Contract Administration

Question 1

What is a Collateral Warranty?

Answer 1

Collateral warranties are agreements which are associated with another ‘primary’ contract. They provide for a duty of care to be extended by one of the contracting parties to a third party who is not party to the original contract.

Question 2

What is the difference between JCT & NEC Contracts?

Answer 2

JCT – Contract Administrator
NEC – Project Manager

1. Price – JCT fixed lump sum & NEC options C & D are target costs contracts
2. Provisional Sums – JCT includes & NEC Excludes

NEC typically used for infrastructure projects

Question 3

ASOS – Collateral Warranty – what could happen if there wasn’t a collateral warranty in place. Are there any other fallback positions?

Answer 3

Third Party Rights Act

Question 4

What are the benefits of a Collateral Warranty from a client perspective?

Answer 4

Provides a contractual agreement with a third party, which otherwise would not have been there

Question 5

What is the QS role in arranging a collateral warranty?

Answer 5

This is the solicitor/lawyer responsibility

Question 6

JCT Standard Building Contract – What reason can a JCT be terminated?

Answer 6

i. failure to “proceed regularly and diligently with the performance of his obligations”, thereby entitling the employer to give notice of default and subsequently terminate

ii. Contractor goes into liquidation

Question 7

ASOS P3 – Can you name me one of the CDP packages under these works?

Answer 7

Co-ordination of services

Question 8

Why was co-ordination of services CDP?

Answer 8

The co-ordination of service wasn’t completed at point of tender, therefore this element of design was passed onto the contractor

Question 9

What is the risk to the client of CDP items?

Answer 9

Client loses control of the design element

Question 10

How does a verbal instruction process work under a JCT?

Answer 10

i. Contractor issues Confirmation of verbal instruction (CVI) within 7 days of receiving verbal instruction
ii. If the architect/contract administrator does not dissent from that confirmation within seven days from receipt of the written confirmation, the instruction then takes effect

Question 11

What is the timeline for the CA to reply to a confirmation of verbal instruction?

Answer 11

Seven days

Question 12

Collateral Warranty – can you give me an example of where a Collateral Warranty may be used?

Answer 12

i. Funders - banks and other lenders funding construction works who are taking a charge over the property, rather than purchasing it, will require collateral warranties

ii. Purchasers - a party that buys the development

iii. Employers to sub-contractors

Question 13

Schedule of Amendments – Can you give me an example of some of the amendments?

Answer 13

i. Payment dates (example – change from 14 days to 28 days)

ii. May be amendments relating to Covid & Force majeure

Question 14

What is a vesting certificate?

Answer 14

A vesting clause is a contractual term which deals with the transfer of ownership of goods and materials and a vesting certificate is a document evidencing that transfer of ownership of those goods or materials.

Question 15

Off-site joinery at KN – tell me the tasks and actions you carried out in relation to this?

Answer 15

I visited site with the architect to ensure the MOS were there and clearly labelled

Question 16

Did you go on your own to look at these or did you take anyone else with you?

Answer 16

No, I went with an architect and took a copy of the specification

Question 17

What certificates and notices are issued under the JCT?

Answer 17

1. Interim Certificate
2. Certificate of Practical Completion
3. Non-completion certificate
4. Payment Notice
5. Certificate of making good

Question 18

What is the purpose of a valuation?

Answer 18

To provide a recommendation for payment for the CA to certify

Question 19

How is the construction act relevant?

Answer 19

Statutory requirements relating to interval and procedure for contracts that have duration of over 45 days

Question 20

Talk me through the schedule 2 quotation process under the JCT?

Answer 20

+ sufficient information must be provided to the contractor to enable preparation of a quotation

+ prescriptive time periods exist for the preparation and acceptance of a quotation

+ the quotation must include the value of the varied work and the effects on any other work

+ supporting calculations should be submitted, with appropriate reference to the Valuation Rules

+ any requirements for an Extension of Time

+ any amounts to be paid in lieu of ascertaining Loss & Expense

+ a fair and reasonable amount in respect of the cost of preparing the quotation should be included. This fair and reasonable amount is to be paid even if the quotation is not accepted

+ method statements and resource requirements should be included if asked for by the instruction to provide the quotation

Question 21

What is the difference between Patent and Latent Defects?

Answer 21

A patent defect is one that has been identified during the works or during the defect liability period, whereas a latent defect could be concealed and may not be apparent until many years later, for example a building cracking due to inadequate foundation design

Question 22

What is a rectification period?

Answer 22

In JCT contracts, the period is typically between six to twelve months but can be as long as two years. A principal or employer who does not advise that the rectification of defects is needed and/or refuses the contractor access to the site may be in breach of contract