Contract Practice Flashcards
What’s the difference between CA and EA?
EA = D&B
CA = Traditional
What is 6.5.1. insurance?
Refers to clause 6.5.1. in JCT contract.
A requirement on the contractor to organise insurance both for themselves and the client.
This insurance provides cover should there be damage to a neighbouring property due to the works that are carried out, and the cause of which is not the result of negligence.
What does JCT DB say about retention?
3% if not stated.
What does JCT IC say about retention?
5% if not stated (95% valued)
2.5% after PC (97.5% valued)
What else did you learn about in Principles of Contract Law?
Examples of the principles, such as:
Acceptance = must be unambiguous, written or oral
Capacity = must be over 18 OR must have ability to carry out works
What is a contract?
A legally binding agreement that recognises and governs the rights and duties of the parties to the agreement
What’s a bilateral agreement?
a set of promises that each party has made to the other
What’s a unilateral agreement?
only one party will make a promise to do something if the other party actually does something stipulated by the former
What are the 6 principles of contract law?
- Offer
- Acceptance
- Intent
- Consideration
- Capacity
- Legality
What is NEC3 for?
Used for the appointment of a contractor for engineering and construction work, including any level of design responsibility.
It is a suite of construction contracts intended to promote partnering and collaboration.
What are the options under NEC?
I have never used NEC however know the options are:
Option A: Priced contract with activity schedule.
Option B: Priced contract with bill of quantities.
Option C: Target contract with activity schedule.
Option D: Target contract with bill of quantities.
Option E: Cost reimbursable contract.
Option F: Management contract.
Option G: Term contract (
What are the contract documents required under NEC?
- The form of agreement.
- Conditions of contract.
- Contract data
- Prices, activities schedules and bill of quantities.
- Works information (describing what is to be done on the site).
- Site information
What are the core clauses under NEC?
- General terms.
- Contractor’s main responsibilities.
- Time.
- Testing and Defects.
- Payment.
- Compensation events.
- Title.
- Risk and insurance.
- Termination.
What are Z clauses?
Used to amend standard form NEC contracts. They can be inserted into NEC contracts as a means of adding conditions or amending wording.
Are you aware of any other forms of contract aside from JCT/NEC?
- FIDIC
- ACA
- Complex Projects Contract 2013’ or ‘CPC 2013’.
What are the different FIDIC contract suites?
- FIDIC Red Book (Conditions of Contract for Construction)
- FIDIC Yellow Book (Conditions of contract for Plant & Design-Build)
- FIDIC Silver Book (Conditions of Contract for EPC Turnkey Projects)
What are the differences between JCT DB 2011 and 2016 in terms of payment?
- Contractor in 2016 must submit interim application 7 days prior to due date. (Interim Valuation Date)
- Sub-contractors/sub-sub-contractors (as relevant) must submit their payment application 4 days before the Interim Valuation Date.
- Interim payments would occur monthly prior to practical completion and every two months post practical completion. In the 2016 Edition, interim payments will continue on a monthly basis after practical completion.
What are the differences between JCT DB 2011 and 2016 in terms of insurances?
Under Option C the Employer maintains insurance of the existing structures and contents. Where the Employer is a tenant, home owner or other domestic employer, it is often difficult for the Employer to take out the required insurance. JCT 2016 deals with this by allowing the parties to agree to alternative insurance arrangements.
Are there any other differences between JCT DB 2011 and 2016?
JCT standard forms include provisions for performance bonds and parent company guarantees
JCT 2016 provide a time limited procedure for the prompt assessment of any loss and expense applications by the Contractor. The architect/contract administrator must now assess the claim within 28 days of receipt (14 days from any update). Under JCT 2011 there was no such time limit.
What’s the difference between a Contractr Administrator and Employer’s Agent?
CA = SBC
EA = DB
What’s the difference between the payment timeline in JCT DB 2011 and JCT IC/SB 2011?
