3 - Contract Practice Flashcards
1
Q
What should you consider when recommending a form of contract?
A
- Complexity
- Overall value
- Procurement
- Risk
- Client behaviours
- Control of quality or design
- Time constraints
- Quality constraints
- Nature of client (public, private)
2
Q
What does a Contract need to be binding?
A
1) Offer
2) Acceptance
3) Consideration
4) Intent to create legal relations
3
Q
What are the differences between Under Hand or Under Seal (as a Deed)?
A
- Under hand limits liability for a claim to 6 years
- Under seal limits liability for a claim for 12 years
- Under hand requires any one person given authority by a director
- Under seal requires two directors listed on Companies House, or Director and Company Secretary
- If Under Seal (as a Deed) then this must be explicitly stated
4
Q
When would you expect something to be signed Under Hand vs. Under Seal?
A
- Under hand for simpler projects or for temporary elements of projects, such as a large scaffold/temporary works scheme.
- Under deed when it’s a full construction project with potential for latent defects to occur.
5
Q
Explain the make up of an NEC ECC Contract
A
- Core clauses:
General Terms
Contractors Responsibilities
Time
Testing and Defects
Payment
Compensation Events
Title
Risk and Insurance
~~~
- Choose one of 6 main options
- Select W option for Dispute Resolution - option W2 in the UK due to the Construction Act
- Choose relevant secondary X options
- Select Y options (have to select Y(UK)2 because of LDEDCA)
- Contract Data Parts 1 and 2
- Scope
6
Q
Can you identify all the Main NEC ECC options?
A
A - Priced Contract with Activity Schedule
B - Priced Contract with BoQ
C - Target Contract with Activity Schedule
D - Target Contract with BoQ
E - Cost Reimbursable Contract
F - Management Contract
7
Q
When would you use Option B?
A
- Design is largely complete to provide good BoQ
- Client wants to pay only what they should for the actual quants
- Allows interim payments based on typical valuation
8
Q
When would you use Option A?
A
- Effectively a lump-sum contract
- When requirements are well defined
- When you want Contractor to take the risk
- Simple stage payments based on activity schedule
9
Q
When would you use Option C?
A
- For D&B
- Not greatest level of design, enough to price, but need to get on with the project
- When Client risk under A/B would be too great
10
Q
When would you use Option E
A
- Emergency works (repair fire damage)
- Just need to get on with it
11
Q
When would you use Option F
A
- Very experienced
- Don’t want to pay large PC overheads
- Cost risk with Client
12
Q
What JCT Contracts do you know of?
A
- Minor Works (up to £200K, small, simple)
- Intermediate Works (up to £500k, medium, simple)
- Major Works (£millions, large, complex)
- Standard Building Contract (£millions, large, complex)
- Design and Build (£any value, technically)
- Constructing Excellence (£millions)
13
Q
What is the difference between Reasonable and Best Endeavours?
A
Reasonable is less onerous than Best.
Best implies that no stone should be left unturned and that may mean a party has to use extra resources to do so. If they don’t, they may find themselves in breach.
14
Q
What is the CE process under NEC?
A
- NCE issued by Contractor within 8 weeks of it occurring.
- PM responds within 1 week confirming or rejecting
- PM accepts and requests quotation
- Contractor submits quotation
- PM reviews within 2 weeks
- PM accepts and implements CE
Key Rules
- Deemed acceptance by PM if don’t respond to quotation
- PM can request quotation on the basis EWN should have been issued
- PM can assess quotation
- PM can request Contractor make assumptions in their quotation
15
Q
What Insurances are required under JCT?
A
- Contractors All Risk insurance in following options
A - Taken out by Contractor
B - Taken out by Employer
C - Taken out by Employer (existing building) - Employers Liability Insurance
- Professional Indemnity Insurance
- Non-Negligence Insurance (6.5.1)
- Can also provide Latent Defects insurance
16
Q
What Insurances are required under NEC?
A
NEC4 states the four specific events for which the contractor is liable. These are:
- Claims from third parties
- Loss or damage to works, plant, materials, and equipment
- Loss or damage to client property
- Death or injury of employees
17
Q
Can you tell me about design liability in NEC4?
