Contract Practice Flashcards
JCT D&B Contract components
- Contract
- Amends
- ER’s
- Appendix
(CSA,
Design,
Site Info,
Prelims,
Warranty,
Bond,
PCI,
TQ,
Clarifications)
Contractor’s Proposals
JCT Contents;
- (ACS)
- AGREEMENT (RECITALS, ARTICLES, PARTICULARS, ATTESTATION)
- CONDITIONS
- SCHEDULES
Agreement
- Agreement comprises the
- Recital
- Articles and
- Contract Particulars, followed by the
- Attestation clauses.
- The Contract Particulars set out what is required for both the Articles and the Conditions.
Recitals (overview of works)
- Brief description of the Works,
- identifies the Contract Drawings listing and a
- brief description of the Contractor’s Designed Portion (if applicable).
Articles
- OSD
- Articles 1 and 2 summarising the primary Obligations under the Contract,
- Articles 3 to 6 dealing with relevant contractual and Statutory - appointments and
- Articles 7 to 9 with Dispute resolution
Contract Particulars
- Completion date, sections,
- site possession date,
- LD’s,
- rectification period & amount,
- listed items,
- period of suspension.
- Supp. Provisions applying e.g. acceleration quotations, change
Attestation
Contract execution as a deed or under hand
Conditions
- Definitions and Interpretation –
- Carrying out the Works –
- Control of the Works –
- Payment–
- Changes–
- Injury, Damage and Insurances –
- Assignment, Performance Bonds and Guarantees, Third Party Rights and Collateral Warranties–
- Termination –
- Settlement of Disputes
Schedules
- Design Submission Procedure –
- Supplemental Provisions
- Insurance Options –
- Code of Practice –
- Third Party Rights –
- Forms of Bonds –
- JCT Fluctuations Option A
What make up a contract?
- Invitation - Tender invitation
- Offer - Tender return
- Acceptance - Contract Execution
- Consideration - Payment
VALUING CHANGE
- Pricing Doc.
- Fair & Reasonable rates.
- Daywork.
Contractor Response; SBC 21 days & D&B 14 days
VALUATION DATES:
- Contractor makes Application for Payment at the Interim Valuation Date (1st)
- Due Date is 7 days after (8th)
- Interim Payment Notice is issued 5 days after the due date (13th)
- Employer can issue Pay Less Notice 5 days before the final date for payment (17th)
- Final Date for Payment is 14 days from due date (22nd) (typically amended to 21 days (29th))
RE-MEASUREMENT SBC/AQ
- Large works that cannot be easily/accurately quantified pre contract,
- Tender Figure (Approx BoQ) to Ascertained Figure (re-measured)
- e.g. roads where it is not practical to identify full scope of work prior to commencement
Housing Grant Construction Regeneration Act 1996 (HGCRA)
- Ensure payments are made promptly throughout supply chain;
- Interim stage payments,
Contractor informed of amount due, - suspend for non-payment,
- adjudication.
- Disallowing pay when paid clauses
- Applies to all contracts for construction operations
Local Democracy Economic Development Act 2009 (LDEDA)
- Payment notice issued 5 days after due date,
- Default notices - If no payment notice after 5 days, then receiving party can issue their own
- Pay less notice- 5 days before final date for payment
- Adjudication: Timescales set out in writing
Statute of Limitations 1980
- Contract Under Hand (6 years) - (Signed by a person (authorised by a company director)
- By Deed (12 years) - (Director and Company Secretary / 2 Directors)
LIQUIDATED DAMAGES
- Pre-ascertained estimate of loss arising from the delay (loss of rent, income, storage/rental/finance costs)
- Process:
- Review outstanding EoT claims
- Non-completion notice
- Pay Less Notice to contractor prior to due date for final payment (explain the calculation of the deduction).
RETENTION
- % deduction for making good
- 50% released on completion, 3% SBC & D&B, 5% IC & MW, NEC TBC.
- Making good defects certificate issued after rectification period confirming defects have been rectified. Issue of making good
COMPLETION
- Works substantially complete
- Rectification period starts,
- 50% retention released,
- Client insures building,
- Claims for LD & LE claims end
Typical Completion Requirements
- H&S files,
- works substantially complete,
- O&M,
- Warranties executed,
- As built DWGs
- Building control sign off
- Planning discharge
PARTIAL POSSESSION
Part of the site can be occupied by a third party (like sectional completion but agreed as a post contract variation)
EXTENSION OF TIME –
- Preserve the right to deploy LD’s,
- Contractor Notify;
- Cause,
- Relevant Event,
- Impact Employer;
12weeks to respond
Pay Less Notice
- Can be issued 5 days prior to the final payment to identify a reduction to the previously stated interim payment notice.
- This may be due an error in the notice or as
- part of implementing LD’s.
Difference between JCT & NEC
- COMPS events time and cost
- Simple language,
- Collaborative,
- Standard Contract Form with Options
RELEVENT EVENT (time)
- Change (scope, quality etc),
- Instruction (early use), UPS
- Deferment of Possession (start 2 weeks later) fairview
- Antiquities (archaeology discovered),
- Suspension (Coronavirus), UPS
- Act or Omission (UPS HV power),
- Statutory undertakers (services),
- Weather (slows/stops work),
- Loss/damage by a specified peril (civil commotion, riot, fire, lighting, explosion),
- terrorism,
- strike,
- statutory powers,
- approval delay (e.g. noted in change request response to client),
- force majeure (Coronavirus) (14)
RELEVENT MATTER (time & cost) –
- FAIRVIEW EXAMPLE
- Change (to existing completed work),
- Instruction (early use – disruption),
- Deferment of possession,
- act or omission.
HEADS OF CLAIM
- Prolongation, FAIRVIEW - ONLY ASSESSED THIS TYPE
- Site overheads increase, disruption,
- 3rd party claim,
- loss of profit (Global
- collection of all)
CHANGE
- Client
- QS (estimate) or Direct Instruction
- Contractor Quote
- Negotiate
- EA instruction
Contractor’s Estimate Process D&B
- If paragraph 2 of the Supplemental Provisions is selected, a contractor’s estimate of the works can be provided
- D&B
- Contractor must provide a quotation within 14 days of the instruction
- Employer then has 10 days to accept the quotation or withdraw instruction
- Contractor can object on reasonable grounds (H&S) within 10 days of instruction
- Employer will pay for specific design work required to produce the estimate if rejected
SBC
- 21 days to provide quotation
- 7 days to instruct
JCT DB Loss & Expense Process
- Contractor must notify Employer as soon as likely effect of Relevant Matter becomes reasonably apparent
- Notification should be accompanied by initial assessment of L&E incurred and what else is likely to be incurred
- Contractor must update the employer at monthly intervals until everything is supplied
- Employer has 28 days from initial assessment (and 14 days from subsequent updates) to notify the contractor of the amount of L&E incurred in suitable detail