Contract Administration Flashcards
What is nomination?
Selection of a particular subcontractor to carry out works, manufacture or supply of materials
Provides the architect and client with greater control of material choice and thereby quality
It is often used where there are long lead-in times with the employer and placing orders prior to the MC award which reduces potential delays on site
The MC is relieved of liability of design and compliance with the performance spec in addition to subcontractor delays in respect of the works that have been nominated
Are nominated subcontractor paid separately?
They are normally paid via the Main Contract with sums identified separately
Can the contractor object to a nominated subcontractor?
Any objections must be made during the tender period
There are specific exclusions and grounds for an objection for example if they have found out the subcontractor is having financial difficulties and may be going insolvent
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 & their 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 = a mechanism whereby one party can transfer all of its obligations under a contract and all benefits arising from that contract to a Third Party
Assignment = where contractual benefits are assigned however contractual burdens cannot be transferred under assignment
What is set-off?
Set off are any monies owed to the employer by the contractor which are deducted against any payments due to the contractor
Describe the differences between Statutory Provisions and Contract Provisions?
Stat. Provs are set out by law and must be complied with
Cont. Provs relate to the contract in question & therefore only apply to a specific project
What are domestic subcontractors?
This is a standard appointment of a Subcontractor by the Main Contractor
What are named subcontractors?
Clients provide the MC with a choice of named subcontractors for a portion of the works
Once appointed they become a domestic subcontractor in terms of the conditions of contract
Additional names may be added if approved by all parties
This allows the client a level of control over the quality of the works packages and in some cases cost.
After valuation and certificate are issued, the client advises that they don’t have sufficient funding to make the payment. What would you do?
Once the certificate is 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 payment just needs to be delayed 1-2 days to allow the Client to secure the funds
Failing this, or if the contractor is unwilling to delay the payment, the client would need to finance the payment through other funds to honour the certificate
What items do you include for on a valuation?
- Prelims
- Measured works
- Materials on/off site
- Variations
- Claims
- Retention
- 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 was 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
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 CA, 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 documents would be required in incorporating a Contractor Design Portion Supplement into a project?
Within a D&B project, the documentation to be included would be the Employers Requirements including the Scope, Spec, Drawings, Contractors Proposals along with any insurances
Could an email constitute a contract document?
Yes, providing there is offer, acceptance, intention to create legal relations and the responding email does not vary the conditions, a contract will be created
What is your opinion of Oral Contracts?
Whilst they are legally binding the difficulty lies in proving the specific terms and conditions of the agreement
It is for this reason why the HGCRA (Housing Grants Construction Regeneration Act) only applies to written contracts
What is the difference between NEC and JCT?
The main difference between the two forms is its usage;
NEC can be used within 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
What is the difference between an information requirement schedule & an information release schedule?
The Info Req Schedule asks the Contractor to provide dates when design information is required
The Info Release Schedule informs the Contractor when the design information will be available
What is Frustration?
Frustration occurs when any event or circumstances beyond control of both parties changes the contractual obligations or makes it impossible or illegal to fulfil their contractual obligations.
The happening of such events automatically discharges the contract
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 the defects liability period?
The DLP is the duration at the end of the contract, usually 52 weeks after the PC or Substantial Completion Certificate has been issued whereby the contractor undertakes to rectify any defects that arise within the structure at the contractors expense, providing they were due to materials & workmanship not being in accordance with the contract
In the event that the contractor failed to rectify any defects the employer may employ another contractor to carry out the works & recover the cost of doing so from the MC
The retention money retained may be used to cover the cost of making good
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 Architect 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
If the works or materials are not in accordance with the Contract what options does the Architect have available to them?
The architect may:
- Instruct the contractor to remove all defective work, materials and goods at their own expense and time
- They can notify in writing that they can remain with an appropriate deduction being made from the contract sum
- Issue instructions for variations that are necessary as a result of the work. If they are necessary there should be no additional costs or extension of time given
- Instruct the contractor to open up and test further work to determine the extent of any non-compliance
