Para 6.10.2 - Breach of Contract | KartavyaDesk
Original Rule Text
6.11 Breach of Contract, Remedies and Termination 6.11.1 Breach of Contract In case the contractor is unable to honour important stipulations of the contract, or gives notice of his intention of not honouring or his inability to honour such a stipulation, a breach of contract is said to have occurred. Mostly, such breaches occur in relation to the performance of the contract in terms of inability to complete the Work within stipulated time. It could also be due to breach of ethical standards or any other stipulation that affects Procuring Entity seriously. As soon as a breach of contract is noticed, a show cause notice should be issued to the contractor, giving two weeks’ notice, reserving the right to implement contractual remedies. If there is an unsatisfactory resolution, remedial action may be taken immediately.
What This Means
Para 6.10.2 of the Works Manual deals with what happens when a contractor fails to fulfill their contractual obligations. This is called a 'breach of contract'. It essentially means the contractor isn't doing what they promised to do in the agreement. This could be anything from not finishing the work on time to violating ethical standards outlined in the contract. The rule applies to all contracts governed by this Works Manual and affects both the government entity (the 'Procuring Entity') and the contractor.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •A breach of contract occurs when a contractor fails to meet important terms of the agreement.
- •Common breaches include failure to complete work on time or violation of ethical standards.
- •Upon noticing a breach, a 'show cause' notice must be issued to the contractor, giving them two weeks to respond.
- •The notice reserves the government's right to take remedial action if the response is unsatisfactory.
- •Remedial action can be taken immediately if the contractor's response is not satisfactory.
Practical Example
The Department of Rural Development awarded a contract to M/s BuildWell Enterprises for constructing a rural road for ₹50 lakhs, with a completion deadline of six months. After four months, only 20% of the work was completed, and the site supervisor reported significant delays and substandard work. The Department, acting as the Procuring Entity, issued a show cause notice to M/s BuildWell Enterprises, giving them two weeks to explain the delay and quality issues. If M/s BuildWell Enterprises fails to provide a satisfactory explanation or a credible plan to rectify the situation within the given timeframe, the Department can initiate remedial actions, such as terminating the contract and engaging another contractor to complete the work, potentially at the expense of M/s BuildWell Enterprises.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What constitutes a 'breach of ethical standards'?▼
What is a 'show cause' notice?▼
What are examples of 'remedial action'?▼
What happens if the contractor doesn't respond to the show cause notice?▼
Does this rule apply to all types of government contracts?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Test Your Knowledge
Question 1 of 3
According to Para 6.10.2 of the Works Manual, what is the FIRST action to be taken by the Procuring Entity upon noticing a breach of contract by a contractor?
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