JCT DB 16 Flashcards
What are the differences/changed between 2011 and 2016?
- an extension of (Works) Insurance Option C to allow alternative solutions
- inclusion of provisions for the grant of Performance Bonds and Parent Company Guarantees
- 28-day window to respond to loss and expense
- IVD introduced 7 days prior to the due date
- IVD is every month after PC, previously every 2 months
What sections does the AGREEMENT refer to?
- Recitals
- Articles
- Contract Particulars
- Attestation
What is included in the recitals?
Explanatory, scene-setting in nature.
1 - description of works
2- In response to the ERs the contractor has provided the CPs and CSA
3 - employer has examined the CPs and is satisfied they meet ERs
What section of the recitals is the client required to fill?
1 - description of the works ONLY
5 - [if the work is not sectioned, reference to work being sectioned in item 5 should be removed]
What are the articles?
State obligations, identify parties and dispute resolution
1 - Contractors oblibations 2- Contract Sum 3 - EA 4 - Location of ERs and CPs 5 - Principal designer 6 - Principal contractor 7 - Adjudication 8 - Arbitration 9 - Legal proceedings
What are contract particulars?
A schedule of variables used to “fill the gaps” in the conditions of contract.
What sections of the articles need to be filled in?
2 - Contract Sum
3 - Empoyer’s Agent
5 - Principal Designer
6 - Principal Contractor
What is attestation?
The action of being a witness to or formally certifying something.
Declaring that the contract is genuine
What are the two ways a contract can be executed in the attestation section?
- Under hand (simple contract)
- As a deed
What are the limitation periods for a contract executed under hand vs as a deed?
Under hand = 6 years
As a deed = 12 years
How are collateral warranties between the third party and the contractor executed?
The mode (under hand or as a deed) will reflect that in the main contract, as will the limitation period.
What is included in Contract Particulars?
- Section description and values
- References/identifiers for ERs, CPs and CSA
- Whether arbitration apply/do not apply
- base date
- date of possession of site
- Limit of liability for loss
- Liquidated damages (amount per [week/day])
- Rectification period
- Fluctuation provision
- Method of payment
- IVD
- Retention percentage
for more I would refer to the contract
What is the contracts position on arbitration if neither entry is deleted?
Article 8 and clauses 9.3 to 9.8 DO NOT APPLY
What is the default length of time for the rectification period?
6 months
What is the default fluctuation provision?
JCT fluctuations Option A
What are the payment alternatives?
Alternative A - Staged payments
Alternative B - Periodic payments
What is the default payment position?
Alternative B
What date in the contract dictated the payment cycle?
Interim Valuation Date, NOT Due Date
How are contracts executed under hand?
- Parties or authorised representatives sign in the presence of a witness
- witness signs and sets out his name and address below each party signature
How are contracts executed as a deed?
Separate page for Employer and Contractor
Four methods:
A) signed by two directors or director and company secretary
B) affixing company’s common seal in presence of a director and the Company Secretary or two Directors or other duly authorised officers
C) signed by a single director in the presence of a witness who attests the signature
D) Where the employer or contractor is an individual, he may sign in the presence of a witness who also signs and sets out name and address
What are the sections in the conditions of contract?
1 - Definitions and Interpretation 2 - Carrying out the works 3 - Control of the works 4 - Payment 5 - Change 6 - Injury, damage and insurance 7 - Assignment, performance bonds and guarantees, collateral warranties and third party rights 8 - Termination 9 - Settlement of Disputes
What does section 2 “Carrying out the works” cover?
- Contractors obligations
- Transfer of possession to contractor and control of site up to PC
- Discrepancies and divergences
- Liability in respect of contractors design work
- Unfixed materials and goods
- Adjustment to Completion Date
- PC, lateness and LDs
- Partial possession
- Defects
- Contractor’s Design Documents (CDD)
What is the general obligation of the contractor?
Carry out and complete the Works in a proper and workmanlike manner in compliance with the Contract Documents, Cons Phase Plan, Statutory requirements
and complete design for the works in compliance with the requirements in the ERs/CPs
How long must the contractor insure the site for?
from possession up to and including the date of PC
Can the client defer possession of the site?
