Agreement Sum Meaning

Sum certain is a legal term that refers to a certain amount (usually a sum of money) which, at the time of the transcription of the document, is directly indicated in a contract or an exchangeable instrument (. B, for example, a mortgage or debt) that cannot be interpreted or misinterpreted. Sum certain is therefore used for all types of contracts, including financial instruments, but also employment contracts, sales contracts and leases. According to the Associated General Contractors of America (AGC), the owner of a contract essentially attributed the entire risk to the contractor, who can be expected to impose a higher mark-up to avoid any unforeseen contingencies. A contractor under a lump sum contract is responsible for the proper execution of the contract and provides his own means and methods to carry out the work. [6] A lump-sum contract (or fixed-price contract) is a contract with a single flat price for all work, and the contractor is responsible for the completion of the project as part of the agreed fixed costs, set out in the contract. When the contractor completes the project below the total fixed cost, the contractor will reap additional benefits from the project. The "Lump Sum" contract is normally used in the construction industry to reduce order management costs. The "Lump Sum" contract is the most recognized contract form for simple and small projects and, in general, where the project is already well defined in terms of scope and responsibilities of both parties, and it is unlikely that changes will be made, so that the owner must have sufficiently detailed and complete designs and specifications and construction documents at the time of the bid to allow bidders to evaluate work and equipment costs. The "Lump Sum" contract may include incentives or benefits in the event of early completion or penalties called liquidated damages for a late conclusion. In lump sum contracts or fixed-price contracts, the contractor assesses the value of the work in accordance with the available documents.

Mainly, these documents can be specifications and drawings. In the pre-auction process, the contractor takes into account the costs of implementing the project (based on the above documents, such as drawings, specifications, schedules, tender instructions and details received for the requests raised). And the contrast with these contracting documents evaluates and has agreed with the owner (or employer) to complete the work without exceeding the agreed lump sum. [7] A contract that sets an amount of $10,000 for the work performed is clearer than an indeterminate contract that indicates payment at a rate of $50 per hour, subject to a maximum of 200 hours. An employee`s salary, if entered into a contract, would be a certain amount, whereas the performance bonus would not. A certain amount describes the predetermined billing price of a contract or negotiable instrument. It is a fixed or determined amount of money, without being ambiguous. Similarly, when issuing the tender documents, the contracting entities should indicate whether the overhead and profits of the interim amounts are considered to be included in the interim allocations or whether they are part of the contractor`s fixed price.

Because a certain amount is known in advance, actors can better cover or insure the declared value than if the amount was flexible or varied due to contingency (for example. B the different price of a call option moving with the underlying security). Safe Amount is also known as "payable money." On the other hand, the provisional amounts are included, both for the delivery station and for all related work that must be provided by the contractor.