Contract Admin Flashcards
What is an EA?
The Employer’s Agent is typically appointed in Design and Build (D&B) contracts, such as under the JCT Design and Build Contract. Their role represents the employer in managing the project and overseeing the contractor’s performance.
What is a CA?
The Contract Administrator is typically appointed in traditional procurement routes (e.g., JCT Standard Building Contract). Their role focuses more on administering the terms of the contract between the employer and contractor.
Difference between EA and CA
Employer’s Agent (EA)
Design and Build
Client representation and contractor oversight
Oversees compliance with employer’s requirements
Broad oversight, often involved early in defining employer’s requirements
Can issue instructions on behalf of the employer
Contract Administrator (CA)
Traditional procurement
Contract management and compliance
Ensures compliance with detailed designs
Focuses on the post-contract phase
Acts impartially to ensure fair contract execution
Difference between EA and CA
The EA is more aligned with the employer in a Design and Build contract, focusing on ensuring the contractor delivers on the employer’s requirements
.
The CA plays a more neutral role in a Traditional contract, ensuring that both the employer and contractor adhere to the agreed terms.
JCT VS NEC Differences
JCT Contracts
Primarily used for traditional construction projects with clear roles for design and construction phases.
Focuses on defining roles, rights, and responsibilities of parties.
Includes various specific forms (e.g., Design and Build, Standard Building Contract, Minor Works).
Uses legalistic and traditional contract language, which can be complex.
Risk is usually allocated to specific parties, often leading to adversarial relationships.
Less flexible, designed for defined roles and a structured approach.
Limited emphasis on real-time project management processes.
More adversarial, with disputes often resolved through formal procedures.
Traditional payment structures with interim valuations and final accounts.
Variations are managed through formal instructions and associated cost/time adjustments.
Commonly used for building projects in the UK, particularly in the private sector.
Primarily used in the UK; less common internationally.
Limited emphasis on collaboration.
Administered by a Contract Administrator (CA) or Employer’s Agent (EA) depending on the form.
Suitable for traditional, design and build, and management contracting approaches.
NEC Contracts
Designed for a broader range of projects, including construction, engineering, and service contracts. Emphasizes collaboration and flexibility.
Promotes proactive collaboration, teamwork, and risk management.
Uses a modular approach with a core contract and optional clauses (NEC4 is the latest version).
Written in plain English for better accessibility and understanding.
Encourages shared risk management, focusing on early warning and mitigation.
Highly flexible, adaptable for various project types and procurement routes.
Strong focus on project management with mechanisms like early warnings, compensation events, and regular risk reviews.
Emphasizes dispute avoidance through collaboration and proactive issue resolution.
Focus on transparency and detailed payment processes with activity schedules and payment milestones.
Changes are managed as compensation events, encouraging early agreement on impacts.
Increasingly used in the UK for public sector projects and internationally for collaborative engineering and infrastructure projects.
Widely recognized and used internationally due to its collaborative framework.
Strong emphasis on teamwork and partnership.
Administered by a Project Manager who plays a central role in the contract.
Adaptable to a wide range of procurement routes, including traditional and design and build.
What is a contract?
Answer: A contract is a legally binding agreement between two or more parties that creates obligations enforceable by law. It typically includes terms, conditions, and the scope of work or service.
What are the essential elements of a valid contract?
Answer: The essential elements include:
1. Offer
2. Acceptance
3. Consideration
4. Mutual consent
5. Capacity
6. Legal purpose
What is the difference between a fixed-price and cost-plus contract?
A fixed-price contract specifies a set amount for the work regardless of actual costs.
A cost-plus contract reimburses the contractor for actual costs incurred plus an additional fee or profit.
How would you handle a situation where a contractor fails to meet a key deadline?
Answer: I would first review the contract terms to understand the provisions for delays. Then, I would communicate with the contractor to identify the reasons for the delay and discuss mitigation strategies. If necessary, I would implement penalties or remedial actions as outlined in the contract.
What steps would you take to ensure compliance with contract terms?
Answer: Steps include:
1. Regularly monitoring contractor performance against contract terms.
2. Maintaining open communication with all stakeholders.
3. Conducting audits and reviews as needed.
4. Keeping thorough documentation for all transactions and communications.
What is the importance of change management in contract administration?
Answer: Change management ensures that any modifications to the contract, such as scope or cost, are properly documented, reviewed, and approved. This helps prevent disputes and ensures all parties are aligned.
