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APC > Contract Practice > Flashcards

Contract Practice Flashcards

1
Q

*Where are LD’s included in a contract?

A

Section 2.29 of the Contract (JCT DB) with a value inputted into the contract particulars.

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2
Q
  • What part of a contract relates to quality?
A

Section 2.2 Materials, Goods and Worksmanship

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3
Q

Can you please name some different types of a JCT contract?

A

Minor Works
Intermediate
Standard
Design & Build
Prime Cost
Management
Major Works

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4
Q

What are included in the Recitals?

A

Recitals contextualise the agreement, giving factual explanations for the basis of the contract. Seven recitals describe what is required and the events that have taken place.

1-7 Recitals
1- Describes the work required, site and preparation of design and bills of quants
2- Confirms a priced copy of the bills of quants has been supplied to the employer
3 - Identifies contract drawings
4 - Identifies whether employer is considered a contractor for tax purposes
5 - Refers to an information release schedule (Optional)
6 - Whether works are to be carried out in sections
7 - Only applies when contractor is obliged to complete design works under a CDP.

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5
Q

What is included in the Articles?

A

These set out what is agreed between the parties.

Article 1
The obligation of the contractor

Article 2
The obligation of the employer

Article 3
Identifies the architect (or contract administrator) or employer’s agent).

Article 4
Identifies the quantity surveyor.

Article 5
Identifies the principal designer.

Article 6
Identifies the principal contractor.

Article 7
Makes reference to the right to adjudication in the event of any dispute.

Article 8
Makes reference to the right to arbitration in the event of any dispute.

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6
Q

What are the Contract Particulars?

A

Sets out the variables that are particular to the specific project.

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7
Q

What is attestation and how is it completed?

A

Attestation is the process of confirming that something is correct or genuine or that a requirement has been met. It can be completed as:

  • A Deed - (signed and witness) - 12 years limitation period
  • Underhand - just signed by both parties - 6 years limitation period
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8
Q

What happens if the value of LDs is left blank?

A

It means they are unliquidated damages and the value is agreed in court. It can be unlimited.

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9
Q

What is novation?

A

Novation is a process in which contractual rights and obligations are transferred from one party to another.

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10
Q

How does novation differ from assignment?

A

Assignment transfers the benefits of of a contract, Novation transfers both the benefits and the burdens/obligations.

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11
Q

When does a novation agreement need to be agreed.

A

Novation agreements need to be agreed at appointment with the consultant and be written into the contract with the contractor.

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12
Q

What is an alternative to a novation agreement?

A

A consultant switch - simply transfers the consultant from working for the client to the contractor by terminating the current contract and entering a new one.

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13
Q

Retail Hornchurch - How did you ensure that you were competent to draft a contract?

A

I have experience in drafting contracts previously and pulled the contract together using NBS Chorus. Once it was drafted I issued it to the employers legal representatives and for ensuring that is was legally sound.

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14
Q

Retail Hornchurch - At what point did you issue the contract particulars to the contractor for comment?`

A

I would input the the contract particulars that I could at the time, I would issued these to the contractor in a table for comment.

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14
Q

What is the retention in the JCT Minor Works Contract?

A

5%

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15
Q

What is the typical max value for JCT MW Contract?

A

£250k

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16
Q

Was the contract issued via Docusign, if so, how did you ensure that data is secured when contracts issued over docusign?

A

I safely stored contract documents in password protected files. I issued the contract to the legal advisors via an password protected file send. I received confirmation from all parties that they were happy for me to share the document in this manner.

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17
Q

What is the difference between CA and EA?

A

EA is for Design and Build Contracts whereas CA is for traditional forms?

The CA is completely impartial and the role begins following the execution of the contract.

EA is reports to the Employer.

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18
Q

Could please describe the process of implementing insurance option C?

A

In understanding the project i knew that the works were occurring within an existing building. I inputted Insurance option c within the contract particulars and shared this with the client and contractor for approval. I inserted this into the contract and advised my client of the requirement to take out joint names insurance of the works and the existing structure against specified perils.

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19
Q

What is Insurance Option C, what section of contract is it in and what are the other options

A

Insurance Option C is found in Section 6 of teh Contract Particulars and requires the the employer to take out joint names insurance on the works and the existing structure.

Option A - contractor insurers the work
Option B - employer insurers the work

20
Q

How did you insure the contractor held adequate PL?

A
21
Q

What is the difference between a collateral warranty and a third party right?

A

Collateral warranties transfer the whole contract obligations s to the third party.

Third party right transfers specific clauses of the contract to the third party.

22
Q

When are collateral warranties beneficial?

A

Getting recourse from the supply chain if their are defects and the contractor has gone bust.

23
Q

How are third party rights documented?

A

Will be name and the contract clause referenced within the contract.

24
Q

What changes are in the JCT 2024 suite of contracts?

