Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

RICS APC QS/PM > 3.1 Contract Practice > Flashcards

3.1 Contract Practice Flashcards

1
Q

What is a legally binding Contract? What are the key elements?

A

An agreement for one party to fulfil obligation in exchange for consideration. The key elements for a contract are:
-Offer
-Acceptance
-Consideration
-Intent to form a legal relationship

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the Local democracy, Economic Development and Construction Act 2009?

A

The Act amended the housing grants construction and regeneration Act 1996. Makes further amendments to how contracts are entered, payments and adjudication.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the provisions under LDEDC act?

A

-Construction contracts no longer need to be in writing.
-Pay-When-Certified is no longer allowed.
-Payment notice must be issued no later than 5 days from due date.
-Payment notice must show calculation of payment even when it’s Nil.
-Default notice can be issued by other party fails to issue Notice. If payment isn’t issued by final date of payment then suspension of work.
-Pay less notice is issued if notified sum is found to be unsound but must calculate sum due to when pay less is served.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What information is typically found in a letter of intent?

A
  • Detailed decription of works
  • Contract sum
  • Date for possession
  • Date for completion
  • Insurance provision
  • Method of payment
  • Expiration date of the letter
  • Right not to award main contract
  • ADR
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a letter of intent?

A

A letter from Employer to Contractor indicating the Employer’s intention to enter into contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Advantages of Letter of intent?

A

-Save time and cost by starting contract works before main contract is agreed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Disadvantages of Letter of intent?

A

-May result in complacency in getting main contract agreed and signed.
-Less robust than a main contract.
-Employer’s negotiation strength is usually reduced.”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is a PCG?

A

Parent Company Gurantee - Security for the Client incase of contractor insolvency. Particularly used for smaller companies which a part of a group. The group will be required to meet the smaller company’s obligation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are Third Party Rights?

A

-Contracts (Rights of third parties) Act 1999.
-Allows third parties to enforce terms of contracts that they are not party to but that benefit them.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Advantages of third-party rights?

A

-Save time and cost as you don’t need to issue multiple CWs?
-Certainty, no renegotiating unlike CWs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Disadvantages of third-party rights?

A

-Lack of flexibility
-Need for careful drafting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is a Collateral Warranty?

A

A formal contractual document that creates a direct contractual relationship between two parties.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the difference between a bond and a collateral warranty?

A

Bond is generally financial and CWs pass on contractual obligations. Bonds are contained within the contract but CWs sit outside the contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Example of the collateral warranty?

A

D&B contract Employer might want CWs for the design team.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is an assignment?

A

Assignments pass the benefit but not the obligation to a third party.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is a bond?

A

Protection for the holder from non-payment, lack of performance, insolvency or warranty issues

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the different types of bonds?

A

-Performance bond
-Retention bond
-Advance payment bond
-Tender bond
-Off-site materials bond

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Why would an employer require a performance bond?

A

-Contractor is new or unapproved
-Concerns over contractor’s finances
-A recession is looming
-Employer wants to protect their commercial exposure

19
Q

What are different types of performance bonds?

A

On demand - available without meeting any requirements
Conditional - requires employer to prove a loss as a consequence of the contractor.

20
Q

What is a Tender bond?

A

Provides security if the successful bidder fails to get into contract.

21
Q

What is an Offsite materials bond?

A

Provides security for material being manufactured off site that have been paid for.

22
Q

What is a retention bond?

A

Will pay the Employer part or all the bond if contractor fails to complete the defects.

23
Q

What is an advanced payment bond?

A

Protects the payment that is issued before contract works begin.

24
Q

What are defects and the different types?

A

Part of work not in accordance with scope or law. There can be Patent or Latent defects.

25
Q

What is novation?

A

Replacing one party in a contract with another.

26
Q

What is retention?

A

A percentage (usually between 3-5%) of the contract is held during the construction stage to safeguard against defects the contractor fails to remedy.

27
Q

What are the types of Insurances?

A

-Professional Indemnity - cover professional negligence.
-Product liability - cover damage caused by defective product.
-Public liability - covers injury to third parties or damage to their property.
-Employer liability - covers the employees for work related illness or injury.
-CAR

28
Q

What can be done at tender stage to identify potential contractor insolvency?

A

-Check for front loading in tender submission.
-Bank references
-Credit check D&B Report
-Previous references
-Bond or PCG

29
Q

What are the considerations when selecting a contract?

A

Client
Priorities - time, cost, risk, quality
Procurement route
Value of work
Nature of work
Complexity of work
Size and location of work

30
Q

Advantages of standard forms of contracts?

A

-Written by legal experts
-Quicker to agree as most employers and Contractors are familiar.
-More consistencies and aid from previous parties.
-Less administration issues.

31
Q

Disadvantages of standard forms of contracts?

A

Broad and would need amendments to tailor to Employer/contractor.

32
Q

What are examples of JCT Contracts?

A

-Standard Building Contract
-Minor Works Building Contract
-Design and Build Contract”

33
Q

What are relevant events? with examples?

A

Event that prolongs the project. Entitles the contractor to an extension of time.
-Variations and instructions
-Exceptionally adverse weather

34
Q

What are relevant matters? with examples?

A

Issues that occur in a project that the employer is responsible for and entitle the Contractor to loss and expense claims.
-Failure to give possession/access to site.
-Delay instructions
-Delay in work the Employer is responsible.

35
Q

What is the difference between partial possession and sectional completion?

A

Sectional completion is pre-planned and involved delay damages. Partial possession requires the Contractor’s consent.

36
Q

What the contracts within NEC suite?

A

-NEC ECC + short (Client and Subcontract)
-NEC Professional Service + short (Client and Subcontract)
-NEC FM
-NEC Alliance
-NEC Design build operate

37
Q

NEC Secondary Clauses

A

X1 - Inflation adjustment
X2 - Changes in law
X5 - Sectional completion
X7 - Delay damage
X11 - Termination by Client
X15 - Contractor’s design
X22 - Early contractor involvement(Only used with Option C&E)

38
Q

What compensation events and some examples?

A

Changes in the project that result in changes in cost or time for either the client. List detailed in Clause 60. Some include:
-Access to site
-Changes to scope

39
Q

Contract Practice - Level 2 example?

A

Raising subcontract with Atkins on RAF M.
What is included in the contract:
-Contract document
-Framework agreement
-Collateral warrant
-Scope register (Drawings list and site information list)
-Payment schedule

40
Q

Contract Practice - Level 3 example?

A

Advised on the need of another contract for the surveys on RAFM. Had to use a full contract due to the survey value and risk of work and insurances.

41
Q

Why would you not use PSC for site works?

A
  • payment are different (no option b, d, f)
  • insurances
  • comp events
42
Q

What are the different types of Loi!

A
  • Comfort : gives assurance that the party intended to act at that particular time.
  • Proceed with consent to spend : allows work to proceed to a certain value.
  • Recognition of contract : contract is substantially agreed.
43
Q

What is retention of title?

A

Allows the owner of goods to retain ownership until they’re fully paid for.

44
Q

What is the difference between ECC and ECSC?

A
  • Short only has lump sum payment option
  • Designed for simple, low risk contracts
  • No PM or supervisor, just Contractor and Client
  • No requirement for programme

RICS APC QS/PM (22 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions