Electrical Contract

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Electrical Contract

A Brief  Introduction About the Electrical Contract

Electrical services contracts are formed in order to hire the services of a professional to plan, install, and manage electrical systems and components. It is the primary and key aspect of the construction industry. The contract falls under the construction contract law, and it comprises the structure of court regulations, decisions, and statutes.

The said aspect of the contract law gets a bit complex as the lawyers are not held accountable to the financial burden of being aware of the law, but the contractors are. In the electricity contract law, the contractor is supposed to perform a specific work (electrical) in return for the contract amount.

In an electrical work contract, the specified work differs according to situations, but it must be related to electrical skills. The offer is usually accepted in writing within a reasonable time, in case the period is not mentioned. If the acceptance is not made in a specified manner, then the contract would be stated null or void.

Who Takes the Electrical Contract? – People Involved

The contract is of importance to anyone who wishes to hire a professional for performing tasks related to planning, installing, and managing electrical components. This contract must involve two interested parties, like the majority of valid contracts. Much like every other legal contract, it must have a promisor/offeror and a promise/offeree. The offeror makes an offer to hire an individual for a specific task. The offer then usually is required to be accepted explicitly. When the said offer is accepted, an electric maintenance contract is effectively agreed on.

Purpose of the Electrical Contract

This contract ensures that the party gets a secure execution of electrical tasks. These tasks generally include:

  • Outdoors or linework on high-voltage electricity lines. The contractor ensures that the electricity transmitted via the lines is secure before reaching the office premises or homes. Managing and maintaining the connections between the office premises and homes with energy sources is also a job of the contractors.
  •  Installation and management of electrical systems in commercial, industrial, and residential buildings.
  • Installing electrical systems for low-voltage requirements. These are crucial in energy-saving lightings, fiber optics, security systems, back-up power, wireless networks, and climate control systems.

In case someone is looking to get any of the aforementioned tasks performed, then they should first consider knowing a bit about the law regarding the electricity contract. It will ensure clear communication and a safe working environment.

[ Also Read: Pre Construction IRU Agreement ]

Contents of the Electrical Contract

When you enter into a contract with an electrician, an Electrical Service Agreement is established which defines the important terms of the contract. The nature of the contract could, however, vary and is well-established in the electrical services contract. In this contract, electrical service provider caters to international or commercial clients.

The electrical maintenance contracts specify the types of services to be provided. The contract has several components and aspects that must be decided before forming the contract. The said components and aspects must be clear and unambiguous. A standard electrical contract template contains:

  1. Consideration: The payments to be made on completion of the assigned work through the modes decided by both parties.
  2. Task Scope: The contractor provides all the labor and materials required
  3. Beginning and Finishing Date of the Project: The contractor commences and completes the work on or before the date specified in the contract.
  4. Permits: The contractor obtains work permits and regulatory approvals from the local municipal/government.
  5.  Insurance: The contractor maintains workers wages and builder’s risk insurance.
  6. Survey & Title: If the property boundaries are subjected to doubts by the owner, the contractor provides boundary stakes.
  7. Access: Specifies the free access provided by the owner to the workers for the materials along with a parking space
  8. Indemnification: Indemnification clause protects the indemnified party against losses from third party claims.
  9. Warranty: The contractor agrees to provide the services in a timely and efficient manner using knowledge and acceptable standards and arrangements.
  10.  Default: Failure to deliver timely services, bankruptcy or insolvency, failure in payments will give rise will be subjected to a material default.
  11. Remedies: If a party defaults to provide any provisions as stated in the agreement, the other party may terminate the agreement by providing a written notice.
  12. Arbitration: Any disputes shall be resolved in accordance with the arbitration rules of the state.

These terms are clearly stated in any electrical contract template, which is easily available online. If the project prospects contain a large scale operation, then a project manager or supervisor must be hired as well. This ensures not just efficiency and security but also budget control and time management. The supervisor can create and maintain a work report to keep the project on time. The supervisor can also take care of the needed project paperwork.

How to Draft the Electrical Contract?

Drafting a clear electrical contract is needed for smooth task performance, and the parties must know the proper way to do it. Here are the steps on how to draft an electric agreement:

  • Description of Services: The contract shall provide information on the tasks, procedures, and verification of equipment and appliances.
  • Scope of Work: Specifications on the materials and services to be provided by the contractor must be stated.
  • Payment: The remuneration, and the mode of payments decided upon by both the parties must be specified.
  • Time of Completion: The work commencement and completion date for the project undertaken must be mentioned.
  • Description of Services: this contract should include the nature of services that are expected to be provided, and authority that the other party grants for completing that project
  • Scope of work: The responsibilities of the parties, along with the deliverables are required to be mentioned
  • Payment: The mode of payment, the payment cycles, and any fines or penalties for non-compliance should be addressed
  • Time of Completion: The estimated time it takes to complete the entire project, along with sectional deadlines should be included. These sectional headlines will determine the rate of completion, and accordingly, payment.
  • Evaluating the Project Aspects: The party who needs the electrical tasks performed must evaluate the scale of the operation.
  • Finding the Apt Party: The next step of the contract should be finding an apt party suitable for the project prospects.
  • Making an Offer: The interested party should then make a reasonable offer to suitable professionals.
  • Negotiations: The parties should negotiate the contract consideration.
  • Acceptance: Accepting the offer is the next step in the contract formation.
  • Plan Formation: The parties should formulate an apt plan to commence the proceedings.
  • Other Aspect: Miscellaneous aspects like the need for a supervisor, project deadline, and task performance should be discussed before commencing the project.

Negotiation Strategy

While negotiating the terms and conditions of an electrical contractor, the parties should consider the following components:

  1. The benefits of both parties must be taken into consideration. No party should hold more power than others in the contract.
  2. The parties should be rewarded adequately according to the task difficulty.
  3. The consideration amount and the task requirements must be clear and unambiguous.
  4. An apt payment channel must be formed.

Benefits and Drawbacks of the Electrical Contract

Forming an electrical contract should be the primary priority of someone hiring an electrical professional. This has several advantages, and some of them are:

  • Efficient Work Performance: Hiring a professional electric contractor ensures an effective and efficient task performance.
  • Security and Stability: Compromising the electrical system of a household or office premises is something everyone wishes to avoid. The same can be achieved by hiring a professional.
  • Reliability: Hiring a professional provides certainty about the reliability of the electrical system.
  • Proper Supervision: Assigning a supervisor ensures time-management and efficient task-performance.

Even though an electric agreement has several benefits, it has a drawback, as well. When it comes to the electrical contract, then the involved parties are supposed to know the details of the law and not their representatives.

What Happens in Case of Violation?

The electrical contract is a key part of the construction contract law and must be taken into account before hiring an electrical contractor. In case the contract is violated, then the party at a loss can sue for damages. However, the contract must have every component of a legal contract for this to happen. If it fulfills the same, then the aggrieved party gains the right to sue for breach of contract or damages.

The party must have sufficient proof about the existence of the contract and the other party’s accountability for the damages. Even if the party fails or refuses to fulfill the assigned tasks, then it would be considered a breach of contract, thus making the party liable to pay for damages.

An electrical contract or electric agreement is an integral component of the construction contract law(1). The contract must be taken into account before a party hires a professional for electrical components or system installation. Forming the contract ensures the safety, reliability, and efficiency of the installed electric components.