Contract Practice

Question 1

What is an extension of time?

Answer 1

• an agreed re-arranged completion date to the contract that is now later than the original date

Question 2

What are LADs?

Answer 2

-Pre estimate of loss suffered by the employer because of late completion.
- can include rent/professional fees/capital salaries etc

Question 3

What is a contract?

Answer 3

Legally binding promise from one party to another.

Question 4

What forms a contract?

Answer 4

Offer, acceptance, consideration and intent

Question 5

What is acceleration?

Answer 5

• sum of money agreed to be paid to the contractor to ensure completion date is earlier than contract date

Question 6

What is loss and expense?

Question 7

What is retention?

Answer 7

• % of money held by the employer to ensure contractor requirements are met.
• usually 3 or 5 %

Question 8

What are provisional sums?

Question 9

What is a letter of intent?

Answer 9

• Letter to contractor notifying them that they are the recommended contractor and wish to be used for the works

Question 10

What is novation?

Answer 10

Process of transferring management of the design consultants from the employer to the contractor

Question 11

What is a performance bond?

Answer 11

• money held to ensure contractor lives up to requirements
• money is used to re- tender works if necessary

Question 12

What is a retention bond?

Answer 12

• Sum of money held that will be paid at completion
• ensures quality and contractor abides by contract

Question 13

What is terrorism cover?

Question 14

How do you choose which contract is best to use?

Answer 14

JCT guidance note on contract selection
- procurement route
- length of project
- cost of project

Question 15

Can you name any other contract suites other than JCT?

Answer 15

NEC
Bespoke

Question 16

Do you know any differences between JCT and NEC?

Answer 16

• JCT includes prov sums
• EoT is a relevant event in JCT/compensation event under NEC

Question 17

What is a bespoke contract?

Answer 17

• Contracts tailored to fit the specific requirements of a project
• used when standard is not suitable

Question 18

What contract was used on BS landscaping?

Answer 18

JCT Design & Build 2016

Question 19

What is collateral warranty?

Answer 19

Creates contractual relationship between two parties alongside another contract where this wouldn’t otherwise exist

Question 20

What are antiquities?

Answer 20

• Items of historical interest
• fossils

Question 21

What is a vesting certificate?

Answer 21

Deals with the transfer of ownership of goods and materials off site

Question 22

Why would it be the clients risk to pay for materials off site with no vesting or anything in contract?

Answer 22

• if factory sets on fire or company becomes insolvent then all the materials paid for are now gone

Question 23

What is the valuation timeline?

Question 24

What is a final account statement?

Question 25

L3 LAD bit

Question 26

What’s included in the contract documents?

Question 27

What are contract particulars?

Question 28

What is expressed terms?

Answer 28

Terms of the agreement that are expressly agrees, they are written down

Question 29

What is implied terms?

Answer 29

Contractual term that has not been expressly agreed but implied into the contract

Question 30

What are third party rights?

Answer 30

Allows third parties to enforce terms of contracts that they are not party to