Contract Administration Flashcards
1
Q
Whats are the main forms of JCT available?
A
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
2
Q
What are the other JCT forms available?
A
JCT Measured Term 2016
JCT Design and Build 2016
JCT Homeowner 2016
3
Q
What is a sectional completion certificate
A
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.
4
Q
When would you use the contractors design supplement?
A
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.
5
Q
How does the JCT Measured Term Contract work?
A
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.
6
Q
Why would you choose a JCT over another form of contract?
A
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.
7
Q
What 5 things must be in place for a contract to exist?
A
Offer Consideration Acceptance Time Agreement
8
Q
Must contracts be written?
A
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.
9
Q
What are the difference between “Under Hand” and “Signed as a Deed” contracts?
A
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
10
Q
Can a contract be modified once signed?
A
Yes if all parties to the contract agree to the modifications.
A provision of amendments would usually be attached to the contract.
11
Q
What constituents a construction contract under the Construction Act?
A
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.
12
Q
What are the payment provisions under the Construction Act?
A
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.
13
Q
What contract documentation would you find with a MW?
A
Specification
Schedule of works
Drawings / details
14
Q
JCT MW SECTION 1
A
Definitions and Interpretation
15
Q
JCT MW SECTION 2
A
Carrying out the works
16
Q
JCT MW SECTION 3
A
Control of the works
17
Q
JCT MW SECTION 4
A
Payment
18
Q
JCT MW SECTION 5
A
Injury, Damage and Insurance
19
Q
JCT MW SECTION 6
A
Termination
20
Q
JCT MW SECTION 7
A
Settlement of disputes
21
Q
What certificates are issued by the CA under a JCT MW
A
Extension of time Interim payment certificate Non-completion certificate Practical completion certificate Certificate of Making Good Defects. Final certificate (releasing retention)
22
Q
What is practical completion and what contract mechanisms trigger?
A
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.
23
Q
What documentation is handed over to the client at Practical Completion?
A
Building owners manual and user guide
Health and Safety file
Building Log Book
Construction stage report
24
Q
How are liquidated damages calculated?
A
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.
25
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.
26
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.
27
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.
28
When may an extension of time be granted.
Not the contractors fault.
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Relevant Events:
Act of god / Force Majeure
Unforeseen/adverse weather
War / invasion
Pandemic
Country shut down
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Relevant matters:
Client has delayed matters.
29
How would you exceptionally constitute adverse weather?
Unforseen weather which will have an effect on contractors operatives.
30
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
31
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.
32
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.
33
Can a contract administrator issue verbal instructions?
No, all instructions must be in writing.
Verbal instructions hold no bearing.
34
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
35
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.
36
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.
37
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.
38
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.
39
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.
40
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.
41
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.
42
What works can be paid for?
4. 3.1 work properly executed and adjusted where relevant amounts are ascertained.
4. 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.
43
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.
44
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.
45
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
46
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.
47
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.
48
How do you recover unpaid amounts and interest?
Unpaid amounts and interest will be recoverable as a debt.
49
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.
50
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.
51
Who is liable for personal injury or death?
The contractor.
Although, the employer may be if they are negligible including their employers person or employers statutory undertaker.
52
Types of insurance under the JCT MW 2016?
5. 4 - Joint Names Insurance of the Works by the Contractor.
5. 5 - Joint Names Insurance of the Works and existing structures by Employer.
5. 6 - Insurance of the Works and existing Structures by other Means
53
What is 5.4 Insurance
Joint names insurance by contractor
Usually used on new builds.
54
What is 5.5 Insurance
Joint names insurance of the works and existing structures by Employer.
Usually used in works to existing buildings.
55
What is 5.6 Insurance
Insurance of works by other means.
Third party (i.e. tenant works where they dont insure the building).
56
What is the time frame to provide evidence of Insurance?
The Person insuring the works shall provide evidence of insurance within 7 days of request.
57
If there is a loss to existing structures caused by the contractor, what can the client do?
If there is material loss or damage to existing structures the Employer may terminate the contractors employment within 28 days of the damage occurring.
The contractor may enter into dispute resolution within 7 days of receiving the notice.
58
Following termination can the contractors employment be reinstated?
Yes at any time if all parties agree.
