Contract Administration Flashcards
Whats are the main forms of JCT available?
JCT Minor Works 2016
JCT Minor Works 2016 w/ Contractors design
JCT Intermediate Building 2016
JCT Intermediate Building 2016 w/ contractors design
JCT Standard Building 2016
JCT Standard Building 2016 w/ quantities
JCT Standard Building 2016 w/ approx quantities
JCT Major Project Construction 2016
What are the other JCT forms available?
JCT Measured Term 2016
JCT Design and Build 2016
JCT Homeowner 2016
What is a sectional completion certificate
A sectional completion certificate is certificate issued to the part or section of the works completed by the contractor,
Client may take possession of this section.
When would you use the contractors design supplement?
Generally when the works are of specialist nature and require specific detailing. The clients requirements of the design would be outlined during the tender process in a performance specification like criteria.
How does the JCT Measured Term Contract work?
The JCT measured term contract appoints a contractor over a specified period to perform a service usually outlined in a specification or works schedule. The contract usually outlines an envisaged contract sum. The contractor is issued works orders by the Contract Administrator.
Why would you choose a JCT over another form of contract?
I’m familiar and have trained with JCT contracts. More so they are an industry wide and accepted standard contract. I would in the future use other standard forms of contracts subject to training and competence.
What 5 things must be in place for a contract to exist?
Offer Consideration Acceptance Time Agreement
Must contracts be written?
Contracts can be written or oral and still be legally enforceable. However, I would always advise a client to only enter into a written contract.
What are the difference between “Under Hand” and “Signed as a Deed” contracts?
Underhand (i.e. simple)
Action against cannot be brought after 6 years
Less protected than a deed
Quicker as not required to be signed by a bound person.
Higher risk
Signed as a deed
Action against cannot be brought after 12 years
Does not have to be supported by valuable consideration, this offers more protection to the person who hasn’t broken the contract and more remedy from the breaker.
Must be signed by a person who is bound to the company (i.e. director) and witnessed which may be slower
Can a contract be modified once signed?
Yes if all parties to the contract agree to the modifications.
A provision of amendments would usually be attached to the contract.
What constituents a construction contract under the Construction Act?
Construction of structures even where it can move or have moving parts
Installation of a fixture which is annexed or affixed
Enhancement of land or buildings.
What are the payment provisions under the Construction Act?
Payment provisions.
Right to adjudication
Right to suspend performance.
The act states you must provide interim payments if the contract is greater than 45 days.
- Due date set.
- Valuation date is 7 days before due date.
- Certification must be issued no later than 5 days after due date.
- Contractor can submit their own certificate on expiry of the 5th day.
- Client can counter the contracts cert but no later than 5 days before the payment date.
- Payment date is 14 days after the due date.
What contract documentation would you find with a MW?
Specification
Schedule of works
Drawings / details
JCT MW SECTION 1
Definitions and Interpretation
JCT MW SECTION 2
Carrying out the works
JCT MW SECTION 3
Control of the works
JCT MW SECTION 4
Payment
JCT MW SECTION 5
Injury, Damage and Insurance
JCT MW SECTION 6
Termination
JCT MW SECTION 7
Settlement of disputes
What certificates are issued by the CA under a JCT MW
Extension of time Interim payment certificate Non-completion certificate Practical completion certificate Certificate of Making Good Defects. Final certificate (releasing retention)
What is practical completion and what contract mechanisms trigger?
RIBA Stages of Work define PC signifies when the project is handed over to the client from the contractor.
- The defect liability period begins
- Half of the retention is released
- Ending a contractors liability to liquidated damages.
- Employer takes back site and sorts insurance.
What documentation is handed over to the client at Practical Completion?
Building owners manual and user guide
Health and Safety file
Building Log Book
Construction stage report
How are liquidated damages calculated?
They are calculated on a weekly/daily rate in which the loss the client is likely to incur if the contractor fails to meet the completion date.
Calculated by the client.
How are liquidated damages recovered?
Liquidated damages are deducted from any sum due by issuing a Pay Less Notice.
Liquidated damages may also be recovered as a debt.
Must be done prior to issue of final certificate.
What is partial possession?
Partial possession is when contractor agrees to allow the client to use part of the works prior to completion.
Notify insurers.
What is performance specified works?
