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Alton Powell APC > Contract Practice > Flashcards

Contract Practice Flashcards

1
Q

Level 3 - Sectional completion

LED project - Tell me about when you provided reasoned advice on any specific matters of a contract and why?

A
  • Advised on dividing contract in sections
  • Enabled the client to plan their operations as sections are clearly identified with start/completion dates and rate of LDS.
  • Meet client requirements
  • Allowed client to vacate areas at agreed times rather than vacate entire space
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2
Q

Level 3 - Sectional completion

What were the benefits of dividing the contract into sections, as apposed to doing it any other way?

A
  • Both parties understand their liability/obligation
  • Allows the employer to plan/programme their operation (decant/vacate)
  • Pre-agreed and written in the contract, scope & extent clearly identified
    *
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3
Q

Level 3 - Contract selection

Why did you advise on a JCT IC 2016?
Why were other forms or suites discarded?

A
  • Simple nature
  • Contained appropriate provisions such as; Sectional completion to meet client requirements
  • Minor Works doesn’t allow for sections
  • Standard Building Contract for larger more detailed projects
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4
Q

Level 3 - LDs

On your LED lighting project, how did you advise your Client on the Liquidated Damages provision in the contract?

A
  • Genuine pre-estimate of likely loss
  • Reasonableness of LD’s
  • Method of calculation
  • How the LDs are specified in the contract (days/weeks)
  • Obligation under contract - how LDs become payable
  • Risks involved in under/over valuing or leaving blank
  • Termination
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5
Q

Level 1 - LDs

What are the risks of unreasonable LD amounts?

A
  • Construed as a penalty
  • Unenforceable
  • Employer will have to claim unliquidated damages
  • Will have to prove actual loss, remoteness, causation, reasonable steps to mitigate loss
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6
Q

Level 1 - LDs

What are the risks of under/over valuing or leaving LD’s blank?

A
  • Employer cant change or increase under valued LDs if sums doesn’t cover their loss.
  • Employer cannot levy damages against contractor if damages are stated as ‘Zero’
  • Unreasonable sums are construed as a penalty and left to claim unliquidated damages
  • Leaving the provision blank assumes unliquidated damages.
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7
Q

Level 1 - LDs

What are the Pro’s and Con’s of Unliquidated Damages?

A

Pro’s
* Employer could be compensated for sums not previous considered or forseeable

Con’s
* Employer has to prove actual loss, remoteness and loss mitigation
* Hard to prove
* Contractor doesn’t know their liability and cannot budget for risk of delay or adjust tender accordingly.

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8
Q

Level 2 - LDs

On your LED project, what considerations were mad in calculating the LD’s?

A
  • Loss of rent
  • Level of occupancy
  • Storage costs
  • Fee’s
  • Financing costs
  • Accommodation costs
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9
Q

Level 1 - LDs

What are the advantages of LD’s?

A
  • Pre-defined sum
  • Recoverable without proof of loss
  • Contractor knows the limit of their liability
  • Allows contractor to budget risk of delay and adjust tender
  • Confirms remedy to the Employer
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10
Q

Level 3 - Completion

On your LED Lighting scheme, how did you advise your client before including Sectional Completion provisions in the contract?

A
  • Provisions required for sectional completion to apply
  • Risks associated with incomplete information
  • Consequences of sectional completion
  • EOT provisions
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11
Q

Level 1 - Completion

What are the advantages of sectional completion?

A
  • Gives you a clear cut off point
  • Allows parts of the business to remain operational
  • Minimises disruption to client operations
  • Removes need for entire vacation
  • Parties understand their liability for each section
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12
Q

Level 1 - Completion

What are the consequences of completion?

A
  1. End of liability for LD’s.
  2. The client takes control of the building and should transfer and maintain building insurance.
  3. Risk of loss and damage passes to the client, which terminates any further requirement for the contractor to insure the works.
  4. Beginning of rectification period
  5. Half retention releases
  6. Preparation of final account
  7. Assessmennt of EOT claims
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13
Q

Level 1 - Design potions

What is CDP?

A
  • Contractos design portion
  • Contractor designs and builds discrete parts of the works
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14
Q

Level 1 - Design portions

What is required from the contractor for their CDP?

A
  • Collateral Warranty
  • Take out and maintain Professional Indemnity Insurance
  • Contract sum analysis
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15
Q

Level 1

Post completion, can the contractor still be liable for damages?

A
  • If the client suffered loss or damage as a result of the contractors defective work
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16
Q

Level 2 - Contract practice

You mention preparing contract documents, can you tell me what you’d include within a contract document?