A
- If X15 is selected then Design is limited to Reasonable Skill and Care.
- X15 requires PII to be taken out.
- If not, it needs to be to suit Scope, which is therefore Fit for Purpose.
18
Q
What was the Third Party Rights Act 1999?
A
Reformed the principle of contract privity in English law to allow third party rights
19
Q
What was the Latham Report 1994?
A
‘Constructing the Team’ - identified two key things:
1) Payment practices were poor
2) Disputes were expensive and time consuming.
Led to many of the elements of the Housing Grants, Construction and Regeneration Act 1996
20
Q
What are the key elements of the Housing Grants Construction and Regen Act?
A
1996
- Right to stage/interim payments after 45 days
- Right to adjudication
- Removal of pay when paid
- Right to be informed of amounts due
- Right to suspend works
21
Q
What are the key elements of the Local Democracy Economic Development Construction Act?
A
2009
- Withholding notice changed to Pay Less
- Contracts don’t just have to be in writing
- Payment notice still required even if zero
- Payment notice required 5 days after due date
- Remove pay when certified loophole
- Remove unfair allocation of adjudicator’s costs
22
Q
What is Tort Law?
A
Area of law that mainly deals with negligence. Allows parties to bring a case against another due to the Duty of Care.
23
Q
What are the three general types of LOI?
A
- Letter of comfort
- Instruction to spend
- Recognition of contract
24
Q
What are the key things to consider about LADs?
A
- Zero/Nil means zero for anything
- If blank, that ULAD can apply
- Must be a genuine pre estimate of the loss
25
What is the difference between a bond and a guarantee?
- Bond is a means of protection against a contractor not fulfilling their obligation.
- Guarantee is a 3rd party guaranteeing to fulfill that obligation.
26
What are some issues to watch out for with Bonds, Warranties and Guarantees?
- How they relate to the main contract
- Any time bars on correspondence?
- Exact process must be followed
27
Give me 2 key clauses from NEC
- 60.2 - Compensation Events
- 10.2 - Mutual trust and cooperation
28
What are some key changes in NEC4?
- New ECI X Option
- Deemed acceptance of programme
- Gender neutral language
- 'Dividing Date' rule for assessing CEs
- X15 Option for design liability
29
What is the NEC EWN process?
- Parties give EWNs to each other if prices, programme, or quality are affected.
- PM enters on the EWN register and issues out.
- PM instructs EWN meeting within first two weeks and then when they want to throughout.
- If scope change is decided as a solution, needs to be instructed when EWN register is re-circulated.
30
What if a client is not happy about PII levels?
- Just accept it
- Get project specific PII
- Look at additional items such as Latent Defects Insurance, bonds or guarantees
31
What happens at Practical Completion?
- Works deemed complete
- Defects period begins
- LADs fall away
- Insurance for building responsibility of Client
- Half retention released
- Practical completion certificate
- Testing & Commissioning details
- O&M Manual
- Statutory Sign-offs
32
What happens at Sectional Completion?
- Works for that section deemed complete
- Defects period beings BUT NOT FOR NEC
- LADs for that section fall away
- Half retention for that section released BUT NOT FOR NEC
- Insurances to be resolved
33
What happens at Partial Possession?
- Agreement from contractor to use the space in a project for its purpose
- Works for that section deemed complete
- Defects period beings BUT NOT FOR NEC
- After calculation, LADs for that section fall away
- After calculation, Half retention for that section released, BUT NOT FOR NEC
- After calculation, Insurances to be resolved
34
What are the core payment options in JCT
- Stage payments (milestone payments)
| - Periodic payments for COWD
35
What are the payment options under NEC?
A – Priced Contract with Activity Schedule
B – Priced Contract with Bill of Quantities
C - Target Cost Contract with Activity Schedule
D – Target Cost with Bill of Quantities
E – Cost Reimbursable Contract
F – Management Contract
36
What is assignment?
Assigning the benefit of a contract to another party - i.e. the developer after they've finished to a new landlord.
37
What are the three Notices required for deducting LADs under JCT?