If the CPs say clause 2.4 applies, yes, not exceeding 6 weeks.
What happens in the case of an error, discrepancy or divergence discovered in the Contract Documents?
Contractor must notify the Employer immediately with their proposed amendment.
Employer will issue an instruction to rectify
Who is responsible for the cost of errors in Contract Documents?
The responsibility lies with the party that is responsible for the document in question; e.g.
ERs (that are not dealt with in CPs) = employer
CPs/CDD/CSA = contractor
What instances is the contractor responsible for divergences in the ERs?
Divergences from Statutory Requirements in ERs are responsibility of Contractor as they are responsible for checking them, with several exceptions:
- If Stat Req changed after Base Date
- Development Contron permission or approval issued after base date
What are listed items?
Pre-agreed items to be included in interim payments when off-site. Listed Items will include the value of such materials and once paid, ownership passes to the Employer
What are the requirements listed items must meet for the client to pay for them?
- The listed item is in accordance with the contract.
- Proof that they are vested in the contractor and covered by an insurance policy covering them against loss or damage caused by specified perils until they are delivered to site.
- At the place of storage listed items are clearly and visibly marked as belonging to the employer and set aside from other materials.
- If required, the contractor must provide a bond from an approved surety (in a form provided by JCT) which enables the employer to recover the amount it has paid to the contractor if he is unable to obtain the relevant goods.
What is the process for notifying a delay to the works?
- Contractor must give notice to the EA when it becomes reasonably apparent, and shall identify any event which they believe is a relevant event
- Contractor will give info on expected effects, incl delay to completion of works or section
- Contractor must notify employer of any update to estimated delay
- IF EA believes EoT event is genuine, employer shall give EoT by fixing later PC to works or section as he estimates fair
- Regardless, EA will notify contractor of decision within 12 weeks. When PC is within 12 weeks, he shall endeavour to respond prior to PC.
If it is not an EoT event, is the contractor obliged to report the delay?
Yes - any delay must be communicated as soon as practically possible
What are the relevant events in JCT DB 16?
- Change
- Employer Instruction
- Deferment of possession of site
- compliance with clause 3.15
- suspension by contractor under clause 4.11
- impediment, prevention or default by Employer
- works carried out by a statutory undertaker
- exceptionally adverse weather
- loss or damage occesioned by any Specific Peril
- Civil commotion or terrorism
- strike
- the exercise of any statutory power after the Base Date
- delay in receipt of permission/approval which contractor has taken all practical steps to avoid/reduce
- force majeure
What happens on PC?
- EA issues Practical Completion Statement/Sectional Completion Statement
- Liability for LDs ends
- retention release
- Contractor no longer has to insure site
- Handover of H&S file, as-built drawings, user guide to building
What does the EA issue if the site is not complete by PC?
Non-Completion Certificate
What is the process for rectifying defects after PC?
- defects specified by Employer in schedule of defects which are instructed not later than 14 days after the expiry of rectification period
- within reasonable time after receipt of the schedule, the contractor should make good the defects
- Notice of Completion of Making Good is issued once all rectified
How might the contract sum be adjusted post-contract?
- Changes
- Acceleration Quotation
- Fluctuations
- other amounts referred to in clause 4.12.2 or 4.13.2 (??) excl loss and/or expense
- deductions of all PSUMs in ERs
- any other amount which under this Contract is to be added to the Contract Sum or may be deducted from it (??)
What is CIS?
Construction Industry Scheme
A tax deduction scheme which involves tax being deducted at source from payments which relate to construction work.
What is an Advance payment?
When part of a contractual sum is paid in advance of the exchange
What is the payment timeline?
Interim Valuation Date - Contractor submits Interim Payment Application
Due Date (+7 days)
EA issues Payment Notice (+5 days from Due Date)
Pay Less Notice (-5 days from final date for payment)
Final Date for Payment (+14 days from Due Date)
What does the contractor submit on the Interim Valuation Date?
Interim Payment Application stating the sum they consider to be due at the due date and the basis on which it has been calculated
Does the Employer/EA/QS and Contractor have to agree on valuation?
