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APC Project Management > Level 1 Contract Practice > Flashcards

Level 1 Contract Practice Flashcards

1
Q

What is a contract?

A

Legally binding agreement between two parties to provide goods and service within a specified timeframe.

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2
Q

What is necessary to form a contract?

A

Offer, Acceptance, Consideration, Intention, Capacity & Legailty

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3
Q

How is a contract executed?

A

Under hand: signed by both parties with a 6 year limitation period.
Under seal as a deed: signed and witness, 12 year limitation period.

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4
Q

Common contract documents?

A
  • The contract
  • Preliminaries
  • Contract Sum
  • Drawings
  • Specification
  • Planning agreements
  • ERs
  • Contractors Proposals
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5
Q

JCT

A

Joints Contract Tribunal
Contracts Administrator (Traditional)
Employer’s Agent (Design & Build)
- Oversees the project checking progress, payment, pc certs and notices of making good.

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6
Q

NEC Contract

A

New Engineering Contracts
Aimed at engineering projects but are easily adapted to building works.

  • Includes a process of early warning
  • PM overriding duty
  • Compensation rather than Relevant events
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7
Q

What are the standard forms of JCT?

A

Design & Build
Minor Works
Intermediate Building
Major Projects
Construction Management

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8
Q

Design & Build

A

Used by all types of clients, create a single point of responsibility for design and construction.

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9
Q

Minor Works

A

Not used for complex projects

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10
Q

What is a collateral warranty?

A

A way of forming a direct contractual link between two parties which otherwise wouldn’t have - i.e contractor and client.

  • use of quality and carrying out works in a professional manner
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11
Q

What is a letter of intent?

A

Outlining an agreement between two parties before a formal contract is created.

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12
Q

Advantages of LOI

A
  • Establishment of good faith
  • A summary of terms and structure of business transaction
  • Identifys significant concerns that are a deal breaker.
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13
Q

Disadvantages of LOI

A

If not worded properly, it may be considered as binding on the parties, resulting in unforeseen obligation.

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14
Q

Performance Bond

A

Form of financial security used to cover the client against the contractor failing to fulfil their contractual obligations.
Client pays for this

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15
Q

Retention Bond

A

Used instead of taking retention from interim valuations, used to improve contractor cash flow.

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16
Q

PII

A

Professional indemnity insurance
- Covers professional negligence

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17
Q

Employer’s liability insurance

A

Covers the injury and death arising from business activities.

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18
Q

Types of payment methods

A
  • Stage
  • Milestone
  • Third party certification
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19
Q

Construction Act introduced what?

A

Right to fair payment

20
Q

Pay less notice?

A
  • Issued after the final date for payment if the notice is unsound.
  • The notice must specify the sum that the party
21
Q

Elements in place for a contract?

A

Capacity - those must be of sound mind.
Intent - clear intention for both parties to do business.
Consideration - allows anyone reading the contract to see something of value be exhanchged.
Lawfulness - must be legal
Offer- must explain the nature of the offer and explain the nature of the change, reponsibilities and costs. & what happens if someone doens’t oblige.
Acceptance - signature
Clarity of terms - to avoid a breach of terms, certainty must be provided.

22
Q

How is a contract under hand different from under deed?

A

A deed is signed by the parties as well as a witness. Traditionally authenticated by a seal.
Whereas under hand in only signed by the parties of the contract.
Under hand = 6 years
Deed = 12.

23
Q

LADS

A

A Genuine pre-estimate of the likley loss of the employer should the completion date not be met.
Need to be substantiated if applied.

24
Q

What in place before LDs to be deducted?

A

Non-completion notice
Payless notice / witholding notice.

25
Q

What if the employer actually suffered no loss or damage?

A

It doesn’t matter.
The damages can still be deducted at the value stated in the contract.

26
Q

What is the defects liability period?

A

Duration at the end of the contract, where the contractor undertakes any defects at their own expense.

27
Q

If there is a discrepancy between the ER’s and CP which one takes precedence?

A

The Contractor’s Proposals.

28
Q

What is a bespoke contract?

A

Contract conditions are drafter specifically for a project.

29
Q

Advantages of standard forms over bespoke contract?

A

Written by legal experts
Rights and obligation clearly set out
Risks should have been allocated
Parties should be familiar
Case law has built up over time.

Disadvantages: Risks is rarely questions and becomes implicit.
May not be appropriate to the needs of a particular project.

30
Q

When would you use a bespoke over standard form?

A

Used for major project with novel

31
Q

Main parts of JCT contracts?

A
  • Recitals
  • Articles
  • Contract Particulars
  • Attestations
  • Conditions
  • Schedule
32
Q

JCT Forms of Contracts?

A
  • Minor works
  • Intermedite
  • SBC
  • Major Projects
  • Design & Build
33
Q

9 Sections

A
  • Definitions and interpretations
  • Carrying out the works
  • Control of the works
  • Payment
  • Variations
  • Injury, damage and insurance
  • Assignment, third party rights and collateral warranties
  • Termination
  • Settlement of disputes
34
Q

When would you use JCT minor works?

A
  • Simple in nature
  • Project shorter in duration
    -JCT guidance up to £200,000
  • Lump sum
35
Q

JCT Intermediate contract

A
  • Projects that don’t exceed one year duration
  • Simple in content and require only basic skills
36
Q

JCT Standard contract

A
  • Where the works have already been designed
37
Q

What Are Relevant Events?

A

Events that entitle to EOT.
- 13 in total
- Vairations/ instructions
- Deferment of posession of site
- Suspesnsion by the contractor for non-payment
- Exeptionally adverse weather conditions
- Strike or lock out
- Civil commotion or terrorism
- Force Majeuore

38
Q

EOT without a L&E claim?

A

Yes an EOT does not automatically mean entitlement to L&E

39
Q

Certificates under JCT?

A

Interim Payment certs
PC, PP or SC
Non Completion Certs
Cert of making good

40
Q

Partial Posession?

A

Relies on the contractor’s consent.

41
Q

Sectional Completion?

A

Contractual obligation to hand over the section at the stated date

42
Q

What is PC

A

Is a vague concept, not defined in the JCT, common pracitce where works are substantially complete and works dont prevent beneficial occupancy.

43
Q

NEC

A

New Engineering Contract

44
Q

Disadvantages of the NEC

A

They are often only considered to be used for civil engineering project and partnerships.

45
Q

NEC

A

The role of the qs is not included in the contract.
The QS can adopt a supporting role

46
Q

Specified Perils?

A

Significant events that would cause significant damage - fire, explosions, earthquakes, flooding etc.

APC Project Management (28 decks)

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