PN 9.100-9.600 - CHATGPT Flashcards

Question 1

Q

Flashcard Questions and Answers:

Question: What is the purpose of Practice Note PN 9.101?
- Answer: The purpose is to highlight Building Act 2004 (BA04) matters relevant to NZIA architects, especially building consent issues, and provide guidance on preferred practices.
Question: What are some key definitions provided in the note?
- Answer: Definitions include “building,” “building consent authority,” “building code,” “building consent,” “building work,” “code compliance certificate,” “compliance schedule,” “licensed building practitioner,” “notice to fix,” “owner,” and “territorial authority.”
Question: Where can architects download the Building Act 2004 and Amendment Act 2005?
- Answer: Architects can download the Building Act 2004 and Amendment Act 2005 as PDF files from www.dbh.govt.nz/ba-get-a-copy or purchase them from Vic Books or Bennetts.
Question: What cautionary note is provided regarding architects and the new building control regime?
- Answer: Architects should be alert to conditions imposed on them without statutory authority and should not be pressured into signing statements or certificates transferring additional liabilities or responsibilities beyond what the Act requires.
Question: How does the note suggest architects handle building consent applications?
- Answer: The owner should sign the application, and the architect can be named as the “Contact person.” Architects should not be appointed as the owner’s agent unless there is a compelling reason.
Question: What advice does the note provide regarding amendments to a building consent?
- Answer: Amendments should be made as if applying for a new building consent, and architects should discuss variations with the building consent authority (BCA) before making an application.
Question: What are some varying council practices regarding building consent amendments, as mentioned in the note?
- Answer: Practices include using specific forms for amendments, bundling amendments at intervals, clear identification of changes, and the potential future requirement for producer statements.
Question: What liability alert does the note provide to architects?
- Answer: Architects, deemed to possess reasonable knowledge of BA04 requirements, may face liability if they fail to give adequate advice to owners and clients on the Act’s requirements.
Question: What references are mentioned in the note?
- Answer: References include the Building Act 2004, Amendments to the Building Act, “Information for designers, builders and specialist trades” (DBH folder), NZIA Standard Conditions of Contract, and an example of a council’s “Amendment to an existing building consent – application form” from Rodney District Council.

Question 2

Q

Flashcard Questions and Answers:

Question: What is the purpose of Practice Note PN 9.102?
- Answer: Practice Note PN 9.102 deals specifically with the code compliance certificate (CCC) process under the Building Act 2004 (BA04) and provides guidance on related matters.
Question: Define “Code Compliance Certificate” (CCC) as per the note.
- Answer: A “Code Compliance Certificate” (CCC) means a certificate issued by a building consent authority (BCA) under BA04 s.95. The note emphasizes that “Code of Compliance” does not make sense.
Question: What key points does the note highlight regarding the application for and granting of a CCC?
- Answer: Owners must apply for a CCC “as soon as practicable after the building work is completed” under BA04 ss.91–95. The application is assessed against the approved building consent plans and specifications, not the building code.
Question: What are the main changes in BA04 regarding CCCs, as mentioned in the note?
- Answer:
  - Compliance is assessed against building consent, not the building code.
  - No interim CCCs are issued.
  - Residential property developers cannot complete a sale or allow possession before a CCC is issued.
Question: How does the note suggest handling the relationship between CCC and Practical Completion?
- Answer: A building may not qualify for a CCC at the same time as Practical Completion, and this varies from contract to contract. Items like client-supplied items and building services may preclude Practical Completion from aligning with the CCC.
Question: What are some “implied warranties” for residential contracts mentioned in the note?
- Answer: Implied warranties include proper and competent building work, suitable materials, consistency with the Building Act and Building Code, work done with reasonable care and skill, completion within the specified time, suitability for occupation, and fitness for the specified purpose.
Question: What is the significance of the implied warranties for residential contracts mentioned in the note?
- Answer: These implied warranties, applying to residential contracts after November 30, 2004, cannot be contracted out of and cover various aspects ensuring the quality, fitness, and compliance of the building work.
Question: What references are mentioned in the note?
- Answer: References include the Building Act November 2004, Amendments to the Building Act April 2005, “Information for designers, builders and specialist trades” (DBH folder), “Sales by residential property owners” (DBH folder), and NZIA Standard Conditions of Contract (NZIA SCC 2008 1st Edition © Dec 2006).

Question 3

Q

Question and Answer:

Q1: What is the purpose of Practice Note PN 9.103 regarding the Building Act?

A1: The purpose is to address the implications of alterations under the Building Act 2004 (BA04) section 112, considering differences from BA91 section 38. It clarifies compliance requirements and the possibility of relaxation for certain building code provisions.

Q2: What changes from BA91 are highlighted in the practice note?

A2: Notably, the removal of the phrase “to the same extent as if it were a new building” from BA04 section 112(1)(a) distinguishes it from BA91, providing clarity on compliance requirements. Additionally, section 112(2) introduces the potential for relaxing specific building code requirements under certain conditions.

Q3: How does the practice note suggest handling minor alterations that still require a building consent?

A3: Architects are advised to engage with the Territorial Authority/Building Consent Authority early to clarify requirements. This proactive approach is essential when dealing with minor, cosmetic alterations that necessitate a building consent.

Q4: What is the significance of BA04 section 112(2) regarding the relaxation of building code requirements?

A4: BA04 section 112(2) allows for the potential relaxation of certain building code requirements if alterations result in improved means of fire escape and facilities for persons with disabilities. This can occur when the overall benefits outweigh any potential detriments.

Q5: How does the practice note recommend handling design proposals leading to substantial upgrades in commercial building alterations?

A5: Architects are encouraged to review past determinations on the Department of Building and Housing (DBH) website to identify precedents. This research can be valuable when dealing with design proposals that might lead to significant costs associated with upgrading existing commercial buildings.

Question 4

Q

Q & A:

Q1: What’s the purpose of Practice Note PN 9.104 on the Building Act’s “Change of Use”?

