Contract Administration

Question 1

Under JCT - Define Relevant Event and Relevant Matter

Answer 1

Relevant Event: Time Impact

Relevant Matter: Cost Impact

Question 2

What’s the difference between a bond and insurance?

Answer 2

Bond - Financial Security for the payer in the event of default by the payee

Insurance - Financial cover for insurable events

Question 3

Name 3 types of bonds

Answer 3

Performance Bonds
Payments Bonds
Stage Payments for Offsite manufacture

Question 4

What is Contractors All-Risk (CAR) insurance?

Answer 4

A policy that
covers all risks associated with a construction project,
commonly issued under the joint names of a contractor and a principal client

Includes cover for:

• loss or damage to building works
• tools
• plant hire
• defects in materials and workmanship
• liability to pay LDs

AKA - Contract Works Insurance

Question 5

Name 3 types of insurance required by the standard forms of contract

Answer 5

Insurance of the works
Third party Insurance
Employer’s Liability

Question 6

What is Employers’ Liability Insurance?

Answer 6

Insurance for death or injury caused to employees

Question 7

What is Professional Indemnity Insurance?

Answer 7

protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided or negligent advice you offered

Question 8

What is Third Party Insurance?

Answer 8

Covers insurance of people and property not employed on the contract but damaged by the work.

Question 9

What is a collateral warranty?

Answer 9

Legally binding agreement, associated with another ‘primary’ contract, that extends the duty of care to a third party who is not party to the original contract

e.g Stannah provided collateral warranty to school for lift

Question 10

What were the aims of the 2011 Amendments to the ‘Construction Act’

Answer 10

The aims of the amendments are:
- to increase clarity and certainty as to payment in construction contracts;

• to introduce a ‘fairer’ payment regime, and improve rights for contractors to suspend their work in non-payment circumstances;
• to make adjudication more accessible for the resolution of disputes.

Question 11

What is the Housing Grants, Construction and Regeneration Act, also known as?

Answer 11

the ‘Construction Act’

Question 12

How would you record amendments to a JCT contract?

Answer 12

In a schedule of amendments
OR
could individually amend each clause.
Employer and Contractor should countersign each amendment

Question 13

Describe the 3 versions of the JCT Standard Building Contract (SBC).

Answer 13

Without quantities (SBC/XQ) - lump sum contract
With quantities (SBC/Q) - bill of quantities
With approx. quantities (SBC/AQ) - a remeasure BoQ

Question 14

Name some suites of standard contract from JCT

Answer 14

Standard building contract
Design & Build
Minor works 
intermediate building contract
Constructing Excellence
Construction Management Contract

Question 15

Name some factors when deciding on what contract to use

Answer 15

Contract Value
Complexity
Extent and Detail of design
Risk Appetite
Payment preferences - lump sum, value against BoQ, target
Client Knowledge
Whether Client will be the owner operator
How the project is financed - PFI and BOOT often v specific ‘watertight’ contracts

Question 16

How might the nature of the works affect contract choice?

Answer 16

Scale i.e. major projects, intermediate, minor works
Nature i.e. emergency repairs, might use remeasurement
Type of project i.e. building engineering refurb and repair, different contracts more appropriate
Priority of output - time cost quality

Question 17

What are the objectives of Partnering

Answer 17

Achieve mutual Goals 
Mutual Trust 
Non adversarial relationships
Communication
Avoid blame culture

Question 18

How does JCT cater for bonds and PCG’s?

Answer 18

o Contract Particulars will set out specifics/ value etc of bond

Schedule 6 details how bonds are used as a supplemental provision for, Advanced Payment Bond, off-site materials bonds, Retention Bond

Question 19

What are the advantages of Standard Forms over bespoke contracts?

Answer 19

1. Written by legal experts
2. Rights and Obligations of each party are clearly set out to the required level of detail
3. Risk should have been allocated equitably between the parties
4. Parties should be familiar with the provisions in the form - greater consistency of application and fewer anomalies
5. Avoid time and expense of preparing fresh contracts
6. Case law is built up over time - provides good source of knowledge and clarity of terms

Question 20

How do you define practical completion?

Answer 20

Completion of all works described in the contract. Not limited to physical works but also include documentation such as certificates, operation and maintenance manuals and health and safety files

Question 21

Why does completion on a construction project matter?

Answer 21

Often directly triggers a number of actions/obligations or marks the end of any further liabilities

e.g
Client takes possession and control of building
Cessation of any further liability for delay damages (liquidated or unliquidated)
Risk of loss or damamge to the works passes to the client
Commencement of defects liability, rectification or maintenance period
Milestone Payment or release of retention
A requirement for an account of the works to be prepared
Obligations under third party agreement such as funding agreements, bonds, guarentees, leases, sale agreements etc

Question 22

What’s the difference between Patent and Latent Defects?

Answer 22

Patent Defects are those which can be discovered by reasonable inspection.
Latent defects are those which cannot be discovered by reasonable inspection e.g. issue with foundations