59
On what basis can the contractor be terminated by default?
1. Unreasonably suspends the works.
2. Fails to proceed regularly and diligently with the works.
3. Fails to comply with CDM Regulations
CA must issue a notice specifying the defaults.
If the contractor continues with a default as notified for 7 days of receipt of the notice the Employer may on or within 10 days of the expiration of the 7 day notice terminate the contractor.
60
Can the employer Terminate the contract if the contractor becomes insolvent?
If the contractor becomes insolvent the Employer may at any time terminate the contractor.
61
Can the employer terminate the contractor if they have committed an offence under the bribery act?
The employer may terminate the contractor if them or their people have commited an offence under the bribery act 2010
62
What happens if the contractor is terminated by the Employer? (6.4, 6.5, 6.6)
1. Employer may instruct another contractor to carry out the works and use the plant materials etc on site.
2. No further sum shall be due to the contractor and any outstanding works shall be fully complete (i.e. end of rectification period).
3. Sums adjusted at the end, any additional costs can be claimed as a debt or if lower these will be owed to the contractor.
63
How can the Contractor terminate the contract by the Employers default?
1. If the employer does not pay the final date for payment.
2. Interferes or obstructs the issue of any certificates.
3. Fails to comply with CDM Regulations.
The contractor may give them Employer a notice specifying the defaults.
The contractor must issue a notice to the Employer specifying the events and if the event continues after 7 days of the receipt of the notice the contractor may on or within 10 days from the expiration of the 7 day notice terminate their employment under the contract.
or
If the Employer suspends the carrying out of the works on a continuous period of 1 month or more by CA instructions or by any prevention of default by the Employer, CA or Employers person.
64
Termination by Employer insolvency.
Contractor may terminate the employment by notice and their conditions to complete the works are suspended.
65
Either party may suspended the employment if for 1 month or more the following occurs?
1. Force majeure (Act of god)
2. CA/Architects negligence
3. Loss or damage to the works covered by works insurance policy or excepted risk
4. Civil commotion or terrorism
5. Local Authority or statutory power which stops the works.
May submit a termination notice and terminate the contract within 7 days of the expiration of that period.
66
What are the consequences to the employer by termination by the contractor under 6.8, 6.9, 6.10
No further sums due to contractor. The contractor prepares final account detailing:
Total value of work executed
The cost of materials and goods the contractor has ordered for the works which they are legally bound to pay.
Any direct loss/damage incurred by the termination.
The Employer must pay the contractor any outstanding amounts within 28 days of the final account notice being served without deduction of any retention.
67
Whats the provisions of settling disputes?
Negotiation
- first resort.
Mediation
- used if the dispute cannot be resolved by direct negotiations with serious thought to the other parties offer.
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Adjudication
- used if any party wishes to refer to adjudication.
Arbitration
- set out in schedule 1
Litigation
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68
What is a letter of intent?
Letter of intent – Expresses intent to enter into a future contract but does not always create a contractual relationship. It is not an agreement to agree. Allow contractor to mobilise. Need to agree formal contract as a matter of urgency. Courts can decide that they are legally binding.
69
What are liquidated damages?
Liquidated damages – If the contractor fails to achieve PC at the completion date.
Predetermined at a weekly/daily rate, not a penalty. Based on a calculation of actual loss to the client as a result of the delay.
70
What are unliquidated damages?
Payable for breach of contract.
Not pre-agreed. It is a form of compensation that is determined by the court and you need to prove loss.
71
What is a Contractor's Loss and Expense?
Loss and Expense – Sums a contractor has incurred due to progress being affected by relevant matters for which the client is responsible.
- Contractor must give notice
- Claims restricted to direct loss.
- Usually run side by side an Extension of Time
72
What is a certificate of non-completion?
Certificate of non-completion – Formal notice to the contractor that they have failed to complete the works in the contractual time.
Must consider claims for EoT first and the implications of LADS etc of this.
If sectional completion then then separate certificates can be issued.
Issue a new certificate of non completion each time they fail to hit the new target.
73
What is an extension of time?
Extension of time – If there is a delay that is not the contractors fault.
The contract must give notice of the relevant event that has occurred and the required extension of time. Extension of time clause benefit client also as without it the contractor would be able to take as long as they want and you couldn’t pursue for LADs. Can be linked to claims for loss & expense. Review actual progress and critical path.