A1: It outlines key aspects and implications of “Change of Use” in Building Act 2004 (BA04), recommending early discussions with the Territorial Authority/Building Consent Authority (TA/BCA) if relevant in a project.

Q2: What’s the significant change in BA04 section 115(a) regarding change of use?

A2: It specifies that a change of use occurs when incorporating household units that didn’t exist before, impacting residential architects more.

Q3: How is “change of use” defined in Building Regulations 2005?

A3: Defined in Regulation 5 and detailed in Regulation 6 with Schedule 2, reflecting fire safety purpose groups.

Q4: What’s subject to upgrading under BA04 section 115(b) for change of use?

A4: It covers a broader range, including means of escape, access, facilities for persons with disabilities, property protection, sanitary facilities, structural and fire rating performance.

Q5: What’s the form of approval and potential offense under BA04 for change of use?

A5: TA/BCA gives written notice of satisfaction, and not providing written notice of a change of use is an offense with a fine of up to $5,000.00 for the Owner.

Question 5

Q

Q & A:

Q1: What’s the purpose of Practice Note PN 9.105 on the Building Act’s “Compliance Schedules and IQP’s”?

A1: It provides guidance for architects on compliance schedules, focusing on changes in the Building Act 2004 (BA04) compared to the 1991 Act.

Q2: What role did architects traditionally play in compliance schedules under the 1991 Act?

A2: Architects generally had a limited role, with compliance schedules being seen as the domain of specialists like building services engineers. Architects’ involvement was often related to specific architectural features.

Q3: What are the main differences between BA91 and BA04 regarding compliance schedules?

A3: The practice note touches on some differences and briefly comments on the evolving role of architects in compliance schedules.

Q4: Under BA04, when is a compliance schedule required for a single household unit?

A4: A compliance schedule is required for a single household unit only if it has a cable car, as defined.

Q5: What types of systems require a compliance schedule under BA04, and who issues the building warrant of fitness annually?

A5: Systems like automatic sprinklers, emergency warning systems, lifts, etc., require a compliance schedule. The owner, not the TA, issues the building warrant of fitness annually based on IQP certification that all systems are well maintained.

Q6: Can you provide a synopsis of the compliance schedule process under BA04?

A6: The compliance schedule is issued by the Building Consent Authority (BCA) simultaneously with the Code Compliance Certificate (CCC). The IQP certifies to the owner, who must comply and apply to the TA for amendments if needed. The TA can also initiate inspections and charge fees.

Question 6

Q

Q: What is the purpose of Practice Note PN 9.106 regarding Producer Statements (PS)?
- A: It aims to promote consistent and appropriate practices in issuing and accepting PS from Registered Architects.

Q: What are the main types of PS mentioned in PN 9.106?
- A:
1. PS1 Design: Used for Building Consent, architects are advised caution.
2. PS2 Design Review: Intended for independent design review, recommended only for highly qualified practitioners.
3. PS4 Construction Review: Used for construction monitoring, architects are advised caution.

Q: What is the status of PS under the Building Act 2004?
- A: PS has no statutory status, and its acceptance is at the discretion of Building Consent Authorities (BCAs).

Q: How have changes, such as Risk-Based Consenting, impacted the relevance of producer statements?
- A: Despite changes, producer statements remain crucial. BCAs need a systematic approach to assess compliance.

Q: What responsibilities do authors of PS have according to the practice note?
- A: Authors must sign within their technical competence, state qualifications/limitations, and recommend peer review for complex work.

Q: How should BCAs approach the acceptance of PS?
- A: BCAs should assess compliance considering the nature, complexity, and importance of the work, focusing less on insurance details.

Q: What information should be included in a PS according to the practice note?
- A: Details about the author, building work, compliance, and information to help BCAs determine reliance.

Q: What is the role of insurance in PS according to PN 9.106?
- A: Insurance details are not for risk transfer. BCAs should focus on compliance-related information rather than insurance details.

Question 7

Q

Flashcard Set: Practice Note PN 9.107 - Reasonably Practicable

Q: What is the purpose of Practice Note PN 9.107?
- A: To provide guidance on the meaning of “reasonably practicable” as used in the Building Act 2004.
Q: In which section of the Building Act 2004 does the term “reasonably practicable” appear?
- A: Section 112, specifically related to alterations to existing buildings.
Q: According to Section 112, for what aspects must an altered building comply with the building code?
- A: Means of escape from fire and access and facilities for persons with disabilities.
Q: Are new buildings exempt from complying with the building code under the “reasonably practicable” argument?
- A: No, all new buildings must comply with the building code.
Q: What does the term “reasonably practicable” mean in the context of the Building Act 2004?
- A: The term is not defined in the Act, but it involves compliance as near as reasonably practicable to the building code.
Q: In the case of Auckland City Council v NZ Fire Service (1996) NZLR 330, what principle was established?
- A: The principle of balancing the benefits of an upgrade against the costs or sacrifices of the upgrade.
Q: Give an example from Determination 2007/81 where the DBH weighed costs against benefits.
- A: Upgrading windows in a change of use to apartments; adding fire doors was deemed reasonable for safety benefits.
Q: In Determination 2006/104, why was a ramp or lift not considered reasonably practicable for Mt Victoria lookout?
- A: Due to cost considerations and the significant impact on the landscape’s cultural importance.
Q: In Determination 2007/73, why was it ruled not reasonably practicable to install a lift in a two-storey warehouse?
- A: Cost and the floor area taken up by a lift were deemed greater sacrifices than the benefits.
Q: What is the recommendation if the issue of “reasonably practicable” arises?
- A: Consult with the Building Consent Authority (BCA) at the earliest opportunity to determine compliance.

