Contract Admin Flashcards
What were the Main updates to the RIBA plan of works from 2013 to 2020 version?
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What if the client tells you the LDs are to be £100,000 per week?
Check that they do believe that they are a genuine pre-estimate of likely loss
Explain the dangers that they might be construed to be a penalty
What if the liquidated damages are construed to be a penalty?
They will not be enforceable
The employer will have to sue for any actual direct loss that can be proved
What are the benefits of liquidated damages to the contractor?
The contractor knows the consequences of delay from the outset
What are extensions of time?
Adjusts the completion date and relieves the contractor’s liability to pay liquidated
damages for the period of the extension
What are liquidated damages?
A genuine pre-estimate of the likely loss incurred by the employer should the
completion date not be met
What must be in place before LDs can be deducted?
A non completion certificate
A withholding notice
What if the employer actually suffered no loss / damage?
It doesn’t matter
They can still deduct the liquidated damages stated in the contract
What are the benefits of being able to grant an extension of time?
It relieves the contractor’s liability for liquidated damages for a delay that they did
not cause
It enables another completion date to be set, which maintains the employer’s
ability to take liquidated damages if another delay occurs
What happens when ‘time is at large’?
There is no set completion date
The contractor only has the obligation to complete the works in a ‘reasonable
time’
Liquidated damages cannot be claimed (no date to take them from)
The employer would have to try and prove that the contractor had not completed
in a reasonable time
What is the procedure for claiming an extension of time?
As soon as it is reasonable apparent that a delay is or is likely to occur they
should write to the architect to notify them
This should identify the cause of the delay and if any of the causes are a
Relevant
Event, and give an indication of the extent of the likely delay
They should give any other further information requested by the architect
The architect must notify the contractor in writing of their decision
What are the time periods related to granting extensions of time?
The architect has 12 weeks from notification to decide on an extension of time
If there is less than 12 weeks to PC, they should endeavour to decide before PC
The architect has up to 12 weeks after PC to review any previous EOTs
previously given or to award further EOTs
What are Relevant Events?
The events that entitle the contractor to an extension of time
What are the relevant events?
Suspension by the contractor for non-payment
The carrying out of work by statutory authorities
Impediment, prevention or default by the employer
Loss or damages occasioned by the Specified Perils (fire, flood etc)
Exceptionally adverse weather conditions
Strike or lock out
Civil commotion or terrorism
The exercise of any statutory power after the base date by the UK gov
Force majeure
Variations
Instructions
Execution of an approx quantity that is not a reasonably accurate forecast
Deferment of possession of the site
If work is delayed due to two or more competing causes of delay,
one the fault of the contractor and one the fault of the employer, is
there an entitlement to an EOT/loss and expense?
No clear rule on which delay takes precedence where a number of delays occur
Each case has to be judged on its merits
Have to make efforts to identify all causes and effects
Who owns programme float?
No clear rule – generally it belongs to the contractor
The contractor normally includes float in his programme to accommodate his risk
items and also provide time for correcting mistakes
Therefore the actual impact of the delay should be considered
When there is a delay at the middle of the project, would you
consider the actual delay or the delay for the whole period?
The actual delay caused by the item in question.
It is not fair to offset against any float time the contractor may have built up
through good progress.
What is the purpose of a valuation?
To provide advice to the certifier on value to allow them to issue their interim
certificate
How is the Construction Act relevant?
It contains statutory requirements relating to interval and procedure for contracts
that have a duration of over 45 days
What are the standard provisions under JCT?
The first interim certificate must be issued within one month of the date of
possession
The contractor can apply for payment no later than 7 days before the end of the
relevant period
An interim certificate should be issued 7 days after application – payment
becomes due
The employer has 14 days before the date for final payment
If they wish to withhold payment they have to issue a notice no later than 5 days
before the final date
An interim certificate must be issued within one month of practical completion
Interim certificates should be issued ‘as and when’ monies become due to the
contractor after PC
What are the main elements of a valuation / what do you expect to
be included in a valuation?
Preliminaries Measured work Variations Materials on site Materials off site Loss and expense Retention
What needs to be in place for you to include payments for
materials on site?
The materials should be for the works, adequately protected, delivered to
programme and in a reasonable quantity
What needs to be in place for you to include payments for
materials off site?
Proof that ownership will transfer to the employer on payment (vesting certificate)
Insurance until materials arrive at site
Materials are clearly labelled as for the site and set apart from other materials
A materials off site bond has been provided if required
What is a retention of title clause?
Where the sub contractor or supplier retains ownership of materials until they are
paid for them by the contractor
This is why vesting certificates are important – otherwise the employer may pay
for materials that are not owned by the contractor
Can lead to disputes in the event of insolvency
General wisdom is materials that have been incorporated in the works belong to
the employer BUT less clear if they haven’t