SB/IC has Contractor’s Interim Application for Payment date
DB = Interim Application can be submitted as late as the due date
What guidance note does RICS public on payment timelines?
RICS Interim Valuations and Payments 2015
What is the payment cycle in JCT DB 2011?
14 days
What is the payment cycle in JCT DB 2016 or SBC?
21 days
What is the payment timeline in JCT SBC 2016?
Valuation period (7 calendar days before due date)
Due Date
Interim certificate issue (5 calendar days after due date)
Pay less notice issue (deadline is 5 days before Final Date for Payment)
Final date for payment (14 days after due date)
What guidance is publsihed on contract selection?
Deciding on the appropriate JCT contract 2016
What provisions are in JCT SBC 2016?
- CA, QS, Clerk of Works
- NO design responsibility
- NO contractor’s risk for ground conditions
- Sections
- EoT full list of events
- Detailed rules for valuation
- Quotation provision for variations
- CoP covering testing of other work
- Inspection and testing provided for
- Advance payment & advance payment bond
- Retention & retention bond
- Bond in respect for payment for off-site materials
- Loss and expense expressly provided for
- NO Stage Payments - detailed provision
- All 3 insurances
- 3rd party rights + Collateral Warranties
- Arbitration agreement provided for
What provisions are in JCT DB 2016?
- EA (NO QS)
- Design responsibility
- Silent on ground conditions @ contractor’s risk
- Sections
- EoT full list of events
- Detailed rules for valuation
- Quotation provision for variations
- CoP covering testing of other work
- Inspection and testing provided for
- Advance payment & advance payment bond
- Retention & retention bond
- Bond in respect for payment for off-site materials
- Loss and expense expressly provided for
- Stage Payments - detailed provision
- All 3 insurances
- 3rd party rights + Collateral Warranties
- Arbitration agreement provided for
What provisions are in JCT IC 2016?
- CA, QS, Clerk of Works
- NO design responsibility
- NO contractor’s risk for ground conditions (ICD silent)
- Sections
- EoT full list of events
- Detailed rules for valuation
- NO Quotation provision for variations
- NO CoP covering testing of other work
- Inspection and testing provided for
- Advance payment & advance payment bond
- Retention, NO bond
- Bond in respect for payment for off-site materials
- Loss and expense expressly provided for
- All 3 insurances
- Collateral Warranties
- NO 3rd party rights
- Arbitration agreement provided for
What provisions are in JCT MW 2016?
- CA
- NO QS, Clerk of Works, EA
- NO design responsibility
- NO contractor’s risk for ground conditions
- NO sections
- NO EoT full or restricted list
- NO Detailed rules for valuation
- NO quotation provision for variations
- NO provisions for testing/opening-up
- Retention on payments
- NO to all bonds/advance payments,off-site materials etc
- Provisions for all insurance apart from B - new builds insured by employer
- NO provisions for warranties/3rd party rights
- Arbitration agreement provided for
What did the unadulterated JCT DB contract say about interim payment applications?
There was no “interim application for payment” date, the contractor could have submitted up to or on the Due Date
Why was the contract amended to allow for a 7-day window?
To give enough time for myself, the QS, to receive, review and return my recommendation prior to the EA issuing his Payment Notice
What’s the difference between contract particulars and amendments?
Contract Particulars “fill the blanks”. The Contract, clauses are already fixed.
Amendments change the clauses, fundamentally changing the contract
Why are contracts amended?
To suit clients needs, many clients have amendments they use on all projects
To change the balance of risk to the benefit of the client or contractor
What’s the structure to a JCT contract?
Agreement Recitals Articles Contract Particulars Attestation Conditions
What are the sections in Conditions?
1.1 Definitions
1.2 Interpretation
2 Carrying out the works
3 Control of the Works
4 Payment
5 Changes
6 Injury, Damage and Insurance
7 Assignment, Performance Bonds and Guarantees, Third Party Rights and Collateral Warranties
8 Termination
9 Settlement of Disputes
What are the insurance options in JCT 2016?
