Contract Administration Flashcards
Under JCT - Define Relevant Event and Relevant Matter
Relevant Event: Time Impact
Relevant Matter: Cost Impact
What’s the difference between a bond and insurance?
Bond - Financial Security for the payer in the event of default by the payee
Insurance - Financial cover for insurable events
Name 3 types of bonds
Performance Bonds
Payments Bonds
Stage Payments for Offsite manufacture
What is Contractors All-Risk (CAR) insurance?
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
Name 3 types of insurance required by the standard forms of contract
Insurance of the works
Third party Insurance
Employer’s Liability
What is Employers’ Liability Insurance?
Insurance for death or injury caused to employees
What is Professional Indemnity Insurance?
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
What is Third Party Insurance?
Covers insurance of people and property not employed on the contract but damaged by the work.
What is a collateral warranty?
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
What were the aims of the 2011 Amendments to the ‘Construction Act’
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.
What is the Housing Grants, Construction and Regeneration Act, also known as?
the ‘Construction Act’
How would you record amendments to a JCT contract?
In a schedule of amendments
OR
could individually amend each clause.
Employer and Contractor should countersign each amendment
Describe the 3 versions of the JCT Standard Building Contract (SBC).
Without quantities (SBC/XQ) - lump sum contract With quantities (SBC/Q) - bill of quantities With approx. quantities (SBC/AQ) - a remeasure BoQ
Name some suites of standard contract from JCT
Standard building contract Design & Build Minor works intermediate building contract Constructing Excellence Construction Management Contract
Name some factors when deciding on what contract to use
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
How might the nature of the works affect contract choice?
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
What are the objectives of Partnering
Achieve mutual Goals Mutual Trust Non adversarial relationships Communication Avoid blame culture
How does JCT cater for bonds and PCG’s?
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
What are the advantages of Standard Forms over bespoke contracts?
- Written by legal experts
- Rights and Obligations of each party are clearly set out to the required level of detail
- Risk should have been allocated equitably between the parties
- Parties should be familiar with the provisions in the form - greater consistency of application and fewer anomalies
- Avoid time and expense of preparing fresh contracts
- Case law is built up over time - provides good source of knowledge and clarity of terms
How do you define practical completion?
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
Why does completion on a construction project matter?
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
What’s the difference between Patent and Latent Defects?
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
