Contract Practice to L3 - SoE Q’s

Question 1

What Contracts are available under the JCT Suite of Contracts?

Answer 1

• JCT Standard
• JCT Intermediate
• JCT Minor Works
• JCT Design and Build
• JCT Construction Management
• JCT Management Building
• ]CT Major Projects

Question 2

What are some differences between JCT Contracts?

Answer 2

D&B includes for Employers Agent, not included in Standard, Intermediate or Minor Works

D&B and Major Projects Contractor is responsible for completing the design.

D&B and Major Projects do not mention a QS.

Deferment of possession n/a to Minor Works forms.

Minor works does not include provisions for collateral warranties

Minor Works unable to include sectional completion

Question 3

When would you use certain JCT Contracts?

Answer 3

Standard = For larger projects involving complex services installations and specialist work

Intermediate = when proposed works are simple in nature, involving basic recognised trades within the industry, without complex services installations or specialist work.

Minor Works = When works are of a
simple nature

Design & Build = When looking to transfer risk to the Contractor

Question 4

What Contracts are available under the NEC Suite of Contracts?

Answer 4

• Option A: Priced contract with Activity Schedule

• Option B: Priced contract with Bills of
Quantities

• Option C: Target contract with Activity Schedule

• Option D: Target contract with Bills of Quantities

• Option E: Cost reimbursable contract

• Option F: Management contract

Question 5

What is a contract?

Answer 5

Legally binding promise by one party to fulfil an obligation to another party in return for consideration.

Question 6

What is a contract comprised of?

Answer 6

1. Offer
2. Acceptance
3. Consideration - benefit each party involved gets or expects.
4. Intention to create legal relations

Question 7

What are the key differences between JCT and NEC contracts?

Answer 7

JCT - QS |adversarial traditional risk apportionment | Variations & Changes | programme is not contractual
NEC - collaborative | CE’s | Programme is contractual | supervisor monitors defects

Question 8

What is the valuation procedure under JCT D&B?

Answer 8

1. IVD
2. 7 days after Due Date
3. 5 days after Due Date Payment Notice
4. Final date for payment 14 days after Due Date
5. 5 days before Employer must serve Pay Less Notice

Note: D&B if application isn’t received by IVD date then Due Date is 7 days after receipt of application

Question 9

What is a variation or a change?

Answer 9

Modifications to the contract works. Can be due to performance or instructions.

Question 10

What is a change under D&B?

Answer 10

A Change in the ER’s which makes necessary the alteration or modification of the design or quality of the works.

Question 11

Factors affecting the process of valuing change / variations

Answer 11

1. Type of contract
2. Character of work
3. Conditions of the work
4. Quantity

Question 12

How do you value change?

Answer 12

1. Use of BOQ, SoW or CSA - star rate
2. If the work is not similar in character or nature then value is based on fair rate and prices - quotes
3. Day works - labour, plant and materials with % definitions set out in the contract

Question 13

What is Loss and Expense?

Answer 13

A claim from the Contractor for direct loss and/or expense as a result of a relevant matter occurring

Question 14

What is a relevant matter?

Answer 14

A relevant matter is a matter for which the client is responsible that materially affects the progress of the works.

1. Failure to give possession
2. Failure to give access
3. Delays in receiving instructions
4. Failure to supply goods or materials

Question 15

What is a relevant event?

Answer 15

Specific events or circumstances that may impact the progress, completion, or cost of a construction project. Entitle the Contractor to an EOT.

Question 16

What are some examples of an relevant event?

Answer 16

1. Variations
2. Delays due to nominated sub-contractor
3. Loss from a specified peril such as flood
4. Instructions
5. Deferment of possession of the site
6. Adverse weather

Question 17

What is retention?

Answer 17

A sum of money deducted from each interim payment to provide the client with security that the Contractor will remedy defects during the defects liability period

Question 18

How is retention released?

Answer 18

Half at PC and half at the end of the defects liability period

Question 19

What is practical completion?

Answer 19

The date which the works a determined to be practically complete

Question 20

What happens at practical completion?

Answer 20

1. Notification of completion
2. End of LAD’s
3. Retention 50% released
4. Defects liability period begins
5. Risk of loads or damages to the works transfers to the Employer
6. CA or EA can not issue instructions

Question 21

How do you prepare a final account?

Answer 21

1. Establish items affecting final account - PS, PC, LOE, provisional or approx quantities, instructions, anticipated instructions
2. Last cost report should reflect final account
3. Agree sum with contractor
4. Prepare statement
5. Release of remaining retention relating to change in value of works and variations if not agreed prior to PC

Question 22

What are the standard Final Account timelines?

Answer 22

Contractor submits all necessary information for assessment within 6 months of PC.

Employers QS has 3 months to respond.

Question 23

What are the factors which impact contract selection?

Answer 23

1. Risk transfer
2. Time
3. Design Responsibility
4. Cost Certainty

Question 24

What are the key updates to the JCT 2024 suite of contracts?

Answer 24

1. Modernisation -
   - Provisions & guidance for electronic communications.
   - Gender neutral language.
2. EOT
   - Streamlined notification procedures.
   - New relevant event to cover epidemics.
   - the period of time for an Employer to assess an interim extension of time will be reduced from 12 weeks to 8 weeks from receipt of a Contractor’s Particulars.
3. Legislative changes
   - Provisions relating to BSA, Termination accounting and pavment provisions reflecting the Construction Act and new insolvency grounds reflecting corporate insolvency and government act 2020.
4. Target cost contract
   - Cost reimbursable contract. Contractor paid actual cost. Work package costs, prelims, OHP & Risk.
   - Employer shares savings or overruns with Contractor based on agreed formula.
5. Future proofing
   - Alignment with construction playbook.
   - previously optional supplemental provisions are now mandatory relating to Collaborative
   Working, Sustainable Development & Environmental Considerations and Notification & negotiation of disputes.