A - New Buildings - All Risks Insurance of the Works by the Contractor
B - New Buildings - All Risks Insurance of the Works by the Employer
C - Joint Names Insurance by the Employer of Existing Structures and Works in Extensions to them
What does Insurance Option A - New Buildings - All Risks Insurance of the Works by the Contractor entail?
- New Buildings
- Contractor takes out joint names policy for all risk insurance for the works OR include them on that basis on their Annual Construction policy
What does Insurance Option B - New Buildings - All Risks Insurance of the Works by the Employer entail?
- New Buildings
- Employer takes out joint names policy for all risk insurance for the works OR include them on that basis on their Annual Construction policy
What are articles in a Contract?
- Set out what is agreed between the parties
- Contractor’s obligations (1) and Contract Sum (2)
- Identifies CA/EA
- Identifies QS
- Identifies principal designer
- Identifies Contractor
- Reference to adjudication/arbitration in event of dispute
What are recitals in a Contract?
- Introductory statements at the begining of a contract
- First Recital - name of project + address
- Scene setting, explanatory in nature
What do Contract Particulars in a Contract do?
- Sets out aspects of Contract that are particular to the project, fills in the blanks
e. g. where the ERs/CPs/CSA can be found, drawing references, key dates, sections, payment method, insurance option. - It is a schedule of variables for the agreement and conditions
What is Attestation in a Contract?
The attestation is the process of confirming that something is correct or genuine or that a particular requirement has been met. It may be completed:
- Under seal (signed by both parties, witnessed & made clear it is executed as a deed)
- Under hand (just signed by both parties)
What does “insurance option C - Joint Names Insurance by the Employer of Existing Structures and Works in Extensions to them” entail?
- Used for alternations of or extensions to existing structures
- Employer takes out Joint Names Policy for All Risk Insurance for the Works
- If C1 applies, Employer must also take out Joint Names Policy to insure Existing Structures and contents owned by him/which he is responsible against loss/damage by the Specific Perils.
C1 = The Employer must take out joint names policy for works and existing structures + contents for reinstatement of loss/damage due to Specific Perils unless stated otherwise
Who’s responsible for personal injury or death caused by carrying out the works in JCT DB 2016?
Contractor
Who’s responsible for loss, injury or damage to property caused by carrying out the works in JCT DB 2016?
Contractor
Why are insurances joint name?
Insured parties are unable to claim against one another in respect of an insured loss, as they are considered to be one-and-the-same for the purposes of the insurance.
What are the advantages of joint name insurances?
- neither party needs to take out its own insurance policy, which can lead to dual insurance, unnecessarily increasing the project’s total insurance cost
- it can help avoid costly litigation between the jointly-insured parties who may otherwise try to claim against the other
- The insurer has no rights of subrogation
What’s subrogation?
When an insurance company pursues a third party for damages, it is said to “step into the shoes of the policyholder,” and thus will have the same rights and legal standing as the policyholder when seeking compensation for losses.
What are the implications of waivering the rights to subrogation in an insurance policy?
- No fault claims, so sub-contractor can claim on insurance and the main contractor won’t be sued by sub-contractor’s insurer
- Higher insurance cost
What’s the role of a QS in a JCT DB project?
Not in the contract.
QS acts as a third party validator
Who would advise client on making amendments?
- Ideally no amendments will be made, contracts are designed to be balanced in terms of risk for their procurement route
- Client’s may have their own
- Amendments must go through Lawyers
Have you ever put a contract together?
JCT ICD 2016 - Central London Office Fit Out
JCT DB 2016 - West London Academy
Do you advise on LDs/insurances?
No
- LDs are based on employer’s loss of income/expense in delay, I do not know what that is
- Insurance company to advise on insurances
What are LDs?
Liquidated Damages
Not a penalty. If the contractor does not complete works by agreed PC date, they are to compensate the Employer based on the actual loss of income the Employer would experience.
