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APC > Contract Practice > Flashcards

Contract Practice Flashcards

1
Q

What key contract rules came from the Housing Grants Construction and Regeneration Act 1996?

A
  • Gives a right to adjudication
  • Gives a right to stage/periodic/milestone payments for projects >45 days
  • A payment notice MUST be issued 5 days after the due date
  • Right to suspend work for non payment
  • Removes pay when paid provisions
  • Created the scheme for construction contracts to cover the above if they are not specified within the contract
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2
Q

What is the valuation procedure under a standard JCT

A
  • Valuation date (fixed under the contract as a set date every month. But it must be a working day)
  • 7 days (excl BH) later is the due date
  • 5 days later is the payment certificate
  • 14 days after the due date is the final date for payment
  • 5 days before the final date for payment is the final date for a pay less
  • Valuations must be done regardless of if the contractor submits their valuation or not
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3
Q

What is the valuation procedure under a JCT D&B

A
  • Valuation date (fixed under the contract as a set date every month. But it must be a working day). If the contractor submits their valuation late, the following are pushed back by the same number of days
  • 7 days (excl BH) later is the due date
  • 5 days later is the payment certificate
  • 14 days after the due date is the final date for payment
  • 5 days before the final date for payment is the final date for a pay less
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4
Q

What is the timeline for adjudication

A
  • Either party raises a notice of adjudication
  • Within 7 days of the notice, an adjudicator is chosen (either already named in the contract or an adjudicating body) and the referring party must issue the adjudicator with a referral notice
  • The adjudicator must make a decision within 28 days after the referral notice, or 42 days if the referring party consents, or longer if both parties consent
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5
Q

What powers does an adjudicator have?

A
  • Ask for any documents/statements reasonably required
  • Question any party to the contract or their representatives
  • Visit sites and undertake tests
  • Give directions as to the conduct of the adjudication
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6
Q

What must a notice of adjudication contain?

A
  • The nature of the dispute and involved parties
  • Details of where and when the dispute arose
  • The nature of the redress which is sought
  • The names and addresses of the parties of the contract
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7
Q

What is the effect of an adjudicator’s decision?

A

It is binding on all parties unless legal redress is sought

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8
Q

What is the effect of an arbitrator’s decision?

A

It is legally binding on all parties

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9
Q

What are the JCT contract sections?

A
  • Recitals
  • Articles
  • Particulars
  • Attestation
  • Conditions
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10
Q

What are the contract recitals?

A

Factual explanations for the basis of the contract e.g. cost, where the drawings are, sections etc

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11
Q

What are the contract articles?

A

Sets out what is agreed

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12
Q

What are the contract particulars?

A

Aspects of the contract that are specific to the project

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13
Q

What is contract attestation?

A
  • Confirming the agreement is genuine
  • Under hand or deed
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14
Q

What are the principles of contract law?

A
  • Offer
  • Acceptance (might be by action, rather than a signature)
  • Consideration
  • Intention to create legal relations
  • Capacity
  • Legality (lawful purpose for the contract)
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15
Q

What are some contract documents?

A
  • The contract
  • Schedule of amendments
  • Preliminaries
  • Contract Sum Analysis or BoQ
  • Section Sums (if applicable)
  • Information release schedule
  • Drawings
  • Specifications
  • Employer’s requirements
  • List of named/nominated sub contractors
  • Client policies (net zero, H&S etc)
  • Pre-Construction Information pack
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16
Q

What is included in a Pre-Construction Information Pack?

A

Information about:
- The project
- Planning and management
- H&S hazards and how they are to be addressed
- Any existing H&S file
- ER’s and Contractor’s proposals

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17
Q

What are the types of contract?

A

JCT
- SBC
- MW
- IC
- D&B
NEC
FIDIC

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18
Q

What are the NEC Payment Options?

A

A - Priced contract with activity schedule
B - Priced contract with BoQ
C - Target contract with activity schedule
D - target contract with BoQ
E - Cost reimbursable
F - Management

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19
Q

What are some NEC Option Clauses?

A
  • W Clauses (1-3) relate to adjudication
  • X Clauses (1-29) deal with risk allocation (Delay damages, CDP etc)
  • Y Clauses (1-3) deal with UK specifics
  • Z Clauses (custom) form the SoA
20
Q

What are key difference between the JCT contracts?

A

Intermediate contract includes for:
- Section completion
- Clerk of works
- Collateral warranties
SBC includes the above AND:
- Schedule 2 quotations
- BoQ
- Retention bond
- Third Party rights
MW includes for none of these

21
Q

What is the SBC final account timeline?

