Contract Practice and Administration Flashcards

1
Q

What is acceleration?

A

Mechanism in the contract which allows the client to ask the contractor for a quotation to complete the works before contract PC date

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2
Q

What are the options of acceleration considered?

A

Re-sequencing the works, Increasing the working time, Increasing the resources employed, Changing the working methods, Increasing incentives

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3
Q

What are the most effective and least effective methods of acceleration?

A

Most: Resequencing the works
Least: Increasing hours / resources employed on site - less productivity

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4
Q

What are the timing processes for acceleration under the JCT?

A

Schedule 2 Quotation, EA request quote, Contractor has 7 days to notify no comply, 21 days to submit quote, Employer has 7 days to confirm acceptance / rejection / more time required

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5
Q

What is novation?

A

When a contract is transferred from the employer & DT to contractor & DT, Transfer rights, obligations & benefits, Client like this as they keep continuity of the design team

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5
Q

What is assignment?

A

Involves the rights of the contract being transferred to a 3rd party, Rights and benefits transferred, e.g. collateral warranties to subsequent owners / lease holders, Clause 7.1 states assignment rights under the contract is totally excluded, Clause 7.2 optional clause enables assignment

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6
Q

If an problem becomes apparent after novation of the design team to the contractor, who is responsible?

A

The design team are responsible for the problems in design

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7
Q

What are the key issues with novating?

A

Does new party have the right to take action against novated party for breaches that occurred prior to novation
Ensure novated DT responsibilities adequately transferred to contractor to establish a duty of care
Obtain all relevant CW

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8
Q

What is a domestic sub-contractor?

A

One whose selection and employment the employer generally plays no part, although the employer may be required to give consent to the appointment where specified in a particular contract

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9
Q

What is a nominated contractor?

A

One who is selected by the employer, but who then enters a sub-contract with the MC
Employer remains responsible for certain aspects of the nominated contracts performance even though MC has overreaching obligation to carry out & complete
works

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10
Q

What is a bond?

A

Protects against disruptions or financial loss due to contractors failure to meet contract specifics

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11
Q

How can you protect the client under a contract? (Types of bonds)

A

Performance Bond
Advance Payment Bond
Retention Bond

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12
Q

What is a collateral warranty?

A

They are supporting documents to the primary contract which creates a bilateral agreement to the contract between the client and the 3rd party

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13
Q

Why bother with a collateral warranty when the 3rd party act exists?

A

CW can be written with inclusion of specific terms and conditions
Physical agreement = easier negotiation
Parties specifically named

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14
Q

What is professional indemnity insurance?

A

Provides cover against claims of negligence & used widely where professional services are being provided to a developer
Provide insurance for up to a specified amount where negligence is proven to have been committed on part of the service provider

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15
Q

What is public liability insurance?

A

Required by contractors to cover against death, injury of damage to property of a 3rd party
Liability for claims is unlimited

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16
Q

What is employers liability insurance?

A

Compulsory after employer liability act 1969 by UK statutory
Provides indemnity to an employer for its legal liability to its employees for death / disease or personal injury arising out of their employment
The limit of indemnity provided must be for a minimum amount of £5m in respect of any claim

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17
Q

What is joint names insurance?

A

Where employer & contractor both can benefit from rights under the insurance agreement, regardless of party that fronts the cost

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18
Q

What is non-negligent damage?

A

Insurance is available to cover liability for damage to adjoining buildings where there has been no negligence on part of contractor
D&B optional provision from this type of insurance and would need to be in ER’s

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19
Q

What is terrorism cover?

A

Clause 6.8 in the JCT and is an insurance provided in joint names for physical loss & damage to work executed, site materials, existing structures and their contents caused by terrorism

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20
Q

What is defects liability insurance / latent defects insurance?

A

Can be used instead of collateral warranty - costs generally between 0.65 - 2%
Covers event of an inherent design defect, workmanship or materials becoming apparent after PC

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21
Q

What is subrogation?