74
When are interim payments necessary and what are there time frames for due dates?
HGCR Act 1996 (AKA Construction Act). If a construction project is longer than 45 days the contractor is entitled to interim payments.
Due date: set within the contract.
Interim Valuation date: 7 days before due date
Contractors application for payment: No later than the interim valuation date.
Certificate issued: 5 days after due date
Final date of payment: 14days after the due date
Pay Less Notice: No later than 5 days before the final payment date.
If no notice is served by the CA/Payer (i.e. 5 days after the due date), the contractor (Payee) may serve their own Payment Notice, provided its before the final date of payment and this will need to be paid, though this can be countered with a Pay Less Notice.
Final contract payment (not including end of rectification 2.5% release): 28 days after receiving all relevant documentation.
75
What is a pay less notice?
Pay less notice – Client must issue 5 days prior to payment date. Setting out why they are paying less than the payment certificate.
76
What is the Housing Grant Construction Regeneration Act (The Construction Act)?
Housing Grant, construction and regeneration act (the construction act) deals with payment, dispute resolution:
- Payment mechanisms
- Performance suspension
- The right to adjudication.
77
What is an accelerated programme?
Accelerated programme – Speeding up construction so that it can complete prior to the contractual end date. If the contractor incurs costs as a result of this it can result in a claim against the client if it is at the clients request that the programme be accelerated. They can work over time, more labour, more off-site manufacturing, more plant equipment. No guarantee of early completion as activities can not always be done concurrently. Quality and compliance can be negatively effected by this. Should get an acceleration agreement confirming the new dates and costs and what happens if the target is not met.
78
What is sectional completion?
Sectional completion – Pre-determined in the contract that different sections of the works will have different completion dates (Not included within MW).
- Different completion dates means there can be separate claims for Liquidated damages etc.
- Retention released for sections complete.
- Can be complicated if one delay leads to other delays in terms of assessing.
- Rectification period begins for that section.
79
What is partial possession?
Partial possession – Not pre determined in the contract. If you take possession of an area then it is deemed to have reached PC. Half of retention must be released etc and client becomes responsible.
80
What is a Latent Defect?
Latent defect – Defects that are hidden from inspection after the rectification period and final certificate.
If the defect appears after the rectification period there is no contractual right to claim so you have to go to court for breach of contract for negligence.
81
What is a Patent Defect and a Latent defect?
A patent defect is one that has been identified during the works or during the defect liability period.
A latent defect could be concealed and may not be apparent until many years later.
82
What is a contra charge?
It's a sum which is charged back to the contractor for a failure/defect or something which has caused damage to the Employer.
83
What is a collateral warranty?
Collateral warranties are agreements which are associated with another 'primary' contract.
Third party (usually sub-contractor) which is not party to the main contract extend a duty of care to one of the parties (usually employer)
For example, a sub-contractor may provide a collateral warranty to the project's ultimate employer and / or its funder by which it promises it has completed its works in accordance with the contract.
84
What are preamables?
Preambles – Pre-explanation of a document.
Background to the project, rationale or objectives. etc
85
What is a rentention?
Retention – half of the retention is released at PC an the other half on final completion/certificate of making good. Can be kept in a separate bank account like a bond. Also applies to sub-contractors. Can cause cash flow issues for contractors. Can use retention bonds. Can hold on to retention when there is arguments over defects.
Usually 5% reduced to 2.5% at PC.
86
What mechanisms occur because of Practical Completion?
1. Releases half of retention.
2. Client becomes responsible for the building again/insures.
3. Ends liability for liquidated damages.
4. Beginning of rectification period.
87
What is De Minimis?
De minimis – Too minimal to be considered
88
What is a rectification period?
This begins at PC and usually lasts 12 months. Contractors responsibility to highlight defects however. If the contractor does not make good the defects they are in breach of contract and the client can employ someone else to do it and deduct from retention as long as cert of making good hasn’t been issued. At the end CA provides a schedule of defects and a programme for completing the works. When they are complete a certificate of making good is issued and retention released and final certificate issued. Defects before PC should be rectified before PC.
89
What is a schedule of defects?
