CONTRACT PRACTICE Flashcards
What is a contract
A legally binding agreement to provide goods and services within a specified timeframe.
What are the 3 conditions that need to be in place for a contract to be in place
Offer
Acceptance
Consideration
What are the 3 conditions that need to be in place for a contract to be in place
- Offer
- Acceptance
- Consideration
- Intention
- Legality
- Capacity to make agreements
- Consent
- Possibility of performance
What are the main suites of construction contracts and what do they stand for
JCT. - Joints Contracts Tribunal
NEC 3 & 4 - New Engineering Contract
ECC. - Engineering and Construction Contract
ICE. - Institution of Civil Engineers
FIDIC. - (International Engineers Federation) Federation internationale des ingenieurs civils.
Name the main types of JCT Contracts
a. Minor works
b. D&B
c. SBC (with and without quants)
d. Intermediate
e. Construction Management
f. Management Contract
g. Intermediate
What are the main parts of the JCT contracts
• Recitals.
• Articles.
• Contract Particulars.
• Attestation.
• Conditions divided into 9 sections (7 for minor works).
• Schedules.
Name the 9 sections under the main section of the JCT
Section 1 - Definition and interpretation.
Section 2 - Carrying out the works.
Section 3 - Control of the works.
Section 4- Payment.
Section 5 - Variations.
Section 6 - Injury, damage and insurance.
Section 7 - Assignment, Third Party Rights and collateral Warranties.
Section 8 - Termination.
Section 9 - Settlement of disputes.
How is a contract executed?
Under hand, signed by both parties, 6 year limitation period. Means that a party must bring about any claim for breach of contract within 6 years of the breach taking place. Any later and the claim will be time-barred.
Under Seal (as a deed), signed and witnessed, 12 year limitation period. Valuable consideration not required,
Why use standard forms of contract?
They are cheaper than getting a bespoke contract drawn up
Offer a level of familiarity between the parties
Tried and tested contracts in court, therefore you should be able to predict the outcome in the courts
Why would you not use a bespoke contract?
They are costly to produce and time consuming
Contractors do not like them, as they usually put alot of the risk onto the contractor
They are not tried and tested like a standard form
What should you consider when selecting the contract
The criteria of the client
The procurement method you are going to use
Nature and value of the works
Timings, are the works required to start quickly or do you have time to produce robust set of docs
When is a JCT minor works suitable for recommendation
The project is fairly simple.
The project should last no more than 12 months
The client is responsible for procuring the design, including drawings, a specification
. Contractor’s design portion is required
When is a JCT Intermediate Contract suitable?
Works are of simple content involving the normal, recognised basic trades and skills of the industry
Works are designed by the Employer
Fairly detailed contract provisions are necessary
Can you provide more information on the JCT Design and Build Contract 2016?
Client must produce the Employers Requirements
Contractor is not only to carry out and complete the works, but also to complete the design
Can you provide more information on the JCT Management Building Contract?
Used when a management contracting route is chosen on large-scale projects requiring an early start.
Works are designed by the client and used by experienced clients
It is not possible to prepare full design information before the works commence
Can you provide more information on the JCT Construction management contract?
Used when a CM route is chosen on large-scale projects requiring an early start.
Works are designed by the client and used by experienced clients
It is not possible to prepare full design information before the works commence
What is the main contractor responsible for
The construction of the project, through either direct labour or sub-contracted labour
What are domestic subcontractors
This is a standard appointment of a Subcontractor by the Main Contractor.
What are named subcontractors
Clients provide the Main Contractor with a choice of named Sub Contractors for a portion of the works.
Additional names may be added if approved by all parties.
This allows the client a level of control over the quality of the works packages and in some cases cost.
The named sub-contractor becomes a domestic sub-contractor, they are paid by the main contractor and the main contractor is responsible for their works
What is the “date for completion” and how does it differ from the “Completion date”?
Date for completion is the contract agreed completion date
Completion date is the out turn effect after any EOT and delays
What happens if ‘time is at large’
There is no set completion date
The contractor has to complete the work in reasonable time
LDs cannot be claimed or it would be upto the client to prove the contractor didn’t complete work in reasonable time to recover damages
What is an extension of time
An adjustment to the contract completion date. In this period the Contractor is relieved of paying LDs.
What is the mechanism under the contract for an extension of time
Contractor should put delay notice in writing to advise the CA/EA of delay at the start of delay or when they delay becomes apparent
The contractor should state the cause of delay and identify the relevant event
CA has 12 weeks to assess the period of extension
Contractor should do what they can to mitigate the delay
What are Relevant Events under the JCT
They are events which would entitle the contractor to EOTs