Ethics, Contracts & Tenders
Behaviour, clients, fees, the contracts a project runs on — and competitions
Professional practice is behaviour as much as knowledge: honesty, confidentiality, no secret commissions, and the client’s interest first. This unit covers ethics and the client relationship, how designers charge and negotiate fees, the contracts a project runs on and their balance of risk, tenders and arbitration, and the conduct of design competitions.
Learning objectives
By the end of this lesson, you will be able to — mapped to the course outcomes for Professional Practice:
Describe professional behaviour and ethics, the types of clients, and the client–professional relationship.
Explain how designers charge and negotiate fees, and how billing and tax (GST) work.
Compare the main contract forms — item-rate, lump-sum, cost-plus, labour, percentage-rate — by their balance of risk.
Distinguish open, limited and negotiated tenders, the role of arbitration, and how design competitions are run.
Ethics, clients & fees
Professional behaviour is the daily code: honesty, confidentiality, no kickbacks, no undisclosed conflicts. Read the client type without bending the ethics, keep the relationship on trust and clear records, and name the fee, its basis and what it covers before starting — with tax (GST) counted as part of the true cost.[3, 1]
How a professional behaves
PROFESSIONAL BEHAVIOUR is the daily practice of the code of conduct: honesty in what you promise and claim, confidentiality with a client's affairs, no secret commissions or kickbacks from suppliers, no undisclosed conflicts of interest, fair dealing with contractors and consultants, and never taking credit or work beyond your competence. CLIENTS come in TYPES — the private homeowner, the developer, the corporate or institutional client, the retailer — and each brings a different brief, budget, decision process and risk appetite; part of the skill is reading the client and adapting how you communicate and contract without bending your ethics. The CLIENT–PROFESSIONAL RELATIONSHIP is built on trust and clear communication: the designer advises honestly (even when the advice is unwelcome), manages expectations, records decisions, and keeps the client's real interest — not the easiest sale — at the centre. Trust, once broken by a hidden commission or an overclaim, rarely returns.[3, 4]
Contracts, tenders & competitions
A project runs on a contract, and the form chosen decides who carries the cost risk — from shared (item-rate) to owner (cost-plus, labour) to contractor (lump-sum). Tenders are open, limited or negotiated; arbitration settles disputes by clause; and design competitions use independent assessors. Explore the contract forms below.[1, 2]
Contract-type explorer · who carries the risk
Item-rate — Measured quantities × quoted rates
- Use when:
- The design is resolved enough to measure, but final quantities may still move a little (most Indian fit-outs).
- Watch out ·
- The final cost varies with the measured quantities, so it needs accurate measurement (IS 1200) and a clear, complete item list.
- Note:
- The workhorse: you pay for what is actually built. Risk sits broadly in the middle.
The form you choose decides who carries the cost risk — cost-plus does not automatically protect the client, and the lowest tender is not automatically best.
Who carries the risk
A project runs on a CONTRACT, and the form chosen decides who carries the cost RISK. ITEM-RATE: payment = measured quantities × quoted unit rates — the most common Indian form, fair when the design can be measured, with risk broadly shared. LUMP-SUM: one fixed price for a fixed scope — cost certainty for the client, but every change is a paid variation, so the contractor carries the quantity risk. COST-PLUS: actual cost + an agreed fee or percentage — useful when scope is unknown, but with NO built-in ceiling, and a percentage fee can reward overspend, so the OWNER carries the risk and it needs open books and a cap; 'cost-plus protects the client' is not automatically true. LABOUR: the owner supplies materials, the contractor only labour — the owner then carries procurement and quality risk. PERCENTAGE-RATE: a single percentage above or below a published schedule of rates (CPWD DSR) — transparent and easy to compare, but only where a suitable schedule exists. Try the contract-type explorer to see each one's balance of risk.[1, 2]
At a glance
| Aspect | The fact | The folklore |
|---|---|---|
| Item-rate contract | Measured quantities × rates — risk shared; the common Indian form | A guess at the total |
| Cost-plus 'protects the client' | A myth — no cost ceiling; the OWNER carries the risk; needs open books & a cap | True — it's always safest for the client |
| The lowest tender | Not automatically best — compare like-for-like on the same BOQ + capability | Always the one to accept |
| A secret commission from a vendor | A breach of conduct — any discount must be disclosed to the client | A normal perk of the job |
| Design-competition assessors | Independent judges with a duty to judge fairly against the brief | The promoter picking a friend |
Key terms
The code a designer practises daily: honesty, confidentiality, no secret commissions or conflicts of interest, fair dealing, and staying within one's competence.
Percentage of project cost, lump sum, per-square-foot, or hourly/retainer — named, based and scoped in writing before work starts.
The five common contract forms, differing chiefly in who carries the cost risk — from shared (item-rate) to owner (cost-plus, labour) to contractor (lump-sum).
An invitation to bid — open to all, to a shortlist, or negotiated with one party — chosen for the project's value, complexity and risk.
Settling a dispute through a private tribunal under the Arbitration and Conciliation Act 1996, when the contract has an arbitration clause — often faster than court, not always cheaper.
Open or closed contests judged by independent assessors against the brief, with instructions to participants and a premium (prize) for winners.
Study task
Take one imagined fit-out and decide which contract form you would recommend — item-rate, lump-sum, cost-plus, labour or percentage-rate — and write a short paragraph justifying it by who carries the risk and what you would watch for (use the contract-type explorer). Then draft the fee you would quote and its basis. Finally, write two lines on an ethical test: a vendor offers you an undisclosed commission to specify their product — what do you do, and why? The goal is to reason about contracts and conduct the way a practitioner must.
Self-assessment
1. Is 'cost-plus always protects the client' true?
2. How should tenders be judged?
3. A vendor offers you an undisclosed commission to specify their product. This is:
4. What is the role of assessors in a design competition?
Recap
References & further reading
- [1]Indian Institute of Architects, Handbook of Professional Practice — conditions of engagement, fees, tenders and competitions. https://www.indianinstituteofarchitects.com/
- [2]The Arbitration and Conciliation Act, 1996 (India) — the framework for resolving contractual disputes by arbitration. https://www.indiacode.nic.in/bitstream/123456789/21922/1/the_arbitration_and_conciliation_act,_1996_act_no._26_of_1996.pdf
- [3]Christine M. Piotrowski, Professional Practice for Interior Designers, Wiley — ethics, clients, fees and contracts. https://www.wiley.com/
- [4]H. Roshan Namavati, Professional Practice, Lakshani Book Depot, Bombay — contracts, tenders and competitions in the Indian context. https://www.worldcat.org/search?q=namavati+professional+practice
Further reading
- Christine M. Piotrowski, Professional Practice for Interior Designers, Wiley.
- H. Roshan Namavati, Professional Practice, Lakshani Book Depot, Bombay.
- Indian Institute of Architects, Handbook of Professional Practice.
Sources gathered and fact-checked June 2026. Published values vary by source, sample and method — treat as indicative and confirm against the cited standard before structural use.
The author
Amogh N P
Architect, interior designer, and creative polymath. Studio Matrx began in his notebooks — his vision of design made honest, useful, and open to everyone. Its Academy is written and taught in his memory, and free, forever.
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