Schedule of defects – Issued by the CA at the end of the defects liability period (patent).
Certificate of making good is issued when the works have been repaired and releases retention.
If defects are not made good then the client can withhold some of the retention.
90
What is final account?
Final account – At the end of the construction period to identify the final amount owed.
Final payment due to the contractor. Need to keep a good audit trail throughout. Client can issue a pay less notice if they are paying less.
This will also allow a final certificate to be issued at end of rectification period.
91
What is a certificate of making good defects?
Certificate of making good – once all defects on the schedule of defects (before rectification period expires) have been resolved during the rectification period a certificate of making good cert is issued followed by a final certificate.
Once cert of making good is issued then this releases the remaining half of the retention.
92
What is a Final Certificate?
Final certificate – Issued at the end of the rectification period.
The value of the final certificate will be based on the final account, will be the release of 2.5% retention.
All patent defects must be remedied. If there is a dispute this must be resolved before issuing the final certificate. Or you can issue a certificate to resolved matters but not unresolved matters. if a defect becomes apparent after cert of making god but before final cert you should hold off issuing final cert until it has been rectified. If a client intends to pay less than the certificate they must issue a pay less notice.
93
What is Prolongation?
Prolongation – Delay related costs incurred by the contractor due to the extended duration of works as a result of delays caused by the client.
Can result in a claim for loss and expense. But is not the same as loss and expense.
Prolongation must result in the completion date being delayed.
94
What is a PC Sum?
Provisional sum – is an amount of money included in the contract sum to cover work or materials (budget fig).
PC Sum - an amount of money included in a contract sum to purchase a specified item such as tiles, taps, doors or bathroom fittings. (Labour not included)
95
What is an advance payment bond?
Advance payment - client pays and helps contractors cash flow but there is a bond in place for the security of the advance payment.
It provided by a third party and states that the advanced sum will be returned if the agreement under which the advance was made cannot be fulfilled. They can also be called Advance Payment Guarantees.
96
What are concurrent delays?
Where more than one event occurs at the same time, but where not all of those events enable the contractor to claim an extension of time or to claim loss and expense. Or for the employer to claim for liquidated damages.
The difficulty arises in determining whether concurrent delays allow an extension of time and loss and expense claims, or liquidated and ascertained damages.
97
What happens if contractor insolvency occurs?
Contractor insolvency –
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Notify employer
Notify insurers and put means in place.
Contract termination (be wary!)
Secure the site and materials, plant etc
Appoint another contractor.
Carry out the works.
Provide a final statement on any additional costs incurred because of the insolvency.
May be eligible to recover as a debt if more than contract or if less pay back contractor what they're owed.
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98
What is force majeure?
Force majeure – Superior force. Act of god impedes performance. Out of control of either party to the contract.
Doesn’t have a defined legal meaning in English law. Considered a relevant event so may allow an EoT (could be difficult to define ‘adverse weather’ for example).
May end up being a frustration event and either party can terminate the contract without creating a breach. Not a relevant event so can not claim loss and expense as it is not the clients fault. 1 month must pass and issue 7 day notice.
99
Difference between JCT and NEC?
JCT – time and money is separate. More risk on the contractor.
NEC – time and money seen as one compensation event. Shared risk approach not blame. Programme based. Target cost.
100
Limitation period of contract under hand?
Contract under hand – Limitation period is 6 years.
101
Limitation period of contract under seal?
Contract under seal (as a deed) - Limitation period is 12 years.
Needed if there are collateral warranties in place.
102
What are preliminaries?
Preliminaries – Provide a description of the project in the tender documents.
Allows the contractor to assess costs that are not within the package of works.
Describe testing, site overheads, welfare, profit, completion dates, waste management, insurance , cleaning, H&S
103
What are Life Cycle Costs?
Lifecycle and whole lifecycle – Lifecycle are costs directly as a result of construction. Whole life cycle includes costs for land, income from the building and any costs associated with the building inc disposal and maintenance.
Cradle to grave.
104
What is a Letter of Intent?
A letter stating the intention to enter into a contract. This still can be seen as a contractual agreement.
Not a replacement for a contract, a contract should follow almost immediately.
Can allow a contractor to mobilise and order materials etc before an official contract is drafted and signed.
105
What should be in the agenda for progress meetings?
