Premium Essay

Design Liability

In: Other Topics

Submitted By teemrug321
Words 13290
Pages 54
Design Responsibility under Design and Construct Contracts: Some issues for Principals

Introduction

There are a number of reasons design and construct (D&C) contracts are attractive to principals and lenders. There is a single point of responsibility for both design and construction aspects of the project, the principal is able to fast track the project although not all aspects of the construction are complete, there is greater certainty of price and the contractor is involved from the earliest stage in planning design and programming. In consequence, the principal will need to accept a higher price for the contractor to take on this additional risk compared to more traditional construct only contracts.

This paper will identify some issues for principals to consider when allocating design responsibility to contractors within a D&C project. These issues arise as the design and construct process involves a fundamental conflict of interest. Principals desire to have constructed a product of the best quality for the lowest possibly price. The contractor on the other hand is more likely to make a higher profit if the product is of a lower quality (and therefore cost) and a higher price (as opposed to costs). In addition, although a greater proportion of design risk is placed on the contractor, this passing of risk is often accompanied by the abrogation of responsibility and loss of control.

The paper will refer to the approaches of 3 standard form contracts - AS 4300-95, AS 4902-00 and PC1-98 in dealing with these issues focussing on:

1 content of the design duty (this may be duty to achieve a specified result or satisfy particular criteria) and role of the principal’s project requirements (PPR);

2 level of design responsibility (such as an absolute duty or a lower duty of reasonable skill or care);

3 responsibility for prior design...

Similar Documents

Premium Essay

Marketing

...Nisreen Alaa ElDin Ali Abdel Wahed Esraa Adel Hamdy EN Accessories Designs https://www.facebook.com/groups/54233179350/?fref=ts EN Accessories Designs Business Plan Prepared: April 2015 Contents (Just an idea) Business Plan Summary 3 The Business 3 The Market 3 The Future 3 The Finances 4 26 Business Plan Summary Summary EN Accessories Designs is owned and operated by Nisreen Alaa and Esraa Adel. It will be formed as an equal partnership. Nisreen was always an artistic child, even at a young age instead of playing sports like other kids she would make things. She would often find ordinary things lying around school and transform them into a piece of art. Most of her free time was spent crafting things, this is what she enjoyed.  Nisreen and Esraa realized that they needed to develop their own business, specifically a jewelry design and manufacturing studio, also specializing in doing accessories and jewelry made of crystals and semi-precious stones. Recognizing that location of the studio was not that important, as Nisreen works from her home. After finishing the new designs Photos are taken by Esraa to be uploaded in their web page (Facebook) for marketing and taking orders on the new collection. This procedure usually takes place once or twice monthly. Nisreen used to work as an accessories and jewelry designer for almost two years. She also took training courses in Faculty of Fine Arts. Esraa have a good communication and social skills,......

Words: 3716 - Pages: 15

Premium Essay

Analysis of Inditex Performances in 2014

...analysis of INDITEX Annual Report—2014 Major Activities What are the major activities of the company? Explain in your own words( max 150 words) what company does. Use pictures to support your story. INDITEX is a fashion retailer from Spain which started in 1930 as a small workshop making women’s clothing. After the launch of the first ZARA store, a fashion brand, in 1975, INDITEX aims to offer the most fashionable clothes and accessories of high quality. Trough the brands’ international expansion during last 40 years, INDITEX became the biggest fashion group and owns eight brands, such as PULL&BEAR, ZARA HOME, and so on, dealing in activities related to textile design, production and distribution. Today, this fashion group designs and manufactures goods almost by itself, and has a factory for shoe design, production and distribution in the town on the Spanish Mediterranean coast. Profit or loss Did the company have a net income or net loss for the year? How much? Explain on what you base your answer(max 150 words). Refer to the material in your appendices and use footnotes that the reader can easily find the information as well. From the Consolidated statement of comprehensive income and main indicators, we can clearly tell that the net profit is 2,510 million euros. Net Income Percentage = Net Income /Total Revenue = $2,510 /$18,117 =13.9% INDITEX’s Net Income Percentage is relative low, which illustrates that......