Question 8

Q

Flashcard Set: Practice Note PN 9.109 - Dispute Resolution / Arbitration Act

Q: What is the purpose of Practice Note PN 9.109?
- A: It provides an overview of dispute resolution for New Zealand construction projects and architects’ conditions of engagement.
Q: What dispute resolution processes are provided in NZIA standard contracts for construction?
- A: Formal architect’s decision, mediation, and arbitration.
Q: How does the Construction Contracts Act apply to construction contracts?
- A: It provides for adjudication, and any dispute under an NZIA standard construction contract could be referred to adjudication.
Q: What dispute resolution provisions do NZIA standard conditions of engagement for architects provide?
- A: Mediation and arbitration, and adjudication for fee disputes.
Q: What is mediation, according to the Practice Note?
- A: A confidential process where an independent person assists parties in reaching an agreement.
Q: What is adjudication under the Construction Contracts Act, and how is it different from arbitration?
- A: It is similar to arbitration but may not be final; it is enforceable and binding. It’s intended for fees disputes under NZIA conditions of engagement.
Q: Describe arbitration as mentioned in the Practice Note.
- A: A confidential process where an independent person decides a dispute based on available evidence; the award is enforceable, final, and binding.
Q: What is the structure of the Arbitration Act 1996?
- A: It comprises 20 sections, with the First Schedule covering legal aspects applicable to all arbitrations.
Q: What does Section 6 of the Arbitration Act 1996 require concerning the First Schedule?
- A: All arbitrations in New Zealand must comply with all provisions of the First Schedule.
Q: What does Clause 5.1(c) of the Second Schedule pertain to, and why might it be opted out of?
- A: It relates to consumer protection; it may be opted out to avoid challenging the award on legal grounds, maintaining cost-effectiveness and finality.

Question 9

Q

Flashcard Set: Practice Note PN 9.110 - Weathertight Homes Resolution Service Act 2006

Q: What is the purpose of Practice Note PN 9.110?
- A: It focuses on Weathertight Homes Resolution Service (WHRS) claims and procedures, applicable to “leaky building” claims.
Q: What are the objectives of the Weathertight Homes Resolution Service Act 2006?
- A: To assess damage related to leaking housing, resolve disputes arising from assessments, and provide remedies for owners to recover payments for remedial work.
Q: How is a claim initiated with the WHRS, and what does it involve?
- A: For a nominal fee, owners of “leaky buildings” can lodge a claim within ten years of building work. The claim is initiated by applying for an assessor’s report on the property.
Q: What is the process for resolution procedures in the WHRS?
- A: For claims with repair costs $20,000 or less, negotiation or mediation is the first step. If unsuccessful, an application can be made to the Weathertight Homes Tribunal for adjudication. Higher-value claims may be directly referred to the Tribunal.
Q: What does the adjudication process involve, and how does it differ from mediation?
- A: Adjudication involves pre-hearing communications, potential mediation, and a binding determination by the adjudicator. It is a public, judicial process, different from the mediation process, with parties possibly represented by non-legals.
Q: What does the Weathertight Homes Resolution Service Act not replace in a contract?
- A: It does not replace dispute resolution provisions in a contract; if a leaky building matter is part of an arbitration or submitted to arbitration, adjudication cannot proceed.
Q: How is “dwellinghouse” defined in the Act?
- A: It includes apartments, flats, or units within a building used as housing, excluding hospitals, hotels, institutions, etc. A “leaky building” is one where water has penetrated due to design, construction, alteration, or materials in the preceding 10 years.
Q: What is the recommended action for architects under this Act?
- A: Architects need to be cautious about attending to repairs in an ad-hoc manner, and they should be prepared for potential areas of liability if served with a notice of claim.
Q: What is highlighted as a major risk in potential areas of an architect’s liability?
- A: The solvency of the building contractor is a significant risk, as damages claimed might be spread over various parties, including the architect.
Q: What issue has contributed to the costs of claims under this Act, and how can it be addressed?
- A: The suggested remediation being out of proportion to apparently minor defects. Addressing this may involve a rigorous debate during settlement negotiations or adjudication submissions.

Question 10

Q

Flashcard Set: PN 9.111 - Hazardous Substances Building Design

Q: What does PN 9.111 guide architects on?
- A: Designing buildings for hazardous substances, focusing on HSNO Act requirements.
Q: How does Clause F3 of the Building Code relate to HSNO Act?
- A: F3 references HSNO Act regulations for buildings with flammable substances.
Q: Key legislations for flammable substances storage?
- A: Hazardous Substances (Classes 1-5) Regs 2001, Transfer Notice 2004.
Q: Schedule 10 significance?
- A: Specifies construction and separation based on substance type and quantity.
Q: Types of construction in Schedule 10?
- A: A (platform), B (framed), C (fire-resistant), D1 (strong construction).
Q: How to seek a separation distance waiver?
- A: Apply to ERMA; add protection measures like vapor-tight walls or sprinklers.
Q: What determines controls for hazardous substances?
- A: Hazardous properties; classifications found on ERMA website.
Q: Key references for architects?
- A: Transfer Notice 2004, Emergency Management Regs 2001, Identification Regs 2001, Classes 1-5 Controls Regs, Codes of Practice.
Q: Importance of test certifier input?
- A: Ensures compliance with regulations for substances storage.
Q: Example scenario steps for isopropyl alcohol building design?
- A: Check hazard classification on ERMA, refer Schedule 10 for building type (e.g., Type D).