Performance specified works are usually key perofrmance requirements of works or components in the form of a performance specification. A contractors design portion usually meets the performance specification.
When may an extension of time be granted.
Not the contractors fault.
Relevant Events: Act of god / Force Majeure Unforeseen/adverse weather War / invasion Pandemic Country shut down
Relevant matters:
Client has delayed matters.
How would you exceptionally constitute adverse weather?
Unforseen weather which will have an effect on contractors operatives.
How do you determine an extension of time.
Work out how long the event is and how long that will impact the contract programme. This will determine the amount owed.
Relevant event or relevant matter
What happens if the contractor has not finished the works before the end of the contract period with no extensions of time granted?
Non-completion cert issued.
Notify insurers of extended programme.
Advise the client they have the option to claim liquidated damages.
What would you do if a contractor asked if they could be paid for off site materials.
Under Section 4 of JCT MW 2016, off site materials cannot be claimed or payed for. I would advise the contractor accordingly.
Can a contract administrator issue verbal instructions?
No, all instructions must be in writing.
Verbal instructions hold no bearing.
Tell me about a Certificate of Making Good
Issued to the contractor following the end of the defect rectification period and they have rectified the highlighted defects. The certificate discharges their obligations
Tell me about Person-in-charge
The contractor must ensure that a competent person will in charge at all reasonable times. Any instructions given to this person is deemed to be given to the contractor.
Tell me about sub-contracting
The contractor may only sub-contract at the CA’s consent.
Where considered appropriate the sub contractor should be engaged under the JCT Short Form Contract.
Tell me about giving instructions
Instructions can be given in writing and verbally however instructions which are gave verbally bare no affect until they are given in writing.
Contractor non-compliance with instructions
Section 3 of MW
Submit notice and if within 7 days the contractor has not executed the work, the Employer may instruct other contractors to execute the work and the appropriate cost such works and instruction incurred can be deducted from the contract sum.
Tell me about Variations
Omit, add or change the contractual works.
The cost of such variation should be agreed prior to the works going ahead.
Failing this CA must value the variation on a fair basis utilising the priced contract documents and standard pricing methods.
The variation shouldn’t change the dynamic of the works.
Tell me about the release of provisional sums
The CA may release the use of provisional sums to the contractor. Failing agreement on price the CA must fairly value the work.
Can a CA exclude persons from site or the works.
The CA may but exclude people from the works.
But not unreasonably excluded people from the works.
What works can be paid for?
- 3.1 work properly executed and adjusted where relevant amounts are ascertained.
- 3.2 materials and goods reasonably and properly brought on the site for the purposes of the works that are adequately protected against weather and casualties.
Contractors application for payment.
Can make an application from the ‘Valuation date’ up to the ‘due date’ (i.e. 7 days before due date)
or
5 days after the due date up till the final date of payment.
If an interim or final payment certificate is not issued by the CA?
Where the contractor has submitted an application for payment then this is then used as a Payment Notice.
If a contractor has not made an application they may submit a payment notice after the 5 day period of the due date (i.e. if the CA fails to submit a certificate/valuation)
This can be countered by a Pay Less Notice 5 days before the final date of payment.
Can a client pay less?
Yes the client can pay less.
A ‘Pay Less Notice’ must be issued to the contractor 5 days prior to the final payment date of that interim/final
Who issues a Pay Less Notice
Employer or can be done by CA on behalf of Employer or any other person authorised by the Employer.
If the paying party fails to pay, what happens with the receiver’s money?
If the paying party fails to pay they must pay a simple interest rate on the unpaid monies.
How do you recover unpaid amounts and interest?
Unpaid amounts and interest will be recoverable as a debt.
Does the contractor have the right to suspend performance (the works)?
The contractor has a right to suspend performance of the works if they have not been paid 7 days after the final payment date of that due date.
The suspension may take affect until the contractor has been paid.
They must give a notice to the client and CA.
The contractor will be entitled to reasonable costs and expenses incurred during this suspension. Such applications should be made to the CA with evidence.
When should the Final Payment be issued?
Refers to Final Account
Following practical completion the contractor shall supply the CA with all documentation required for the computation of the final payment.
The due date for the final payment shall be 28 days after the date of the receipt the of documentation unless otherwise specified.