Words: 985 - Pages: 4

Premium Essay

Audit Study Guide

...I/C. ACCOUNTS PAYABLE flows into: -cash in bank / Raw material purchases -purchase R&A / PPE -purchase disc / Prepaid Expenses ….which then flows into Manufacturing/Selling/Admin Expense Control Accounts CLASSES OF TRANSACTIONS/ACCOUNTS Acquisitions: Cash Disbursements: * Inventory -Cash in bank (from cash disbursements) * Property, plant, and equipment -Accounts Payable * Prepaid expenses -Purchase Discounts * Leasehold improvements * Accounts payable * Manufacturing expenses * Selling and administrative expenses Processing Purchase Orders: -Purchase requisition -Purchase order Receiving Goods and Services -Receiving Report Recognizing Liability: -Vendor’s invoice -Debit memo -Voucher -Acquisitions transaction file -Acquisitions Journal/lisintg -AP master file -AP trial balance -Vendor’s statement Processing and recording Cash Disbursements: -Check -Cash disb. Transaction file -Cash disb. Journal/lisiting * For both the acquisition/expenditure and cash disbursement cycles, just refresh your understanding of the flow charts and be able to do the following: * Identify internal controls * Identify the objective/purpose of the I/C * Describe how the I/C is supposed to work * Describe how to perform test of internal controls (including where you would select the sample) * What a deviation would look like INTERNAL CONTROLS -Authorization of......

Words: 584 - Pages: 3

Premium Essay

Business

...example of an asset? A) Accounts receivable B) Cash C) Building D) Notes payable Which of the following accounts is NOT an example of a liability? A) Wages payable B) Notes payable C) Accounts payable D) Accounts receivable Which of the following accounts is NOT an example of an owner’s equity account? A) Drawing B) Capital C) Additional investments D) Cash Accountants first record transactions in the: A) chart of accounts. B) trial balance. C) journal. D) ledger. Which of the following accounts is an asset? A) Salary expense B) Accounts payable C) Service revenue D) Prepaid expenses Which of the following accounts is a liability? A) Accounts payable B) Prepaid expenses C) Salary expense D) Service revenue Which of the following accounts is an owner’s equity account? A) Accrued Liability B) Accounts Payable C) Prepaid Expense D) Capital Prepaid expenses are recorded as: A) assets. B) liabilities. C) debits and credits. D) capital. Which of the following are accrued expenses? A) Taxes payable B) Interest payable C) Salary payable D) All are accrued expenses 2. 3. 4. 5. 6. 7. 8. 9. 10. Which of the following accounts is an example of a liability? A) Service revenue B) Building 1 C) Accounts receivable D) Notes payable 11. Which of the following is the detailed record of the changes in a particular asset, liability, or owner’s equity? A) Journal B) Trial balance C) Ledger D) Account 12. Which of the following is the book (or printout) holding......

Words: 4812 - Pages: 20

Premium Essay

Business Plan

...Thanks for downloading a sample plan from Bplans.com A sample plan is a great way to get started, but you can’t just print this plan out and turn it into the bank. You’re still going to have to put in all your own information and do all of your own financial forecasts. With LivePlan, you can easily use this sample as inspiration and create your own plan, complete with financial tables and graphs. You’ll also be able to: • Save time with linked financial tables (the formulas are built in, so you don’t have to do the calculations!) • Benefit from tons of help, advice, and resources. • Present your plan with confidence, with automatic charts and graphs corresponding to your financial data. • Work on your plan anywhere, on any computer. “For 20 dollars I ended up getting a quarter of a million dollars of funding. That’s worth it!” – Todd C. Tablegate Click here to save 50% off the first month of LivePlan! Cover Page [pic]     This sample business plan has been made available to users of Business Plan Pro®, business planning software published by Palo Alto Software, Inc. Names, locations and numbers may have been changed, and substantial portions of the original plan text may have been omitted to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to resell, reproduce, publish, distribute or even copy this plan as it exists...