Generally £X/week
What’s sectional completion?
When a project has different completion dates for different sections of the works. PRE AGREED.
This is common in large projects.
What considerations should you make when incorporating sectional completion into a contract?
- Liquidated damages must be specific to each section
- Retention/retention release must be specific to each section
- EoT clarifications required, i.e. if EoT is required on section 2 will it impact section 3?
- Sectional completion must be specified in EXPRESSED TERMS in the Contract
What happens with regards to commissioning and O&M manuals at the end of a sectional completion?
These items may be left outstanding until practical completion of the whole site.
What are the key considerations for a Contractor for sectional completion?
- Logistics
- Protection of completion sections
- Insurance for all sections at all times
- H&S measures dealing with the risk of construction adjacent to occupied areas
What are the three main types of sub-contractor?
- Domestic sub-contractor
- Nominated sub-contractor
- Named sub-contractor
What is partial possession?
Handing over part of the site before official completion. NOT PRE AGREED
Why would partial possession of the site be given?
- If the client wishes to occupy part of the site
- When there is no sectional completion in the Contract
- When part of the site is deemed to have achieved practical completion
What are the implications for retention, LDs and DLP when partial possession of the site is given?
- Half retention for that section of works is released
- The Defects Liability Period (DLP) begins for that part of the site
- Liquidated Damages are reduced proportionally.
What do contractor’s proposals include?
Requirements described in ERs. On my project incl:
- Design drawings
- Specifications
- Method statement
- Programme
- CSA
- Detail of insurances
- CV of staff + relevant experience
What’s included in Contract Documents in DB?
- Articles of Agreement & Conditions of Contract
- Employer’s Requirements
- Contractor’s Proposals
- CSA
- BoQ (for some of design if poss)
What’s included in Contract Documents in SB/IC?
- Articles of Agreement & Conditions of Contract
- Working drawings
- BoQ
- SPecification
- Schedule of work
- Information release schedule
- Schedule of tender adjustment/clarifications
- Requirements for Contractor to provide performance bond/collateral warranties
What is retention?
Retention is a percentage of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the client.
How would you determine retention amount?
On a case my case basis. If it’s a riskier project/contractor you may apply higher %age.
What’s the default retention amount in JCT?
IC 2016 - 5% before PC
DB 2016 - 3% before PC
Do you think retention is good?
I think it serves a purpose in protecting the client which is good from the client’s perspective
Bad for Contractors cash flow, can cause issues for client if contractor goes bust due to poor cash flow so overall possibly bad
What do you think of the future of retention?
Lots of discussion around ending retention
Instead could use performance bonds
Will add an extra premium to project
Following Carrilion collapse in 2018 - Build UK, the Civil Engineering Contractors Association and the Construction Products Association provided a joint submission to the ongoing government consultation, stating that; ‘The industry is fully committed to achieving zero cash retention and we believe that government must introduce legislation to ensure there is zero cash retention within the industry by no later than 2025.’
How are contracts executed?
- Under seal (signed by both parties, witnessed & made clear it is executed as a deed)
- Under hand (just signed by both parties) (simple contract)
What’s the difference between a simple contract and a contract signed under seal?
Simple contracts and contracts under seal have different limitation periods.
An action founded on simple contract cannot be brought after six years from the date on which the cause of the action accrued. The limitation period for a contract under seal is 12 years.
What are the methods of payment in JCT DB 2016?
Alternative A - Stage Payments
Alternative B - Periodically
What are the methods of payment in JCT IC 2016?
No staged option, periodically assumed
What insurances may you come across in construction?
Employers Liability Insurance Public Liability Insurance All Risk Insurance (to works + contents) Professional Indemnity Insurance Terrorism Cover
What’s Pool Re Cover?
Loss or damage to work executed and Site Materials caused by or resulting from terrorism as is from time to time generally available from insurers who are members of the Pool Reinsurance Company Limited Scheme
What are Specified Perils?
fire, lightning, explosions, storm, flood, earthquake, water from pipe/tank/apparatus
What’s PC?
