Types of Contracts Relating To the Construction Business

According to the law, a contract is a legally binding agreement that is voluntarily entered into by two or more parties. The only fundamental fact is that both the parties must be capable of having legal power.  A contract can be anything in either a written form or even a verbal promise. . A contract is the key element of every business and is therefore, very vital for everyone to understand all the terms and conditions that are included in it.

In the Middle-East, there are two types of labor contracts- limited and unlimited. A limited contract has both the start and the end date. It cannot go above the period of 4 years but can be renewed if both the employer as well as the employee agrees to it. If the employee is terminated within the period of the contract, the employer then, has to pay for the compensation that is based on either 3 month’s wages or for the remaining period of the contract.

An unlimited contract only has a start date but no end date is mentioned. Either the employer or the employee can terminate the contract as long as a 30 day notice is given. The employee’s wages within the notice period will be paid in full amount for the entire period that has been served. If for some reason, no notice period was given, whoever gave the 30 day notice has to compensate the other with the full payment of the 30 day wages. If you want more information about the types of contracts in the Middle-East, then make use of the Arabic Construction Contracts Translation Services. Even in the construction business, there are different types of contracts. Have a look at a few of them.

Unit Price Contract

In this type of contract, not only the quantities of items are counted but also their prices. The final price of the project entirely depends on the quantity that is required to do the work. Occasionally, this type of contract is suitable only for the construction and supplier businesses that involve accurately identifying only the different types of items not their numbers, in the documents of the contract. As several people are unaware of the Arabic Translation Services, you can take help from the Document Translation services which can be very helpful for all.

Lump Sum Contract

Here, an agreement is made where the engineer or the contractor has agreed to perform a specific project for a fixed price. This type of contract can also be named a Fixed Price Contract and is mostly used in the engineering business. This is suitable where both the capacity and schedule is satisfactorily clear so that the contractor or the engineer can properly estimate the costs of the project at hand. Take advantage of the Arabic Contracts Translation Services, if you’re interested in starting a construction business in the Middle-East.

Cost plus Contract

This contract is similar to an agreement made where the buyer has entirely agreed to pay for not only the complete cost of the material and labor, but also the amount for the contractor operating cost and profit.  This type of contract is especially favored where the scale of work is not sure and cannot determine the different types of labor, material and also equipment that is to be used. Uncountable people, living in the Middle-East, have no knowledge of the Arabic language. You can always avail the opportunity to hire the best Language Translation Services for their help.

Along with these types of contracts, there are also incentive contracts as well as percentage of construction contracts. So, if you want to start a business in the construction field, it is very important for you to understand all the details about the different types of contracts. Therefore, you can check out the Arabic Contracts Fast Translation Services.