CA Questions Flashcards
What is the role of the Contract Administrator?
The contract administrator manages the contract between the employer and the building contractor.
What are the key differences between a Contract Administrator and Employer’s Agent?
- An Employers Agent is employed by the Client within a design and build contract, while a Contract Administrator would be employed within a traditional form of contract.
- An Employers Agent can be appointed prior to the Contract being formed, whilst a Contract Administrator can only be appointed once the Contract is executed.
What is nomination?
Selection of a particular subcontractor to carry out the works, manufacture or supply materials.
Client is at risk of EOT as contractor is relieved of liability of design, compliance with performance spec, supply chain delays etc. Contractor retains liability for poor workmanship and defects.
What are named subcontractors?
Client provides main contractor with a choice of subcontractors for a portion of the works, all must be capable of doing the work. Additional names may be added if approved by all parties.
What are the key differences between JCT and NEC?
Programme, - NEC requires a more detailed set of documents that make up the programme to be submitted on a regular basis as prescribed by the employer. NEC allows for incentivising the contractor to finish early through an option for a bonus for early completion. JCT encourages early notification but has no sanctions if a contractor fails to do so, NEC on the other hand dictates that a compensation event is to be assessed on the basis that notification was issued even if it was not, and whether reasonable steps could have been taken to mitigate the impact.
Cost, - Both contracts provide for change control (variations/claims in JCT and compensation events in NEC). NEC deals with the effects of cost and time together, providing for a quotation to be prepared by the contractor. JCT refers to ‘exceptional adverse weather conditions’ whilst NEC uses a ‘worse than 1 in 10 year’ approach to weather.
Quality, - NEC identifies a state at completion which is defined within the works information, unlike JCT which relies upon a subjective assessment of practical completion.
What are the key differences between the various forms of JCT Contract?
Minor Works - Generally refers to small, relatively straightforward construction projects
Not suitable when- The project is complex, Design includes Bill of Quanties, Sectional completion is required, Provision to govern work carried out by named sub-contractors is required
Intermediate - Recommended for use on simple construction projects that require greater contractual provisions like sectional completion, relevent events and matters named, named QS, named specialist, advance payment
Standard Building Contract - Contract allows for the following; Retention bond, BofQ, 3rd party rights, quatation provision for variations
What is a defined provisional sum?
A sum included in the contract for work that has not been completely designed but sufficient details are included for the contractor to allow in programme
What is a undefined provisional sum?
A sum included for work for which there is minimal or no information.
What would you say if a client asked you to draft a letter of intent?
This should be passed onto the client’s legal team as letters of intent give rise to a substantial number disputes.
Are you aware of any guidance on dealing with Loss and Expense?
This is subject to the guidance as set out in Ascertaining loss and expense, 1st edition, 2015
Are you aware of any guidance on agreeing the Final Account?
RICS Final Account Procedures, 2015
What are fluctuatuions?
Typically used on large projects spanning multiple years,
What are the different insurance options under JCT?
Insurance Option A - New builds joint name policy under the contractor’s policy
Insurance Option B - New builds joint name policy under the employer’s policy
Insurance Option C - Existing structures. Requires the employer to take out joint names including the works.
Under what circumstances may insurance Option C be inappropriate for an existing building?
For example, the employer under the building contract is frequently a tenant in the building in which the works are being carried out and not the landlord. As a result the employer may have no influence or control over the insurance policy for the building. The landlord or his insurers may object to the inclusion of the contractor under the property policy (even for specified perils only).
What is a relevant event?
Where a delay which impacts the completion date is not caused by the contractor, it may be a ‘relevant event’, for which the contractor may be entitled to an extension of time. The contract should set out what constitutes a relevant event in clause 2.20
What is a relevant matter?
A matter for which the Employer is responsible that materially affects the progress of the works. The contract should set out what constitutes a relevant matter under clause 4.17
What is the Joint Fire Code Policy?
Typically required on projects over £2.5m. Refers to a document called ‘Fire Prevention on Construction Sites: The Joint Fire Code’. Covers all activities from design through to construction.
Names some of the standard forms of collateral warranty that can be used
JCT standard form of collateral warranty for a funder, JCT standard form of collateral warranty for a future purchaser or tenant
How has the Contract (Rights of third parties) act 1999 changed the situation regarding rights under contracts?
JCT now includes provisions to allow third party rights and obligations to be granted
What is a pay less notice?
Provides a mechanism of notifying the contractor that it is intended to pay less than the sum stated on a payment notice, This must be issued not less than 5 days before the final date for payment
When must an interim certificate be issued?
Must be issued not later than 5 calendar days after the due date, time period fixed by statute and cannot be changed by parties. This is governed by the Housing Grants, Construction and Regeneration Act 1996
What is partial possession?
Allows the employer to take possession of part of the site before works are formally completed. Areas in question are deemed to have reached practical completion an retention release is triggered on these areas.
How long after PC can an EOT be issued?
Up to 12 weeks after PC (8 weeks with JCT 2024 suite)
What would you do if the payment certificate you are issuing is late?
Issue a pay less notice and the amount shown becomes the notified sum, which is payable by the final date for payment of that interim installment.
What are materials offsite and how are they dealt with under the JCT suite of contracts?
The contract identifies ‘listed items’ whose value is to be included in interim payments and states that when the value of such materials has been included in an interim payment, title will pass to the Employer. There following has to be in place before payment:
- The listed item is in accordance with the contract.
- Proof that they are vested in the contractor and covered by an insurance policy covering them against loss or damage caused by specified perils until they are delivered to site.
- At the place of storage listed items are clearly and visibly marked as belonging to the employer and set aside from other materials.
- If required, the contractor must provide a bond from an approved surety (in a form provided by JCT) which enables the employer to recover the amount it has paid to the contractor if he is unable to obtain the relevant goods.
What is the period for Final Account agreement?
3 months
3 months after receipt by the architect/contract administrator of information supplied by the contractor (which itself should not arrive any later than 6 months after issue of the practical completion certificate).
