Contract Practice Flashcards
What must be present for a contract to exist?
Offer
Acceptance
Consideration
Intent
What is an invitation?
inclusion in tender process
What comprises an Offer?
Contractors tender price & programme
omissions,
exclusions
Acceptance?
Acceptance is whereby the client accepts the “offer” of the contractor in exchange for consideration
- Consideration?
Consideration refers to the amount of money that is agreed in exchange for building out the project.
- What is intent?
Intent refers to the party’s intention to create legally binding relations with one another.
For example, the offer to build the project for £1m will be administered under an amended JCT D&B 2016.
- What are the main pricing approaches within the JCT contract?
Lump Sum / Measurement / Cost Reimbursable / D&B / Management / Partnering
- What are the lump sum contracts?
SBC Q – Larger, Complex works, BoQ
SBC xQ – Larger works but not complex (linear/repetitive i.e. warehouse), drawings and specification
IC – Simple works without complex building services, BoQ or drawings and spec., work can be carried out in sections
ICD – as previous but specialist work by contractor
MW – Low value work (sub £1m), Can’t name subcontractor or have sections
MWD - as previous but specialist work by contractor
- What constitutes complex building services?
?
- When would lump sum contracts typically be used?
For buildings when the scope of works can be largely identified pre contract.
- Why would you use a contractor design portion contract option?
Where the contract is traditional in that the client develops the design CDP can pass an element of works for Contractor Design
- When might a CDP be used?
Substucture design,
M&E
- Why might the client want to pass on certain design elements to the contractor?
Works which functional rather than aesthetic e.g. structural loading, heating and electrical performance
- What are the measurement contracts?
SBC AQ – Large works, Approx BoQ (subject to remeasurement)
MTC – Regular maintenance or minor work, Ongoing contract instruction, Contract is defined by Schedule of Rates over say 24 month period
- When would you use a measurement contract?
SBC AQ – Road i.e. scope is known but quantities are remeasured based on actual works
MTC – e.g. university maintenance works or council road repair works
- What are D&B contracts?
Initial design by employer but contractor takes on design liability/responsibility. Employers requirements detail the project requirements where design to be completed by contractor.
- What is Cost Reimbursable?
Contract Sum is only ascertained at final account.
Prime cost of labour, plant, materials and OHP.
- When could it be used?
Works requiring quick start where cost of construction is far outweighed by loss of revenue due to closure e.g. Hotel/Airport repair works – caused by unforeseen event / damage
- Cost Re-imbursable Contracts?
Prime Cost Contract – Early start on site, Drawings and specification,
- what are the types of Management Contracts?
Management Building Contract (MC)
Construction Management Appointment (CM/A)
Construction Management Trade Contract (MC/TC)
MC – Large projects, early start and full design not complete, drawing and spec, MC appoints trade contracts
CM – Varied project size, as MC but client appoints TC’s directly
- Partnering Contract?
JCT Constructing Excellence Contract
JCT Constructing Excellence Contract Project Team Agreement
- What are the NEC contracts?
- Option A – Priced Contract with Activity Schedule
- Option B – Priced Contract with BoQs
- Option C – Target Cost with Activity Schedule
- Option D – Target Cost with BoQs
- Option E – Cost Reimbursable
- Option F – Management Contract
- What are the other contracts?
FIDIC - International Federation of Consulting Engineers
ICC - Infrastructure Conditions of Contract
- Give examples of when certain contract may be best suited?
Lump Sum -Building (Good design)
Measurement - Roads (spec know but not scope)
Also MTC - maintenance / ongoing repair work e.g. roads or estate management
Cost Reimbursable - Quick start but limited design
- What is a typical contract structure?
Contract – Amends – Appendix: CSA, Design, Site Info, Prelims, Warranty, Bond, PCI, TQ, Clarifications)
- What is the main contract?
TBC
- What is the SoA?
Vary the contract as agreed between parties
- Example of a SoA?
Coronavirus event, ER’s take precedent over CP’s
- What is the pricing document?
Provides a clear breakdown of the contract sum
Basis for valuation and variations
- Why are drawings included?
Visually detail the work required
Allow the proposed works to be measured
- What are specifications?
Descripe the work to back up the detailed drawings.
- Why would surveys be included?
e.g. Ground condition to inform foundations
Asbestos – identify areas required to be removed for safety and define scope of work
- What is the pre-construction information?
Identify, eliminate, or control risks.
Produced by Principal Designer
- Give an example? PCI
Winnington – Multiple units creating high site traffic. Designated pedestrian walkways and gate to avoid pedestrians walking onto site.
- What is the preliminaries document?
set out the way in which the works should be done and restrictions and standards that should be complied with
- Example? Prelims
Welfare cabins working hours, PPE requirements, waste disposal, temporary services, security, plant,
- How is the prelims different to project preliminary costs?
Project preliminaries are works required to complete the measured works.
- What are the different types of contract pricing basis and when would these likely be used?
Lump Sum
Re-Measurement
Prime Cost
- What is the implications of the Housing Grants, Construction Regeneration Act 1996 (HGCRA)?
- Interim, periodic or stage payments
- Informed of the amount due or withheld
- Right to suspend works for non-payment
- Right to adjudication
- Disallowing pay when paid clauses
- What is the Local Democracy, Economic Development and Construction Act 2009 (LDEDCA)?
- Payment notice 5 days after due date
- If no payment notice after 5 days, then contractor can issue their own
- Pay less notice
- Adjudication
- What are liquidated damages?
Pre-estimate of ascertained loss to client as a consequence of works completing after the contract completion date.
- What is partial possession?
Post contract variation Contractor cannot unreasonably withhold Detail to clarify extent of area Value of Section must be stipulated Completion requirement Half retention (of ascertained value)
- What is Practical Completion?
What is required?
Implications?
Substantial Completion
H&S file, Testing & Commissioning, O&M, CW’s, Building Control Certificate, Planning Compliance, Structural Warranty, As Built DWGs, Keys.
Implications; Rectification period begins - Half retention released
Client insures - Contractor relinguished from LD liability
Employer must accept building early if it is actually complete
- What is Practical Completion?
Must be confirmed in contract; H&S file, Testing & Commissioning, Work Practically Complete, O&M, CW’s, Building Certificate, Planning Compliance, Structural Warranty, As Built DWGs, Keys.
Implications; Rectification period begins - Half retention released - Client insures - LDs are not applicable
Employer must accept building early if it is actually complete
- What is sectional completion?
As PC but Pro Rata – Value of Section must be stipulated
- What are extensions of time?
EoT provisions are to preserve the employer’s right to liquidated damages should the contractor fail to complete on time due to the employer
- Why did you use NEC4 short form for the demolition project?
Simple work
Lighter administrative requirements for parties.
Short programme (6 months)
Contract value sub £1m