How do you mitigate risks in a contract?
Answer: Risk mitigation strategies include:
Clearly defining terms and conditions.
Including penalty clauses for non-compliance.
Conducting due diligence on contractors.
Ensuring proper insurance and indemnity clauses are in place.
What is the purpose of a dispute resolution clause in a contract?
Answer: A dispute resolution clause outlines the agreed-upon methods for resolving conflicts, such as negotiation, mediation, arbitration, or litigation. This helps prevent prolonged disputes and provides a structured approach to resolving issues.
How do you ensure key performance indicators (KPIs) are met in a contract?
Answer: By:
Clearly defining KPIs in the contract.
Regularly monitoring and reporting on performance.
Implementing penalties or incentives tied to KPI achievement
What is the importance of a liquidated damages clause?
Answer: A liquidated damages clause specifies a pre-agreed amount that one party must pay to the other if they fail to meet contractual obligations, such as deadlines, to avoid prolonged disputes.
Express Term
Implied term
Definition: A term that is explicitly stated and agreed upon by the parties, either in writing or verbally.
Example: The contract states, “The employee will work 40 hours per week, Monday to Friday, from 9:00 AM to 5:00 PM.”
This is an express term because it is clearly written in the contract and agreed upon by both parties.
Definition: A term that is not explicitly stated but is assumed to exist based on the nature of the contract, law, or customary practice.
Example: The employer has a duty to provide a safe working environment.
This is an implied term because, even if it is not specifically mentioned in the contract, it is a legal requirement under health and safety laws and is assumed to be part of the employment relationship.
What is novation in contract management?
Answer: Novation is the replacement of one party in a contract with a new party, requiring the consent of all original parties.
Example within a D&B the client may want to novate there design team to the contractor , in order for a novation they would have to send the fee schedule
How do you manage contract variations?
Answer: By:
Documenting all changes in a variation order.
Obtaining agreement from all parties.
Ensuring the variation complies with the original contract’s terms.
What is the purpose of a warranty clause?
Answer: A warranty clause guarantees that certain conditions, such as quality or performance, will be met.
What is the difference between a subcontractor and a supplier?
Answer:
A subcontractor performs part of the contracted work or services.
A supplier provides materials or goods needed for the work.
What is the role of insurance in contracts?
Answer: Insurance protects parties against specific risks, such as property damage, liability, or worker injuries, and is often required as a term in contracts.
What insurances are you aware of?
Contractors’ All Risks (CAR)
Employer’s Liability
Public Liability
Professional Indemnity
Product Liability
Construction Plant and Equipment
Environmental Liability
Delay in Start-Up (DSU)
Performance Bond and Surety
Builders Warranty (Latent Defects)
What is the difference between a letter of intent and a contract?
A letter of intent indicates a party’s intention to enter into a contract but is not legally binding.
A contract is a legally binding agreement.
What is the significance of payment milestones?
Answer: Payment milestones ensure that payments are tied to the completion of specific tasks or phases, reducing financial risk for both parties.
What is indemnity in a contract?
Answer: Indemnity is a provision where one party agrees to compensate the other for specific losses or damages.
What is a force majeure clause?
Answer: A force majeure clause relieves parties from fulfilling contractual obligations due to extraordinary events or circumstances beyond their control.
What is a performance bond, and why is it important?
Answer: A performance bond is a financial guarantee provided by a third party (usually a bank or insurance company) ensuring that the contractor fulfills their contractual obligations. It protects the client from financial loss in case of non-performance.
What is the role of retention money in contracts, and how is it released?
Answer: Retention money is a portion of payment withheld to ensure the contractor fulfills their obligations, including rectifying defects. It is usually released after project completion or after the defect liability period.
How do you assess contractor performance during the contract period?
Comparing performance against KPIs and milestones.
Conducting regular progress meetings and site visits.
Reviewing documentation like progress reports and invoices.
Difference between Latent and Patent defects
Latent Defects (L for later)
Hidden, not obvious upon inspection.
Detected later, often after use or exposure.
Hidden structural flaws, internal leaks.
May involve warranties or specific clauses.
Patent Defects (P for present)
Obvious and visible upon inspection.
Detected during or shortly after inspection.
Cracks, misaligned doors, surface scratches.
Usually rectified during the defect liability period.
Why the Client Would Want Collateral Warranties:
The client wants to ensure that if there are design flaws (e.g., the building does not meet energy efficiency standards or structural defects occur), they can directly hold the architect or structural engineer accountable, rather than relying solely on the contractor.