A

The right for the insurer to pursue a third party claim that caused an insurance loss to the insured
Insurers right to pursue for loss

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22
Q

What are the insurance options under the JCT contract?

A

Option A - insurance of a new site by the employer
Option B - insurance of a new site by the contractor
Option C - insurance of an existing site by the employer

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23
Q

What is run-off cover?

A

Cover needs to be provided should a claim be made against you or a former practice for work undertaken in the past
If a company comes to an end, run off cover must be in place to cover for any claims which may be made after this date (when PI does not exist anymore)

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24
What is the procedure if loss or damage occurs as result of an insured risk?
Contractor notify architect in writing for location, extent of damage Valuation of works take no account of the damage Once insurers make inspections, contractor should rectify damage at their cost Under option A: contractor must enable insurers to pay out any monies due to the employer Reinstatement value depends on insurance option used Employer can only recover indirect losses sustained by an insured event if he can prove negligence on part of the contract
25
What is the joint fire code?
Fire prevention on construction sites Compliance with CDM regulations Specific guidance on high risk sites & timber frame buildings Change to requirements for storing combustible materials & burning waste on site Requirement to liaise with fire & rescue during design process Fire protection / hot work / electricity / gas safety
26
What is a parent company guarantee?
Form of security that can protect clients in the event of a default on a contract by a contractor
27
What are the differences between a guarantee & a warranty?
Guarantee: Usually free, legally binding contract, must explain about how to make a claim in simple terms Warranty: Similar to an insurance policy, sometimes referred to as an extended guarantee, can cover a longer period than a guarantee
28
What are the advantages & disadvantages of a Collateral Warranty?
ADV: Physical Agreement, Parties specifically names, assignment easier to undertake. DISADV: Standard forms Unsatisfactory, expensive and time consuming
29
What are the advantages & disadvantages of rights of third parties?
ADV: Large saving in cost and time v CW, Can extend rights to entire classes of 3rd parties DISADV: Enabled classes of parties to bring action enforcing the contract, operation of the act untested in law, no physical paper agreement
30
What is net contribution clause?
Where 2 or more parties involved in construction project are each jointly liable for the same loss or damage. The liability of each party is limited to the amount which would be apportioned to that party by the court
31
Why are both CWs and Third Parties needed?
Construction security - can claim losses from those liable Because of privity of contract, only those party to contract can enforce its terms Employers will now ask advisers / contractor to agree CW / 3PR to any funders
32
What are step-in rights?
Rights for a party to step in & take over the development to complete it, e.g. funder will require that step in rights are included in CW If employer becomes insolvent through construction process, other party steps in and completes development in employers role
33
What is the difference between a conditional and unconditional bond?
Conditional bond: Can only be called upon by the bondsman when contractor has gone insolvent and you have to prove they've gone insolvent & cost of X to retender project Unconditional bond: Can be called upon at any time - don't have to prove the condition has been met. Contractors don't tend to accept this.
34
What is all risks insurance?
Insuring the materials & the site (the contract works)
35
What are the 4 types of insurance on construction projects?
All risk, Professional indemnity, Employers Liability, Public Liability
36
What is the difference between performance bond & guarantee?
Guarantee free, Performance bond covers 10% of the package / works, Guarantee the parent company steps in and carries out the works of the contractor
37
What is a contract?
A legally binding agreement which is enforceable by law
38
What is legislation?
The process of making or enacting laws
39
What is the privity of contract?
States that only a party to a contract has the benefit of that contract or is subject to the obligations contained in it Only a party to a contract can enforce the terms of that contract A 3rd party cannot be subjected to a burden of a contract to which he is not party Only parties of contract can sue one another Contractors / rights of 3rd parties & collateral warranties changed this rule
39
What is the purpose of a contract?
An agreement entered into voluntarily between 2 parties which is intended to be legally enforceable
40
What is Contra Proferetem?
