Contract Practice Flashcards
What are variations?
A variation is a change to a contract.
A could include, change to the service level or type, product, delivery, timeframe, personnel, contractor or price.
Why might they arise?
a) change to spec etc
b) discrepancy between contract documents
c) discrepancy with statutory requirements
d) errors and omissions
e) deficiency in employer’s requirements
Can the contractor object to a variation?
They can make ‘reasonable’ objections in writing for variations relating to those described in 5.1.2 (working conditions / access / working hours etc)
What costs is the contractor entitled to if the quote is rejected?
The fair and reasonable cost of preparing the quote, as long as the quote itself was fair
How does NEC3 deal with change?
- The PM gives an instruction to change the Works Information
- Employer doesn’t allow access or keep to a key date
- Project manager doesn’t reply in time required to communications or stops the works
- PM withholds an acceptance
What are ‘fair rates and prices’?
A market rate, or price based on actual costs, on in line with current cost data e.g. SPONS
What are extensions of time?
Adjusts the completion date and relieves the contractor’s liability to pay liquidated damages for the period of the extension
What are liquidated damages
A genuine pre-estimate of the likely loss incurred by the employer should the completion date not be met
Whats in a Traditional (fully designed) Contract ?
- Article of agreement and conditions of contract, for completing as a simple contract (or as a deed).
- Working drawings - serve guide for construction. CHECK
- Bills of quantities.
- Specifications.
- Schedules of work.
•A schedule of tender
adjustments or clarifications negotiated and agreed after the receipt of tenders and prior to the signing of the contract.
•The requirement for the contractor to provide a performance bond and to obtain collateral warranties from any sub-contractors or suppliers.
What is the Article of Agreements?
The ‘articles of agreement’ set out the core obligations of the parties involved. Typically, they consist of four sections:
Recitals - What contract is/who for
Articles.
Contract Particulars. - project specific detail.
Attestation - action of being a witness to or formally certifying something.
What are contract particulars?
Form part of the Articles of Agreement (Core Obligations/project specific detail)
The contract sum.
The retention percentage.
The interim payment period.
Requirement for collaborative working.
Requirement for early warning notification.
Addresses for servicing notices.
The details of the adjudicator / arbitrator or appointing body.
Third party rights and collateral warranties.
The contract base date.
The completion date (or sectional completion dates).
Details of key personnel.
The date for possession.
The maximum permitted period for the deferment of possession.
The amount of liquidated damages.
The length of the defects liability period (or rectification period).
Insurance requirements.
What are working drawings?
“construction
drawings”, given to contractors before construction.
used; by a contractor to construct the works, or by suppliers to fabricate components of the works or to assemble or install components.
architectural drawings, civil drawings, mechanical drawings, electrical drawings etc
BoQ
provides project specific measured quantities of the items of work identified by the drawings and specifications in the tender documentation.
Whats found in a Design and Build Contract?
•The articles of agreement and conditions of contract.
•The employer’s requirements.
•The contractor’s proposals.
•The contract sum analysis.
Possibly bills of quantities (for some or all of the design).
What are Employer’s requirements?
- Typically used on D&B
- Could be part Traditional for Contractor designing discrete packages
Include:
fitness for purpose criteria for the project
Contractor’s scope of work and design and how it is to fulfil those obligations
technical criteria to be satisfied
other project-specific obligations
