Contract Admin Flashcards
What is a Collateral Warranty?
It is a legal document that provides a contractual relationship with a 3rd party beneficiary such as a sub contractor or funder to give them additional rights or obligations.
Why would you use a collateral warranty?
It would allow the 3rd party to enforce their rights if necessary, or have assurance of sometting, e.g. being paid.
What is The Housing Grants, Construction and Regeneration Act 1996?
The Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) is a significant piece of legislation in the United Kingdom that aims to improve the payment practices in the construction industry and provides mechanisms for dispute resolution. It was introduced to address issues related to late payment and to ensure fair treatment and prompt payment for construction work.
The key features of the Housing Grants, Construction and Regeneration Act 1996 include:
Adjudication: The Act introduced a statutory right to adjudication, which allows parties involved in construction contracts to resolve disputes quickly and cost-effectively. Adjudication provides a temporary binding decision that can be enforced by the courts if necessary.
Payment provisions: The Act includes provisions for payment mechanisms in construction contracts. It establishes a right to interim payments and sets out procedures for determining the amount and timing of such payments. It also provides protection against late payment through mechanisms such as statutory payment notices and suspending performance.
Withholding payment: The Act restricts the ability of parties to withhold payment without proper justification. It establishes specific requirements for withholding payment and establishes a mechanism for notifying the reasons for withholding payment.
Construction contracts: The Act applies to construction contracts, which include agreements for construction-related operations such as the carrying out of building, engineering, or architectural works. It covers contracts for both residential and non-residential projects.
The Housing Grants, Construction and Regeneration Act 1996 has been amended and supplemented by subsequent legislation, including the Local Democracy, Economic Development and Construction Act 2009. These amendments have refined and expanded certain aspects of the original Act, but the core principles and objectives remain the same.
What is Time at Large?
In the context of construction contracts, “time at large” refers to a situation where the original contractual completion date or deadline for completing a construction project becomes invalid or unenforceable. In such cases, the contractor is relieved of the obligation to complete the project within the original time frame, and there is no fixed date for completion until a new valid deadline is established.
The concept of “time at large” is commonly associated with contracts based on the standard forms published by the Joint Contracts Tribunal (JCT) in the United Kingdom. Under JCT contracts, if events occur that are beyond the contractor’s control and would entitle them to an extension of time (e.g., delays caused by the client, unforeseen circumstances, or variations), but the contract administrator fails to issue a valid extension of time within the prescribed time limits, the contractor may argue that they are entitled to “time at large.”
When “time at large” is claimed, the contractor is typically still required to proceed with the construction works, but without the contractual obligation to complete the project by a specific date. The contractor’s entitlement to any additional costs incurred as a result of the delay will depend on the specific terms and provisions of the contract.
It’s important to note that the concept of “time at large” can have legal implications and may vary depending on the specific contractual provisions and applicable laws in different jurisdictions. It is advisable to consult legal professionals and refer to the specific terms of the contract in question to determine the rights and obligations in relation to time extensions and “time at large.”
What is the Scheme for Construction Contracts?
The Scheme for Construction Contracts is a set of regulations that provide a default framework for construction contracts in the United Kingdom. It is commonly referred to as the “Construction Act Scheme” or simply the “Scheme.”
The Scheme for Construction Contracts was created under the Housing Grants, Construction and Regeneration Act 1996 (HGCRA) and applies when a construction contract does not contain adequate provisions regarding payment terms, adjudication, or other requirements specified by the Act. The Scheme serves as a fallback mechanism to ensure that key provisions of the Construction Act are still applicable in such cases.
The key areas covered by the Scheme for Construction Contracts include:
Payment terms: The Scheme sets out default payment terms that ensure prompt and fair payment in construction contracts. It includes provisions for interim payments, final payments, and procedures for issuing payment notices and withholding notices.
Adjudication: The Scheme establishes the default adjudication process for resolving disputes in construction contracts. It outlines the timelines, procedures, and responsibilities of the parties involved, as well as the appointment and powers of adjudicators.
Suspension of performance: The Scheme provides a mechanism for contractors to suspend their performance under certain circumstances, such as non-payment. It outlines the notice requirements and procedures for suspending work temporarily.
Contractual notices: The Scheme specifies the default requirements for various contractual notices, including notices of intention to withhold payment, notices of intention to adjudicate, and notices of suspension of performance.
It’s important to note that the Scheme for Construction Contracts only applies when a construction contract does not contain its own adequate provisions that comply with the requirements of the Construction Act 1996. Parties to a construction contract can choose to opt out of the Scheme by including suitable alternative provisions that meet the statutory requirements of the Act.
What is the difference between signing Under Hand vs. as a Deed?
The main difference is the limitation period (liability). Under hand is 6 years, as a Deed is 12 years.
What is the difference between a Contract Administrator and an Employer’s Agent?
A Contract Administrator focusses solely on the contractual obligations of both parties, however an Employer’s Agent’s role is broader and their role is to act generally in the employer’s best interests. This can include Contract Administration as well as design etc.
How would you procure a contract?
When choosing a contract, I would consider various factors, such as size and scope of the project, timelines, attitude to risk. I would use JCT decision tree if I was unsure of exactly the right contract to use.
What is the JCT Valuation procedure?
- The Contractor has up until 7 days before the Due Date to submit his application.
- The CA needs to submit his Payment Cert. not later than 5 days from the Due Date.
- The Employer must pay the Contractor within 14 days of the Due Date, or otherwise agreed timframe (e.g. 21 days) within the contract.
What is triggered at Practical Completion?
Release of 50% of the retention, start of the defects rectification period, transfer of insurance risk, start of the Final Account process.
What are Fluctuation Provisions?
Fluctuation provisions in a JCT contract refer to clauses that address the adjustment of contract prices to account for changes in the cost of labour, materials, and other resources during the course of a construction project. These provisions are also known as price fluctuation, price adjustment, or escalation clauses.
The purpose of fluctuation provisions is to provide a mechanism for contractors to recover additional costs incurred due to inflation, changes in market conditions, or unforeseen circumstances that affect the overall project costs.
What are daywork rates?
Daywork rates in a JCT contract refer to the predetermined rates at which the cost of labour, materials, and plant (equipment) is calculated for specific activities or tasks that are not covered by the contract’s lump sum or measured works.
Daywork rates are used when the exact quantity or extent of work cannot be accurately determined in advance or when variations and additional works arise during the course of the project.
What is the difference between a PC sum and a provisional sum?
PC Sum (Prime Cost Sum):
A PC sum is an amount included in the contract for a specific element of work, whereby the spec isn’t fully defined. E.g. client choice of floor tiles.
Provisional Sum:
A provisional sum is an amount included in the contract for work or items that are unknown at the time of writing the spec. E.g. the extent and scope of groundworks, essentially giving an allowance for a potential variation.
What is the difference between a Patent & Latent defect?
A patent defect is a defect that is immediately apparent or visible upon reasonable inspection.
A latent defect is a defect that is not immediately apparent or visible upon reasonable inspection.
What are Supplementary Provisions?
Supplementary Provisions are additional clauses or provisions that are added to a contract to address specific requirements or circumstances.