This is especially critical if the contractor becomes insolvent.
Example Clauses in the Warranty:
Duty of Care: The architect warrants that they have exercised reasonable skill, care, and diligence in the design of the building.
Compliance with Specifications: The structural engineer warrants that the design complies with building regulations and agreed project specifications.
What are the main suites of construction contracts?
JCT
NEC
FIDIC
ICE
If there are problems with the design, after Novation of the architect, who would be responsible?
the contractor assumes responsibility for the architect’s design, including errors and omissions.
The architect now works for the contractor and continues designing under their instructions.
The employer is no longer directly liable for the architect’s design work.
What are the main parts of the JCT contracts?
Agreement
Recitals.
Articles.
Contract Particulars.
Attestation.
Conditions divided into 9 sections (7 for minor works).
Schedules.
Describe differences between Statutory Provisions and Contract
Provisions?
Statutory provisions are mandatory legal requirements set by the government.
Contract provisions are agreements between private parties that must align with statutory law but can be customized to suit project needs.
What happens if a contractor does not respond to a change raised by the EA
Under Clause 3.9, the Contractor must respond within 7 days if they dispute an instruction as a change.
Under Clause 3.10, the Contractor must comply with valid instructions.
Under Clause 5.2, if the Contractor does not provide a cost proposal, the EA can assess the cost themselves.
Under Clause 3.10, the Contractor must comply with all valid instructions.
Failure to comply may result in:
Withholding of payment.
A contractual breach, potentially leading to termination.
Example Scenario:
The EA instructs the Contractor to use a different type of flooring.
The Contractor ignores the instruction and continues with the original flooring.
The EA may withhold payment for the incorrect flooring work.
What is a ‘Pay Less Notice’ and when can it be issued?
A Pay Less Notice is issued by the Employer to withhold part of a payment if there is a valid reason (e.g., defective work, non-compliance with instructions).
It must be issued at least 5 days before the final due date of the payment under Clause 4.10.
The notice must state the amount being withheld and the reason for withholding it.
How are changes in contract value assessed?
Contract rates (if applicable).
Agreed new rates (if the work is not covered by contract rates).
Fair market valuation (if no other method applies).
What is the role of the Quantity Surveyor (QS) in contract administration?
The QS prepares valuations and payment recommendations.
They assess variations and cost impacts of instructions.
They support the Employer’s Agent (EA) but do not issue instructions themselves unless authorized.
What is the difference between an Interim Payment Certificate and the Final Certificate?
Interim Payment Certificates are issued at regular intervals (e.g., monthly) to certify payments for work completed to date.
The Final Certificate is issued at the end of the contract to confirm the total sum due, including variations, adjustments, and any retained sums.
Under what circumstances can an Employer terminate a JCT contract?
Failure to proceed regularly and diligently.
Persistent failure to comply with instructions.
Insolvency of the contractor.
Defective or abandoned work.
Non-payment of subcontractors (if contractually required to do so).
A formal notice must be issued before termination.
How does the Contract Administrator assess an Extension of Time (EOT) request?
The cause of the delay (e.g., Employer changes, weather, force majeure).
Whether the delay is a Relevant Event under Clause 2.26.
Supporting evidence from the Contractor (e.g., programme analysis).
Whether the delay affects the Completion Date.
The Contractor’s mitigation efforts (e.g., acceleration strategies).
If granted, the Completion Date is revised, and liquidated damages (LADs) do not apply.
What are the key differences between Practical Completion and Final Completion?
Practical Completion (Clause 2.27):
Issued when the works are substantially complete (minor defects can remain).
Triggers release of half of the retention.
Marks the start of the defects liability period (rectification period)
Final Completion (Clause 4.26):
Issued after all defects are corrected.
Triggers release of the remaining retention.
Ends the Contractor’s liability for defects.
What is a Relevant Event vs. a Relevant Matter under a JCT contract?
A Relevant Event (Clause 2.26) affects time and may entitle the Contractor to an Extension of Time (EOT) (e.g., weather delays, changes instructed by the Employer).
A Relevant Matter (Clause 4.21) affects money and may entitle the Contractor to loss and expense compensation (e.g., late information from the Employer, restricted site access).
How are variations valued under a JCT contract?
Contract rates (if applicable).
Pro-rata adjustments of existing rates.
Market rates if no contract rate exists.
Cost-based valuation for new work.