Practical Completion
What happens on PC?
- CA/EA certifies PC when all works have been completed
- Half retention is released
- End of Contractor’s liability for LDs
- DLP begins
- Various documents may be released to client such as O&M manual, H&S file.
- Client takes possession
When does the Contractor’s obligation to insure the works come to an end?
At PC????????
When is PC?
No absolute definition of practical completion in JCT but generally a project is deemed PC when works are complete and there are no outstanding defects (aside from snagging or minor items) so the building can be used.
Does JCT DB 2016 require interim valuations every 2 months post PC?
No, only 2011
Does Alternative A in JCT DB 2011 not require valuations every 2 months post PC?
?????????
What were your amendments in the Dulwich project?
Interim Valuation must be submitted by Contractor 7 days prior to due date
Why did you not use DB on Central London project?
- Client wanted to retain control over aspects of the design
- No requirement for other provisions such as staged payments, CoP covering testing of other works, retention bond
Why did you not use MW for Central London project?
- Project was sectioned
- Full list of EoT revents desirable to limit EoT requests as risky project.
How big was the project in CL?
- 3 floors, c. 25k sqft each
- c. £4m
What is a Collateral Warranty?
A way of forming a direct contractual link between two parties with otherwise wouldn’t have a link, such as between a sub-contractor and a client.
What is a performance bond?
A means of insuring the client against the Contractor failing to fulfil their contractual obligation
What is novation?
- The process whereby both the benefit and the burden of a Contract are transferred from one party to another.
- Requires consent from all parties, usually parties enter into tripartite novation agreement.
What is assignment?
- The benefit of a contract is transferred from one party to another, but the burden of the contract remains with the original party
- Contrast of Novation
What are third party rights?
The Contracts (Third Party Rights) Act 1999 enabled third party rights to be created by a contract.
Alternative to collateral warranties
The right is created to enforce a term in a contract, e.g. contractor is required to carry out works to be fit for purpose.
Must expressly state that a third party has specific rights (often excluded)
What are the differences between collateral warranties and third party rights?
- Collateral Warranties can be laborious to compile, sometimes expensive
- CW’s seen as more effective as they mirror building contract
In JCT IC 2016, what date is the work valued up to?
Interim Valuation Date
AKA 7 days prior to due date
In JCT DB 2016, when is work valued up to?
Due date
When is the Interim Valuation Date?
When the Interim Payment Application comes in
What risks are covered in the JCT 6.5.1. insurance?
The risks that are covered are named within the JCT Contract as:
Collapse. Subsidence. Heave. Vibration. Weakening or removal of support. Lowering of groundwater.
What are the schedules in JCT?
Schedule 1 - Insurance Options Schedule 2 - Name of sub-contractor Schedule 3 - Form of Bonds Schedule 4 - Fluctuations Schedule 5 - Supplemental provisions SChedule 6 - Design Submission Procedure
For the project in Central London, how/where was the contractor’s design work detailed?
In the tender documents as “Employer’s Requirements”, responded to with “Contractors Proposals”.
How detailed was the design before handing it over to the Contractor?
Stage 2/3 level of design
What are the key considerations when tendering with a CDP in a contract?
- it must be made abundantly clear exactly what the specialist has to design within the work section.
- A performance specification must describe quality both in terms of function and form, bearing in mind that contractors tendering in competition will respond with the cheapest option available to meet the specification.
What is the design submission procedure for CPD? (give more detailed answer)
See Schedule 6 - Design Submission Procedure (clause 2.10.3)
ER’s state design requirements
Contractor prepares and submits Contractor’s Design Documents to CA w/in sufficient time to allow design team to comment
CDD marked A/B/C. If not marked A (compliant), then comments will be included as to why the CDD is not good enough
What do A/B/C mean in CPD?