A
  • 6 months after receiving the PC cert, the contractor will submit all info necessary to make final adjustments to the contract sum
  • If they fail to do so, the CA may at any point following issue the contractor with a reminder and 1 month to issue said information
  • Following this, the CA or QS will review this information and make their own assessment
  • An agreement is made between the parties
22
Q

What is the D&B final account timeline?

A
  • Within 3 months of receiving the practical completion certificate, the contractor will supply the client with their final statement (States the amount calculated in the final adjustment)
  • If they don’t do this, the client can issue them with a reminder
  • If still nothing is received, the client may issue their own final statement
  • An agreement is made between the parties
23
Q

What is the difference between partial possession and sectional completion

A
  • Sectional completion is a predetermined agreement within the contract
  • Partial possession is a request from the client that the contractor must not unduly decline
24
Q

What relevant matters are there?

A
  • Variations
  • Opening up of works that were undertaken correctly
  • Discrepancies
  • Prevention such as: delay to site possession; failure to supply materials etc.
25
Q

What relevant events are there?

A
  • Variations
  • Opening up of works that were undertaken correctly
  • Discrepancies
  • Prevention such as: delay to site possession; failure to supply materials etc.
  • Exceptionally adverse weather conditions
  • Force majeur
    Specified perils e.g. floods, fire etc.
  • Civil commotion or terrorism
  • National strikes
26
Q

What is the process for notifying about loss and expense

A
  • The contractor should notify the architect/CA of the likely effect coming from a relevant matter.
  • Along with this or soon after, the contractor should follow with their initial assessment of the amounts likely occurred
  • The contractor should provide the architect/CA at monthly intervals with information reasonably required to ascertain the loss and expense
  • The CA/QS should provide the contractor with their assessment within 28 days of the initial claim, and 14 days after every release of new information.
27
Q

What are Liquidated Damages

A
  • A genuine pre-estimate of loss
  • Cannot be seen as a penalty as this would be unenforceable
28
Q

What are the principal changes to JCT D&B 2024?

A
  • Adopt gender neutral language
  • Adjustments to reflect the new Part 2A of the building regulations
  • Adjustment to allow for notices to be issued by email
  • Removing the optionality of the supplementary provisions for: sustainability, collaborative working, and negotiation
  • Amendments to the time frame for deciding an EoT
  • Include epidemics as a relevant event
29
Q

What are the main differences between JCT SBC & D&B?

A
  • SBC has CA; D&B has EA
  • SBC puts the design risk on the client; D&B puts it on the contractor
30
Q

What types of bond are there?

A
  • Retention bond
  • Performance bond
  • Materials off site bond
  • Tender bond
31
Q

What is a tender bond?

A
  • A financial mechanism that states that a Contractor will enter into a contract with the Client under the tendered-for terms if they are selected
32
Q

What are day works?

A

Method of valuing additional or substituted work that can’t be valued by measurement.

33
Q

What is the date for final payment under JCT SBC?

A

No later than 2 months after whatever occurs last:
- End of the rectification period
- Notification of making good defects
- Final statement

34
Q

What are collateral warranties?

A

A mechanism to create a contractual link between parties who would otherwise have none

35
Q

What are third party rights?

A

Under the contracts (rights of third parties) act 1999, it allows named parties who are not privy to the contract to confer rights under said contract.

36
Q

What is a final certificate? (Final statement under D&B)

A

Issued at the end of the project, after the rectification period, and it brings the contract to a close, stating the final contract sum.

37
Q

What is a certificate of making good defects?

A

Issued after all items raised during the rectification period have been rectified. This releases the second moiety of retention.

38
Q

What are the 3 JCT fluctuations Clauses

A

A - Contribution, tax, levies
B - Labour and material, and taxes
C - Formula based

39
Q

What are rough value guidelines for JCT contracts?

A

JCT MW - <£250k
JCT IC - <£1m
JCT SBC - >£1m

40
Q

What is joint names?

A

Where the two insured parties (client and contractor) are treated as one and the same, so the insurer has no rights of subrogation

41
Q

Why would a waiver of subrogation be needed?

A

In an insurance option other than joint names, to prevent the insurer coming after the other party for the damage money

42
Q

What is a schedule 2 quotation?

A

A formal quotation from a contractor for works. The rates provided cannot be relied upon unless instructed

43
Q

What are some common contract amendments?

A
  • Payment dates
  • Retention
  • Responsibility of ERs
  • Third party provisions (CWs, 3rd party rights)
44
Q

What has been introduced under the building safety act 2022?

A
  • Introduced an Accountable Person who is responsible for managing the safety risks of a building
  • Golden thread of information to ensure info about a building is stored, updated, and available
  • Introduced new responsibilities
45
Q

What are requirements for the golden thread of information?

A
  • Kept digitally
  • Kept securely
  • The single source of the truth
  • Available
  • Presented clearly

APC (17 decks)

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