This document outlines a study on the interpretation and implementation of laws in subcontracts for construction projects. It discusses the methodology used, including literature review, questionnaires, and interviews. The objectives are to identify the unique legal provisions governing subcontracts and assess the relationships between construction parties. It reviews literature on subcontract definitions, types, and selection criteria. It also examines contractual relationships and liability between parties, including privity of contracts, substituting third parties, and back-to-back arrangements.

1. BAHIR DAR INSTITUTE OF TECHNOLOGYBAHIR DAR INSTITUTE OF TECHNOLOGY
SCHOOL OF CIVIL AND WATER RESOURCE ENGINEERINGSCHOOL OF CIVIL AND WATER RESOURCE ENGINEERING
CoTM M.sc. Program
STUDY ON
THE INTERPRETATION AND
IMPLEMENTATION OF LAWS IN SUBCONTRACT OF
CONSTRUCTION PROJECT

2. OUTLINES
INTRODUCTION
METHODOLOGY
STATEMENT OF THE PROBLEM
OBJECTIVE OF THE STUDY
LITERETURE REVIEW
CONCLUSION AND RECOMMENDATION

3. 
Construction projects involve many parties namely the
contractors, consultants, clients, suppliers, subcontractors
and so forth. So the relationship between them are one of
the keys to any successful construction project.
Sub-contracting has been given of recognition in the
construction industry in Ethiopia under the Civil Code of
Ethiopia of 1960. Art. 3201(2) .

4. Duties and responsibilities of the parties have limitations
in understanding of laws, that how to administer
subcontracts.
So this project indeed arise the following research
questions:
1. What are the unique provisions of laws that govern the
sub contract?
2. What are the relationships between the parties?
STATEMENT OF THE
PROBLEM

5. 
The general objectives
of this study assess how
to interpret and
implement laws in
subcontract of
construction project.
To identify the unique
provision of laws that
governs the sub contract.
To assess the
relationship between the
construction parties.
General objective of the
study
Specific objective of
the study

6. Methodology
Literature Review
Questioner
Interview

7. LITURATURE REVIEW ABOUT SUB-CONTRACT
Definition of Contract and Subcontract

8. Classifications of Subcontractors
Based on Contract Price
Lump Sum Sub-contract.
Unit Price Sub-contract.
Negotiated Sub-contract
Based on Appointment
Domestic Sub-contractor
Nominated Sub-contractor
Selected Sub-contractor

9. subcontractor selection Criteria's
According to Arslan et,2008 , specify the important
criteria's to select sub contractors
the quality of production
Efficiency
employment of qualif ied members
reput at ion of and accessibilit y t o
t he company
complet ion of t he work on t ime et c
So if don’t care for the selection process
as well original party shall be liable ( civil
code article 3206(2))
Prof. Awad Hanna

10. Prof. Awad Hanna
Contractual relationship between parties and
their liability
1. Privity of Contracts
1.1 The Rule of Privity of Contracts

11. Prof. Awad Hanna
1.2 Option to Substitute a Third Party
Continue . . . Relationship/privity

12. where a person enters into a contract with another
promising not to assume an obligation him- or herself
but promising that a third party will assume the
obligation. In such cases, if the third party has ratified
the contract, then the person will be released.
Prof. Awad Hanna
1.3 Promise for Third Party
Continue . . . Relationship/privity

13. Back-to-Back Application is the Main Contract,
under which the Main Contractor is obliged to the
Employer & may have rights against the Employer.
The Main Contract, unless expressly incorporated in
the Sub-contract, shall not create any relationship
between the two & there with the former shall not be
applicable to the latter.
Prof. Awad Hanna
2. Back-to-back arrangement
Continue . . . relationship

14. Back-to-back payment conditions (or pay when paid / pay
when certified conditions) are conditions whereby a
subcontractor accepts the risk of being paid by the main
contractor only if the employer pays the main contractor or
if the employer certifies payment to the main contractor
A subcontractor should attempt to negotiate the removal
of back-to-back payment terms under a proposed
agreement. If this is not possible, then such back-to back
payment terms should at least be modified to become more
feasible or to contain special exceptions
Prof. Awad Hanna
The Significant clauses of back-to-back
subcontracts
1. Terms of Back-to-Back Payment Arrangements