Where a party modifies a clause, it is their responsibility to make the wording clear & they should lose out if there is any ambiguity
41
What is Quantum Merit?
Judicial policy that allows a party to recover losses in the absence of an agreement or binding contract
42
What is the scheme for Construction Contracts?
Applies when a construction contract does not comply with the construction act Makes provision for adjudication where the contract does not comply with HGCRA Sets out payment provisions that are to be used in cases where the parties have entered a contract but the provisions of the contract to not provide an adequate mechanism determining what payments become due and when
42
How can a contract be executed?
Orally, Underhand, As a deed
43
What are the aims of Construction 2025?
Reduce construction costs, greenhouse gases Push sustainable, whole life cycle costing
44
What was the Latham Report 1994?
Highlighted the inefficiencies of the construction industry Suggests government should become best practice client NEC should be used more Create standardisation & integration of contract documents & guidance notes
45
What was the Egan Report 1998?
Improving quality & efficiencies in UK constructionQuality driven agenda
46
What are the standard construction contracts?
JCT, ICE (NEC), FIDIC
47
What are the contract conditions?
They set out the relationship between parties, including risk and price
48
What are the advantages and disadvantages of standard contracts?
ADV: Written by legal experts Fair (as prepared by recognised organisations & institutions RIBA, contractors, RICS, etc.) Rights and obligations clearly set out Risk allocated evenly Saving in time & expense Familiarity DISADV: Familiarity decreased as they are often amended May not be appropriate in the needs of the client Using inappropriate standard contract for a project will cancel out benefits
49
What are the advantages and disadvantages of using a bespoke contract?
ADV: Beneficial for major projects with novel obligations Risk can be transferred as required Specific to employer DISADV: Parties unfamiliar with terms Can be ambiguous = disputes Liable to unfairly allocate risk Expensive to produce Not gone through the courts Cannot contradict current law
50
What elements should you consider when choosing a contract?
Procurement route Sector Risk allocation Size of project Client experience Design responsibility Contract sum
51
What is tort law?
A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits a tortious act E.g. negligence, financial losses, injuries etc.
52
What is required for a contract? OACLIC
Offer, Acceptance, Consideration, Legality, Intent, Capacity
53
What amendments have you made to a contract?
Payment date from 14 -21 days Retention percentage from 3% to 5% Rectification period from 6months to 12 months Change % released retention at PC / Certificate of making good e.g. demolition give 100% as there is no making good necessary (in theory) Risk allocation Inserting obligations such as the provision of bonds / collateral warranties
54
What is the difference between an intermediate building contract and minor works?
IBC: Traditional route Drawings with spec / BoQ Lump sum Fairly detailed contract provisional without it being complex With contractors design is the same but their design is specified MW: Small & basic construction Possession of site not given to contractor No detailed rules for variation or valuations No advance payment or CWs EOT beyond control of contractor
55
What is a measured term?
Minor works at irregular occurrence on agreed schedule of rates
56
What is a framework agreement?
Carry out work regularly with supply cain & build on relationships
57
What is partnering?
Partnership to improve delivery, collaborative processes, project / strategic partnering, dispute avoidance
58
What are the main provisions for carrying out works under a JCT?
Definitions Carrying out the works Controlling of the works Payment Variations Injury damage & insurance Assignment, third party rights, CWs Termination Settlement of disputes
59
What are advantages and disadvantages of Traditional?
ADV: Familiarity amongst industry Client retains control over design and quality Direct reporting design team to client Independent CA Some price certainty at contract Prices based off same information - no risk premium Contractor is responsible for programme DISADV: Design should be fully developed before tendering to avoid expensive variations Fragmented design/ construction process leads to disputes e.g. design defects or construction defects? Over-designing / over-engineering Contractor cannot buy into design or offer advice on buildability Fixed price lump sum rarely achieved Price escalation post-contract with CCRFs Contractor could win job not reflecting works carried & claim back money
60
What are the contract documents under JCT SBC?
Articles of agreement & conditions of contract Contract drawings Bill of quantities Specifications Schedule of work Schedule of tender adjustments & clarifications Requirements for performance bond or CW
61
What are the advantages and disadvantages of D&B?
