcontractor works in the same way as a domestic subcontractor, as well as is a subcontractor whose contracts with the main contractor to carry out aspects of the job after being chosen by them from a list of acceptable contractors identified by the client.

Despite the fact that they were initially recommended to the contract by the client, the named subcontractor is ultimately employed by the main contractor but not the client.

Naming a subcontractor gives the client greater involvement in who the main contractor selects as a subcontractor while keeping the element of choice as well as the responsibility of assessing their progress.

This is considered an excellent alternative to nominating subcontractors, particularly because nominated subcontractors are no longer available under several contract types.

14. Works Contractor

Management contracting is a procurement approach for which the activities are performed by a number of separate work contractors who are contracted to the management contractor.

The management types of contractors are mostly employed earlier in the design phase so that their expertise may be useful to improve the cost as well as buildability of projects as they improve and to provide packaging advice.

Management contracting varies with construction management in that management contractors handle the activities directly with the contractors, while construction managers simply handle the trade contracts, which are arranged by the client.

As principal contractors are responsible for controlling safety and health hazards throughout the construction process, they must have the necessary knowledge, skills, experience, and organizational capabilities to carry out work.

15. Principal Contractor

In a project with many types of contractors, the primary contractor is the one in charge of the construction process. The client (commercial or domestic) appoints them in contract to plan, manage, monitor, as well as coordinate safety and health throughout this period.

16. Supplier Contractor

The broad phrase refers to someone who provides services or items to a client or to some other supplier in the supply chain. Typically, suppliers are thought to be companies that have been engaged to give physical supplies including materials, goods, as well as plants.

In construction projects, the word “supplier” relates to any firm that is employed to contribute to the delivery of the built asset.

17. Specialist Contractor

The suppliers of specialized aspects of the project usually contribute to the design. Specialized parts which are properly designed in detail by their manufacturers or installers must be included in development plans.

Lifts, cladding systems, escalators, refrigeration units, switchgear, air conditioning systems, heating ventilation, cleaning cradles, and so on are examples of such items.

In such circumstances, it is sometimes advisable to secure this expert design prior to a supply contract being offered, so that they may be correctly integrated into the entire design as well as no delays or adjustments are required.

Responsibility Of Contractor

  • The contractor is responsible for designing, planning, executing, monitoring, as well as inspecting a building construction project in general. Regardless of the project’s scope, the responsibility continues from the beginning to the finish.
  • A contractor is responsible for providing all materials, workers, machinery, and other items needed to complete the task as specified in the contract.
  • The contractor must complete the work according to the plans as well as specifications, and the engineer’s instructions.
  • Before beginning any new item or covering up any work, the contractor should notify the supervising engineer.
  • On the work site, the contractor should appoint a skilled person to whom instructions and directions may be given.
  • The contractor must follow all applicable labor rules as well as make timely payments to both his workers and subcontractors.
  • Throughout the execution of a work, the contractor is responsible for any harm to individuals or surrounding properties.
  • A contractor should provide all necessary support to the engineer in determining the work lines as well as levels.
  • When necessary, the contractor must submit the bills of work.
  • The contractor is responsible for the security of all workers as well as staff on the work site and should give them safety clothing such as safety shoes and helmets.

Conditions of Contract in the Construction Industry

Following are some important terms and conditions of contracts in the construction Industry:

1. Security Deposit

Upon acceptance of the tender, the contractor has to deposit 10% of the amount as security money with the department which is inclusive of the earnest money already deposited.

This amount is kept as a check so that the contractor fulfills all terms and conditions of the contract and carries out the works satisfactorily according to the specifications and maintains the progress of the work, and completes the work on time.

A typical clause cap be framed as follows

The contractor shall (within ten days of the receipt by him of the notification of the acceptance of his tender) deposit with the owner while making cash money (usually the amount is 1% of the cost of the work) and permits the owner while making any payment due, to deduct 10% of all money so payable until the full amount of security deposit specified in the tender is made up.

The security deposit referred to when paid in cash deducts 10% of all money So payable until the full amount of security deposit specified in the tender is made up. The security deposit referred to when paid in cash, may, at the cost of the contractor be converted into interest-bearing securities provided the contractor has expressly desired this in writing.

