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APC 24 > Contract Practice > Flashcards

Contract Practice Flashcards

1
Q

What is a Loss and Expense claim and how would you go about reviewing

A

A matter where the client is responsible that affects the progress of the work
Review if relevant matter
Cost incurred so cant claim for OH+P, only loss of profit.

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2
Q

What goes into Contract Docs

A

The contract itself
Contract Particulars
Pre Construction Information
Pricing Document - Contract Sum
Prelims Document
Contract Drawings
Specifications
Tender Correspondence
Tender Queries
Tender Addendums

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3
Q

Give some examples of contract particulars you included in your JCT Contract.

A

Pricing Document
Base Date
Date of possessions
Date for Completion
CDP
LAD’s
Rectification Period
Fluctuations
Interim Payments - (first date for payment)

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4
Q

NEC Options

A

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

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5
Q

Whats are LAD’s

A
  • Liquidated and ascertained damages
  • Predetermined and agreed between parties in contract
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6
Q

When may a JCT minor works contract be appropriate for a project?

A
  • Short duration straight forward construction
  • JCT guidance says value up to £100k but simple in nature
  • Lump sum - design completed prior
  • Employer provides spec, design and sow
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7
Q

What is on an interim payment certificate?

A
  • Valuation date
  • Issue date
  • Gross val
  • Retention percentage and amount
  • Less than previous amount
  • Payment
  • Employer details
  • Contractor details
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8
Q

What is a Relevant Matter? What is a relevant event?

A

Relevant Matter - Events that entitle contractor to loss and expense

Relevant Event - Events that entitle contractor to an EOT

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9
Q

How do you review contractor variations

A
  • check scope
  • check validation
  • check rates
  • check measures
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10
Q

If a client asked for assistance with calculating a sum for LD’s, how would you approach it

A

Cant advise on a value, but can advise on how they might get to a “estimation of genuine loss

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11
Q

How does JCT differ from NEC

A
  • EW and risk register encourage proactive approach on NEC, JCT is more reactive
  • CEs deal with money and time, JCT has variations for money and L&E/EOT for time
  • No QS mentioned in NEC
  • Programme is contract doc in NEC
  • Short periods of reply on NEC which incentivises responses
  • NEC concise and plain english
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12
Q

Who administers a JCT SBC? DB? NEC Contract?

A

JCT SBC - CA
DB - EA
NEC - PM

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13
Q

If a client is late to pay a contractor, what could the contractor do?

A

Contractor can notify to suspend the works

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14
Q

How would you advise your Clients on using standard v bespoke forms of Contract

A

Standard contracts
Pros
- Widely recognised & understood within the industry
- More cost effective and time efficient
Cons
- May not cover all unique aspects of project

Bespoke
Pros
- Tailored to specific requirements
- Can address specific risks
Cons
- Usually more expensive
- Time consuming to draft

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15
Q

What is the Housing Grants, Construction and Regeneration Act 1996? (Known as the Construction Act)

A

Intended to ensure that payments are made promptly throughout the supply chain and that disputes are resolved swiftly. Provisions of the act include:

  • The right to be paid in interim, periodic or stage payments
  • The right to be informed of the amount due, or any amounts to be withheld
  • The right to suspend performance for non-payment
  • The right to adjudication
  • Disallowing pay when paid clauses
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16
Q

What was included within the 2011 update to the construction act?

A
  • The act now applies to construction contracts not in writing
  • Doesn’t allow who bears cost of adjudication, this is agreed within case
  • Dates for payment must be set out in contract
17
Q

What forms the basis of a contract?

A
  • Offer
  • Acceptance
  • Consideration
  • Certainty of terms
  • Intention to enter contract
  • Legality of Contract
  • Capacity to make agreement
18
Q

Can you tell me what elements you have included in a Valuation from one of the projects you have worked on

A
  • Prelims
  • Measured works
  • Variations
  • MOS/Materials off site
  • Loss & Expense/Retention
19
Q

What are the relevant events in the contract?