- Notice of non-completion
- Notice of intention to deduct
- Notice of withholding or demanding payment
38
Explain a Performance Bond
Insures a client against the risk of a contractor failing to fulfil contractual obligations.
Pays out 10% of contract value in the event of Contractor default.
39
What is a Bid/Tender Bond?
Used to prevent idle tendering. Usually around 1% of contract value and covers the cost of re-tendering.
40
Explain a Retention Bond
Used in lieu of holding retention. Eases Contractor cashflow but can reduce leverage on Contractor and Client doesn't get interest.
41
What is the programme submission process in NEC?
- First programme for acceptance.
- Regular intervals thereafter - defined in Contract Data
- PM has 2 weeks to review. Can reject for numerous reasons
- If no answer, Contractor notifies of failure
- If still no answer, default acceptance
42
What happens when a Contractor misses a Key Date
Contractor is liable to pay the incurred costs to the employer as a result, but only the specific project costs.
43
Explain Latent Defects Insurance
Can provide extra security for resolving latent defects if they are not covered under the Contractors other insurances, or if the Contractor has gone insolvent.
44
What is the Contract Sum Analysis in JCT?
A form of pricing document included with D&B contracts. Sets out the breakdown of costs of the works in the format required by the Employer.
45
When can the CSA be amended?
- Changes
- Loss and Expense
- Expenditure against provisional sum
- Acceleration
46
What are the key parts of the JCT contract?
Remember ACCCE:
- Agreement
- Conditions
- Contract Particulars
- CSA
- ERs
- Sections
- Schedules
47
Can you explain Novation?
Transfer of obligations between one set of parties to another set.
48
What are the benefits/risks of Novation?
- Confusion over who the master is
- No recourse for the original party to claim due to contract privity. Would need collateral warranty.
- Retains the same design team and knowledge.
49
What are the benefits/risks of a Collateral Warranty?
- Lots of paperwork in big projects
- Can cost a lot in legal fees
- Addresses the issue of Privity and offers protection in the event of insolvency of a party
- Contractor insolvent they are responsible for defective work
- Alternative to Third Party Rights
50
What are the three key reasons for issuing an EWN?
- Prices could go up
- Key date, sectional or completion could be delayed
- Impair performance of the works
51
Explain the Defects Process under JCT
- Rectification Period usually 12 months
- Schedule of Defects 14 days after
- After defects closed, a Certificate of Making Good is issued.
- Final Certificate 2 months after end of defects
- Remaining retention released
52
Explain the Defects Process under NEC
- Defects Date usually 52 weeks after Completion
- Defects Rectification Period defined in Contract Data . This is the time required to rectify a defect.
- Supervisor issues the Defects Certificate.
- Remaining retention released.
53
Give me 3 Relevant Events in JCT
- Inclement Weather
- Possession of the works
- Civil Commotion
54
Give me 3 Relevant Matters in JCT
- Variations
- Disruption caused by Client
- Delays in receiving information
55
Give me 3 Compensation Events under NEC
- Change to the Scope
- Weather (objective test)
- Failure to provide access
56
What is Opening Up in JCT? What is the equivalent in NEC?
- Exposing potential defects
- Called 'Inspections' under NEC and instructed by the Supervisor
- If defect found, Contractor pays. If no Defect, the Employer pays.
57
What is the design acceptance process in JCT?
- A, B, or C status. Employer must state why they are giving B or C.
58
What is the design acceptance process in NEC?
- Whatever the scope says, but in any case it must be given to PM for acceptance before works start.
59
Does NEC have a final account proceedure?
Yes under NEC4 - 4 weeks after Defects certification
60
What is the Scheme for Construction Contracts?
Principle set out rules that are automatically used in the event a construction contract does not comply with the Act
61
What as the Ashley vs. Blue Case?
Two men in a pub - Blue thought an oral contract existed - it didn't.
62
Name some Secondary X Options
```
X1 - Adjustment for inflation
X2 - Changes in the Law
X5 - Sectional Completion
X7 - Delay Damages
X15 - Contractors Design
X16 - Retention
```
63
Name some Secondary X Options that were brought in by NEC4
X15 - Contractor's Design
X21 - Whole Life Cost
X22 - Early Contractor Involvement
64
Why would you recommend an NEC Contract over a JCT Contract?