Question 11

Q

Flashcard Set: PN 9.112 - Restricted Building Work (RBW) Design

Q: What is the purpose of PN 9.112?
- A: To outline the regulations for Restricted Building Work (RBW) in building design from March 1, 2012.
Q: Who can perform RBW design from March 1, 2012?
- A: NZ Registered Architects, Chartered Professional Engineers, or Licensed Building Practitioners (LBPs).
Q: What is required for overseas architects to perform RBW?
- A: Apply to become an LBP or consider becoming a NZ Registered Architect.
Q: What does RBW in design cover?
- A: Primary structure design, external moisture management systems design, and fire safety systems design.
Q: Define the primary structure in RBW.
- A: Includes foundations, floors, walls, roofs, columns, beams, and bracing.
Q: Examples of External Moisture Management Systems in RBW?
- A: Damp proofing, roof/wall cladding, waterproofing.
Q: What is considered residential for RBW purposes?
- A: Houses and small-to-medium-sized apartment buildings, excluding commercial units, with a height under 10m.
Q: What documentation is required from March 1, 2012?
- A: Memorandum (Certificate of Design Work) (CoDesW) for RBW elements, alongside building consent applications.
Q: How does CoDesW differ from a Producer Statement PS1?
- A: CoDesW certifies RBW compliance but lacks details on the basis, verification method, and firm-related information.
Q: What should designers include in CoDesW?
- A: Design details, RBW compliance, LBP or registration numbers.
Q: How is RBW supervision handled?
- A: It can be carried out or supervised by NZ Registered Architects, Chartered Professional Engineers, or Design LBPs.
Q: Key information for clients about RBW?
- A: Engage trade LBPs for construction, provide trade LBP names to the council, report replacements, and ensure Record of Work after completion.
Q: What is the penalty for knowingly avoiding LBPs for RBW?
- A: It is an offense; clients must use LBPs for RBW.

Question 12

Q

Flashcard Set: PN 9.113 - Building Amendment Act 2013

Q: When did the Building Amendment Act 2013 come into effect?
- A: On January 1, 2015.
Q: What does PN 9.113 aim to advise practices about?
- A: Implications of the Building Amendment Act 2013.
Q: What are the major changes in the Amendment Act related to?
- A: Consumer rights and remedies in residential work.
Q: What obligations does the Building Contractor have before entering a residential building contract?
- A: Provide disclosure information, a checklist, and a written building contract for work over $30,000.
Q: What contracts are advised for compliance with the law?
- A: NZIA SCC 2014 or National Building Contract 2015.
Q: What is the new 12-month defects notification/liability period?
- A: Builders must fix defects notified by homeowners within 12 months of completing the building work.
Q: What is the key issue regarding the completion of building work?
- A: Interpretation of completion concerning Practical Completion Certificate, end of Defects Liability Period, or final inspection.
Q: What is the NZIA position on when the building work is complete?
- A: Likely at Practical Completion unless a different interpretation is provided in the future.
Q: How long is the Defects Liability Period under contracts like NZIA SCC 2014?
- A: 3 months, and it remains unchanged.
Q: What responsibilities do architects have regarding the 12-month defects period?
- A: No responsibility under the Act, but a professional responsibility to advise clients of their rights.
Q: What does PN 9.113 say about retentions?
- A: No changes; they are released as stipulated in the contract, not necessarily at the end of the 12-month defects period.
Q: What additional obligations on builders are mentioned in PN 9.113?
- A: Further obligations related to implied warranties and durability.

Question 13

Q

Flashcard Set: PN 9.201 - NZIA Forms of Contract – Use

Q: What is the purpose of PN 9.201?
- A: To clarify who has the right to use NZIA forms of Standard Conditions of Contract for construction and who should be named as the person administering such contracts.
Q: Which NZIA forms are intended for use in alterations or new building work of simple nature and lower value?
- A: NZIA Standard Conditions of Contract Short Form – NZIA SCC – SF (year).
Q: Who can use NZIA SCC and NZIA SCC – SF according to PN 9.201?
- A: NZIA Practices holding an Architects Document Set License.
Q: What is emphasized regarding the Architect’s representative in NZIA SCC and NZIA SCC – SF?
- A: The representative doesn’t have to be an Architect, but their powers must be well defined, and approval of the contractor is required.
Q: How should complete copies of the rules embodied in the Standard Conditions be handled?
- A: They should be clearly included in the documents attached to the contract agreement, and not merely referred to, to avoid misunderstandings and disputes.
Q: What could happen in case of unauthorized use of NZIA documents?
- A: Breaches NZIA’s copyright, is unlawful, and may lead to penalties, including criminal prosecution.
Q: When must the NZIA Practice Principal or the Architect’s Representative sign or initial the Standard Conditions of Contract?
- A: Wherever the Standard Conditions of Contract require the Practice’s endorsement.
Q: What is the NZIA’s position on modifying the rules within the Standard Conditions?
- A: The rules cannot be modified in any way; however, there is flexibility in filling out the schedules/addenda, including special conditions.
Q: Which NZIA formats involve the Architect in the construction phase services?
- A: NZIA Standard Conditions of Contract – NZIA SCC (year) and NZIA Standard Conditions of Contract Short Form – NZIA SCC – SF (year).
Q: What is the NZIA’s stance on the use of NZIA forms without an Architects Document Set License?
- A: It is considered unauthorized use, breaches copyright, and may lead to penalties.

Question 14

Q

Flashcard Set: PN 9.202 - NZIA Forms of Contract - Options

Q: What is the purpose of PN 9.202?
- A: To advise Architects on the use of NZIA Conditions of Contract and the implications of using other forms of Contract.
Q: Which other Practice Notes should PN 9.202 be read in conjunction with?
- A: (a) PN 9.201 NZIA Forms of Contracts – Use, (b) PN 4.110 Procurement, (c) PN 9.203 NZIA SCC Overview, (d) PN 9.204 NZIA SCC – SF Overview.
Q: What does NZIA SCC stand for, and what is its purpose?
- A: NZIA SCC stands for NZIA Standard Conditions of Contract. It is a contract between a Principal and a Contractor for the construction of Contract Works, administered by the Architect on behalf of the Principal.
Q: Who can use NZIA SCC and NZIA SCC – SF?
- A: NZIA Practices holding an Architects Document Set License.
Q: What is NZIA NBC – G 2010, and when is it used?
- A: NZIA National Building Contract General. It is used for construction works where the Architect is not engaged to administer the Contract.
Q: What action is recommended regarding procurement in the design process?
- A: As early as possible, obtain the client’s agreement on the method of tendering, form of contract, and specific conditions. Refer to AAS (date) Section C for advised discussion stages.
Q: If a client prefers other forms of contract conditions, what should the Architect consider?
- A: Calculate fees appropriate to administer these contracts and seek written approval from the client.
Q: What advantages do NZIA Conditions of Contract offer, as per PN 9.202?
- A: (a) Recognized role of an Architect during construction, (b) Competitive bidding due to familiarity, (c) Easier administration of terms and conditions, (d) Well-defined role for the Architect.
Q: What should be done if the client decides not to use NZIA Conditions of Contract?
- A: Seek legal and professional indemnity insurer’s advice on proposed alternative conditions. Advise the client in writing of professional risk, quality assurance limitations, and the definition of the Architect’s role.
Q: If special conditions are needed, what must happen?
- A: The client must agree to these special conditions, and they should adequately provide for the intended role of the Architect.