Words: 5441 - Pages: 22

Premium Essay

Vipp

...purchased a photo-frame for my wife, I wandered into “liro”, a designer furnishings boutique and art gallery. Amongst their beautifully overdesigned and overpriced stock were a number of exceedingly smart looking Vipp pedal-bins. I imagined one such in our bathroom, in place of the small blue plastic bucket-shaped bin we’d been using for the past year and a half. I sensed an impulsebuy coming on, but then looked at the price, which startled me and made me think twice, until, very shortly after, having thought about it a third time, I bought one anyway.” Giornale Nuovo, January 2003 – a Swedish customer tells his Vipp-story Perception of the Brand A waste bin becomes an object of desire. “Less is more” seems to be slogan of Scandinavian design in general: Luxury is rather an understatement than a flashy interior and like furniture and kitchen equipment it takes a lot of decoding to translate the desirable brands into a pretty posh lifestyle. Only if you are sufficiently posh yourself you can decode for instance the Vipp pedal-bin as a desirable object – and then you become a member of this sequestered club of life style connoisseurs. In that sense the waste bin is much more than a convenient place for garbage. 2 The origin Mrs. Nielsens hairdressing salon, 1937 When Jette Egelund’s mother Marie Axelsen in 1939 opened a hairdressing saloon in the Danish provincial town of Randers she asked her husband Holger Nielsen to develop and produce a waste bin to collect......

Words: 4790 - Pages: 20

Premium Essay

Vipp

...purchased a photo-frame for my wife, I wandered into “liro”, a designer furnishings boutique and art gallery. Amongst their beautifully overdesigned and overpriced stock were a number of exceedingly smart looking Vipp pedal-bins. I imagined one such in our bathroom, in place of the small blue plastic bucket-shaped bin we’d been using for the past year and a half. I sensed an impulsebuy coming on, but then looked at the price, which startled me and made me think twice, until, very shortly after, having thought about it a third time, I bought one anyway.” Giornale Nuovo, January 2003 – a Swedish customer tells his Vipp-story Perception of the Brand A waste bin becomes an object of desire. “Less is more” seems to be slogan of Scandinavian design in general: Luxury is rather an understatement than a flashy interior and like furniture and kitchen equipment it takes a lot of decoding to translate the desirable brands into a pretty posh lifestyle. Only if you are sufficiently posh yourself you can decode for instance the Vipp pedal-bin as a desirable object – and then you become a member of this sequestered club of life style connoisseurs. In that sense the waste bin is much more than a convenient place for garbage. 2 The origin Mrs. Nielsens hairdressing salon, 1937 When Jette Egelund’s mother Marie Axelsen in 1939 opened a hairdressing saloon in the Danish provincial town of Randers she asked her husband Holger Nielsen to develop and produce a waste bin to collect......

Words: 4790 - Pages: 20

Premium Essay

Ken Mark

...w 9B11N012 Ken Mark wrote this case under the supervision of Professors James E. Hatch and Larry Wynant to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2011, Richard Ivey School of Business Foundation Version: 2011-11-07 INTRODUCTION It was late March 2007, and Richard McDonald, a managing director at Federal Securities (Federal), was briefing his team on a financing proposal for Lululemon Athletica (Lululemon). Federal Securities was a mid-sized investment bank and in recent years, had managed several capital issues for businesses in the retail sector. McDonald had been monitoring Lululemon’s progress over the past few years and had been impressed by the company’s unique positioning and its rapid growth. He felt it might be timely to approach the......

Words: 5641 - Pages: 23

Premium Essay

Xacc 280 Final Project

...Financial Analysis of Coca Cola versus PepsiCo, Inc. Axia College of University of Phoenix Financial Analysis of Coca Cola versus PepsiCo, Inc. There are two major competing companies that manufacture beverages. They compete for the number one manufacturer and distributor spot for beverages worldwide. Both companies are immediately identifiable almost anywhere. They are PepsiCo and Coca-Cola. They have so thoroughly saturated the markets around the world that they enjoy universal recognition for their company and for their products. Historically, these are the major competitors in the “Cola wars”. They both produce flavored water, regular water, and soft soda drinks. Coca-Cola (Coke) and PepsiCo, Inc. (Pepsi) target all income brackets across the globe due to their ability to produce products which they have convinced millions of people are attractive and reasonably priced. This makes people buy them regardless of their income level. We will review these companies’ income statements and balance sheets to reveal the financial condition of the companies in relation to one another. After an introductory discussion of the companies, we will perform vertical and horizontal analyses from their annual report financial data and then will provide recommendations on each company. There are a wide variety of distributors in these markets, but Coke and Pepsi have stayed number one and two for decades. They have reached far beyond......

