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Contract Practice > Document Questions > Flashcards

Document Questions Flashcards

1
Q

What is the HGCRA?

A

Housing Grants Regeneration Act 1996 (HGRCA)

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2
Q

What is the Construction Act?

A

Was born following the Egan and Latham reports to prevent adverse and ambiguous terms in construction contracts to :

Introduction intended to ensure payments made promptly, included:
The right to be paid in interim, periodic or stage payments.
The right to be informed of the amount due, or any amounts to be withheld.
The right to suspend performance for non-payment.
The right to adjudication.
Disallowing pay when paid clauses.

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3
Q

What is the Local Democracy, Economic Development and Construction Act 2009?

A 
Due dates
Pay-when-certified clause
Payment notices
Default payment notices
Pay less notices
Changes to suspension of the works
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4
Q

What is the Scheme for Construction Contracts?

A

When construction contracts do not comply with the Housing Grants, Construction and Regeneration Act.

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5
Q

What are the options within NEC?

A

Option A: Priced contract with activity schedule.
Option B: Priced contract with bill of quantities.
Option C: Target contract with activity schedule.
Option D: Target contract with bill of quantities.
Option E: Cost reimbursable contract.
Option F: Management contract.
Option G: Term contract (for the appointment of a consultant based on a priced schedule of tasks).

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6
Q

What are the sections within the JCT?

A 
Articles
CPs
Section 1 - Definitions 
Section 2 - Carrying out the Works
Section 3 - Control of the Works
Section 4 - Payment
Section 5 - Changes
Section 6 - injury, damage and insurance
Section 7 - assignment, third party rights and collateral warranties;
Section 8 - termination;
Section 9 - settlement of disputes.
Schedules
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7
Q

Name some Relevant Events?

A
  1. Variations
  2. Instructions
  3. Deferment of possession
  4. Antiquities
  5. Suspension due to non-payment
  6. Any impediment, prevention or default by the Employer
  7. Work, or failure by, statutory undertaker
  8. Exceptionally adverse weather
  9. Loss or damage caused by Specified Perils
  10. Civil commotion / terrorism
  11. Strike, lock-out
  12. Exercise of statutory power by UK Government
  13. Delay in receipt of any necessary permission or approval of any statutory body
  14. Force majeure
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8
Q

Name some Relevant Matters?

A
  1. Variations
  2. Instructions
     Postponement of work
     Instructions on Provisional Sums
     Opening up for inspections or testing (unless work is defective)
     Errors, discrepancies and divergences
  3. Antiquities
  4. Impediment, prevention or default by the Employer
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9
Q

What is the difference between NEC3 and NEC4?

A

TBC

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10
Q

What are the payment provisions in the Construction Act?

A

Claim for Payment
+ 5 days = Payment Notice
+ 17 days (from IV Date) = Payment Date
- 7 days from payment date = Pay Less Notice

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11
Q

How does the NEC deal with prelims?

A

These are not explicitly mentioned in the NEC but should be included in your price to deliver the works

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12
Q

What are Z clauses?

A

Z clauses can be used and inserted into NEC contracts to allow the parties to agree additional terms and conditions, in order to cater for specific needs relating to a project and the terms of its delivery

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13
Q

Why did you propose a PCG over a Performance Bond?

A

Lovell had financially strong parent company who would be capable of completing the work should Lovell default or go insolvent
Saving for my client
Less requirements to prove this like there would be with a conditional Performance Bond

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14
Q

Why did your advise your client to use JCT over other forms of contract and how did you advise this?

A

In a formal report (section incl in my Procurement Route)

Familiarity 
Tried and tested
Common in the sector
Experience with client
Contractors understand
Risk allocation to the Contractor more
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15
Q

What constitutes a construction contract?

A

A large section in the Construction Act but in summary it is

The construction, alteration, repair, maintenance, extension or demolition of buildings or structures.

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16
Q

What are the key differences between the NEC / JCT?

A 
Project Manager
Works Information (ERs)
Compensation Events (time/money)
Time Constraints on CE's
C.Es are both time and cost
No Prov Sums
Programme is a contractual document
EWNs
No Schedule of Rates
NEC is a lot more collaborative
NEC dispute resolution is different
NEC does not reference other clauses like the JCT
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17
Q

What should be considered when selecting a contract?

A 
Procurement Strategy
Time 
Cost 
Quality
Risk
Complexity
Type of project
Experience
18
Q

What are the types of contract? JCT

A 
SBC with and excl quants
D&B
Intermediate
Minor Works
Management Building Contract
19
Q

What documents are included when preparing the contract documentation?

