1.5 Basic contractual mechanisms and procedures at various stages of the contra Flashcards
Client / Contractor Protection
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Give a list of mechanisms to protect the main contractor from the client.
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Give a list of mechanisms which protect the client from the main contractor?
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How would a dispute be dealt with in the contract?
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What is meant by adjudication?
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Which party under the contract has a right to adjudicate?
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What is meant by arbitration?
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Explain how provisions relating to Testing and opening up might benefit the client under a construction contract.
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How do you deal with defective work?
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What is meant by fluctuation provisions?
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Can you explain what is meant by contribution levy and tax fluctuations
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Can you explain what is meant by labour and materials cost and tax fluctuations
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How are fluctuations rates worked out?
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What is an advance payment? Why might the client wish to use one?
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What is an advance payment bond?
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Can you tell me the advantages and disadvantages of using an advanced payment compared to an advanced payment bond?
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Explain what is meant by retention
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Why is it beneficial to the client to use retention?
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At what RIBA stage will retention firstly need to be considered?
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Explain the significance of retention at tender stage and how it may be incorporated into particular tender documents.
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What is a typical rate of retention?
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Explain the process of releasing half then full retention.
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What is an alternative to retention?
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What is a retention bond? Why might this be used?
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What might be a typical rate of retention?
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What is the rectification (or defects) period?
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What is a typical timescale for a rectification period?
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Why is it beneficial to the client to include a rectification period under the contract?
1.5
Under a construction contract what contractual provisions may be in place to deal with materials off site?
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Explain what a Performance Bond is.
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At what RIBA stage will a Performance Bond firstly need to be considered?
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How does the use of a Performance Bond affect certain processes at tender stage?
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What is a typical value of a Performance Bond?
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How will the client go about claiming a Performance Bond?
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Explain what a Parent Company Guarantee is.
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What are the benefits to the client of using a Parent Company Guarantee?
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At what RIBA stage do we firstly need to consider Parent Company Guarantees?
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How is a Parent Company Guarantee triggered? What are step-in rights?
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Can you tell me the advantages and disadvantages of using a performance bond compared to a parent company guarantee?
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What do you understand about the Third Parties Rights Act?
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What are the disadvantages of using the Third Parties Rights Act?
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How might a construction contract be suspended?
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What is force majeure?
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How can a construction contract be terminated by the contractor?
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How can a construction contract be terminated by the employer?
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What are LADs? How are they calculated?
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What is the process for deducting Liquidated Damages?
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Can Liquidated Damages be challenged by the contractor?
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What provisions are within the JCT SBC to protect the client financially should the contractor become insolvent?
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Can you tell me some of the reasons why an employer may determine the contract? What are the procedures in relation to this?
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What is acceleration?
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What is the process of acceleration?
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What do we mean by a claim for Loss & Expense?
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Why is it beneficial to the contractor to be able to claim for Loss & Expense?
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What are the general heads of claims for loss & expense?
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Give an example of the procedures and timescales which may govern a claim for loss & expense under a given construction contract.
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What is an Extension of Time?
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For what reasons may a contractor claim for an Extension of Time?
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Why is it beneficial to the contractor to be able to claim for an Extension of Time?
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Give an example of the procedures and timescales which may govern an Extension of Time claim under a given construction contract.
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Can you explain what a Collateral Warranty is?
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Why is it beneficial to the client to use a Collateral Warranty?
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At what RIBA stage do we firstly need to consider a collateral warranty?
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How is a Collateral Warranty triggered?
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Timescales
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Give an example of mechanisms which place timescales on parties named under a construction contract
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Commencement & Completion
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What do you understand by sectional completion?
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What contractual considerations are required if the works are divided into sections?
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What do you understand by partial possession?
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What things do you have to consider if the client takes partial possession of a site?
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How does partial possession effect LADs and insurances as set out in the contract?
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What are the advantages and disadvantages of Partial Possession?
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What is the difference between sectional completion and partial possession?
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What is meant by deferment of possession? How long might deferment of possession typically be?
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What is an Extension of Time? How is it granted?
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What is meant by a relevant event? Give some examples.
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Sub-contractors
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What are the different types of sub-contractors which may be named under a construction contract?
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What are the contractual implications of using domestic sub-contractors?
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What are the contractual implications of using a named sub-contractor?
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Variations / CEs
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What constitutes a variation under a JCT contract?
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What are the rules for valuing variations under JCT?
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If you are using JCT in relation to a variation how can you make it so that time and cost for implications are agreed upfront?
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What is a Schedule 2 variation quotation? Why might this be beneficial to the client?
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What constitutes a Compensation Event under a NEC contract?
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What are the rules for valuing Compensation Events under NEC?
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What is the difference between valuing variations under a JCT compared to an NEC contract?
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Explain what a verbal instruction is.
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Is a verbal instruction applicable to both JCT and NEC?
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Payment
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What are the different types of payment mechanisms used under various construction contracts?
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Explain the procedures and timescales which govern interim valuations under a JCT SBC.
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How would the roles in the interim valuation process (in relation to the certifier and the valuer) differ under a JCT SBC and a JCT D&B Contract?
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What do we mean by stage payments?
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What do we mean by milestone payments?
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What do we mean by payment against an activity schedule?
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What do we mean by Valuation of works done to date on site (third-party certification)?
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What is your understanding of a pay less notice? When might the client issue one?
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Which timescales are governed by statute in relation to interim valuations?
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If the contract did not state any rules for interim valuations and stage payments how would you know which rules to follow?
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Insurances
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What insurances are likely to be included under a construction contract?
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Can you explain what Employers Liability insurance is?
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Can you explain what Public Liability insurance is?
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Can you explain what insurance of the works and existing structures is? How is this dealt with under a JCT contract?
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What other optional insurances might be used under a construction contract?
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Can you tell me about Professional Indemnity Insurance?
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Other
1.5
What are the implications if an Employer is deemed to be a residential occupier within the meaning of section 106 of the Housing Grants Construction and Regeneration Act 1996?
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What is an information release schedule and why might the client choose to provide one?
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What are the implications if an Employer is considered a ‘contractor’ for the purposes of the Construction Industry (CIS) scheme?
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What is the significance of inserting a Base Date into a construction contract?
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Under a construction contract what is meant by listed items? How are these significant?
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Why might you have a bond for a listed item?
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Under a construction contract what is meant by ‘assignment of rights’?
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What is the difference between executing a contract underhand or as a deed?
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For NEC contracts what is the mechanism for amending the terms?
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What is your understanding of Practical Completion? What needs to be in place to grant Practical Completion?
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What obligations do the Contractor commit to after Practical Completion?
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Explain the process and timescales in relation to interim valuations under JCT and NEC
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Explain the process of Early Warning Notices through to instructing a Compensation Even under an NEC contract
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What is the Joint Fire Code and when does it apply to a contract? What effect does it have?
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