ADV: Speed Single point of responsibility Acceptance of design from MC Contractor input on buildability DISADV: Initial price may be high due to risk premium Post-contract variations costly Client less control on design due to novation Small scope for client change once in contract Discrepancies between ER's & CP's
62
What are the contract documents under JCT D&B?
Articles of agreement & conditions of contract ER's Contractors Proposals CSA
63
How is the JCT contract set out? ARACACS
Articles of agreement, Recitals, Articles (D&B), Contract particulars, Attestation, Conditions, Schedules
64
What are the differences between IBC & SBC?
IBC more appropriate for simpler construction projects with detailed contract provisions but without the requirement for the installation of complicated building services or other specialist work IBC has more extensive control than MW but less than SBC Not suitable for projects where the contractor is required to build in discrete parts of the work
65
What is an EOT?
A provision in the contract for an amendment of the scheduled practical completion date due to unforeseen circumstances
66
Have you had any experience of EOTs in your projects?
17CC - Lift out of order caused delay for strip out program.
67
Where in the contract (SBCXQ) is the EOT?
Notice by contractor for delay: 2.27 Fixing completion date: 2.28
67
What methods of delay analysis are there?
Facts, Actual vs Planned Progress, Critical path analysis, Focused methods analysis
68
What is a relevant event?
A mechanism to define what constitutes an EOT - doesn’t always lead to a loss & expense claim Clause 2.29
69
What are some relevant events in your contract?
Variations to the contract CAIs Deferment of site possession Adverse weather Loss or damage by specified perils Civil commotions Antiquities / statutory undertaker Force majeure
70
What is a dispute?
A disagreement or argument
71
What are the types of avoidance & dispute resolution?
Negotiation, Mediation, Conciliation, Adjudication, Arbitration, Litigation
72
What is the difference between adjudication and arbitration
Anyone has the right to adjudication / arbitration must be agreed and written in at contract stage Adjudicator cannot award costs, only their own fees / arbitrator has power to order costs
73
What is insolvency?
When a company doesn’t have sufficient funds or assets to cover its debts
74
What are the signs of insolvency?
Not making payments to creditors Late sub-contractor payments Poor progress against cashflow Overclaiming Legal action against the company Site murmurs On account payments requested Materials claimed for not onsite Quiet on site
75
What are the different types of insolvency?
Company Voluntary Agreements (CVA) Administration Winding up Administrative receivership Voluntary
76
What is the difference between liquidation and administration?
Administration aims to help the company repay debts in order to escape insolvency Liquidation is the process of selling all the assets before dissolving the company completely
77
What is the difference between insolvency and liquidation?
Insolvency is where a company doesn’t have sufficient funds or assets to cover its debts Liquidation is the legal ending of a company
78
What are the QS responsibilities pre-insolvency?
Check companies house Keep key details / emails Investigate verbal evidence Relaxation of payment terms Reletting work to others Direct payments to avoid insolvency Termination
79
What should you do if a party becomes insolvent?
Ensure the clients' interests Appoint skilled people Legal advice Consider claim on bond Prepare notional final account
80
What steps should be taken upon a contractor becoming insolvent?
Advise client of contractual position and recommend action Secure the site Prepare a detailed valuation Stop processing any payments to the contractor Contact S/C, suppliers and commence discussions about continuation of contracts Check the contract bonds / PCG Contact the administrator / liquidator / client about their views with regards to project completion Keep a record of time spent and costs incurred in dealing with insolvency
81
What is legislation?
The process of making or enacting laws
82
What are the CDM regulations 2015?
The construction design and management regulations Main set of regulations for managing health, safety and welfare of construction projects All building works from demolition to repairs
83
What was the Consumer Rights Act 2015?
Replaced supply of goods & services act 1992 Faulty goods / faulty digital content Unfair terms in the contract
84
What changed in the Local Democracy Economic & Construction Act in 2009?
No longer allowed to define within contract who should bear the cost of adjudication Adjudicators have right to correct contract errors within 5 days of decision Dates for payment must be in contract Can go to adjudication even if contract not formalised in writing Notified sum is payable by the final date for payment If client fails to issue, contractors application becomes the default Supersedes HGCRA as latest legislation
85
What is the Housing Grants & Construction Regeneration Act 1996 (HGCRA)?
