Contract Practice

Question 1

What is a Tort?

Answer 1

A body of law that creates & provides remedies for civil wrongs that do not arise out of contract

Question 2

What is the difference between statutory and contract provisions

Answer 2

Statutory - implied by law and be complied with regardless of contract

Contract - relates to contract, specific to project

Question 3

What is a contract?

Answer 3

A legally binding agreement between parties enforceable by law.

Sets out details of agreement and mechanisms to be used during the course of a project

Question 4

What is contract administration?

Answer 4

Administering the provisions of the contract such as:

• payment
• change control and variations,
• substantial completion,
• extension of time,
• resolving disputes
• settlement of the final account

Question 5

What do you need to make a contract?

Answer 5

1. Invitation-Employers invitation to tender (scope of works, design, proposed Ts&Cs)
2. Offer-Contractors tender (proposed amendment to terms/agreement terms)
3. Acceptance-Employers acceptance of tender
4. Intention (to enter into contract)-Intention of the parties to create legal relations
5. Consideration-Some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment or loss undertaken by the other
6. Must be lawful-Not an illegal act

Question 6

What are express terms?

Answer 6

Those set out in writing in the contract

Question 7

What are implied terms?

Answer 7

Those not specifically set out in the contract but which are implied

Question 8

How can terms be implied in a contract?

Answer 8

1. Implied in fact (not set out in the contract)
2. Implied by law (legal requirements)
3. Implied by custom
4. Implied by routinely part of business

Question 9

What are the two different ways a contract can be signed?

Answer 9

1. Under-hand

2. A deed

Question 10

What is the difference between an information requirement schedule & an information release schedule?

Answer 10

Information Required Schedule - asks contractor to provide dates when design information is required.

Information Release Schedule - tells contractor when the design information will be available

Question 11

What are the provisions under the Construction Act? (HGCRA 96)

Answer 11

Payment: The Act requires payment to be made within a certain timeframe, which is set out in the contract. It also allows parties to submit payment applications, and provides for the right to suspend performance if payment is not made.

Adjudication: The Act provides for a statutory right to adjudication, which is a fast-track dispute resolution process. Parties can refer disputes to adjudication at any time, and the decision of the adjudicator is binding, although it can be challenged later in court or arbitration.

Notices: The Act requires certain notices to be served at various stages of the construction process, such as notices of payment due and notices of intention to withhold payment.

Retention: The Act provides for the use of retention, which is a percentage of the payment that is held back by the payer as security for the performance of the contract. The amount of retention is limited, and there are strict rules on when and how it can be released.

Suspension and Termination: The Act allows parties to suspend or terminate the contract in certain circumstances, such as non-payment or failure to proceed regularly and diligently with the works.

Question 12

Why was The Housing, Grants, Construction and Re-generation Act (HGCRA) 1996 introduced?

Answer 12

To improve the payment practices in the construction industry and to provide a framework for dispute resolution.

Question 13

When does the Construction Act 1996 apply?

Answer 13

Applies to all contracts for works classified as ‘Construction operations’

Question 14

Give some examples of works not classified as ‘construction operations’ and excluded from the Construction Act

Answer 14

Drilling for oil/gas
Extraction of minerals
Tunnelling
Artistic works/scuptures
Manufacturing of components

Question 15

Give some examples of the 2011 Amendments to the Construction Act

Answer 15

The Act now applies to all construction contracts, whether they are in writing, partly in writing, or entirely oral (previously it was just written contracts)

Clients must issue a payment notice even if no payment is due and this must be issued within five days of the payment being due

If works are suspended by contractors due to non-payment they are now allowed to recover costs and expenses incurred in doing so and are to be granted extensions of time where applicable to cover the programme effects of suspension

Contracts can no longer define which party is to bear the costs of the adjudicator. (was viewed as a disincentive to commence proceeding). It is now generally up to the adjudicator who pays their fees.

Question 16

Name some key legislation relelvant to your pathway that you are aware of

Answer 16

Construction (Design and Management) Regulations 2015 (CDM Regulations): The CDM Regulations set out legal requirements for managing health and safety in construction projects, and apply to all construction work, regardless of size or duration.

The Building Regulations 2010: The Building Regulations specify minimum standards for the design and construction of buildings, including requirements for safety, accessibility, and energy efficiency.

Health and Safety at Work etc. Act 1974: The Act places a duty on employers and employees to ensure the health, safety and welfare of all those who may be affected by their work activities. This includes project managers who have a responsibility to ensure that adequate safety measures are in place on construction sites.

Contracts (Rights of Third Parties) Act 1999: This act allows third parties to enforce terms of a contract, where the contract specifies that they have that right.

Freedom of Information Act 2000: This act provides the public with a right of access to information held by public authorities, including project documentation related to public projects.

Data Protection Act 2018: This act regulates the collection, use, storage and sharing of personal data. Project managers should be aware of the data protection obligations associated with their project, particularly if it involves the processing of personal data.

Public Contracts Regulations 2015: These regulations apply to public sector procurement and set out detailed rules on how contracts should be advertised, awarded and managed.

Question 17

What is the ‘black book’

Answer 17

A collection of technical practise documents which covers all processess throughout the construction project life cycle

Documents are essential for junior professions and useful best practise guides for experienced professionals

Example:
Change Control and Management
Conflict Avoidance and Dispute Resolution

Question 18

Give an example of how you have dealt with an EOT

Answer 18

Heath Primary - EOT for bad weather

1. Reviewed records provided by contractor and obtained my own weather reports
2. Considered the exact type of adverse weather and how it actually impacts the worked being carried out

High winds - crane work, roofing, working at height unsafe
Heavy rain - delays to groundworks, excavations, paving and tarmac, water ingress if building not watertight
Low min temp - concreting, road surfacing, excavation impossible

Compared with planned programme - doing roof work and therefore high winds did impact

Accepted RE and awarded EOT