A = can carry out works in strict accordance with CDD
B = can only carry out works if CA/architect comments taken on board
C = cannot carry out works
What is a relevant matter?
A matter for which the client is responsible that materially affects the progress of the works.
What are relevant events in JCT DB 2016?
- Changes
- Employer instruction for opening up/inspection or testing of works
- Client delays giving possession of site
- Impediment, preventon or default whether by act or omission by the Employer/Employer’s Person
- Exceptionally adverse weather
- Strike
- Force majeure
- Delay in receipt of necessary permission/approval from statutory body in which contractor has taken all practicable steps to avoid or reduce
What are relevant events in JCT ICD 2016?
- Variations
- Employer instruction for opening up/inspection or testing of works
- Client delays giving possession of site
- Impediment, preventon or default whether by act or omission by the Employer/Employer’s Person
- Exceptionally adverse weather
- Strike
- Force majeure
What are relevant matters in JCT DB 2016?
- Changes
- Employer instruction for opening up/inspection or testing of works
- Impediment, prevention or default whether by act or omission by the Employer/Employer’s Person
- Compliance with 3.15.1 or Employers instructions under 3.15.2 (relating to discovery of fossils/artifacts)
What are relevant matters in JCT ICD 2016?
- Variations
- Employer instruction for opening up/inspection or testing of works
- Employer instructions in relation to errors, omissions and inconsistencies in or between the Contract documents
- Impediment, prevention or default whether by act or omission by the Employer/Employer’s Person
Where are relevant events stated in DB 16?
Section 2 - Carrying out the works
2.26
Where are relevant matters stated in DB 16?
Section 4 - Payment
4.21
Where are relevant events stated in ICD 16?
Section 2 - Carrying out the works
2.20
Where are relevant matters stated in ICD 16?
Section 4 - Payment
4.17
What takes precedence over ERs and CPs?
CPs supersede ERs so CPs
However always check amendments
Who’s responsible for error in CPs?
Contractor
What does the provision in a JCT contract for providing a quotation refer to?
You can ask contractor to provide quotation for large piece of work without having to go to tender.
This would sit outside existing contract if IC/MW. MW simple contract, not expected to do major additional scope
What do you agree with regards to PI insurance when tendering for a project?
Limit of indemnity, i.e. what is the maximum amount we are liable for in the case of negligent advice.
Try to reduce this to protect firm
What’s the minimum wording policy on PI referring to?
We have to use RICS wording as a minimum in our PI insurance, to ensure key parts are covered as stated in RICS.
What insurances are covered in A/B/C?
- Contract Works.
- Public Liability Insurance.
- Employers’ Liability Insurance.
What are some standard contract amendments in JCT DB?
- extend period to make payment (bad for cashflow)
- contractor payment application”
What are the contract documents in an IC contract?
- JCT ICD 16
- ERs
- CPs
- CSA
CHECK
Describe rectification process?
- Half retention released on PC
- Any defects that emerge must be made good by contractor within timeframe
- At end of RP, if defects not rectified, EA will list and give time limit for contractor to make good.
- If not made good, remaining retention monies will be used to bring in different contractor
- If made good, Certificate of MGD issued + remaining retention released
What are some of the key differences between JCT and NEC forms of contract?
a. Programme forms part of the contract
b. Compensation events
c. The JCT Contract contains provisional sums, whilst the NEC Contract does not.
What is a relevant event?
Where a delay which impacts the completion date is not caused by the contractor, it may be a ‘relevant event’, for which the contractor may be entitled to an extension of time and to claim loss and expense incurred as a direct result of the delay.
Do you require a BoQ at stage 4?
No, in the recitals there are options for BoQ/works schedules/specification, delete as appropriate
What’s the difference in valuation rules for SB/IC vs DB?
DB first point in valuation rules related to add/omit of design works.
ICD only has this for CD parts
What are the contract documents for CD contracts?