Right to be paid in interim payments Right to suspend performance if not paid Disallowing pay when paid clauses Right to adjudication
85
What is the Third Party Rights Act 1999?
Also known as the contract act 1999 Removed the need for a separate collateral warranty in order to bring a claim against someone in the contract
86
When were pay less notices introduced?
Form of withholding notices - when were these introduced into construction contracts?
87
What are LDs?
Genuine pre-estimate of loss defined by the client early on and included in the contract Not penalties but pre-determined damages set at contract Actual loss incurred if LDs section crossed out
88
What are the pre-conditions for claiming for LDs?
PC date not achieved Employer issues non completion notice Notified contractor of intention to require LDs payment (payless at 1 valuation) Employer has fulfilled an EOTs
89
What are the common issues with LDs?
Challenge of the sum levied (imposed) Delay in certificate of completion If relevant section of contract is blank then unliquidated damages will apply NIL in contract = no entitlement to LDs If there is no mechanisms in the contract to allow EOT then client cannot claim benefit if they are responsible for delayed possession or change to scope
90
What are unliquidated damages?
Type of compensation that is considered 'at large', meaning the amount is not stated when a contract is established Instead, these damages are determined by a judge or jury in a court following a breach
91
Can you advise on LDs?
No, I would advise my client to consult legal professionals and help provide information on actual / direct loss incurred I can advise on: Loss of rental Leasing alternative accommodation Finance cost Loss of earnings Benchmark data
92
What are the 3 types of LOI?
Comfort Letter, Consent to spend, Into contract
93
What is a LOI?
Used where a contract cannot be signed prior to start of project, a LOI can be used to commence works whilst negotiations continue
94
What is beneficial about a PCSA agreement?
Enables contractor to contribute to design, advise on buildability, packaging on works, develop the cost and programme, assist with planning regs. Gives more price certainty Employer not contractually obliged to award the work the MC who's undertaken a PCSA
95
What is a PCSA?
Pre Construction Services Agreement Enable clients to employ MC before main construction contract commences Typically part of a 2 stage tender process
96
What is the difference between a LOI and PCSA?
Legally - minimum difference PCSA - used during 2 stage tender for MC to collaborate with design team. No provision for the MC to enter site or carry out works LOI - not part of tendering process & will provide for the contractor to enter site and carry out preliminary work
97
What is a relevant matter?
A mechanism that defines what constitutes loss and expense
98
What are the types of relevant matter?
Variations to contract CAIs Opening up works to test if works are in accordance with the contract Any impediment, prevention or default Delay in receipt of approval for the purposes of development control requirements
99
What is loss & expense?
Additional costs incurred by a contractor as a result of disturbance to the regular progress of the works caused by the employer
100
What does a contractor usually include in an L&E claim?
Prolongation Thickening of prelims Disruption Increase in material / labour costs Head office overheads Loss of profit Finance charges Acceleration costs Claim preparation costs
100
How do you ascertain L&E for the above factors?
Prolongation: Comparison between the period of time that the item would have been on site had issue not occurred vs time reasonably to have been on site given the matter did occur Disruption: Request contemporary records, avoid application of overall %, Where labour required in short notice = premium Abortive material purchase: Double handling of materials = more waste Inflation: Works executed later than relevant matter allows, costs not reimbursable under fluctuation clause would be included in claim Head office: Loss in recovery of the head office overheads is an admissible item Loss of profit: If as a direct result of a relevant matter referred to in the conditions of contract, then loss of profit is suffered that could have been gathered in contractors business elsewhere can be claimed Finance charges: A debt that has interest charges on money borrowed by the contractor (that could not be earned on capital)
100
What are the 3 categories of delay?
Excusable event, Neutral, Culpable event
101
Should you pay for materials on site?
Paid in valuations provided that their value shall only be included if they are adjacent to the works, adequately protected a nd are not in the works prematurely
102
Describe the materials offsite payment process?
Listed items are in accordance to the contract (with adequate insurances) Vesting certificate stating the materials are vested from the contractor to the employer Materials should be wrapped up, protected and clearly marked as property of the employer, with site address Photographs and packing list provided to ensure all materials are accounted for Unique items provide a bond (e.g. cupola, listed joinery) Materials should be ready for incorporation
