L4M3 Exam Dumps - Commercial Contracting

A framework agreement will set out the following:

- How call offs can be made - whether a mini-competition is required or a direct call off can be made

- How price is calculated

- The specification - this may have various options to cater for different needs

- The duration of the agreement

- Who can access the agreement

- Any limitations

- The main terms to be included in the contract or the form of contract to be used, where this is intended to be a standard form.

In common law (the legal system in which most rules come from case law or precedents, such as UK, US, Australia, etc), the contract is legally binding if it has the following requirements:

- Offer

- Acceptance

- Certainty & Intention to Create Legal Relations

- Consideration & Promissory Estoppel

- Legal capacity

According to these rules, 'Blanket order', 'One-off purchase', and 'Hire purchase agreement' are contractually binding. One of the reason is that they have consideration.

However, there is a type of legal instruments that does not need consideration to be legally binding. They are called 'Deeds'. A deed (anciently "an evidence") is any legal instrument in writing which passes, affirms or confirms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions, sealed. It is commonly associated with transferring (conveyancing) title to property. At common law, to be valid and enforceable, a deed must meet several requirements:

- It must state on its face that it is a deed, using wording like "This Deed..." or "executed as a deed".

- It must indicate that the instrument itself conveys some privilege or thing to someone.

- The grantor must have the legal ability to grant the thing or privilege, and the grantee must have the legal capacity to receive it.

- It must be executed by the grantor in presence of the prescribed number of witnesses, known as instrumentary witnesses (this is known as being in solemn form).

- In some jurisdictions, a seal must be affixed to it. Originally, affixing seals made persons parties to the deed and signatures optional, but seals are now outdated in most jurisdictions, so the signatures of the grantor and witnesses are primary.

- It must be delivered to (delivery) and, in some jurisdictions, accepted by the grantee (acceptance).

Implementation is a substantive requirement which covers the following areas:

- Will there be a need to train the staff to use the equipment?

- Are there integration requirements with other systems or processes?

- How will this work?

- What are the timescales?

- Are detailed method statements required?

Consultation requirements regards to explicitness of compliance with any national or local legal requirements

Advantages of using invitation to tender may be as below:

No Nepotism: Tenders or bids are evaluated on the basis of certain predetermined criteria, such as price, quality and value for money. In other words, the firm offering the highest quality product or service at the lowest price point would win the contract. As most tender documents are opened and evaluated in a public process, I think that there remains little room for nepotism or favoritism of any kind.

Value for Money: From the perspective of the client, tenders offer the greatest value for the amount of money spent. This is due to the fact that the client can choose from a wide pool of potential suppliers to select the ones that can produce the highest quality product or service at the lowest price point. This allows the company, establishment or organization to save money without having to compromise on quality. Therefore, despite being quite time consuming, tendering is, in my opinion, a profitable long-term process from an organization’s point of view.

Encourages Competition: The process of tendering helps promote a competitive market. This is because a number of potential contractors, firms or suppliers get a chance to bid for every project. And because selection depends on quality and price, every bidder tries to reduce operational inefficiencies and redundancies as much as possible in order to lower expenses and improve quality. This entire process encourages healthy competition in the market and prevents complacency and laziness, which in turn provides a boost to innovation and new ideas.

Easier Entry: The system of tendering makes it easier and simpler for new firms to enter the market or even a particular industry. This is due to the fact that contracts under this system are awarded on the basis of predetermined, objective criteria. As a result, even a firm that is a new entrant to the market, having no connections or contacts in the industry, can win a prestigious and lucrative contract by providing the highest value for the client’s money. This process therefore helps new firms to quickly get a foothold in the market or industry, thus significantly lowering the traditional barriers to entry.