re write it ib different words 4- Is the owner right in demanding the price redu
ID: 2545757 • Letter: R
Question
re write it ib different words
4- Is the owner right in demanding the price reduction of the $30,000 Frigidaire? In our opinion the owner doesn't have the right for reducing the total contract amountby $30,0000 because the supplier has provided the cooling device as requested in the contract. The cooling device is brought from a special industrial Frigidaire in Germany which is meeting the contract. In this type of contract (turnkey contracts) the owner does not have the control over the contractor for supplying the equipment the owners wish but only can argue if the supplied equipment does not meet requirements of the contract.Explanation / Answer
The turnkey contract is an agreement where the contractor completes the projects and then hand it over to the client in fully operational form. In this type of contracts, the essential design is supplied by the contractor not the owner. thus the owner does not have the control over the contractor to supply the product the owner wish. The owner can only argue if the supplied product is not meeting the requirements of the contract. Thus in this case, the owner does not have the right for reducing the contract price by $30,000 because the product supplied is as per the contract's requirements.
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