- Programme a contract document
- Open Book procedure with the Defined and Disallowed Costs
- Early Warning and CEs
- Target Cost ability
65
What projects may be suitable for NEC?
- Any type with any level of design
| - NEC more commonly used in larger value projects (above £25m) but not necessarily
66
When might you recommend JCT over NEC?
- Risk passed to Contractor
- When Client is litigious/less collaborative
67
Other than the ECC, what other types of contract do the NEC publish?
- DBO (Design Build Operate)
- Supply Contract
- Professional Service Contract
- Facilities Management Contract
68
What is the problem with Fitness for Purpose clauses?
- No-one signs up to them
- Absolute requirement to adhere to the scope
- PII insurers only pay out if there has been negligence.
- FFP can be Contractor's fault even if no negligence.
69
What is Prevention in Contract terms?
When something happens that prevents the contractor from undertaking works that was not their own doing and did not plan for because it was so unlikely to happen.
70
Explain the EWN procedure.
- Contractor and Employer notify one another via an EWN if they are are of something that might happen which could affect the prices, impact the key date/sectional/planned completion and/or impair performance of the works.
- Added to the EW register.
- Can instruct each other to attend meeting.
71
Explain the EW Register Process
- EW Register issued one week after starting date
- PM instructs Contractor to attend within 2 weeks after Starting Date.
- Thereafter held as per frequency in the contract data, or earlier if either party instructs.
- EW register issued out after the meeting. If includes instruction, this is implemented when issued.
72
What is repudiation? Give an example.
A party commits a breach of contract that is sufficiently serious to warrant termination, such as abandoning the site.
73
What is contained in a Collateral Warranty?
Principal covenant - fulfil obligations under the underlying contract
Assignment - Benefit of a warranty can be assigned in the same way as any contractual benefit.
Step-in rights - Often given to beneficiaries who have an interest in the project before it is completed (eg they have provided funding). Ability to step in to the shoes of the Employer under the original contract.
Limitation/exclusion of liability - Job specific.
Insurance - Insurances required for duration of warranty
74
What were the objectives of the NEC?
- Promote proactive proper management of contracts
- To be easy to read and use
- Include all standard options and optional clauses
- Flexibility
- Collaborative
- Resolve problems and move on rather than wait until the end
75
What are the core clauses of the NEC?
- General Terms
- Contractors Responsibilities
- Time
- Testing and Defects
- Payment
- Compensation Events
- Title
- Risk and Insurance
76
What is the difference between the main 6 NEC options?
A&B - Risk with Contractor
C&D - Risk shared
E&F - Risk with Client
77
Can the Contractor change their activity schedule?
- Yes, to align it with the Accepted Programme.
- Must be provided to PM for acceptance.
- PM can reject if it's not related to programme, disproportionately redistributes the prices, or increases the prices
78
What are some of the Employer's risks under NEC?
- Fault in the Client's design in scope
- War, Civil War, Rebellion
- Third party claims due to the works which are unavoidable
79
What is PII
Protection against claims of negligent service
80
Define express term
Terms of the agreement which are agreed between parties
81
What is a LOI?
A letter from an employer to a contractor indicating the employers intention to enter into a formal agreement.
82
What is included within a LOI?
Activity list
Contract Sum
Expiry Date
Schedule of payment
ADR method
83
Disadvantages of LOI
Contractually less robust
Employer loses incentive in main contract negotiations
Allows for more cost certainty
84
What is a Letter of Comfort?
Expressing a parties intention to act in a particular way.
85
What is a Instruction to Spend?
Allows works up to a certain value.
86
What is a Recognition of Contract?
Usually used when negotiations are complete between parties.
87
What is a PCG?
A form of security protecting against the insolvency of a main contractor where they are controlled by a parent company/
88
Third Party Rights
Contracts Act 1999
Allows third parties to enforce terms of a contract they are not party to but which benefit them. Such as a funder/purchaser.
