Review of Building Facility Management and Service Agreement

Running Head: BUSINESS AND CORPORATION LAW 0
Project MGMT
MPM 541
5/12/2019
Student’s Name

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Contents
Background of the report.................................................................................................................2
Introduction......................................................................................................................................2
Contract formation...........................................................................................................................3
Remedies for Contract Breach.........................................................................................................4
Contract implementation.................................................................................................................5
Dispute Resolution System..............................................................................................................6
Method of payment and compensation............................................................................................7
Legal issues missing in the contract................................................................................................8
Conclusion.......................................................................................................................................9

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Background of the report
The contract is a legally valid agreement that is enforceable to each party and the same
consists of certain terms and conditions, which reflect obligations and entitlements of parties
(Bonner, 2019). Here to state that in case of breach of contract, another party can sue the
defaulting party. In this manner, a contract also determines remedies for the innocent party to the
contract and therefore it is necessary to develop the terms and conditions related to a contract
carefully. This requirement becomes more crucial when it comes to the development of
significant commercial contracts where huge money is involved. Parties may suffer heavy loss
out of a contract if they do not include each of the potential terms of transactions. In the
presented report, terms of a contract will be reviewed in different aspects and the legal issues and
gaps identified in them will be also be focused and discussed.
Introduction
Contract selected for the preparation of this report is a Building Facility Management and
Service Agreement that is developed between ALDAR Properties PJSC and a facility manager.
As the name implies Facility management is important kind of document that provides the terms
and other provisions related to a facility management work in relation to the infrastructure of
different industry such as airport, hospital, power station, real estate, and many others. Aldar
Properties is a real estate company of Abu Dhabi. Further to say that the contract is developed in
relation to the building named Shams Meera Abu Dhabi. Although the contract is very detailed
and covered all the possible aspects, yet the same left some areas, which could be included in the
same.

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Contract formation
A contract is formed when offer and acceptance are there in addition to a valid
consideration and intention to create legal relation (Epstein, 2012). All these factors seem to be
validly incorporated in the subjective contract. Nevertheless, in the introductory part of the
contract, registration number of parties should have been mentioned, as the same is a company
and not an individual. In addition to this, under clause 2 of the agreement, it is mentioned that the
parties will do all the necessary things, which are required to do for the renewal of this contract.
It creates ambiguity for the readers of the contract. Parties might have stated the name of
documents, which need to be executed and signed to give effect to the renewal for further
clarification.
Further facility management services required to be performed by a facility manager are
mentioned but the standards/key performance indicators are not mentioned which the service
provider is required to achieve. Section 3 of the clause states that the facility manager will be
entitled to get reimbursement of all the expenses done in the course of performance of the duty in
addition to the cost of services performed by the same. It is a very important clause of this
contract, which consists of consideration for the facility manager. An amount is not mentioned
here but the same should have been. It is very clear that the expenses are real and cannot be
evaluated earlier but the cost of services can be. Parties might have decided the amount, which
will be due in favor of facility manager irrespective of the amount of expenses incurred by the
same. Under clause 4 of the selected contract, obligations of the facility manager are mentioned
and stated that such a manager is required to perform the functions considering Minimum
Service Levels. This term could be more detailed. Minimum service levels are mentioned under
schedule 2 of the contract, but in addition to this, the key indicators should have been