103
What are the options under the suite of contracts (e.g. engineering & construction) (7nr)
Option A - priced contract with activity schedule Option B - priced contract with BOQ Option C - target contract with activity schedule Option D - target contract with BOQ Option E - cost reimbursable contract Option F - management contract Option G - term contract
103
What is the NEC?
New Engineering Contract (NEC4) Stimulates good management Clear, simple without legal terminology Major projects Promote partnering between client / MC - strongly recommended in the Latham Report
104
What is included in an NEC contract?
Name of parties Form of agreement Conditions of contract Contract data Prices, activity schedule, BoQ Works / site information
104
What were the key changes between NEC3 & NEC4?
New contracts introduced (DBO & alliance contract) Review and acceptance of defined cost during project Subcontractor costs included in schedule of cost components Fee percentage / people overheads Programme changes - new provisions for treated acceptance of contractor programme
105
What are the 9 core clauses of the NEC?
General terms MC responsibilities Time Testing & defects Payment Compensation events Title Risk & insurance Termination
106
ADVS & DISADVS of NEC?
ADV: Contract well supported with additional materials including flow charts / guidance notes Clear terms Focuses on real-time management of the project Flexible due to 8 NEC suites & 7 contract options DISADV: Conciseness = ambiguity & much of the terminology untested in court Heavy on administration & required a good understanding of its procedures Requires sufficient resources to administer
107
What are the key differences between NEC & JCT?
No prov sums, Compensation event encompass both, programme key document that is regularly updated, ECC flexible to allow any design responsibility, QS not named, Simplified language, Rolling final account.
108
What is possession?
Date contractor gets possession of the site
109
What is completion?
Completion date in the contract
109
What is partial possession?
No pre-agreed in the contract & agreed with contractor who cannot unreasonably withhold permission to grant partial possession Half retention released Defects liability commences Client becomes responsible
109
What is sectional completion?
Pre-defined set of dates clearly defined with LDs Amount of retention to be released to be agreed
110
What is practical completion?
Contractually required to complete on or before Issue of PC certificate depends on minor snagging to be rectified in stated time Triggers the following: Rectification period Release half retention Employer responsibility for securing the site Insurances transferred Bonds expire LDs cannot be levied Starts FA procedures
110
Who owns the float?
Used to describe the amount of time that an event or activity can be delayed without delaying the overall completion of works Employer owns it unless the contractor claims successfully for a relevant event to a critical path activity
111
What is a certification of non-completion?
In the event of failure to meet PC date, employer can claim LDs by notifying the contractor
112
What is 'time at large'?
When PC date is not reached & non-complete notice / EOT not issued, contractor to complete in reasonable time = high cost risk for the client
112
What is a defect?
Something that is innately wrong with design, construction or building material which does not perform under the contract
112
What is a patent defect?
Identified during the rectification period as a result of reasonable inspection
113
How would you go about resolving a defect?
Contractor has obligation to correct / make good any patent defects in the rectification period Contractor has obligation to correct / make good any latent defects in the liability period Notice of completion of making good issued by CA to certify defects are made good & triggers release of retention
113
What is a latent defect?
Exists before its discovery but could not be identified from a reasonable inspection Hidden or concealed flaws - when it is identified it becomes patent
114
How is snagging different to defects?
Snagging occurs before PC is given to the contractor
115
How does you contract manage defects?
The JCT SBCXQ contains provisions to address defects CA / Architect can open up works for inspection at client risk The second half of retention is returned after certificate rectifying defects has been authorised
116
How long is the defects rectification period on your scheme?
12 months - usually 6months in a standard contract but amended so the building withstands the 4 seasons
117
What is the managing defects process?
Defect identified & reported to PM / MC Contractor visits site & inspects Contractor agrees to rectify in time period Contractor to confirm rectified Client to signoff & issue closed
118
What happens if a contractor refuses to correct a defect in the rectification period?
