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APC 2024 > Contract Practice/Admin > Flashcards

Contract Practice/Admin Flashcards

1
Q

What is needed for a contract to be formed?

A

Capacity
Intent
Offer
Consideration
Acceptance
Legality

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2
Q

Can you give an overview of the structure of the NEC?

A

Core Clause - payment, CE’s, insurances, time

Main Options;
- Option A Priced with Activity Schedule
- Option B Priced with BoQ
- Option C Target With Activity Schedule
- Option D Target with BoQ
- Option E - Cost Reimbursable
- Option F - Management Contract

W Clauses (Dispute Clauses - W1, 2 & 3)
X Clauses (performance bond, PCG, sectional completion, retention, LAD’s)
Y Clauses (National Legislation)
Z Clauses (bespoke amendments)

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3
Q

Can you name some of the contracts in the JCT Suite of contracts?

A

Standard Building Contract.
Design & Build.
Intermediate.
Minor Works.
PCSA.
Major Projects Agreement.
Measured Term.
Framework Agreement.

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4
Q

What types of pricing options are there?

A

Lump sum - fixed price agreed at the start.
Target Cost - a price is agreed, then at the end of the project the under spend or overspend is shared between client and contractor.
Cost plus - Contractor paid actual cost they have incurred plus and agreed percentage for OH&P.
Cost Reimbursable - A schedule of rates is agreed, then at the end of each month the contractor will measure what they have incurred.
Guaranteed/ Agreed Maximum Price - Fixed price where the contractor takes risk on overspend and savings.

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5
Q

Can you identify some differences between NEC and JCT?

A

Different terms for individuals.
Time and cost included in changes under NEC.
Programme is a contractual document in NEC.
NEC has timescales on change control procedures.

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6
Q

Can you outline the payment process and timescales under a JCT D&B?

A

21 day process in total starting with contractor submitting their application.

Due date is 7 days after this.

14 days from due date is final date for payment.

Payment notice should be issued no late than 5 days from the due date.

Pay less notice should be issued no later than 5 days before final date for payment.

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7
Q

What are the different types of subcontractor?

A

Domestic - selected through competitive tender.

Named - client provides a list for the main contractor to use for competitive tender.

Nominated - Proposed by the client and must be used.

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8
Q

What are LAD’s?

A

Damages inserted into the contract that the client can claim in the event of non-completion by the contractor.

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9
Q

What are some of the different suites of contract?

A

JCT
NEC
PPC2000

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10
Q

How does the structure of JCT contracts differ to NEC?

A

Under JCT everything forms part of the standard contract whereas under NEC there are core and optional clauses so there is the ability to adapt the standard contract without making amendments.

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11
Q

How do CE’s under NEC differ to variations under JCT?

A

Time and cost are both dealt with under CE’s.
Under JCT this is split between variations, EoT and loss and expense.

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12
Q

What is Novation?

A

Transfer of rights and obligations under an existing contract, for example under a D&B contract the design team is novated from the client to the contractor.

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13
Q

What is a Collateral Warranty?

A

When a contractual link is created between two parties under an existing contract where one does not already exist, for example between client and a subcontractor.

Allows the client to claim from subcontractors in event of a breach.

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14
Q

What is a Letter of Intent?

A

A non-binding letter which outlines an agreement in principle prior to the contract being executed.

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15
Q

What are the different types of Letter of Intent?

A

Comfort Letter - provides contractor comfort
Consent to Spend - allows contractor ability to place orders
Recognition of Contract - all terms have been agreed however awaiting final signing of contract

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16
Q

What forms of performance security exist for a client?

A

Performance Bond
Parent Company Guarantee

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17
Q

What is a Performance Bond?

A

Contractor takes out for a sum of money and in the event of a default the client can claim this money.

There are two types; on demand and default.

18
Q

What is a Parent Company Guarantee?

A

A PCG is in the event of a company defaulting, their Parent Company then because responsible for fulfilling their obligations under the contract.

19
Q

What is the duration of a PCG?

A

Dependant on how the contract was signed;
Underhand - 6 years
Deed - 12 years

20
Q

When does a Performance Bond end?

A

At the end of the defect liability period - once the certificate of making good has been issued.

21
Q

Different types of insurance under a construction contract?

A

Construction Works Insurance
Professional Indemnity
Public Liability
Employers Liability

22
Q

Who takes out the Construction Works Insurance under JCT.

A

Option A - New build - Contractor
Option B - New Build - Employer
Option C - Works to or extensions to existing buildings - Employer

23
Q

What is the benefit of a joint names policy?

A

If a contractor makes claim against employer and they are not named then the employer is not protected so they are liable for the outcome of the claim. Avoids subrogation.

24
Q

What would you check if a Contractor makes a claim for materials off site?

A

Check if they are listed within the contract.

25
Q

How would you check materials off site?

A
  • Visit the location they are stored.
  • Ensure they are protected and in a good condition ready to be taken to site.
  • Labelled with client name and address of the project.
26
Q

What is a vesting certificate?

A

A certificate which transfers ownership from one party to another.

27
Q

What is a retention of title clause?

A

A clause on a vesting certificate which states if the supplier is not paid for the materials then they retain ownership of them.

28
Q

When would you pay for materials on site?

A

Only when they are on site within a reasonable timescale and ready for install in line with the programme.

29
Q

What is the process for processing an application once received from the contractor under JCT?

A

7 days from this date is the due date.
14 days after the due date is the final date for payment.
no later than 5 days after the due date CA must issue payment notice or pay less notice no later than 5 days before final date for payment.

30
Q

Who administers the contract under D&B?

A

Employers Agent

31
Q

Is the QS listed under D&B?

A

No, therefore cannot issue certificates only recommendations.

32
Q

What is the different between EA and CA?

A

EA is acting as or on behalf of employer whereas a CA is administering the contract impartially.

33
Q

What is retention?

A

A percentage of money that is withheld from payments made to the contractor to ensure they rectify defects.

34
Q

When is retention released?

A

50% at Practical Completion and the remainder is released at the end of the DLP.

35
Q

How can contractor claim an EoT?

A

Must raise notice of the delay as soon as it becomes apparent detailing reasons and likely delay.

36
Q

What is the time period for assessing an EoT under JCT?

A

12 weeks.

37
Q

What are the Relevant Events under JCT?

A
  1. Variations
  2. Instructions
  3. Deferment of possession of the site
  4. Suspension
  5. Works by statutory undertakers
  6. Exceptionally adverse weather
  7. Civil commotion
  8. Terrorism and strikes
  9. Any impediment, prevention, or default by the employer
38
Q

What is the standard period the client can defer possession of the site?

A

6 weeks.

39
Q

What are the Relevant Matters?

A
  1. Variations
  2. Instructions
  3. Any impediment, prevention, or default by the employer
40
Q

What is loss and expense?

A

Loss to the contractor due to relevant matter caused by the client.

41
Q

Difference between Sectional Completion and Partial Possession?

A
  • Sectional Completion are sections to be completed by certain days listed within the contractor.
  • Partial Possession is a clause to allow the employer to request possession however contractor can reasonably refuse.

APC 2024 (18 decks)

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