Words: 2213 - Pages: 9

Premium Essay

Ford vs Gm Case Study

...publicity. These companies have a long-standing tradition in the U.S as manufacturing giants in the automobile industry, since they began here. With these two cooperategiants, I can evaluate and compare both companies financially. My over all preference. was to buy the General Motors line of cars; in doing this project I wanted to know if by researching each company if I would change my mind. Also, this will enable me to draw a conclusion on which company would be a better investment and which company is doing better as a whole. GM History: Founded in 1908, GM today sells its vehicles in about 200 countries. The company has manufacturing operations in more than 30 countries. General Motors (NYSE: GM), the world's largest vehicle manufacturer, designs, builds and markets cars and trucks worldwide. In 2000, GM earned $5 billion on sales of $183.3...

Words: 2386 - Pages: 10

Premium Essay

123456789

...Information: Lucky Charms, Inc. (“LC”) manufactures a line of hand-crafted decorative silver amulets featuring a variety of designs. The amulets are mainly sold to retailers who then sell the amulets to consumers in their shops or at outdoor, street and weekend markets. LC’s business is somewhat seasonal in that most sales occur in the spring (in anticipation of the summer outdoor market season) with significantly fewer sales in the fall and winter. For the past couple of years LC has experienced cash flow problems that have resulted in LC having to limit production in several months which has hurt sales and profitability. You have been hired by LC as a consultant with the task of developing a master budget. LC plans to use this master budget to approach its bank for a line of credit that will help LC better manage its historic cash flow problem. The owner of LC has provided you with the following data regarding LC’s business and operations. • One amulet equals one unit of production. • The selling price of the amulets is $40. • Although the amulets have many different designs, they all contain about the same amount (0.1 ounces) of silver. • The cost of silver (the only direct material) is $25 per ounce. • The amulets each require 1.5 hours of skilled craftsman (direct) labor to produce. Assume that direct labor is a completely variable cost. • LC pays its skilled craftsmen $16 per hour. • Since the amulets are fairly easy to produce, LC only maintains a......

Words: 800 - Pages: 4

Premium Essay

Rules of Preparation of Balance Sheet

...Rules of Preparation of Balance Sheet A balance sheet allows you to see at a glance what your company’s assets and liabilities are. The balance sheet is basically a summary of what you own and what you owe. Assets, liabilities and owner’s capital are listed as of a certain date, usually at the end of a month, quarter or fiscal year. Your balance sheet gives you a way to determine the value of your business at any particular time. 1. * Preparation of balance sheet of company is very necessary, because Indian Company law 1956 gives strict instruction about the format of balance sheet of a company. A company can make balance sheet according to the form given in Part I of schedule VI of company law 1956. A company can also make balance sheet summary form, but it has to attach its schedule in which explanation of different components are given. We are explaining different components of balance sheet of company which will be helpful for students to prepare balance sheet of company. [* Remember the form of balance sheet under Section 211] You should remember balance sheet and its all components thoroughly. It can be made either horizontal or vertical form. But total of assets should be equal to total of liabilities. Here, I am explaining these components. Assets Side of Balance Sheet 1. * Assets are written in right side of company’s balance sheet. In these assets, we include. 1.  1. *    1. Fixed Assets We will show all fixed assets which......