89
Advantages of Third Party Rights
Time
Cost
Nothing needs to be signed by the warrantor
Certainty to the client
90
Disadvantages of Third Party Rights
- Lack Flexibility - Once agreed little room for negotiation
- Some clients like the idea of a physical signing of agreement from the warrantor
- Collateral Warranties better understood
- Need for careful drafting as only rely on rights specifically set out in the contract
91
Why use Third Party Rights over CW's?
If there are a lot of subcontractors.
When Third Party is clearly identifiable and the terms that they want
92
What is a Collateral Warranty?
To create a contractual relationship between two parties where one would otherwise not exist.
93
Why use a Collateral Warranty?
Enforce obligations that the subcontract owes directly to create a security should the contractor become insolvent or their appointment is terminated.
94
What is a bond?
Protection against non-performance. An undertaking by surety to make a payment to the client if theres contractor non-performance.
95
Why are collateral warranties needed in a D&B contract?
The design team typically sit below the contractor and therefore the employer will need to retain a contractual link.
96
Can you name 5 different bonds?
Performance Bond
Advanced Payment Bond
Off-site Material Bond
Tender Bond
Retention Bond
97
What is an On-Demand Bond?
Money is immediately available without needing to satisfy any preconditions, unless the demand is fraudulent.
98
What is a Conditional Bond?
Employer must prodive evidence that the contractor has not performed and they have suffered a loss.
99
What is the risk of not having a performance bond for 40BW?
Contractor Insolvency - Client liable to pay costs
Cannot pursue the contractor in event of liquidation
100
What is an off-site materials bond?
Covers the employer against the risk of paying the contractor for materials being manufactured off-site.
If the contractor is insolvent then the employer can claim on the bond for goods paid for.
101
What is an Advanced Payment Bond?
Protect and support payments to contractors in advance of the works being done.
102
What are Latent Defects?
Defects which cannot be discovered by reasonable inspection.
103
Why is the defects period 12 months?
Allows the building to go through all the seasons of the year.
104
What is Retention?
Used to safeguard against the contractor failing to properly complete the works in the contract. It is used to fund others to remedy the situation.
105
What is professional negligence?
When a professional fails to perform their responsibilities.
106
What is Public Liability Insurance?
Protects against injuries to third parties or their property.
107
What is Employer Liability Insurance?
Used to pay compensation and legal costs if an employee claims compensation for a work place injury.
108
What is Contractor Design Portion?
Used on traditional procurement, design for specific elements are transferred to the contractor. D&B all design responsibility is transferred.
109
What are domestic subcontractors?
Chosen by the contractor to execute a package of works.
110
What are named subcontractors?
Employer provides a pre-approved list of subcontractors for which the contractor can select.
111
What are nominated subcontractors?
A nominated subcontractor selected by the employer to carry out an element of the works.
112
What is termination?
When a contract is terminated the parties are no longer obliged to perform their obligations under the contract.
113
What are LAD's?
Liquidated Ascertained Damages
A estimate of loss suffered by the employer due to late completion.
114
Under JCT what documents need to be in place before damages can be deducted?
Non completion notice
Inform the contractor the employer intents to levy LAD's
A pay less notice is served
115
What is the difference between liquidated and unliqudated damages?
Liquidated damages are agreed in the contract
Unliquidated damages are granted by the courts.
116
What is a PCSA?
Pre Construction Services Agreement
This documents the agreed services the contractor will provide before signing the building contract.
117
How can a PCSA benefit a project?
Buildability
Cost / VE
Integrating in the project team
118
What sort of activities are in a PCSA?
Contribute to the design process
Advise on buildability
Help develop the cost plan
Advise on specialist subcontractors
Develop the method of construction
119
What should be considered when drafting a PCSA?
Arrangements do not guarantee the contract to the contractor
Scope of service clearly defined
Programme and delay damages clauses.
120
What is a bespoke contract?
Tailored to fit the specific project requirements
Used when standard forms are not suitable
121
Why choose a bespoke contract?
When amending a standard contract will not do
Most efficient means of achieving client objectives
Can take a long time to draft
Parties not familiar compared to standard form
122
Why not amend a Standard Form of Contract?
