Contracts Flashcards
Explain the fundamentals of a contract agreement
Agreement = Offer and Acceptance Intention = Both Parties want to enter a legal relationship Consideration = What is being done, Service Capacity = Cannot enter into a contract if you are a minor, Drunk, on Drugs, Poor Mental Health Operation = Illegal, Duress, Mistake, Misrepresentation
What is the difference between an estimate and a quotation?
Quote is an offer - Fixed Price - Price cannot change unless conditions change e.g. Spec
Estimate - guess what works may cost? - Will likely change not fixed. The contractor has a duty of care to inform the client if the price has changed
What date is usually used as the Base Date, and why is this date important?
Base date is 10 days before submission of Tenders
Used for Fluctuations of price etc.
Explain the difference between a contract under hand and a contract as a Deed
The limitation period for bringing a claim, or conversely the liability for defending a claim, is six years for a contract that is executed under hand, whereas for contracts executed as a deed the period of limitation is twelve years
What is the difference between a condition and a warranty in a contract? Give an example
Conditions are certain obligations, terms, and provisions imposed by both parties and breach can lead to termination of contract and damages.
A warranty is a term in a contract that is more like a promise by one party than a condition agreed upon by both parties. A major difference is that if a party fails to live up to a warranty, the aggrieved party can sue for damages, but that failure does not provide cause for termination of the contract
What is the difference between reasonable skill and care & Fit for purpose?
Reasonable Skill and Care - Standard of work undertaken to a level of the average industry professional
Fit for purpose - obligation, which requires that works or services must be good enough to do the job they were intended to do.
Identify the various certificates that may be issued under a JCT 2016 Standard Building Contract
(with Quantities) For each certificate, outline their legal implications
Interim Payment Cert - Payment Due under agreed Payment Terms. Issue of Interim Valuations in good time etc. JCT Timetable
Final Cert - Handover All Remedials completed defect free. Final Payment incl. Retention. No more ties to the project apart from 12 years latent defects. All obligations fully performed
Certificate of Practical Completion - First half release retention, Contractor right to be on site ends, not Liable for LADs, Start of rectification period, Employer takes back possession, MC no longer have insurance of site & Employer needs to take out Insurance. Extension of Time reviewed once Final Cert.
Making Good Defects - Defects which are required to be amended prior to final cert have been fixed
Certificate of Non-Completion - MC in delay - employer takes LAD’s. Time is of the essence? - Given a date
A client is looking to undertake construction works. This is the first project they have ever
undertaken. They ask you what advantages the use of a standard form of building contract would
have over a bespoke contract. How would you guide them?
Standard form contracts are very often cheaper than bespoke alternatives, familiar to the parties involved (reducing tendering, negotiation and administration costs), and tend to contain fewer unforeseen anomalies.
Tested by case law
What are the Contract Particulars (JCT) used for? Give me some examples
Set out the aspects of the contract that are particular to the project to which the contract relates
Contract Sum Retention Percentage Third party rights and collateral warranties. The contract base date. Date for possession