A 
Article of agreement and conditions of contract, for completing as a simple contract (or as a deed).
ER's
CP's
Contract Particulars
Contract Amendments
Working drawings.
Pricing Document
Post Tender Queries
Specifications.
Programme
H&S Docs
20
Q

Name some forms of security for the client included in the contract?

A 
Bonds
Collateral Warranties
PCG
Insurances
LDs
Retention 
Rectification Period
21
Q

What is a PGC?

A

Guarantee provided by the contractor’s ultimate parent company to answer for the debt or default of the contractor.

22
Q

What did you advise your client on PCG vs Performance Bonds?

A

 PCG - parent company liable for all losses. Bonds usually limited to 10% of the contract sum.

 PCG - no cost
 PCG – can last for limitation period. Bond usually expires at PC
 PC has responsibility to complete the works under the Contract

Ultimately client legal team decision

23
Q

What is Employer’s Liability Insurance?

A

Insurance cover against claims from employee’s injuries or illness whether they are
caused on or off-site.

Mandatory, minimum of £5 million
 Labour-only sub-contractors are counted as Employees

24
Q

What is Public Liability Insurance?

A

Personal injury or death, or loss or damage to property of third parties
 Includes bona fide sub-contractors

25
Q

What are the JCT insurance options?

A

Option A – All Risks Insurance of the works by the Contractor
Option B – All Risks Insurance of the works by the Employer
Option C (existing buildings)

26
Q

What is All Risks Insurance?

A

Cover against physical loss or damage to works executed and Site Materials.
Excludes:
 Wear/tear/deterioration
 Defects in design or workmanship
 War
 Excepted Risks (radioactivity, pressure waves, terrorism)
 Inventory losses not traceable to an identified event

27
Q

What are Liquidated Damages?

A

Genuine predetermined estimate of the clients financial losses if the contractor fails to meet completion date including:

  • Fees
  • Site ownership
  • Prelims
  • Loss of rental / profit
  • Interest on loans
28
Q

Would you calculate liquidated damages?

A

As a QS I wouldn’t calculate LD’s, the clients finance team should calculate the impacts of the contractor being late to deliver the works

29
Q

What is a bond?

A

Surety (bank/insurer/bondsmen) promises to make payment to the employer should the contractor default on his obligations

30
Q

Where are collateral warranties commonly used?

A

Sub-contractors undertaking design.

Piling, lifts, frame, windows,

31
Q

What is a Performance Bond? Benefits and negatives?

A

Protects the client for non performance of the main contractor provided by a bank or bondsman

+
Financial recuperation
Incentive for the Contractor

  • Difficult process if conditional
    10% of the value may not be enough
32
Q

Name some types of bonds?

A 
Retention
Advance Payment
Performance
Materials on Site
Tender
33
Q

What type of bond can you have in terms of their requirements?

A

On demand - can be called upon without much evidence or substantiation (Contractors unlikely to agree)

Conditional - evidence must be provided by Client which can be lengthy, costly and difficult to prove

34
Q

What’s in the Articles of Agreement?

A 
Recitals
Contract Particulars
Attestation
Contractors Obligations
Contract Sum
EA
ER's and CPs
PD
Principal Contractor
Adjudication
Arbitration
Legal Proceedings
35
Q

What are the Schedules?

A 
Schedule 1 - Design Submissions Procedure
Schedule 2 - Supplemental Provisions
Schedule 3 - Insurance Options
Schedule 4 - Code of Practice
Schedule 5 - TPR
Schedule 6 - Forms of Bonds
Schedule 7 - JCT Fluctuations Opt A
36
Q

What are the sections of the contract?

A 
1 - Definitions
2 - Carrying out the Works
3 - Control of the Works
4 - Payment
5 - Changes 
6 - Injury, Damage and Insurance
7 - Assignment, PBs and Guarantees, TPR and CWa
8 - Termination
9- Settlement of Disputes
37
Q

What is the structure of the contract?

A 
Recitals
Articles of Agreement
CPs
Conditions of the Contract
Schedules
38
Q

What is the risk of PCGs?

A

If parent company goes bust, there is no recourse for the client

39
Q

What are the heads of claim for L&E?

A 
Prolongation (site overheads, prelims)
Disruption
Increase in Labour
Acceleration
Material cost
40
Q

Why are bonds difficult to obtain?

A

Due to Brexit and COVID there has been increased contractor insolvency which serve to push the price of obtaining bonds making them harder to obtain.

41
Q

What cost increase have you seen due to fire prevention and the types?

A 
Tyvec
Cavity Trays
Sprinkers over 11m 
Fire rated walls / doors
Fire preventive core / stairs

£5/m2

Contract Practice (6 decks)

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