Amendments change the risk allocation
Commonly agreed wording
Create legal uncertainty
Must comply with legislation
123
When would you see a JCT Minor Works Contract?
A simple project procured via traditional.
Employer responsbile for the design
Not suitable where BoQ are required or complex projects
Normally administered by the architect or CA
124
When would you use the JCT Intermediate Contract?
Medium projects up to a year
Designed for projects involving all the recognised trades and skills of the industry where fairly detailed provisions are required.
(Traditional)
125
When would you use the JCT Standard Building Contract?
Large or complex projects where detailed contract provisions are required.
126
When would you use the JCT Major Project Construction Contract?
Large scale projects where major works are involved.
127
What are the key features of the JCT Design and Build Contract?
- Contractor carries out the design.
- Employer gets an agent to administer the contract
- Design requirements are beyond the Contractors Design Portion
128
What is a relevant event?
- An event that entitles the contractor to an extension of time
129
What is Force Majure?
Events that are beyond the control of the parties.
130
What happens when a relevant event occurs?
Contractor notifies stating the event
Provide estimate delay
CA responds in 12 weeks
If event occurs CA assesses delay
New completion date is fixed
131
What are relevant matters?
- A matter to which the employer is responsible.
- Contractor able to submit a loss/expense claim
132
What is a loss and expense claim?
These are associated with delays but can be for any event where the contractor occurs a loss.
133
What is partial possession?
A building contract may allow the employer to take partial possession before the works are completed.
134
What is sectional completion under JCT?
Allows completion dates to be set for different sections of the work
135
What is the difference between sectional completion and partial possession?
Sectional completion is pre-planned and defined in the contract.
136
What are the main options for insuring the works under a JCT contract?
Option A - Contractor takes out and maintains joint names all risks insurance.
Option B - Employer takes out and maintains joint names all risks insurance.
Option C - Renovation, employer takes out and maintains joint names all risks insurance and insures the existing structure.
137
What is Contractors All-Risk insurance?
Protection against the loss and damage to the works being undertaken.
138
What is a joint names insurance policy
- Policy in the names of two or more
parties (contractor and employer)
- Unable to claim against each other over an insured loss
- Insurer has no right to subrogation.
139
What is subrogation?
Concept that when a insurance company has paid a loss to step into the shoes of the insured then a sue a party responsible for making the loss.
140
What is terminal float?
Different between planned completion and the current contract completion date.
141
What are the key PM responsibilities under NEC
- There is no CA it is the PM's duty to manage the contract.
- PM has to issue instructions, notifications and comms
- PM only person to change scope
- Manages to EW Risk Register
142
What are the responsibilities of the supervisor under NEC
- Checks the works carried out by the contractor are compliant.
- Clerk of Works role
- Raises defect notices
143
What are the responsibilities of the employer under NEC?
Provide site access
Make payments
Take out necessary insurance
144
What are the responsibilities of the contractor under NEC
All items under Clause 2 (contractor responsibilities)
145
What is Works Information?
NEC this is called Scope
Specifies / describes the work
States contraints
Info from the employer such as:
Technical information
Specifications / drawings
146
What are compensation events?
Events that are usually not the fault of the contractor that change the completion time / cost of the project.
147
What are the restrictions on compensation events?
Must be submitted within 8 weeks of becoming aware of the event, otherwise they are not entitled to anything.
There are some exceptions from PMI's or changing key dates.
148
What are Early Warning Notices?
A mechanism to allow both parties to identify potential problems to the project.
149
Changes from NEC3 to NEC4
Risk Register is EW Register
2 New Contracts: Design, Build Operate Contract and Alliance Contract
Employer becomes Client and Works Information becomes Scope
All written in gender neutral.
150
What are the differences between JCT and NEC?
- NEC plain English
- NEC operates EWN
- NEC more collaborative 'mutual trust and cooperation)
- JCT allows for provisional sums
- NEC uses Options and Secondary Options whereas JCT has different contracts.
151
What is a net contribution clause? And the effect?
Client can only claim damages for what the person has caused. They will need to then target the other person for the remaining damages.