If the amount of the security deposit to be paid in a lump sum within the period specified above is not paid, the tender already accepted shall be considered canceled and legal steps taken against the contractor for the recovery of damages. The security deposit lodged by the contractor shall be refunded to him after the expiry of six months from the date on which the final bill is paid.

However, in big projects, security is taken in the form of bank guarantees. Because, if the contractor is required to pay SD in cash, he is bound to include the interest on the amount deposited in his tendered rates or cost. The bank guarantee costs the contractor a small percentage.

Seldom exceeding two percent per annum of the amount guaranteed with small margin money. Accepting the security in terms of the bank guarantee is thus to the advantage of the employer. These are important conditions of a contract in construction.

2. Compensation for Delay

There is a provision of compensation for delay in conditions of the contract in construction. The time allowed for completion of the work in the essence of the contract on the pall of the contractor.

When the work allotted to the contractor remains un-commenced or there is a delay in completion of the work or if the progress of the work is not proportionate to the time escaped, then the contractor shall pay as compensation an amount equal to 1% or such a small amount as the superintending of delay engineer may decide for each day of delay subject t to the maximum of 10% of the tendered amount of the whole work.

The decision of the superintending engineer in writing as the quantum of compensation to be levied shall be final.

3. Extension in Time Limit

These conditions of the contract in construction are intended to indicate the circumstances under which an extension of the time limit may be granted to the site contractor by the owner.

A typical clause can be framed as below:

If the progress of the work is delayed by the owner or by the engineer or by some reason which is beyond the control of the contractor such as strikes, fire, etc., or any other cause that in the opinion of the engineer is justified for the extension, the time of completion shall be suitably extended as decided by the engineer.

It is the contractor’s responsibility to report such hindrance to the engineer-in-charge; he can then apply for an extension of time in writing to the engineer-in-charge within 7 days of the date of completion. The engineer-in-charge may grant such an extension of time on reasonable grounds.

4. Completion Certificate

On completion of the work including the removal of surplus materials or any other materials in connection with the work, the contractor shall be furnished with a completion certificate by the engineer-in-charge. The date of completion shall be noted in the measurement book according to the date as certified in the certificate.

5. Payment on Certificate

The contractor shall be entitled to receive monthly payment on bills submitted by him to cost more than Rs. 5000 and duly approved and passed by the engineer in – charge, whose certificate of the sum shall be final and conclusive. But all such intermediate payments shall be regarded as an ance against the final payment and not as payment for work actually done.

6. Work at Night and on Holidays

There are conditions of the contract in construction that No Work shall be done at night, on Sundays, or on another holiday without the written permission of the engineer in charge.

7. Inferior Materials and Workmanship

This clause is provided to reject the materials and workmanship which do not conform with the specifications of the work.

These conditions of the contract in construction may be written as:

All materials and workmanship which in the opinion of the engineer in charge are not conforming to the provisions made in the specifications of the works shall be

All rejected materials shall be suitably marked on the site and shall be removed to a suitable distance at once her the contractor on demand from an engineer. All

Condemned workmanship shall be rectified repaired or replaced by the contractor for the satisfaction of the engineer in charge.

Also Read: Best CAD Software For Architects | All You Need to Know

8. Departmental Materials

When departmental materials are issued to a contractor from time to time for the purpose of the contract only at a fixed issue rate as provided in the tender. The value of the full quantity of materials supplied may be deducted from sums then due or thereafter to become due to the contractor under the contract or from the security deposit.

These conditions of the contract in construction specified that,

All construction materials given to the contractor are the absolute property of the government and shall not on any account be removed from the site of the work and shall at all times be open to inspection by the engineer-in-charge or his authorized persons.    

9. Extra Items and Their Payments

A contractor shall carry out the execution of the items which are not covered under this contract, after obtaining the written order from the engineer-in-charge. Commencement of such work shall not in any way violate the terms and conditions of the original contract.

The engineer-in-charge shall decide and fix the rate of the extra items by comparing and studying the rates of suitable items mentioned in the contractor’s tender or by the actual process of rate analysis. No extension of the time limit shall be granted due to the execution of the extra items unless the same is recommended by the engineer-in-charge.

10. Measurement and Payment to Contractor

The measurements of all the Items under this contract shall be Liken by the Engineer-in-charge or his representative as per standard practice in accordance with the standard model of measurement of building works.