A

There are 13 events set out in JCT forms including:

Variations
Instructions
Carrying out of works by statutory authorities
Execution of an approx quantity that is not a reasonably accurate forecast
Deferment of possession of the site
Suspension by the contractor for non-payment
Loss or damage occasioned by the Special Perils
Impediment, prevention or default by the employer
Civil commotion or terrorism
Exceptionally adverse weather conditions
Strike or lock out
The exercise of any statutory power after the base date by the UK gov
Force majeure

20
Q

How is a relevant event notified?

A
  • The cause of delay in detail (must state one of relevant events)
  • Estimated effect on completion
  • The contractor is required to prevent or mitigate the delay
21
Q

What are relevant events under JCT?

A
  • Event that causes a delay to the completion date, which is caused by the client, or is a neutral event not caused by either party
  • Entitle EoT
22
Q

What are Relevant matters?

A

A relevant matter is a matter for which the client is responsible that materially effects the progress of the works. This may enable the contractor to claim direct loss and / or expense that has been incurred

23
Q

Can you give some examples of relevant matters?

A
  • Failure to give contractor possession of site
  • Failure to give contractor access to and from the site
  • Delays in receiving instructions
  • Opening up the works or testing works that then prove to have been carried out in accordance with the contract
  • Discrepancies in the contract documents
  • Disruption caused by works being carried out by the client
  • Failure by the client to supply goods or materials
  • Instructions relating to variations and expenditure or provisional sums
  • Inaccurate forecasting of works described by approximate quantities
  • Issues relating to CDM
24
Q

What are the common items of claim in L&E applications?

A
  • Prolongation (extra site overheads i.e. prelims)
  • Thickening of prelims (e.g. extra supervision required due to variation)
  • Disruption (causing plant / labour to be underemployed - hard to prove)
    -Increases in labour / material costs during the period of delay
  • Head office overheads
  • Loss of profit (commonly combined with head office overheads)
  • Finance charges (i.e. interest)
  • Acceleration costs
25
Q

NEC Option A

A

Priced Contract with Activity Schedule

  • Lump sum
  • Project defined at tender
  • Activities defined and priced by contractor
  • Payments on completed activities
  • Suitable for design and build
26
Q

NEC Option B

A

Priced Contract with Bill of Quantities

  • Measure & value contract
  • Project defined at tender (may change)
  • Standard method of measurement
  • Contract prices works at tender
  • Contractor paid for quantity of work completed
27
Q

NEC Option C

A

Target Contract with Activity Schedule

  • Variation of cost reimbursement
  • Target cost set by activity schedule
  • Target moves with CE’s
  • Contractor tenders fee percentage
  • Contract recovers forecast defined cost and fee percentage
  • Uses pain / gain mechanism for sharing risk
28
Q

NEC Option D

A

Target Contract with Bill of Quantities

  • Variation of cost reimbursement
  • Project adequately defined to establish target
  • Target cost set out by BoQ
  • Target moves with CE’s and re-measurement
  • Contractor tenders fee percentage
  • Contract recovers forecast defined cost and fee percentage
  • Uses pain / gain mechanism for sharing risk
29
Q

NEC Option E

A

Cost Reimbursable Contract

  • Contractor tenders fee percentage
  • Contract recovers forecast defined cost and fee percentage
  • Contractor no financial risk
  • Used on emergency works, undefined scope
30
Q

NEC Option F

A

Management Contract

  • Contractor generally organises work
  • Works subcontractors
  • Contractor tenders prices (lump sum) and fee percentage
  • Contractor recovers forecast defined cost and fee percentage
  • Contractor has limited financial risk
31
Q

What is concurrent delay?

A

A situation where a construction project is delayed by two events at the same time, one being an event for which the employer takes responsibility under the contract and the other for which the contractor takes responsibility

APC 24 (24 decks)

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