Question 15

Q

Flashcard Set: PN 9.207 - Guaranteed Maximum Price Contracts

Q: What is the purpose of PN 9.207?
- A: To discuss Guaranteed Maximum Price (GMP) contracts and evaluate their advantages and disadvantages.
Q: How is GMP defined in this practice note?
- A: Fixing the Maximum Price of a project at the completion of Sketch Plan or Developed Design, where the contractor can vary the work to maintain price and program.
Q: What are the potential advantages for the client in a GMP?
- A: Cost is fixed with no risk, time is generally fixed with no direct cost penalty for delays, and the contractor may carry certain risks like ground conditions.
Q: What quality-related risks does a GMP pose for the client?
- A: Quality is at risk unless contract or sketch plans are very thorough, and there might be a premium paid to the contractor for cost risk.
Q: What quality-related risks does a GMP pose for the consultant?
- A: If the quality is not clearly established at the outset, it may be compromised to meet the budget, risking the consultant’s professional responsibility and liability.
Q: How can variations on cost/risk sharing be implemented in a GMP?
- A: Some elements with risk aspects may be identified at the pricing stage, and savings or costs are shared between the builder and the client based on actual costs.
Q: What alternative building funding and ownership models are mentioned in this practice note?
- A: BOT (Build Operate Transfer), BTO (Build Transfer Operate), DBOT (Design Build Operate Transfer), DBOM (Design Build / Operate Manage), BOO (Build Own Operate), BOOT (Build Own Operate Transfer).
Q: What is the central issue in GMP contracts according to the practice note?
- A: Defining the roles, scope, financial, and design responsibilities of each party involved.
Q: What are the three basics emphasized in the context of GMP contracts?
- A: Time, Cost, and Quality.
Q: Why is it important for architects to define roles and responsibilities early in GMP contracts?
- A: To avoid getting trapped in situations where traditional liabilities exist without the privilege of time, fees, or professionalism from other parties. Architects must ensure a clear brief and understanding of the consequences of the chosen option.

Question 16

Q

Flashcard Set: PN 9.208 - Cost Reimbursement Contracts

Q: What is the purpose of PN 9.208?
- A: The purpose is to provide two new sections that can be used with SCC 2011 and SCC SF 2011 to convert them into Cost Reimbursement Contracts (CRC), also known as Charge-Up Contracts.
Q: When are Cost Reimbursement Contracts (CRC) appropriate to use?
- A: CRCs are appropriate when it is challenging to determine a precise total contract price at the Tender Stage, especially in cases like remediation work after events such as the Christchurch Earthquake.
Q: What are the two new sections provided with this Practice Note?
- A: (1) Schedules Tendering CRC Specific Conditions of Tender and (2) Schedules CRC Special Conditions – Cost Reimbursement Contract.
Q: How can SCC 2011 and SCC SF 2011 be converted to Cost Reimbursement Contracts?
- A: Replace the existing Schedules with the two new sections provided in this Practice Note.
Q: What duty does the CRC put on the Architect administering the contract?
- A: The CRC puts an increased duty on the Architect to monitor costs regularly and keep the Principal informed.
Q: What should the Contractor provide at the Tender Stage in a CRC?
- A: The Contractor should provide an estimate of direct costs and lump sum items when possible to establish a notional Contract Price, even if it needs revision as the project progresses.
Q: In what context is the use of CRCs highlighted in the Practice Note?
- A: The use of CRCs is highlighted in situations where it is difficult to be precise about a total contract price, especially during remediation work such as that resulting from the Christchurch Earthquake.

Question 17

Q

Flashcard Set: PN 9.210 - Warranties and Guarantees

Q: What is the purpose of PN 9.210?
- A: The purpose is to discuss matters related to warranties, particularly examining contractor and subcontractor warranties, and providing a sample warranty agreement form.
Q: What is the definition of a “guarantee” as per the Practice Note?
- A: A guarantee is an undertaking by a third party in favor of the first party to act if the second party does not fulfill their obligations under the guarantee, particularly to rectify defects in the contract works.
Q: How does the Practice Note differentiate between “guarantee” and “warranty”?
- A: A guarantee involves three parties, while a warranty is an undertaking by one party to make good defects in the contract works.
Q: What was the result of the unresolved issue between the Registered Master Builders Federation and the New Zealand Institute of Architects regarding warranties and guarantees?
- A: A new form of warranty agreement was negotiated that can be used for either main contractor warranties or subcontractor warranties.
Q: What is emphasized as important for architects when dealing with warranties?
- A: Architects should clearly define roles and responsibilities at an early stage, tailoring documents to the situation, and ensuring a professional and transparent process.
Q: What are the common items for which warranties might be considered, according to the Practice Note?
- A: They include tanking, curtain walling, metal cladding, roofing, aluminum joinery, tiling, flooring, surfacing, painting, plumbing systems, drainage systems, and electrical items.
Q: What is recommended regarding warranties and insurance of existing structures?
- A: It is recommended to discuss with the insurance advisor the effect that a claim might have on future premium levels and deductibles in the insurance.
Q: What actions are suggested for architects regarding warranties?
- A: Be cautious in accepting warranties written by the party warranting the work, use the standard form of Warranty Agreement, and ensure all tenderers are issued with the standard form of warranty agreement.

