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Technical PM-competences (Fach) / 1.14 Procurment & Contracts/ 3.11 Legal (Lektion)

You should be able to use and explain the following Terms: Purchase contract, performance default, work contract, claim management, service contract

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  • Summary (Procurment & Contracts) The most important contract types in projects are purchase contracts, work contracts, and service contracts. The main disruptions of performance in project contracts are performance delay, poor performance, partial failure to perform, inability (e.g. delivered amount/quality does not comply with agreement). This results in different rights for client and contractor.
  • Contract A contract is a legal transaction. In common law a contract is an agreement with a legal element entered into voluntarily by two or more parties.
  • Contract management A filed of activity within project management responsible for steering, completing, updating and developing contracts in order to achieve project objectives. The objective of contract management is the optimal design of contracts in order to achieve contract objectives and support the management of additional demands.
  • Laws applicable in projects Maternity protection law (Mutterschutzgesetz) Working hours act Employment protection act Occupational safety law (Arbeitsschutzgesetz)
  • Procurement A commercial transaction between the project team and a third party for certain products or services that the team itself connot, or will not, produce or carry out.
  • Purchase contract The seller owns a product (free of material or legal defects). The seller trades property and posession to the pruchaser for a monetary value.
  • Service contract The contractor owes a service or a acitivity regardless of success. The client owes the agreed compensation.
  • Work contract The contractor owes success. The client owes the agreed approval and compensation.
  • Breach of contract Example: delay, mal-performance, non-performance, no or to less payment Break of contract leads to the following rights:Rework, reduction of agreed compensationm, compensation of damages, contract penalties, non-acceptance, cancellation of the contract
  • Claims Claims are the consequences based on the agreeements in a contract, to which one contract party holds the other, if they do not (or only partially) comply with the contract agreements. Or if the other contract party demands changes due to contractual arrangements, Or if the contract execution is disrupted by something that neither party is responsible for. Types of claims: Schedule related claimsContent related claimsFinancial claims
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