Contract Documents

Question 1

What parties are named within the form of contract?

Answer 1

• architect
• contract administrator
• QS
• principle designer
• principle contractor

Question 2

Using the contents page within the form of contract, state which section relates to the following contract administration issues:

Answer 2

1. Contractors obligations relating the materials, goods and work to be carried out, during the project (section 2)
2. Sub-contracting (Section 3)
3. Payment (interim payments) (section 4)
4. Changes to works or design (section 5)
5. Insurances (section 6)
6. Procedures used to resolve disputes (section 9)

Question 3

Explain the purpose of the ‘articles’ and ‘contract particulars’.

Answer 3

Articles - these set out what is agreed between the parties.
Contract particulars - set out the aspects of the contract that are particular to the project to which the contract relates.

Question 4

List the duties of the contract administrator named within the articles?

Answer 4

The individual who is responsible for administering the construction standard contracts. Could be the project architect, lead consultant, cost consultants etc.
Issues certificates, payment, can change the completion date (EOT)

Question 5

What is the purpose of BOQ document under this form of contract. How does this differ from NEC4?

Answer 5

Provides schedule of rates - can compare tenders.

NEC - project specific measured quantities of items of works identified in drawings

Question 6

Describe the purpose of the contractors design portion, and use of the employers requirements and contractors proposals relating to this section.

Answer 6

Contractors design portion is an agreement for the contractor to design specific parts of the works.

Employer has supplied documents to the contractor which show and describe their requirements for the design and construction.

Contractor then replies with documents showing and describing the contractors proposals - an analysis of the portion of the contract sum relating to the contractors design portion.

Question 7

What is the difference between an activity schedule and bills of quantities under NEC4?

Answer 7

Activity - list of activities prepared by the contractor which he expects to carry out in providing the works - provides price for the activities.
BoQ - prepared by cost consultant, provides project specific measured quantities of the items of work identified in the drawings.

Question 8

What is the difference between an activity schedule and bills of quantities under NEC4?

Answer 8

Activity - list of activities prepared by the contractor which he expects to carry out in providing the works - provides price for the activities.
BoQ - prepared by cost consultant, provides project specific measured quantities of the items of work identified in the drawings.

Question 9

What are compensation events? How do they differ from JCT 16?

Answer 9

They are events which occur and are not the fault of the contractor - they entitle the contractor to be compensated.
JCT state these are being relevant events.

E.g employer not giving contraction site possession
variations

Question 10

NEC4 option C and D are described as Target Contracts. What are the advantages of such a contract compared to option E: Cost Reimbursable?

Answer 10

• both parties will have the same interest to keep costs low
• both parties will share the loss or gain in costs
• motivates the contractor to stay within budget

Cost reimbursement is when the contractor is paid for all expenses plus an additional payment to allow for a profit.

Question 11

Describe how pain/gain contracts work, and how this is incorporated into the NEC4 contract?

Answer 11

Pain/gain are basically target cost contracts.

Option C and D offer the pain/gain contract.

Question 12

Under what circumstances would the target cost be adjusted? How would this impact of the pain gain agreement?

Answer 12

Target cost is set out early in the project and then cost savings or overruns are shared based on an agreed formula.
Target costs can be adjusted when variations are issued in the contract.

Question 13

Describe the difference between the scope and site information as detailed under NEC4?

Answer 13

Scope - includes supply requirements which allow users to comply with the latest international trading terms.
Site info - info about the proposed site which may be relevant to the design team e.g. history, boundaries, drawings

Question 14

Describe the difference between the scope and site information as detailed under NEC4?

Answer 14

Scope - includes supply requirements which allow users to comply with the latest international trading terms.
Site info - info about the proposed site which may be relevant to the design team e.g. history, boundaries, drawings

Question 15

What are the issues with a letter of intent for a main contractor?

Answer 15

Not legally binding - could be doing work without legalities inc insurance.
Payment terms?

Question 16

What date is usually used as a base date, and why is this date important?

Answer 16

Base date is generally used to allocate risk between client and contractor for changes which might occur in the period between the contractor pricing the tender and the signing of the contract. Allows for specific conditions to be changed before the contract is implemented.

Question 17

Explain the difference between a contract under hand and a contract as a deed.

Answer 17

Under hand - cannot be brought after 6 years from the date which the cause of action occurred.
Deed - limitation period is 12 years.

Question 18

What is the difference between a condition and a warranty in a contract? Give an example.

Answer 18

Conditions determine the parties obligations. It is an act or event which affects the parties contractual duty.

Warranty - is a promise. Only entitles the innocent party to damages if it is breached.

Question 19

What is the difference between reasonable skills and care and fit for purpose?

Answer 19

RS&C - implied duty to use same level of skills and care expected of another competent member of the profession.

FFP - works or services must be good enough to do the job they are intended to do.

Question 20

Discuss the terms to be inserted into the CP, and their purpose?

Answer 20

• key dates
• retention %
• insurance details
• rectification period