General Contract Practice Flashcards
What are the timeframes for a compensation event?
Either the Contractor or Project Manager notifies a compensation event (contractor has to do this within 8 weeks of first becoming aware of this).
The Project Manager then has 1 week to reply to the notification of a compensation event, or a period of time to which the contractor has agreed with. The PM must issue an instruction to the Contractor to submit quotations.
The Contractor submits quotations within 3 weeks of being instructed to do so by the PM.
The PM then has 2 weeks to either notify accept the quotation, instruct the contractor to submit a revised quotation or instruct that the PM would be making the assessment.
What if a Project Manager fails to reply to notification of a compensation event by the contractor.
If after 1 week the PM fails to reply to the notification, the contractor must notify the PM of that failure, if a further 2 weeks has gone by without the PM replying, the CE is treated as accepted.
If you wanted to amend an NEC contract, how would you go about that?
You would include Z clauses within the contract, they are incorporated through the contract data
What is an early warning?
The early warning process is a mechanism for both parties to identify potential problems to the project.
Who raises an early warning?
The contract emphasises that both Parties are obliged to notify the other as soon as they become aware of a matter that could affect time, cost or quality.
What is a compensation event?
Compensation events are events which are usually not the fault of the contractor and change the cost of the work, or the time needed to complete it. As a result, the prices, key dates or the completion date may be reassessed, and in many cases the contractor will be entitled to more time or money.
Can you give an example of a compensation event?
Instruction to change the scope
Exceptionally adverse weather conditions
Conditions that could not reasonably have been foreseen.
What happens in an early warning meeting?
Those who attend should make and consider proposals for how the early warning can be avoided or mitigated, seek solutions that will bring advantage to all those affected, deciding on actions and who will own the actions and decide whether matters can be removed from the EWN register.
What if a Project Manager fails to reply to notification of a compensation event by the contractor.
If after 1 week the PM fails to reply to the notification, the contractor must notify the PM of that failure, if a further 2 weeks has gone by without the PM replying, the CE is treated as accepted.
What is a contract?
A contract is a legally binding promise (written or oral) by one party to fulfill an obligation to another party in return for consideration (payment basically)
What does a binding contract comprise of?
Four Elements:
1) Offer
2) Acceptance
3) Consideration (price)
4) Intent (to create legal relations)
What is ‘expressed terms’
Are terms of the agreement which are expressly (specifically) agreed between parties.
What is ‘implied terms’
A contractual term that has not been expressly agreed between the parties but has been implied into the contract either by common law or by statute.
What is a parent company guarantee?
A PCG is a form of security that may be required by clients to protect them in the event of default (breach) on a contract by a contractor that is controlled by a parent company (or holding company). Typically such default might be caused by the insolvency of a contractor.
Can you outline the key changes in the JCT 2024?
1) Relevant events added included an discovery of asbestos and epidemic happening after the base date.
2) Building safety act is recognised within the contract.
3) Added a new target cost contract