If one party is insolvent then the client can only claim the liable contribution. If no NCC, architect could be liable for 100% of the damages under the Civil Liability (Contribution) Act 1978.
152
What did you learn from the Guide to Selecting the Appropriate JCT tree?
I learnt that JCT contracts are dependent on the procurement route, intended pricing structure and complexity of the work.
153
What form of contract are you using for Strawberry Fields / TWS Warehouse 5 and what ADR?
- JCT Design & Build Contract 2016
- Adjudication
154
Who owns the programme in NEC and JCT Contracts?
JCT - Contractor (not a contract document)
NEC - Project Manager (part of the contract documents)
155
Which contract would use named subcontractors?
- Minor works, too small / low value for named doesnt have it.
- JCT Intermediate, D&B and Major works
156
Why is NEC collaborative?
- Obligation to act in a spirit of mutual trust and co-operation
- EWN allows to anticipate and plan
157
What is a PM's role in an NEC Contract?
- Managing the Early Warning Register / risk review process
- Operating the compensation event process
- Administering the contract including issuing instructions, certifying payments and certifying completion.
158
What is a CA role in a JCT Contract?
- Oversees the project on a practical level
- Inspects the works and checks on progress
- Administers the payment process, any applications for extra time or money
- Certifies practical completion / making good of defects during the Rectification Period.
159
What is a EA role in a JCT Contract?
All of the CA roles and also having the functions of the Employer
160
Time Management under JCT?
Contract Completion dates are set out in the contract particulars
161
Time Management under NEC?
- The NEC Contract Data sets out the Completion Date but also includes an option to specify Key Dates which act as milestones the contractor must hit.
- Programme a contract document
162
When would you use a JCT contract?
When an employer wants to retain a greater level of control over the project delivery and are generally favoured by domestic commercial developers and their funders
163
What is a time-based warranty?
A binding promise that a particular thing will be in a particular state at a specific point in time, or remain in that state for a specified period of time
Example when complete everything will comply with statutory requirements
164
What are general warranties?
Provide assurance from one party to another that goods and/or services will meet certain expectations,
165
What is a building warranty?
An insurance policy provided by a developer to the owner. It assures the building has been constructed to a standard set by the warranty provider
166
What does a building warranty provider do?
- Developer submits plans
- Provide a quote
- Provide a technical manual
- Inspect the works so make sure compliance
- After completion cover period starts
167
It says you managed the collateral warranty process?
I kept a tracker recording which sub contractors have had a copy submitted, amended and signed / executed.
168
What is a Deed of Variation?
A document that looks to change one or more clauses of a contractual agreement.
Used to reflect renegotiated terms or a change in circumstances.
169
Difference between assignment and novation?
Novation - New contract transfers rights and obligations to a third party
Assignment - Transfer of contractual rights and benefits. Cannot transfer the burden/obligations
170
Practical Completion JCT
Vague Concept as it is not defined in the contract.
CA / EA opinion if it is complete
Works are substantially complete with minor defects but not preventing the employer to operate
171
Why is a LOI used?
- Early procurement
- Early start on site
- Contract negotiations could take a prolonged period
172
What are employers requirements?
In a D&B they dictate the requirements the contractor must meet
173
What is the difference between a PCG and Performance Bond?
- Should be free
- PCG guarantees works if subsidiary company is insolvent ensuring performance
174
What are the JCT Sections?
- Definitions and Interpretations
- Carrying out the works
- Control of the works
- Payment
- Changes
- Termination
- Settlement and dispute
175
What are the JCT Schedules?
ICT FF
- Insurance Options
- Code of Practice
- Third Party Rights
- Forms of Bonds
- Fluctuations Options
176
What is in an appointment document?
GALTAA
- General obligations
- Additional services
- Liabilities
- Termination
- Assignment and subcontracting
- Adjudication
177
What is CDP?
Contractors Design Portion
In traditional the only bit of design the contractor has responsibility for.
178
What bonds are on-demand?
Defects liability
Performance bond
Advanced payment bond
179
What is a project sponsor?
A person or group that owns the project whom the client pm is likely to report