Question 18

Q

Flashcard Set: PN 9.211 - Labour Only Contracts

Q: What is the purpose of PN 9.211?
- A: To provide guidance on the challenges and considerations associated with “labour only” contracts and to address the absence of a commonly available set of “general conditions of contract” for such contracts.
Q: What is the common misunderstanding related to the term “labour only” in house building?
- A: It is often a misnomer; what is meant is that there is no “main contractor” in the traditional sense, and the owner engages separate contractors for different trades.
Q: Why are there no commonly available sets of “general conditions of contract” for “labour only” contracts?
- A: There are several separate contracts with overlap and interface between them, making it difficult to clearly define roles and responsibilities. Additionally, each situation is different.
Q: Can NZIA’s NCBC-G1 (2010) form of contract be adapted for “labour only” situations?
- A: Yes, it can be adapted by special conditions of contract to a “labour only” situation, with each separate contract being between a Principal and a Contractor for specific work and an agreed consideration.
Q: What are the challenges in defining respective responsibilities in “labour only” situations?
- A: Defining responsibilities is challenging because different contractors work on the same site, often simultaneously, influencing each other’s performance in hard-to-anticipate ways.
Q: What statutory responsibilities exist under the Building Act in a “labour only” situation?
- A: The owner who obtains the Building Consent is primarily responsible for building to the building code, but this responsibility can be contractually off-loaded onto contractors, including the architect.
Q: What challenges exist under the Health and Safety in Employment Act in “labour only” situations?
- A: “Strict liability” ensures each person bears their own degree of responsibility, and in a “labour only” situation, the architect acting as project manager could be in the firing line.
Q: What is highlighted as a potential issue for architects attempting to run multi-contract jobs?
- A: Architects may lack the experience, ability, and “clout” to effectively manage trades and may face challenges in getting trades to perform when needed.
Q: What caution is given to architects considering “labour only” contracts?
- A: Architects must inform their professional indemnity insurers about their intentions, and insurers may not be willing to keep architects covered for such endeavors.

Question 19

Q

Flashcard Set: PN 9.215 - NZIA Standard Construction Contracts (2016 Edition)

Q: What is the purpose of Practice Note PN 9.215?
- A: The purpose is to provide information on the changes made to the 2016 editions of the NZIA Standard Construction Contract (NZIA SCC) and the National Building Standard Construction Contract (NBC).
Q: Which contracts are now superseded by the 2016 editions?
- A: The NZIA SCC:2014, SCC SF:2014, NBC General:2015, and NBC Small Works:2015 are now superseded.
Q: What are the current versions of the contracts?
- A: The current versions are NZIA SCC:2016, SCC SF:2016, NBC Standard Construction Contract:2016, and NBC Standard Construction Contract – Short Form:2016.
Q: How are the contracts intended to be used?
- A: NZIA Standard Construction Contracts are for use when an architect administers and observes the construction, while National Building Contracts are for situations where the architect is not engaged for such services.
Q: What name change has occurred in the contracts?
- A: The “National Building Contract – Small Works” has been changed to “National Building Contract – NBC Standard Construction Contract – Short Form” to align with NZIA SCC versions.
Q: What legislative changes are reflected in the 2016 editions?
- A: Changes to health and safety legislation and the Construction Contracts Act 2002 have been incorporated. The Health & Safety in Employment Act has been replaced with the Health and Safety at Work Act 2015.
Q: How have retentions been addressed in the 2016 editions?
- A: Retentions provisions have been revised, aligning with NZS 3910 cl.12.3.2(c). The balance of retentions is now payable at the end of the defects notification period, less the cost of any uncompleted work.
Q: What changes have been made to the indemnity section (S.5)?
- A: The indemnity provisions related to personal harm have been replaced in total to better reflect the current situation regarding claims.
Q: What revisions have been made to the Insurance Schedules?
- A: The Insurance Schedules have been revised to accurately record the types of insurance and specify whether they are in joint names of the Contractor and the Principal or only in the Contractor’s name.
Q: What changes have been made to Schedule E2?
- A: Schedule E2 (Producer Statement) has been deleted as it was considered no longer serving a useful purpose.
Q: What is the status of these documents for future revisions?
- A: Except for minor corrigenda and erratum, these documents will not be subject to further review until 2018 at the earliest.

Question 20

Q

Flashcard Set: PN 9.301 - Tendering Procedures

Q: What is the purpose of Practice Note PN 9.301?
- A: The purpose is to provide guidance to NZIA members on tendering procedures as the preferred method of building procurement.
Q: How are the recommendations tailored in these procedures?
- A: The recommendations are prepared with a special application to projects of “average” type and size but may need modification for larger or smaller projects.
Q: What documents should be made available to each tenderer during the tendering period?
- A: Documents should include drawings, specifications, NZIA Standard Conditions of Contract, a copy of the schedule of quantities (if applicable), and two copies of a tender form.
Q: What are the time recommendations for tender preparation?
- A: Generally, at least three weeks for small projects, and four weeks for substantial or complex projects.
Q: How does the architect handle additional tender information during the tender period?
- A: Additional information should be sequentially numbered, dated, and sent to all tenderers in a timely manner. Tenderers should acknowledge receipt of such information in their tenders.
Q: Why is public opening of tenders not recommended?
- A: It can lead to misunderstandings as many tenders include qualifications that may influence evaluation. It’s advised to avoid public openings to prevent misinterpretations.
Q: What steps should be taken if a tender appears unreasonably low or contains errors?
- A: The architect should notify the tenderer to confirm the tender price or withdraw the tender. Any tenderer can withdraw a tender before acceptance.
Q: How long does each tender remain valid unless qualified differently?
- A: Unless qualified otherwise, each tender remains valid for one calendar month from the submission date.
Q: What is the purpose of selective tendering?
- A: The purpose is to obtain tenders from builders believed capable of successfully completing the project. A list of suitable builders is prepared, and a maximum of six tenderers is considered sufficient for competitive tendering.
Q: Is a tender deposit required for selected tenderers in selective tendering?
- A: A tender deposit may not be required for selected tenderers as they have been chosen based on their ability to successfully carry out the work.