A

Depends on standard form or suite of contracts, but namely;
JCT –
* Contract particulars
* Contract drawings
* Contract bills/pricing schedule,
* CDP analysis,
* Contractors proposal,
* Employers requirements.
* Technical specification

NEC –
* Works information/Scope
* Contract data,
* Activity schedule/BoQ
* Programme
* Site information

17
Q

Level 1 - Retention

When is retention released to the contractor?

A
  • 50% is released on practical/sectional completion/ partial possession,
  • 50% is released on the issue of making good defects certificate.
18
Q

Level 2 - Valuation

You mention carrying out interim valuations, what did you include/consider when valuing the contractors interim application?

A

Ascertaining sums to be included in gross valuations such as;
1. Preliminaries
2. Works executed
3. Design fees
4. Provisional sum adjustment
5. Approximate quantities adjustments
5. Prime cost sums adjustments
6. Dayworks
7. Materials on-site
8. Materials off-site
9. Loss & expense
10. Variations

19
Q

Level 2 - Valuations

What considerations should be made when valuing materials on-site?

A
  • Stored safely to prevent damage
  • Materials habe not arrived on-site too premature ahead of their intended install.
20
Q

Level 2 - Valuations

What are the considerations when valuing materials off-site?

A
  • Material is clearly labelled
  • Seperated from other material
  • Vesting certificate raised in favour of the employer
  • Pictures
  • Listed items appended to contract
  • Goods are insured
21
Q

Level 2 - Contract selection

You mention the importance of influencing factors when selecting the appropriate contract, what considerations did you make before advising your client on appropriate contract selection?

A
  • Procurement
  • Employer experience
  • Risk allocation
  • Design responsibility
  • Level of control
  • Speed from inception to completion
  • Certainty of price
  • Complexity
22
Q

Level 2 - Case study

In your case study you mentioned that you managed a 2-stage tender strategy, how did you secure the contractors services for design input for the 1st stage?

A
  • Pre-Construction Service Agreement
23
Q

Level 1 - Contract Practice

What are the requirements of a contract?

A
  • Offer
  • Acceptance
  • Consideration
  • Intention
  • Legality
  • Capacity
24
Q

Level 1 - Rentention

What is Retention?

A
  • Sum of money deducted at each monthly payment notice
  • Provides client with security that the contractor/sub-contractor will return to correct any defects during the defects correction period, or defects liability period.
25
Q

Level 2 - Retention

How do you determine the level of Retention?

A
  • Depending on the standard form
  • Unless otherwise stated, the contract stipulates the retention level
26
Q

Level 1 - Contract Practice

What is a Relevant Event?

A
  • A contractual term for a delay event to the completion date,
  • caused by the client or a neutral event not caused by either party.
27
Q

Level 1 - LDs

What if the employer suffered no loss or damage?

A

It doesn’t matter, damages would still be due at the value stated in the contract.

28
Q

Level 1 - Contract Practice

What are Relevant Matters?

A
  • Circumstances where the client is responsible for affecting the progress of the works,
  • Enables the contractor to claim direct loss and/or expense that has been incurred.
29
Q

Level 1

What is a phasing, and how does it differ from a section?

A
  • Phasing involves sequencing construction activities, but does not include contractual provisions.
30
Q

Level 1 - Valuation

What are the contractual timescales associated with valuations?

A
  • Due date - 7+ days after valuation date
  • Certification - 5+ days after due date
  • Final payment - 14+ days from due date (unless amended)
  • Payless notice - -5 days before final payment date
  • NEC - Payless notice -7 days before final payment date
31
Q

Level 1 - Valuation

Upto what point can the contractor value their works?

A
  • Depends on the form of contract
  • Standard/MW/DB - Up to due date
  • Intermediate - valuation date
32
Q

Level 1 - Valuation

What happens if the contractor doesn’t submit their interim application?

A
  • QS should make assessment and CA should certify before expiry of the specified 5 period from the due date.
33
Q

Level 1 - Valuation

What happens if no sums are certified after the expiry of the 5+ day certification period?

A
  • If the contractor didn’t submit their application, they should issue a payment notice detailing sums due and basis of calculation and reduced amounts.
  • If the contractor did submit their application, they should issue a payment notice.
  • The final payment date is prostponed and adjusts by the same amount of days the contractor takes to issue their payment notice.
34
Q

Level 3 -

On your LED project, why did you dismiss the use of the NEC?

A
  • JCT is more familiar with the client
35
Q

Level 1 - contract

What are the key differences between the JCT and NEC?

A
  • Language
  • Time
  • Money
  • Programme
  • NEC more collaborative
36
Q

Level 3 - contract

What did you advise the client in regards to the disadvantages of executing two seperate contracts?

A
  • Incur additional fees
  • Could become confusing
  • Increase workload

Alton Powell APC (21 decks)

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