ITT, Form of Tender, declaration of non-collusion, drawings, spec, employer requirements, CSA, provisional programme, RFI schedule, Tender return slip
What are the alternative arrangements that an employer can make for insurance option C in JCT 2016?
pay premium for owner to take insurance of works into their policy
How would you establish the validity of a loss and expense claim?
Check contract and amendments for relevant matters, ascertain whether it’s a valid claim
What is thickening of prelims?
a contribution to a claimant’s increased overheads resulting from a client-culpable delay.
How do you incorporate amendments into the contract?
I’ve never had to do this, it is something that I would instruct the lawyers to do. A schedule of amendments would be appended to the contract.
How was CPD tendered?
Employer’s Requirements prepared, CPs returned, graded on A/B/C basis
What’s the difference between a change and an instruction? (two separate items in relevent events in the JCT contract).
Change/variation = difference to works Instruction = not necessarily changes works
Can you clarify the difference between:
- a relevant matter that entitles a contractor to loss and expense
- a variation/change/instruction with commercial implications
Loss and expense = claim
What are Alternative A & B in JCT IC and DB?
A - staged payments
B - interim valuations
JCT DB. If not selected, B assumed (interim payments w/ monthly interim valuation dates)
JCT ICD assumes interim payments
Do you advise on insurance option A, B or C?
No, could explain them but not advise which they should select
What was contract for strip out of central London?
JCT ICD
What would you do if the contractor did not meet PC?
Issue non-completion certificate
What are the differences between JCT and NEC?
Compensation events vs relevant matters/events
Programme forms part of NEC contract
No PM in JCT
No PSUMS in NEC
Instead of different contract suites e.g. DB/MW you build your contract
NEC geared towards partnering. JCT contract there may be some cost scrutiny via the contract sum analysis and tender negotiations but the NEC contract has an open book procedure with the key concepts of defined cost and disallowed cost
When would you not use a minor works contract?
If the project has complexities for which MW does not provide adequate provisions, e.g.
- Sectioning
- Contractor design responsibility
- A third party/CW to the contract
When is FIDIC generally used?
Internationally
What are heads of loss/claim?
- inefficient use of labour/plant
- increases in cost of labour/materials during period of disruption
- site running costs
- head office overheads
- finance charges and interest (on borrowed money)
- loss of profit
What are prolongation and disruption?
- Prolongation and disruption are two separate elements that might result in a claim for loss and expense.
- Claims for disruption result from the additional cost of adopting inefficient working methods as a result of the disruption
- The prolongation element is dependent on the completion date being delayed.
What costs are easier to quantify - prolongation or disruption?
Prolongation
Why might a contractor want to terminate a contract?
- Client default on payment
- Insolvency of employer or client
- If the suspension of works is over max time in contract
What is the HGRCA and what did it do for construction projects?
Housing Grants, Regeneration and Construction Act 1996
- Right to be paid in interim, periodic or stage payments
- Right to be informed of the amount due, or any amounts to be withheld
- Right to suspend performance for non-payment
- The right to adjudication
What is the LDEDCA what did it do for construction projects?
Local Democracy, Economic Development and Construction Act 2009
- Includes all Contracts, including those not in writing
- Withholding notice replaced with pay less notice, altering how the sum to be paid is built up
Who does the HGRCA apply to and what’s its general purpose?
- Applies to all Contracts for “Construction Operations” (incl consultants)
- Intended to ensure payments are made promptly throughout the supply chain and that disputes and resolved swiftly
When would you use NEC?
- If the client wanted it
- If I/consultants/PMs were confident in using it (I would do diligence to ensure I was)
- For the benefits of partnering/collaborative work
What are the benefits and downsides of taking a DB to Stage 4?
Benefit = control design up to stage 4 but still transfer risk over to contractor
Negative = lose benefit of reducing overall programme
What do you know about JCT MP contract?
I have no used JCT MP but am aware that it’s a design and build contract for large-scale construction projects.
I will have to learn more about it if we use that contract type