Question 21

Q

Flashcard Set: PN 9.302 - Tendering Pro-formas

Q: What is the purpose of Practice Note PN 9.302?
- A: The purpose is to assist NZIA members using NZIA SCC and NZIA SCC – SF in obtaining tenders that meet the requirements of SCC and ensuring necessary information is obtained when tenders are submitted. The provided pro-formas are for guidance, not mandatory for use, and may be adapted for specific contracts.
Q: What are the key points to note in the Tender Submission pro-forma?
- A:
  - Choose the preferred alternative for submitting tenders and inform tenderers accordingly.
  - Ensure equivalence by acknowledging Notices to Tenderers in each tender.
  - Note if a Tender Deposit is not required.
Q: What is the purpose of the Trade Summary pro-forma (Pro-forma 1a)?
- A: The Trade Summary is essential for tender evaluation, and the pro-forma needs adaptation to reflect the trades involved in the specific contract.
Q: What is the alternative for Trade Summary for subscribers to MasterSpec™?
- A: Subscribers may use the Tender Summary form included in MasterSpec™ STANDARD and MasterSpec™ BASIC (Pro-forma 1b in CBI classification).
Q: What does the Trade Summary - Monetary Allowances - Prime Cost Sums pro-forma (Pro-forma 2) cover?
- A:
  - Prime Cost Sum, excluding costs related to material installation.
  - Declaration by the Contractor in the tender of the margins allowed for adjustment of margins, overhead, and profit.
Q: What is the purpose of the Trade Summary - Monetary Allowances - Provisional Allowances pro-forma (Pro-forma 2)?
- A:
  - Provisional Allowance, covering Contractor’s margins, overhead, and profit.
  - Provides for a declaration by the Contractor in the tender of margins (etc) for adjusting Provisional Allowances.
Q: What do the pro-formas 3 and 4 cover?
- A: Pro-forma 3 provides for the acceptance of tender on behalf of the client, and Pro-forma 4 covers the notification of unsuccessful tenderers.

Question 22

Q

Flashcard Set: PN 9.303 - Principal Supply Items

Purpose:
- To guide exceptions to the Contractor’s obligation to supply all items, known as Principal or Client Supplied Items.
Reasons for Principal Supply Items:
- Clients may choose to supply goods they already own or believe they can purchase for the contract.
Examples of Principal Supply Items:
- Hardware, sanitary ware, tapware, tiles, light fittings, kitchen cabinets.
Responsibility:
- Principal remains responsible even after items are fixed in the building.
Disadvantages:
- Incorrect orders, increased time, potential shortages or defects.
Recommended Actions (Do’s):
- Advise having the main Contractor supply all goods.
- Use a monetary allowance for unselected items.
- Include a detailed list in the tender.
- Verify the construction programme for delivery dates.
- Ensure timely supply for inspection.
- Value items for insurance at full replacement cost.
- Make the Principal aware of time considerations.

Question 23

Q

Q: What is the purpose of Practice Note PN 9.304 - Separate Contractors?

A: The purpose is to describe situations where more than one contractor might be working on the site simultaneously.

Q: What are the key issues to consider, as per PN 9.304, regarding separate contractors?

A:
1. Co-ordination/demarcation between the main Contractor and separate contractors.
2. Responsibility for site safety issues.
3. Insurance matters.
4. Performance liability.

Q: How should costs associated with separate contractors be approached, according to PN 9.304?

A: Be aware of the costs for the main Contractor related to coordinating separate contractors, as these can increase the Architect’s administrative costs.

Q: How does PN 9.304 recommend identifying separate contractors during the tendering process?

A: Clearly identify separate contractors in tender documents, specifying the scope of work, names of personnel, and contact details.

Q: What are the main recommendations or “Do’s” provided in PN 9.304 for handling separate contractors?

A:
1. Use separate contractors only when necessary.
2. Restrict the use of separate contractors to specialists.
3. Clearly define their scope in tender documents.
4. Include separate work in the main Contract Works insurance.
5. Mandate the main Contractor’s responsibility for site health and safety.
6. Ensure the main Contractor accommodates separate contractors in the project schedule.
7. Identify specific preliminary and general needs of separate contractors.

Q: According to PN 9.304, who is responsible for the performance of separate contractors?

A: The main Contractor is not responsible for the performance of separate contractors.

Question 24

Q

Q: What is the purpose of PN 9.305 - Nominated Subcontractors?

A: Address the decision for or against nominating subcontractors by the Architect or Principal for specific Contract Works.

Q: How should subcontractors be nominated as per PN 9.305 when required for specific parts of the Contract Work?

A: Specify nominations in tender documents, clarify their scope, and consider multiple nominations for competitive pricing.

Q: What is generally considered best practice according to PN 9.305 regarding subcontractors?

A: Allow the main Contractor to work with their preferred subcontractors for greater performance and quality certainty.

Q: Does PN 9.305 mention potential issues with requiring a Contractor to work with a nominated subcontractor with no prior relationship?

A: Yes, it notes potential issues related to project delivery.

Q: What does PN 9.305 say about the responsibility of Contractors for the performance of nominated subcontractors?

A: Once nominated subcontractors enter a contract, they have the same obligations, and the main Contractor is equally responsible for their performance.

Q: What does PN 9.305 recommend regarding information in tender documents when nominating subcontractors?

A: Include obtained prices, highlight exclusions, state whether prices from other subcontractors are allowed, and ensure compliance with nomination conditions.