The contractor shall submit a bill in printed form on or before the twentieth (20th) of each month of work executed in the previous month. The bill of work shall be prepared as per the rates specified in the tender.

If the contractor has submitted a bill for payment as above, the engineer-in-charge shall, not later than the first month, issue a certificate for payment to the contractor.

The amount payable shall be 90% of the sum obtained by applying tendered rates to actually measured quantities of the approved work completed by the contractor during the preceding month.

11. Commencement of Work According to Drawing and Specifications

All works shall be carried out in accordance with the design, drawings, and specifications, and all materials in every respect shall be in strict accordance with the specifications. The contractor shall be entitled to have access for the purpose of inspection during office hours of all such drawings and specifications and all of such designs, and drawings as aforesaid.

Also Read: The Best Construction Management Schools Right Now

12. Additions and Alterations

The engineer-in-charge reserves the right to make any change in, omission from, any additions or alterations to, the original designs. Drawings and specifications instructions are necessary for the opinion of the engineer-in-charge during the progress of the work and may be given to him in writing and signed by the engineer-in-charge.

Such charges, omissions, and substitutions shall be deemed to have formed as work included in the original tender and the contractor shall be bound to carry out the work. The time of completion shall be extended proportionately by the engineer-in-charge due to the above reasons.

13. Subletting

In order to guard against the behavior of the sub-contractors appointed by the main contractor, this clause is included in the conditions of the contract in construction.

The clause should provide for two important points,

  • Written permission to appoint sub-contractors is to be obtained from the owner.
  • The main contractor is to be considered responsible for the work as a whole.

The clause of subletting may read as follows.

The contract should not sublet or assign work to others without the written approval of the owner. In case the contractor assigns or sublets his contract, or attempts to do so, the owner may, by notice in writing rescind the contract. In the event of Contract shall thereupon forfeit and be absolutely at the disposal of the owner.

In such a case, the owner has full right to take the remedy, take possession of the premises and all the materials, tools, and appliances thereon and finish the work by whatever method he may deem expedient. The contractor shall not eligible for any payment until the work is completed.

If the unpaid balance of the contract price shall expense the expense of completing the work, such excess shall be paid to the contractors: In case, when expenses or cost of finishing work exceed the unpaid amount balance, the contractor shall pay the difference to the owner. The engineer’s certificate as to the expense r finishing the work shall be final.

14. Breach of Contract

In case a contractor fails to carry out work with contractual obligations, the owner must have the right to claim damages for breach of contract. However such damages will not always be an adequate remedy and provisions must be made in order to get the work completed.

In case of abandonment of the work owing to bankruptcy or liquidation, serious illness or death of the contractor, or any other cause, the owner shall have the power to adopt any of the following courses as he may deem best suited to his interests

  i) To rescind the contract.

 ii) To take over and complete the work as an agent of the contractor.

The owner shall have the right to employ labor and supply materials to carry out the work, or any part thereof, debiting the contractor with the cost of the labor and the price of the materials, and crediting him the value of the work done, at the same rates as if it had been carried out by the contractor under the terms of the contract.

The owner shall also have the right to take possession of and use or permit to use all tools, plants, materials, and stores provided by the contractor for the execution of the-a work, paying or allowing for the same in accounts at the contract rates or at the current market rates.

The contractor shall not remove tools, plants, materials, etc. from the site without the written permission of the owner. The engineer in charge shall determine the cost of all the work done by the owner acting as an agent for the contractor and in that case, the certificate assigned engineer-in-charge shall be confirmed and conclusive against the contractor.

When the breach of contract is on the part of the owner, the contractor has the right to abandon the work and bring an action for damages.

15. Labour Laws

It is agreed by the contractor that he shall have to respect the provision of the labor laws Which are in force from time to time and the contractor shall be responsible for all claims, compensations, etc, occurring under the provision of such labor laws.

the work on behalf of the Architect and the contractor is supposed to give him full cooperation and assistance to perform his duty well.

The clerk of works shall be a qualified competent person to the satisfaction of the Architect or Engineer. He shall be appointed and paid regularly by the owner as per the recommendation of the architect. The contractor shall afford every facility and assistance to the clerk of works for inspecting the works and materials for checking and measuring time and materials. However, subject to this clause, the contractor shall t the instructions only from the engineer or Architect.

