Contract Administration Flashcards
What are the contractual mechanisms under JCT?
EOT
Loss and Expense
Payment Certificate
Section completion
Partial possession
Practical Completion
Non completion
What timescales for issuing a payment certificate under JCT?
Due date - 7 day from the valuation date
Timescales for issuing certificate – 5 days.
Payment terms – 14 day as standard.
What is the definition of completion?
When all the work required by the ‘works information’ is completed by the specified completion date, and all notified defects that would prevent the client from using the works are corrected.
End of contractor liability (termination of any liquidated damages)
Insurance handover
Handover of the premises
Beginning of the defects liability period
Retention releases (generally from 5% to 2.5%)
What is the difference between section completion and partial possession.
Sectional Completion -Defined date in the contract. Liquidated damages can apply
Partial possession LD cannot apply.
What are the various forms of JCT contract?
JCT SBC, IC, MW, D&B
What is the role of a contract administrator?
Management or administration of the building contract between the employer and the contractor.
What is the difference between a contract instruction and a variation?
All variation are contract instructions but not all contract instructions are variations.
On Jodrell – What is the importance of a vesting certificate?
A vesting certificate or agreement for construction goods, plant or materials, in letter form, used to confirm that ownership of the goods, plant or materials will transfer from one party to another on payment.
This is particularly important if the contractor become insolvent
What details must be including in a vesting certificate?
The certificate will have to detail the location where the material is being stored, the client and contractors’ details, and photographic evidence of the material with clear, marked identification of the item being in the client’s entity
What is the type of certificates issued in a project?
Practical completion
Section Completion
Non completion
Certificate of making good
If there are problems with the design, after Novation of the architect,
who would be responsible?
- At the point of novation, the client would agree the level of design was satisfactory & would be signed off by all parties.
- The contractor would then become responsible for the Architect & his design should any problems arise during construction.
- Disputes may arise where it becomes unclear when problems have arisen, either prior to the transfer of services or afterwards.
What is the difference between Novation and Assignment?
Novation -Transfer of obligations and benefits
Assignment - Transfer of contractual benefits
Describe differences between Statutory Provisions and Contract
Provisions?
- Statutory provisions are set out by law & must be complied with.
- Contract provisions relate to the contract in question & therefore only apply to a specific project
After valuation and certificate are issued, the client advised that they
don’t have sufficient funding to make the payment. What would you
do?
- Once the certificate has been issued to the contractor, the client is contractually obliged to honour payment of the certificate and cannot withhold money without a valid reason.
- If this were the case, I would contact the client and contractor ASAP to arrange some form of payment. It may be the case that the client has insufficient funds available in time for the final date for payment and it may be possible to defer payment by 1-2 days.
- Failing this or if the contractor is unwilling to delay the payment, the client would need to find finance the payment through other funds to honour the certificate.
What items do you include for on a valuation?
Items would include:
* 1) Prelims.
* 2) Measured Works.
* 3) Materials on / off site.
* 4) Variations.
* 5) Claims.
* 6) Retention.
* 7) Previous payments.
If an instruction was issued during the contract which involved the
fabrication of a substantial amount of materials off site would you pay
for them as off site materials within the valuation?
- There is no obligation on the client to pay for materials off site if this is not identified in the contract.
- However in the scenario where the client wishes to pay for them, I would ultimately check with the client before paying or rejecting them
- Request vesting certificate
How would you deal with the urgent Verbal Instructions?
- If the instruction affects the critical path or programme in general I would review the instruction with the contractor administrator, client & contractor.
- If the instruction is valid under the contract I would ensure this is converted into a formal written instruction as soon as possible.
What is the difference between NEC and JCT?
The main difference between the 2 forms is its usage.
* NEC can be used within the building & civil engineering projects whereas JCT is specifically for building projects.
* NEC can be adopted to a number of bespoke contract strategies due to the various options available whereas JCT has a standard set of clauses.
How is a contract under hand different from a deed?
A Deed is signed by a witness & traditionally authenticated by a seal.
The limitation period of under hand is 6 years whereas a deed is 12 years
What is your understanding of latent defects and what contractual
issues are associated with them?
- Latent defects are defects which are not readily identifiable upon inspection & only come to fruition some time after building completion and may take many years to become identifiable.
- A claim in contract can only be brought about within the limitation period of the contract, 6 or 12 years depending on whether the contract was executed as a deed or underhand.
What should the architect do if they are discovered?
- The CA should issue an instruction as necessary to instruct the contractor what to do if they are identified.
- This can include telling them to comply with a third party who is examining or opening up the works to identify the defect
What are the main parts of the JCT contracts?
- Recitals.
- Articles.
- Contract Particulars.
- Attestation.
- Conditions divided into 9 sections (7 for minor works).
- Schedules.
Name the main types of JCT contract
- Minor works.
- Intermediate.
- Standard building contract.
- Design and Build.
When would you use JCT Intermediate Contract?
The project should be simple in content and require only basic skills and trades where services are not complex and where the works are already designed
