15 conditions of contract

Question 1

What is contained in the conditions of the contract?

Answer 1

all clauses relating to the respective rights and obligations of the parties of the contract - mainly administrative

Question 2

Where are the technical matters of the contract?

Answer 2

the specification and drawings

Question 3

Who has ultimate responsibility for al the enquiry documents?

Answer 3

PM

Question 4

What can be done to stop an incompetent engineer from preparing legal documents?

Answer 4

hire a specialised team to prepare conditions of the contract, often requirements for tendering, sometimes invite and receive tenders and help evaluate

Question 5

What are ‘general form of contract’?

Answer 5

contracts prepared and published by professional organisation

Question 6

How can project specific provisions be added to the general form of contract?

Answer 6

annexure attached to general form and supplementary conditions

Question 7

What are the fundamental requirements of general conditions of contract?

Answer 7

1 presentation- it should be easy to follow
2 equitability - no bias
3 the project manager acts as an administrator of the contract, impartial decision maker and principles rep

Question 8

What are the 4 areas of the contract that the principle and contractor often fight about?

Answer 8

1 commencement and completion
2 retention
3 defects liability
4 liquidated damages

Question 9

What is the date for substantial completion?

Answer 9

date nominated in the contract for the works to be handed over to the principle

Question 10

What is the date of substantial completion?

Answer 10

the date certified by the PM as the actual date for works being handed over to principle

Question 11

What are the 3 ways a tenderer can specify a date for commencement and completion?

Answer 11

1 nominate in tender a period for substantial completion
2 nominate in tender a date for substantial completion based on be awarded contract before a certain date
3 confirm in their tenders they can reach substantial completion by a certain date stated in tender enquiry docs

Question 12

What is retention?

Answer 12

portion of the payment held back by principle as guarantee that the work will be completed

Question 13

When the the retention paid back?

Answer 13

1/2 a set period after date of substantial completion and 1/2 after the defects liability period

Question 14

What is the defects liability period?

Answer 14

a time period where the contractor has to rectify any omissions or defects in the work- any of these are breaches of the contract so the contractor will not be paid to correct. There as different values for separate sections of work in the project

Question 15

How is the defects liability period measured?

Answer 15

1 set period of time

2 of throughput if a processing unit

Question 16

What are liquidated damages?

Answer 16

if the contractor does not complete the work by the agreed date then will need to pay amount the principle lateness would cost.
Not a penalty.
It is pre-agreed in the contract

Question 17

What is a corollary to liquid damages?

Answer 17

a bonus for completing the work early- the amount more the principle will earn for early completion .

Question 18

How is the value for the liquidated damages evaluated?

Answer 18

1 interest payments on funds borrowed to finance project
2 cost income from non operations of the project
3 damages or costs of principle not being able to honour commitments