No - Payment Notice can be issued based on EA’s (/QS recommendation) view on fair valuation, valued in accordance w/ contract
What are specified perils?
Significant events that would cause very significant damage:
Fire, lightning, explosion, storm, flood, escape of water from any water tank, earthquake, aircraft and other aerial devices or articles dropped therefrom, riot and civil commotion, but excluding Excepted Risks
What is Excepted Risk?
Insurance policies may cover all risks, or may be restricted to certain ‘specified perils.’ However, in either case, there may be ‘excepted risks’, for which insurance is not required (because it will usually be unobtainable).
- contamination by radioactivity from nuclear fuel/waste
- pressure waves caused by aircraft
- terrorism that is not within Terrorism Cover
Who has “authority” to sign off valuations, or agree appointments?
Different authority required for different tasks.
Sign off valuations = Partner or above
Sign/agree appointments = only 4 equity partners
Who does PI insurance cover?
Employer, contractor, individual employee
What insurance do insurance options A, B and C cover?
Insuring the works
What is retention for?
To ensure that the contractor properly completes the activities required of them under the contract.
What is a performance bond for?
Protects the client from non-performance by the contractor (if they don’t carry out works diligently, to the level required)
When should a retention bond be issued to the employer?
On or before the Date of Possession
What would you do if the contractor was failing to perform?
- Write formally to them
- If they still fail to perform, terminate contract
What are the relevant matters?
- Changes
- Instructions
- Compliance with 3.15.1
- Delay in receipt of permission or approval for purpose of Development Control Requirements
- Impediment, prevention or default by the Employer
What is the notification process for a relevant matter?
- Contractor shall notify employer as soon as it becomes reasonably apparent
- Notification should be accompanied or shortly followed by contractors assessment of loss/expense incurred
- Contractor shall update assessment at monthly intervals until all info to ascertain the total amount of loss and expense ahs been supplied
- 28 days from receipt of initial assessment and 14 days from each subsequent update the Employer shall notify the contractor of the ascertained amount of loss/expense incurred
What is the timeframe for responding to a change?
No timeframe. Only timeframe for loss and expense and relevant events.
NEC have compensation events. What’s the equivalent in JCT?
Compensation events relate to cost and time. JCT has separate RE and RM.
What is a change in JCT DB?
Change to ERs in terms of design, quality or quantity of works:
- addition, omission or substitution of work
- alteration of the standard of materials/goods
- removal from the site any work executed, site materials or goods not in accordance with this contract
Imposition by Employer of obligation or restriction:
- access to site
- limitations of workspace
- limitation of working hours
- execution or completion of work in specified order
What insurances are included in JCT?
- Employer’s liability insurance (6.1)
- Public liability insurance (6.2?)
- Insurance of Works and Existing structures (A, B, C)
- Non-negligence insurance (6.5.1)
- Terrorism cover
- PI Insurance (DB)
What is public liability insurance?
Personal injury or death, or loss or damage to property of third parties is covered by public liability insurance.
What is employer’s liability insurance?
Protects you against the cost of compensation claims arising from employee illness or injury, sustained as a result of their work for you
Who needs employer’s liability insurance?
All employers must get employers’ liability insurance as soon as they become an employer. The policy must cover them for at least £5 million and come from an authorised insurer.
What are Employer’s Requirements?
They provide a description of the client’s requirements
What are Contractor’s Proposals?
They are the Contractor’s response to the ERs
Why is exceptionally adverse weather not a relevant matter, only relevant event?
- Shared Pain, nobody’s fault
- Contractor takes hit on cost, client takes hit on time
What is a Relevant Part?
Section for partial possession
What protections are there in the contract for the client from contractor non-performance?
- retention
- performance bonds
- TERMINATION
When is the IVD after PC in JCT DB?
PC becomes new IVD?
What is the Final Statement?
Contract Sum + All Adjustments
Contractor issues his version, negotiated by EA/QS
When will the agreed final statement be issued?
Whenever it is agreed
What would happen if the EA did not issue a defects schedule within the required 14 day window?
Full retention released. No longer arguable that defects happened within DLP.