A
  • Gender neutral language
  • electronic signatures
  • changes to extension of time
    -epidemics
  • Changes off the back of BSA 2022
  • extended limitation periods
  • defined PC and PD roles
25
Q

What is the standard rectification period under each JCT Contract?

A

MW - 6 Months
IN - 12 Months
D&B - 12 Months

26
Q

What is a performance bond?

A

A form of insurance against the risk of a contractor failing to fulful obligations to the client. Most commonly this is to cover in the case of contractor insolvencies.

In this case the performance bond will provide compensation by a third party up to an agreed percentage. Usually 10% of contract value.

27
Q

What other bonds exist?

A

Retention Bonds - held to ensure the contractor properly completes work under the contract.

Will usually be either 5% or 3% depending on typical contract value.

Advance payment bond- used if and when advanced payments are required.

28
Q

What can you do if the consultant declines to be novated?

A
  • Outset i would ensure that the requirement to accept novation is written into their appointment
  • if this isnt the case, i would get the contractor to appt another person within their firm to undertake the same role.
29
Q

What is a waiver of subrogation and how can it be applied when using option c?

A

a contractual agreement that prevents an insurance company pursuing the responsible party for losses above a certain value.

30
Q

What is the response timeframe for EOT under the Intermediate contract?

A
  • No set timeframe under intermediate or MW.
  • Only a set timeframe for D&B, standard etc - 12 weeks however reducing to 8 under new suite of contracts
31
Q

What are the 4 things that make a contract?

A
  • Offer
  • Acceptance
  • Considerations
  • Intention to create a legally binding contract
32
Q

What is Net Contribution Clause?

A

A NCC states that where two or more parties involved in a construction project are each jointly liable for the same loss or damage, the liability of each party will be limited to the amount which would be apportioned to that party by a court.

33
Q

When does a Performance Bond get paid out?

A

Depends on the type of bond it is, whether on-demand or by default.

34
Q

What is the new JCT Contract being introduced?

A

JCT Target Cost Contract

  • Contractor undertakes design and construction
  • Unlike D&B there is no fixed lump sum
  • Contractor would be paid ‘allowable’ costs together with a contract fee (% or fixed sum)
35
Q
A
36
Q

What is the Joint Fire Code and when should it apply?

A

Is a provision that deals with fure safety measures on constructions sites and sets out activities through all stages of design, procurement and construction.

Contracts above 2.5mil or lower contract works that are considered to be high risk.

37
Q

What is the BIM Protocal in contracts?

A

A document that states how BIM proccessses should be implemented into construction contracts. It includes:
- BIM Execution Plan
- Roles and responsibilites in respect to BIM
- Information requirements
- Data exchanges
- Coordination and Colaboration
- Legal and contractual aspects
- Software and standards
- Model managment
- Compliance and montioring

38
Q

What is the standard maximum period of deferment under Jct D&B

A

6 weeks

39
Q

What are the two methods of payment alterantives?

A

Alternative A: Stage payments
Alternative B: Periodic payments

40
Q

What is Pool Re cover?

A

Financial protection against property damage as a result of terrosim. It is a gov backed reinsurance scheme.

How it works:
- Contractors or project owners pay a premium to an insurer who is part of the Pool Re scheme.
- In the event of a terrorist attack, the insurer can claim against Pool Re to cover the losses, ensuring that the affected construction project can recover and continue.

41
Q

What is attestation?

A

The act of witnessing and signing a contract. Confirming the validity of the contract and that proper processes were followed.

Under hand or as a deed.

42
Q

What can be done to bring Completion Date forward?

A

Acceleration Clause (C.4.1.1 in Schedule 2)

  • Invite proposals from contractor to accelerate PC (Acceleration Quotation). The AQ must state the time saving and cost increase.

The contractor has 21 days to provide quote.

43
Q

What are the beenfits and draw backs of JCT Contracts?

A

Benefits
- Offer good protection of common issues
- Swift Dispute resolutopn
- Minimise costs
- Protection from unrealiable stakeholders

Disads
- Unequal allocation of risk (especially for subcontractors)

44
Q

What is typically included within a vesting certificate?

A
45
Q

How should vested goods be valued while off-site?

A

Goods to be vested are to be identified, clearly marked, insurance and free from encumbrance.

46
Q

What are the pros and cons of vesting?

A

Pros
- Cashflow improvements for contractors
- Reduced programme risk (long lead ins)
- Reduced goods price inflation
- Clean reassurance such as insurance

Cons
- Late design changes altering material requirements
- Additional cost due to bonds
- Insolvency risk
- Complex and timeconsuming legal doc

47
Q

What are some things a vesting cert will include?

A
  • Details of beneficiary
  • Relation to contract
  • Value
  • Obligations
  • Insurance requirements
  • free of encumbrances statement

APC (24 decks)

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