Defect / design issues.
Variations / provisional sums
Health and Safety
Progress
106
What documents should be in a Tender?
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Instructions to tenderers
Schedule of Works
Specification
Drawings
Pre-construction Information
Form of tender
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107
JCT contracts, general differences between MW, Intermediate?
Minor works follows on from intermediate. These additional provisions include:
Collateral warranties
Sectional completion
Advance payment
108
How to you assess claims for an extension of time?
Review of programme v progress
Review the request with a pragmatic and fair view.
Time requested should be fair comparing to time lost.
109
What is the difference liquidated and un-liquated damages?
Liquidated are pre determined rates which are written into the contract – they are used when the contractor fails to complete the contract on time.
Unliquidated damages are damages that are payable for a breach, the sum is determined after the breach occurs by a court
110
How are liquidated damages determined?
Clients loss for a delayed project – i.e if a tenant is due to move in and pay rent etc.
111
What claims can contractors make?
Delay costs (i.e. additional overheads, relief of liquidated damages, increase costs on pushed back work, seasonal effect)
Loss and expense
Prolongation
Extensions of time
Uneconomic working (labour, materials, plant)
112
Can a contractor assign the whole or part of the works to a sub-contractor?
Yes with written permission and consent.
113
Who advises and ensures insurances are in place?
Contract Administrators responsibility to notify contractor or client.
Identified in Pozzolanic Lytag Ltd v Bryan Hobson Associates (1999)
114
Is there a contractual link between the CA/Employers Agent and Contractor?
No - The contractor is appointed to carry out the works as they see fit whilst the CA must ensure the works are properly completed.
CA has no obligation to the contractor to issue any recommendations/warning.
115
Does the CA need to make suitable arrangements to keep informed and inspect the property on key events and regularly?
Yes - Florida Hotels v Mayo (1965)
116
If a hidden defect was found following PC what would be the consequences?
Gallagher v McDowell Ltd (1961) - If the defect was hidden i.e. beneath coverings/masked it would be the liability of the contractor.
If it wasn't masked it would be the liability of the CA.
117
What's a CA's role Pre-Contractual?
Establish clear lines of responsibility and communication
Draft the contract
May be pre-instructed to carry out design (often the case)
118
What's a CA's role in contract?
Administer terms of the contract
Inspect progress and quality
Prepare valuations and payment certs
Chair progress meetings and issue minutes
Agree PC and may include snagging schedule
Administer contract during defect liability period.
119
What materials can be claimed for during payments?
Where materials on site are claimed, these should be on site in a timely manner and required for the works coming within the next period.
Materials brought to site too early may be rejected for payment
120
What is a fluctuation?
Fluctuations provisions provide a mechanism for dealing with the effects of inflation.
On large projects lasting several years can be very significant.
121
How are Liquidated Damages claimed for?
They're taken off the Final Payment by the means of a Pay Less Notice.
122
Does a contractor need permission to spend PC sums?
Yes from the CA.
123
Contractor asks to be paid for off-site materials, when is this acceptable?
Not allowed in a MW Contract.
Advance payments - ensure you obtain a receipt of goods, insurance is in place and the materials are set aside and marked up.
124
What can be paid for under MW?
- Works properly executed.
| - Materials relevant to upcoming works, not excessive and are protected.
125
If the contractor fails to insure the works what would you advise?
The Employer is able to insure the works and take this away from the contract sum.
126
What other things could you do appose to issuing an Advance Payment to increase VAT return?
Go into a direct contract with the suppliers
127
Whats the difference between Relevant Events and Relevant Matters?
Relevant Event:
A relevant event is an event that causes a delay to the completion date, which is caused by the client, or a neutral event not caused by either party. The contract should set out what constitutes a relevant event. Relevant events entitle the contractor to claim an extension of time; that is for the completion date to be moved. They cannot claim for loss and expense.
These might include:
- Variations.
- Exceptionally adverse weather.
- Force majeure
Relevant Matter:
A relevant matter is a matter for which the client is responsible that materially effects the progress of the works. This enables the contractor to claim direct loss and expense that has been incurred.
These might include:
- Failure to give the contractor possession of the site.
- Opening up works or testing works that then prove to have been carried out in accordance with the contract.