When can Liquidated and Ascertained Damages (LADs) be applied?
The Contractor fails to complete works by the Completion Date.
There is no valid Extension of Time (EOT).
The LADs amount is pre-agreed in the contract (Clause 2.29).
The Employer must issue a Non-Completion Notice before applying LADs.
What are the key conditions for withholding payment under a JCT contract?
A Pay Less Notice is issued at least 5 days before the due date (Clause 4.10).
The reason for withholding is clearly stated (e.g., defective work, incomplete work).
The deduction is proportionate to the issue.
Failure to issue a Pay Less Notice means the Contractor is entitled to full payment.
What happens if the Employer fails to pay the Contractor on time?
if the Employer fails to make a due payment:
The Contractor can suspend work after 7 days’ notice.
The Contractor is entitled to interest on late payments.
If non-payment continues, the Contractor may terminate the contract under Clause 8.9.
What is the purpose of the defects liability period?
The defects liability period (also called the rectification period) starts after Practical Completion and lasts for a specified period (e.g., 6 or 12 months).
The Contractor must rectify any defects at their own cost.
At the end of the period, a Final Completion Certificate is issued.
The final retention payment is released after all defects are corrected
What is a Non-Completion Notice, and when is it issued?
A Non-Completion Notice is issued by the Employer’s Agent (EA) if the Contractor fails to complete the works by the Completion Date (Clause 2.28).
It serves as a formal notification that the works are late.
It is a prerequisite for applying Liquidated and Ascertained Damages (LADs).
Without this notice, the Employer cannot deduct LADs.
What is the difference between a Provisional Sum and a Prime Cost Sum?
Provisional Sum (Clause 4.4)
An estimated allowance for work not fully defined at the time of contract signing.
Requires instruction from the Employer’s Agent before execution.
Prime Cost Sum (Clause 4.5)
A sum included for specific items (e.g., specialist subcontractor works).
Covers only the base cost of the item, excluding overheads and profit, which are added separately.
How does a JCT contract deal with contractor insolvency?
The Employer may terminate the contract immediately.
The Employer secures the site and assesses work done.
The Employer may engage another contractor to complete the works.
The final contract sum is adjusted based on costs incurred by the Employer.
How are risk events allocated in a JCT Design and Build contract?
Employer’s Risks
Variations ordered by the Employer (Clause 3.5).
Delay in Employer-supplied information (Clause 2.26).
Site risks (if not stated otherwise in the contract).
Contractor’s Risks
Weather delays (unless exceptionally severe).
Supply chain issues.
Design errors (as the Contractor is responsible for design in D&B contracts).
What is the purpose of Retention in a JCT contract?
Retention is a portion of payments withheld to ensure work quality.
Usually 3%-5% of the contract sum.
Half is released at Practical Completion.
The remaining half is released at the end of the Defects Liability Period.
This protects the Employer from defective work that appears after completion.
What is the process for handling latent defects after Final Completion?
A latent defect is a hidden defect that is not immediately visible upon completion.
After Final Completion, the Contractor is generally not liable unless:
The defect was caused by negligence or poor workmanship.
The Employer takes legal action under the Defective Premises Act 1972.
A collateral warranty allows third-party claims.
What are the different types of instructions a Contract Administrator can issue?
A Contract Administrator (or Employer’s Agent in D&B) can issue instructions for:
Variations – Changes to design or materials.
Postponement – Delaying or rescheduling work (Clause 3.6).
Remedial Work – Correcting defects or non-compliant work.
Provisional Sums – Authorising undefined works.
Change of Sequence – Altering the planned construction order
How is the Final Account prepared and agreed upon?
It includes all adjustments for variations, loss & expense, and omissions.
The Contractor submits a final account proposal.
The Employer’s Agent reviews and negotiates before issuing the Final Certificate (Clause 4.26).
Once the Final Certificate is issued, the Employer cannot withhold further payments unless fraud is proven.
How does a Contractor challenge a decision made by the Employer’s Agent?
Submit a formal notice of dispute.
Request further review or negotiation.
Use dispute resolution mechanisms such as:
Adjudication (Clause 9.1) – A 28-day legally binding decision.
Mediation or negotiation.
Arbitration or litigation (if contractually allowed).
What is a Sectional Completion Certificate?
A Sectional Completion Certificate is issued when:
The contract specifies phased handovers for different parts of the project.
A section of the works is complete and can be used by the Employer.
Partial retention release is allowed for that section.
