requirements. Such absurd provisions as asking for a performance guarantee from the
contractor without the other party giving a counter guarantee for prompt payment is not fair,
though the contractors sometimes agree to this requirement. Each party should be very
careful in making changes in the standard format which run in its favour but to the detriment
of the other party.
7. Specific Relief Act : If there is a contract and one party is not performing its obligations or
unwilling to do so while the other party is willing and is performing its obligations under the
contract, the aggrieved party can go to court under this Act and compel the unwilling party to cooperate.
8. Dispute Settlement under the Indian Arbitration Act : Though it is not the order of the day,
disputes do arise due to various reasons between the parties concerned. Some of these disputes
may be over minor matters and can be resolved amicably if both the parties sit across the table
and talk over the things. This is frequently not done. It would be advisable to have weekly
meetings at the site, in which in additions to the discussions on progress and quality, any
grievance that one party may have against the other may be brought up, discussed and settled. If
these are settled, the minutes of meetings should be recorded and signed by both the parties.
Now let us look at the causes of the disputes.
(a) Delay in the payment of bills by the Owner and the consequent slowing of works by the
Contractor: In the contract agreement, it is stated that after a certain minimum arnount of
work is done, (expressed in value) the Contractor is entitled to submit a bill and the payment
procedure is stated. If the bill has been checked by the person authorized by the Owner, then
prompt payment should be made. If the Owner delays the payment of one or more bills, or
pays them only partly, and conceals the fact from the Contractor that there is difficulty in
cash flow, the contractor will not carry on at the same speed of construction. The remedy is
either to pay the bills promptly or to rework the construction schedule.
(b) Fixation or the rates for extra items and payment for the same : The contract specifies that
an extra item will be carried out by the Contractor only when it is properly authorized and the
rates are settled. Frequently, the Contractor delays the submission of rate analysis for the
extra items for various reasons and later submits a bill at high rates. The contract specifies
how the rates for extra items have to be worked out. These instructions have to be strictly
followed and the cause of disputes eliminated.
(c) Payment of escalation : The contract has clauses (10c and 10c and the CPWD format) for the
payment of labour and material escalations. The period over which these are payable is given
in the agreement. If the formula according to which the calculation of escalation payable is to
be made, is typed or printed in the contract document wrongly, the Contractor should seek
clarification before signing the Agreement and not raise the issue at a later date, but he
frequently does as also over the period for which escalation is payab