Words: 1054 - Pages: 5

Premium Essay

Annara

...consider buying an existing business or locating in a rural area. One of the fastest growing areas in the bakery business is the specialty franchise store, producing everything from donuts to complete product lines. For specific information on franchising, refer to Franchising PH guide. A bakery is one of the few businesses where manufacturing and retailing are performed by the same people. You have to be an exceptional baker and business person producing and selling distinctive goods. Get experience in both areas before starting, including areas such as management and accounting. If you buy an existing bakery, carefully evaluate the opportunity. Study the reasons for selling and assess potential profits, sales, expenses, assets and liabilities. Consult with an expert about the condition of the bakery equipment. Ask a lawyer to review any agreement. If you start a new bakery, do the same kind of careful assessments and consult with an accountant and a lawyer. Refer to the Service Business Plan book. Expect early mornings, long days and hard physical work. Sales fluctuate during the year and you will be busiest during special days and holidays. According to the Bureau of Labor Statistics in the online report, “Food Manufacturing”, bakery businesses, together with tortilla manufacturing companies, employed about 18 percent of food manufacturing industry employees in 2008. Also, according to Hoover.com in an online report summary entitled, “Bakery Products”, the United...

Words: 5139 - Pages: 21

Premium Essay

Fin-419/Fin-419-Final-Exam-Guide

...FIN-419/FIN-419-Final-Exam-Guide To Buy This material Click below link http://www.uoptutors.com/FIN-419/FIN-419-Final-Exam-Guide 1) The part of finance concerned with design and delivery of advice and financial products to individuals, business, and government is called A) Managerial Finance. B) Financial Manager. C) Financial Services. D) none of the above. 2)  Managerial finance A) involves tasks such as budgeting, financial forecasting, cash management, and funds procurement. B) involves the design and delivery of advice and financial products. C) recognizes funds on an accrual basis. D) devotes the majority of its attention to the collection and presentation of financial data. 3)  Finance can be defined as A) the system of debits and credits. B) the science of the production, distribution, and consumption of wealth. C) the art and science of managing money. D) the art of merchandising products and services. 4)  Financial service A) is concerned with the duties of the financial manager. B) involves the design and delivery of advice and financial products. C) provides guidelines for the efficient operation of the business. D) handles accounting activities related to data processing. 5)  Which of the following legal forms of an organization’s income is NOT taxed under individual income tax rate? A) Sole proprietorships. B) Partnerships. C) Limited partnership. D) Corporation. 6)  Under which of the following legal forms of organization,......

Words: 2341 - Pages: 10

Premium Essay

Friendly Cards Inc

...Friendly Cards Liu Xing 1. In order to calculate the WACC of Creative Design, we need to estimate the beta first. We can calculate the beta(e) from the weighted beta(e)s of the industry. According to Exhibit 5: βe of American Greetings=1.07 and the net income is 33.4, βe of Gibson Greetings=0.93 and the net income is 24.1. So we estimate theβe of CD: 1.07*33.4/(33.4+24.1)+0.93*24.1/(33.4+24.1)=1.01 Re of CD=Rf+βe(Rm-Rf)=8.4%+1.01*7%=15.47% According to Exhibit 7, the Debt of CD=2250 D/V=2250/4500=50% From Exhibit 6, the interest of 1987 is 100, Rd=100/2250=4.44%, Rtax=95/238=40% WACC=15.47%*50%+4.44%*50 %*(1-40%)=9.07% If we consider the CD’s Equity as it’s market value, which is 11 times of it’s 1987 earnings, the Equity=171*11=1881, the D/V will be bigger, and WACC will be smaller. 2. The purpose we do the projection is to determine whether we should acquire CD, so we need to consider the improvements Friendly intends, they are: Reduce COGS by 5%, other expense by 10%, and sales increase by 6% per year. Using the COGS/Net Sale and Total Expense/Net Sales of 1987, we can estimate that of 1990. When estimate the debt, we use the same rate as Interest/(COGS+Expense) in1987,because Debt is more closely related to the COGS and Expense. Then the income statement of 1990 is as follow: | Income Statement |1987 |1988 |1989 |1990 | |Net sales |5,000 |5,000 |5,300 |5,618 | |COGS |3,075 |2,921 |3,097 |3,282 | | Gross profit |1,925 |2,079 |2,203......

Words: 731 - Pages: 3