Remaining half of the retention money can be used to secure the services of another contractor
119
How do you claim for latent defects after all contractual obligations have finished?
Contractual remedy in law of contract Remedy may arise under tort law Claim under dwelling for negligence by design / construction of the building when occupied
120
What are the employers requirements?
Provide a description of the clients objectives Project overview Scope CSA Form of CPs Project brief Specification / DWGS Form of contract Programme Site information It is very important that CPs match the ER's to remove discrepancies
121
What are the contractors proposals?
Response to the ER's & set out proposal for D&B of project & cost Format should be set out in the ER's - if not set out ask for a compliant tender Design dwgs / spec Schedules Method statement Programme Details of inconsistencies between ER's / CPs
122
What are the differences between an EA & CA?
CA: Expected to act impartially as employed under contract Appointed to administer terms of the contract by Employer Must act independently without reference to ER's Mentioned frequently in the SBC but EA isn't Client leads project EA: Administers contract on behalf of the employer therefore they cannot be deemed impartial Must certify in completely impartial matter Undertakes all duties on Employers behalf An error in the delivery of the EA's services could lead to the employer being responsible Contractor leads project
123
What are the reasons for difference in QS / CA role?
Traditional you have pricing document that you have put together - you have visibility on the cost with no input from contractor Contractor has no obligation to provide any detail to their contract sum, so wouldn’t be feasible for us to cost works Comes down to visibility
124
What is termination?
Where the parties to a contract are no longer required to perform their obligations under the contract
125
What is repudiation?
To refuse or reject something Where the behaviour of one party makes it difficult for the other party to carry out contractual obligations, then the injured party can claim that the contract has been repudiated When one party makes it clear that they no longer intend to be bound by the provisions of the contract
126
What are some examples of repudiation?
Abandonment on site / moving plant Refusal by party to carry out the works Employment of other contractor to carry out the works Access denial by employer
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What are the consequences of a breach of contract?
If a party commits a breach of contract significantly serious it entitles the innocent party to break the contract and terminate / sue Termination clauses in contracts give rights to parties to terminate in certain circumstances
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How does the contract deal with termination?
Termination by employer: Default by contractor / Insolvency by contractor / Corruption / Employers decision not to complete the works. Termination by contractor: Default by the employer / Insolvency by employer Termination by either party
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What is the process for termination?
Issue warning notice specifying default Not resolved in 14 days Further notice submitted within 21 days of 14 days to terminate
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What is termination for convenience?
Wording inserted into contract allowing party to terminate without having to establish that some event has occurred or breach committed Used where employer reconsiders use of land, cannot secure financing for entire project or cannot secure anchor tenants Contractor may find project too risky or unprofitable or project has been suspended for a significant period with no prospect of recommencement
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What is determination?
Allows ending of contractors employment under the contract, contract itself remains in place and so do the rights of both parties
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What is a valuation?
The total values of work properly executed by the contractor
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What are the components of a valuation?
Works executed Preliminaries Variations Provisional sum expenditure Materials on / off site Claims / L&E OH&P Advance payments Currency fluctuations Retention Previously certified Adjustment of prime cost sums
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What is the key difference between SBC & D&B when it comes to valuations?
Under D&B contractors shall issue an interim valuation on the interim valuation date Under SBC contractors may issue an interim valuation on the interim valuation date
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What is a variation?
The alteration or modification of the design, quality or quantity of the scope of works
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What are the different pricing documents in the contract?
CSA Schedule of works Schedule of rates Bill of quantities