Contract Practice Flashcards
What is a Relevant matter?
A matter that the employer is responsible for that materially affects the progress of the works. This will entitle the contractor to submit a loss and expense claim
What are the relevant matters?
- Deferment of possession
- Variations / Changes
- Postponement of works
- Instruction of prov sums
- Opening up or testing instructions
- Discovery of antiquities
- Building control delays
- Delays caused by the employer whether by act or omission
What are the timescales to do with relevant matters?
- The contractor should notigy the employer as soon as reasonably apparant
- Once information received, employer has 28 days, or 14 days from each subsequent update to notify of loss and expense
What are the options within NEC?
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 (for the appointment of a consultant based on a priced schedule of tasks).
What are the sections within the JCT?
Agreement
Recitals
Articles
Contract Particulars
Attestation
Conditions of contract
Section 1 - Definitions
Section 2 - Carrying out the Works
Section 3 - Control of the Works
Section 4 - Payment
Section 5 - Changes / Variations
Section 6 - injury, damage and insurance
Section 7 - assignment, third party rights and collateral warranties;
Section 8 - termination;
Section 9 - settlement of disputes.
Schedules
What are the key differences between the NEC / JCT?
Project Manager
Works Information (ERs)
Compensation Events (time/money)
Time Constraints on CE’s
C.Es are both time and cost
No Prov Sums
Programme is a contractual document
EWNs
No Schedule of Rates
NEC is a lot more collaborative
NEC dispute resolution is different
NEC does not reference other clauses like the JCT
What are the JCT insurance options?
Option A – All Risks Insurance of the works by the Contractor
Option B – All Risks Insurance of the works by the Employer
Option C (existing buildings)
What are the heads of claim for L&E?
Prolongation (site overheads, prelims)
Disruption
Increase in Labour
Loss of Profit
Acceleration
Material cost
What are the differences between FIDIC and JCT?
Use
FIDIC is used internationally, whereas JCT is UK Centric
Payment
JCT Timescales, 7 days to assess payment application, 14 days from due date to final payment (21 days from application)
FIDIC Timescales - 28 days to assess payment application, 56 days from payment application to final date for payment. No payment entitled until performance security received (if required)
Time
FIDIC- Detailed programme required to be submitted within 28 days of notice of commencement and needs to show detailed aspects listed in contract. Must be regularly updated.
JCT - Date for possession and completion stated. Programme to be submitted as soon as reasonable practicle - no teeth.
Variations
FIDIC - Cost and time together. Time limitation – must declare within 28 days of becoming aware or forfeit entitlement.
However, if the engineer does not inform the other party of this within 14 days, then the entitlement is valid
JCT - Cost and time seperated. Declare as soon as reasonably apparent - no consequence for late submission
Terminology
Engineer is key person in FIDIC vs CA / EA in JCT
Disputes
FIDIC is more proactive with regard to disputes with a Dispute avoidance / Adjudication board to be appointed from the outset to proactively manage disputes.
What are the provisions under the Construction Act? (HGCRA 96)
o The right to be paid in interim, periodic or stage payments.
o The right to be informed of the amount due, or any amounts to be withheld.
o The right to suspend performance for non-payment.
o The right to adjudication.
o Disallowing pay when paid clauses.
What were the 2011 changes to the construction act?
o Amended local democracy, economic development and construction act October 2011 to close loop holes within its provisions. Effectively changed the construction act.
o The act now applies to construction contracts including those that are not in writing.
o Adjudication clauses must still be in writing, otherwise the scheme applies.
o No longer allowable to define within a contract who should bear the cost of adjudication.
o Adjudicators have the right to correct errors in their decisions within 5 days.
o The dates for payments must be set out in the contract.
When should an intermediate contract be used?
Designed to be used when the traditional procurement route has been chosen. To help fill the gap between the detailed and lengthy provisions of the SBC and the simplicity of the minor works contract.
What is the Scheme for Construction Contracts (England and Wales) Regulations?
o A scheme which applies when construction contracts do not comply with the Housing Grants Construction Regeneration Act 1996.
o Supplements contractual provisions where the contract has deficiencies
o Part 1 – Makes the provision for adjudication
o Part 2 – Replaces provisions in relation to payment
What were the aims of the amendment to the construction act in 2011?
To increase clarity and certainty as to payment in construction contracts;
To introduce a ‘fairer’ payment regime, and improve rights for contractors to suspend their work in non-payment circumstances; and
To make adjudication more accessible for the resolution of disputes
Can you give me two examples of Relevant Events
- Variations.
- Exceptionally adverse weather.
- Civil commotion or terrorism.
- Failure to provide information.
- Delay on the part of a nominated sub-contractor.
- Statutory undertaker’s work.
- Delay in giving the contractor possession of the site.
- Force majeure (events that are beyond the reasonable control of a party, such as a war or an epidemic).
- Loss from a specified peril such as flood.
- The supply of materials and goods by the client.
- National strikes.
- Changes in statutory requirements.
- Delays in receiving permissions that the contractor has taken reasonable steps to avoid.