16. Compensation in Case of Bad Work

If any work is found to have been executed by the contractor with unsound, imperfect, or unskillful workmanship or with inferior materials, or it Is not in accordance with the contract, the contractor shall make good the defects in work at his own expense and remove the materials or articles complained in writing by the Engineer-in-charge.

If the contractor fails to do so, within a period as specified by the engineer in charge the contractor shall be liable to pay compensation at the rate of one percent per day up to a maximum of 10% of the amount of the estimate. If the contractor fails to rectify the defects or remove and replace the defective materials the same may be done at the risk and cost of the contractor.

17. Maintenance Period

The contractor shall be responsible for any damage or any defects noticed within the prescribed maintenance period of 3 months (6 months in case of road work). The work shall as soon as practicable after the expiration of the maintenance period be handed over to the engineer-in-charge in good and perfect condition.

if any damages, defects, or imperfections become apparent in it from the armed date of commencement until the end of the maintenance period, the contractor shall make good same at his own expenses, or in default, the engineer in charge shall be entitled to carry out such work by other workmen and deduct the expense from any sums that be due to the contractor or from his security deposit.

The security deposit of the contractor shall not be refunded before the expiry of the maintenance period or till the final bill has been prepared and passed whichever is later.

Also Read: Engineering Disciplines

Summary On The Contractor

During the various phases of construction, Different types of contractors play a variety of roles, each with its own set of responsibilities. On a daily basis, contractors should be able to manage uncertainty as well as take decisions. The contractor’s past record is also crucial, because those with more experience may successfully respond to frequent project challenges.

FAQs On The Contractor

What is a Contractor?

The word “contractor” is derived from a legal agreement. Between the owner and the builder, there will be a legal contract. The contractor is an organization or, in certain cases, a person engaged by a client to carry out the work which is necessary to complete the project.

Which are the Types Of Contractors?

The flowing are the types of Contractors

  1. Trade Contractor
  2. Management Contractor
  3. Approved Contractor
  4. Prime Contractor
  5. Work Package Contractor
  6. Integrated Supply Team
  7. Design and Build Contractor
  8. Design, Build and Manage Contractor
  9. Subcontractor
  10. Domestic Subcontractor
  11. Construction Manager
  12. Nominated Subcontractor
  13. Named Subcontractor
  14. Works Contractor
  15. Principal Contractor
  16. Supplier
  17. Specialist Contractor

What is a Trade Contractor?

A trade contractor is a subcontractor who focuses on a specific aspect of a construction project.
The trade contractors perform a wide range of tasks in a variety of locations, including repair, renovation, and construction.

What are the Conditions of the Contract?

The Following are the contract conditions used in construction
1. Security Deposit (An Important Condition of the Contract)
2. Compensation for delay
3. Extension in Time Limit
4. Completion Certificate
5. Payment on Certificate
6. Work at Night and on Holidays
7. Inferior Materials and Workmanship
8. Departmental Materials
9. Extra Items and Their Payments
10. Measurement and Payment to Contractor
11. Commencement of Work According to Drawing and Specifications
12. Additions and Alterations
13. Subletting
14. Breach of Contract
15. Labour Laws
16. Compensation in Case of Bad Work
17. Maintenance Period

What Is Contract?

The Contract is an undertaking or agreement by a person or firm to do any construction work or activity under certain terms and conditions. These terms are used in the Conditions of the Contract in Construction.

These work may be of different natures like construction, maintenance, and repairs, for the supply of materials, for the supply of labor, the transport of materials, etc.

A contract is one type of agreement which can be enforced by law

In order to make this contract or agreement valid, there must be a definite offer and there must also be equally definite and unconditional acceptance of this offer.

We hope this article helped you learn about The Contractor | Types, Responsibilities, and Conditions You Need To Know. You may also want to learn about Concrete |Definition, Ingredients, and Curing You Should KnowReinforced Cement Concrete12 Most Expensive Colleges /Universities In The World, and 16 Different Types of Concrete You Should Know Right Now.

If you liked this article, please Join WebsiteForEngineers on Telegram, and you can also find us on PinterestTwitter, and Facebook.

Popular on Website for Engineers Right Now!