This differs from Practical Completion, which applies to the entire project.
When can an Employer take possession of the site before Practical Completion?
The contract allows for phased handovers (Sectional Completion).
The Contractor agrees to early possession.
The Employer formally instructs it and accepts any liability for associated risks.
Is the Programme a Contractual Document in a JCT Contract?
The Programme is not automatically a contractual document in standard JCT contracts, unless it is expressly included in the Contract Documents.
Can a Contract Administrator refuse to issue a Practical Completion Certificate?
Yes, a Contract Administrator can refuse to issue the Practical Completion Certificate (PCC) if:
✅ The works are not substantially complete.
✅ There are major defects or outstanding works.
✅ The project does not meet contractual requirements.
However, the CA cannot withhold the certificate for minor snags that can be rectified in the defects liability period.
What is the impact of late instructions on a project?
Late instructions from the Employer’s Agent/CA can:
📌 Cause delays to the completion date.
📌 Result in a loss and expense claim (Clause 4.21).
📌 Require a programme revision and potentially an extension of time.
The Employer may have to compensate the Contractor if the delay is caused by late information or instructions.
How does a Contract Administrator deal with defective work discovered after Practical Completion?
If the defect is within the defects liability period, the Contractor must rectify it at their own cost.
If the defect is discovered after the Final Certificate, the Employer may need to:
✅ Rely on warranties or latent defect insurance.
✅ Prove negligence to make a legal claim.
✅ Rectify the defect at their own cost if no other remedy applies.
What is the process for requesting additional information under a JCT contract?
1️⃣ The Contractor submits a Request for Information (RFI) to the Employer’s Agent/CA.
2️⃣ The Employer’s Agent reviews and provides a response within the agreed timeframe.
3️⃣ If delayed, the Contractor may claim for an extension of time (EOT) if the information is critical to progress.
How does the JCT contract handle bad weather delays?
Only exceptionally adverse weather qualifies as a Relevant Event under Clause 2.26.
The Contractor must prove the impact on the programme.
The Contractor may be granted time but no additional cost.
What happens if the Contractor walks off-site without formal termination?
The Employer can issue a Notice of Default under Clause 8.4.
If the Contractor does not return within the notice period, the Employer may terminate the contract.
The Employer can appoint another contractor and recover costs from the original Contractor.
Can a Contractor claim for disruption even if there’s no delay?
Yes, under Clause 4.21, if:
✅ The disruption increased costs (e.g., inefficient working conditions).
✅ The disruption was caused by the Employer or their agents.
✅ The claim is supported with records (e.g., site diaries, cost records).
What is a Performance Bond, and when is it used?
Performance Bond is a financial guarantee (usually 10% of the contract value) that protects the Employer if the Contractor defaults.
It is required in contracts with high financial risk.
If the Contractor fails to complete the works, the Employer can claim compensation from the bond provider.
What happens if the Contractor completes early?
The Employer is not obliged to accept early completion unless agreed.
The Defects Liability Period still starts from the contractual Completion Date.
The Employer does not have to pay early handover bonuses unless stated in the contract.
What is the purpose of a Non-Conformance Report (NCR)?
An NCR records defective work that does not comply with specifications.
The Contractor must rectify the issue before completion.
Repeated NCRs can impact payment and contract performance reviews.
Can the Employer change contract terms after signing?
✅ Both parties agree to a formal contract amendment.
✅ The contract allows specific variations without full renegotiation.
Can the Employer refuse to pay for work that is not signed off?
Yes, if:
✅ The Contractor has not provided required certifications (e.g., test results, warranties).
✅ The work is not inspected or approved.
How does the contract handle provisional sums that are not used?
If a provisional sum is not used, it is deducted from the final contract sum.
The Employer does not have to pay for unused provisional sums.
The Contractor cannot claim loss of profit on omitted provisional sums unless explicitly stated.
What is the difference between an Adjudicator’s decision and Arbitration?
Adjudication (Clause 9.1) is quick (28 days) and binding unless challenged in arbitration or court.
Arbitration is longer and more formal, but the decision is final and legally binding.
How does the JCT contract handle partial possession by the Employer?
Under Clause 2.33, the Employer can take partial possession of the works if agreed with the Contractor.
This triggers:
✅ A reduction in Liquidated and Ascertained Damages (LADs) for completed sections.
✅ The start of the Defects Liability Period for the occupied section.
✅ Responsibility for security, maintenance, and insurance shifting to the Employer for the occupied area.
What is an Employer’s Liability Period?
The Employer’s Liability Period (ELP) is the period during which the Employer remains liable for making decisions, issuing instructions, or fulfilling their obligations.
If the Employer causes delays, late payments, or instructions, the Contractor may claim loss and expense under Clause 4.21.
. What is the difference between a remedial instruction and a variation?
A remedial instruction requires the Contractor to correct defective work at their own cost.
A variation is an Employer-requested change that may entitle the Contractor to extra payment or time
What happens if Practical Completion is certified but defects are later found?
The Contractor is required to fix defects under the Defects Liability Period (Clause 2.36).
If defects are found after the period ends, the Employer may need to rely on:
✅ Collateral warranties.
✅ Latent defects insurance.
✅ Legal action for negligence.
Can a Contractor request early release of retention?
The Contractor can request early release, but the Employer is not obliged to agree.
If agreed, early release may require:
✅ A Retention Bond as security.
✅ The Employer’s Agent’s approval.
What is a Contractor’s Design Portion (CDP), and how is it managed?
A Contractor’s Design Portion (CDP) applies when a Contractor is responsible for designing part of the works in a JCT contract.
The Contractor must submit design drawings and calculations for Employer’s approval.
The Employer remains responsible for the overall design unless otherwise stated.
How is a design error handled in a JCT contract?
If the Employer is responsible for design, the Contractor may claim time and cost adjustments.
If the Contractor designed the element (in D&B contracts), they are liable for correcting the error at their own cost.
How can the Contractor prove loss and expense claims
The Contractor must submit:
✅ Site diaries/logs showing disruption.
✅ Labour and material cost records.
✅ Correspondence proving delays were not their fault.
✅ Revised programme showing impact on completion.
What is the purpose of an Extension of Time (EOT) Notice?
An EOT Notice informs the Employer’s Agent of a delay beyond the Contractor’s control.
The Contractor must submit:
✅ Details of the cause and impact of the delay.
✅ A revised programme showing required additional time.
✅ Supporting evidence (e.g., weather reports, supply chain delays).
Which JCT contracts can Contractor design portion be applied to?
The Contractor’s Design Portion (CDP) applies in:
JCT Standard Building Contract with CDP (SBC/XQ)
JCT Intermediate Building Contract with CDP (ICD)
JCT Minor Works Contract with CDP (MWD)
🚫 CDP does NOT apply to JCT Design and Build (D&B) contracts because the Contractor is responsible for the entire design.
What is Included in a Retention Statement?
Project name
Contract reference number
Employer (Client) details
Contractor/Subcontractor details
Date of the statement
Contract sum (£)
Retention percentage (e.g., 5% of contract sum)
Total retention amount (£)
Retention Held to Date £XX,XXX
Retention Released at Practical Completion (50%) £XX,XXX
Retention Remaining (Final Release) £XX,XXX
Expected Final Release Date DD/MM/YYYY
Requirements for Practical Completion in Construction?
The building must meet Building Regulations and be approved by relevant authorities.
Building Control Sign-off
Fire Safety Certificate
Health & Safety File (CDM Regulations)
Environmental/Planning Consents
All mechanical, electrical, and plumbing (MEP) systems should be tested and commissioned
A snagging list (schedule of minor defects) should be prepared.
The contractor must provide essential handover documents, such as:
Operation & Maintenance (O&M) Manuals
As-built drawings
Warranty and guarantee documents
User guides for equipment and installations
The contract administrator (e.g., architect, QS, project manager) formally issues a Practical Completion Certificate confirming that the project has reached PC.
What is on-demand bond vs conditional bond
On-Demand Bond
An on-demand bond (or demand guarantee) requires the surety (bank/insurer) to pay the beneficiary (employer) immediately upon request, without needing proof of contractor default.
Conditional Bond
A conditional bond (or performance bond) only pays out if the employer provides proof that the contractor has failed to meet contractual obligations.
What is a Z Clause in NEC Contracts?
A Z Clause is an amendment or additional clause added to an NEC contract to modify or supplement the standard contract terms. These clauses are introduced by the parties to tailor the contract to specific project needs.
What is the roles within NEC contract
Employer (Client) - Pays the contractor
Project Manager - Administers the contract, approves payment & changes
Supervisor - Inspects work quality , identifies defects
Contractor - Executes the works , manages risks
Sub Contractor - Delivers subcontracted works
Service Manager - Manages maintenance