Question 25

Q

Flashcard Questions:

Question 1:
What is the purpose of Practice Note PN 9.410?

Answer:
To inform Members of the salient changes made to the insurance provisions of the Standard Conditions of Contract (SCC) and provide guidance in filling out and reviewing forms related to the new provisions.

Question 2:
When was the third edition of Practice Note PN 9.410 published?

Answer:
April 2014

Question 3:
Why were changes made to the insurance provisions in the Standard Conditions of Contract (SCC)?

Answer:
To simplify and standardize the insurance provisions, recognizing that most projects are mid-range in scale and complexity, while larger and more complex projects may require specialized insurance treatment.

Question 4:
What is the warning given in section 2.0 of the Practice Note?

Answer:
Architects are not experts in insurance, and in case of doubts or complex insurances, arranging and placing insurance should be the responsibility of the Principal and/or Contractor and their insurance advisers.

Question 5:
What are the main changes in the requirements for Construction Insurance mentioned in section 4.0?

Answer:
Changes include specific extensions for testing and commissioning, earthquake coverage up to the full sum insured, partial handover, and flow-on damage. Also, the inclusion of Annual Run-off policy and Annual Cut-off policy.

Question 6:
How should the deductible amount for construction insurance be determined, according to the guide note?

Answer:
The speculation surrounding the amount of the deductible has been removed, and the industry is considered the better leveler in determining this amount.

Question 7:
What are the key considerations for filling out the Contract Works Insurance Schedule F1, according to section 5.0?

Answer:
Include estimated amounts for Contract Works, Temporary Works, variations, anticipated increased cost during construction, professional fees, demolition and preparation costs, and increased construction costs during a reconstruction period.

Question 8:
Why is it important for existing structures being worked upon to be insured for their Full Replacement Value, according to section 5.1.3?

Answer:
In the event of a major loss affecting both the existing structure and the new work, insurance proceeds for replacement may come up short if the existing structure is insured only for its indemnity value.

Question 9:
What does the General Liability Insurance cover, as mentioned in section 5.2?

Answer:
It provides cover for the Contractor for damage to Third Parties’ property and interests and for Personal Injury. It includes a cross-liabilities clause allowing each party to claim against the other.

Question 10:
What are the two types of Construction Policies discussed in section 7.0?

Answer:
Annual “Run Off” and Annual “Cut Off” insurances. “Run Off” continues coverage for all projects until completion, while “Cut Off” stops coverage at the expiry date unless renewed.

Question 26

Q

Flashcards:

Question: What is the purpose of Practice Note PN 9.

Question 27

Q

Flashcards:

Question: What is the purpose of Practice Note PN 9.404?
Answer: Practice Note PN 9.404 outlines a step-by-step guide to Bond procedures and provides guidelines regarding the quantum of Bond in construction contracts.
Question: What is the general purpose of a Bond in a construction contract?
Answer: The Bond is a document arranged between the Principal and the Contractor to protect the Principal against financial loss resulting from the default of the Contractor.
Question: What contracts would generally merit consideration for bond requirements, according to the practice note?
Answer: Contracts above approximately NZ$1.5 million in value would generally merit consideration for bond requirements.
Question: When setting up the Bond, what is the suggested procedure for issuing the Bond to the Contractor?
Answer: The Bond’s requirements and amount should be discussed and agreed with the Principal. NZIA SCC Schedule D1 is recommended as the form of the Contractor’s Bond. The Bond should be included in the tender documents, and a specific surety must be named by the Tenderer.
Question: What must the Architect do during contract administration regarding the Bond?
Answer: The Architect should accept the tender on the Principal’s behalf, conditional on the supply of the completed Bond. The Bond must be received and checked by the Principal before certifying the first progress payment.
Question: How can the Contractor’s Bond be discharged at Practical Completion?
Answer: The Contractor’s Bond may be discharged either by issuing a Practical Completion Certificate to the Principal or, if the surety requires, by issuing a letter to the Contractor stating that the work has reached the required stage and the Bond may be canceled.
Question: In case of the Contractor’s default, what steps should the Architect take to call up the Bond?
Answer: The Architect should establish that the default warrants calling up the Bond, discuss with the Principal, confirm the circumstances in writing to the Principal, certify the default to the Contractor, and check with the Surety after seven working days.
Question: How is the quantum (amount) of the Bond determined?
Answer: The appropriate amount for a Bond varies, with contractors suggesting 5-10% of the contract value, while sureties may propose 40-50%. It can also be assessed based on three months of estimated progress payments.
Question: What is emphasized regarding the quantum of the Bond in the practice note?
Answer: The judgment on the appropriate Bond amount is subjective and should be agreed upon in writing with the Principal. The appropriate amount varies with the nature and size of the contract.

Question 28

Q

Flashcards:

Question: What is the purpose of Practice Note PN 9.408?
Answer: Practice Note PN 9.408 provides guidance to practitioners in the application and administration of professional indemnity insurance for Contractor’s design, specifically in construction contracts.
Question: Why was the requirement for professional indemnity insurance for Contractor’s design removed from the NZIA Standard Conditions of Contract (NZIA SCC) in 2009?
Answer: The requirement was removed for various reasons, but it is still considered relevant in specific Design Build type contracts where significant design work is performed under the Contractor’s control.
Question: What does NZIA SCC 2007 Rule 6.6 state regarding professional indemnity for Contractor’s design?
Answer: The rule mandates that the Contractor must effect professional indemnity insurance for Contractor’s design, and the insurance must cover liability for damage or loss caused by the Contractor not meeting its obligations. The insurance should be maintained up to Practical Completion and for a further period of six years.
Question: What is the purpose of professional indemnity insurance for Contractor’s design?
Answer: Professional indemnity insurance provides additional substance for the insured party (Contractor) and assures the Principal that, in case of catastrophic events during and after construction, the Contractor has the funds to meet losses and restore the project.
Question: Why might it be necessary to provide professional indemnity insurance cover for negligent design in construction contracts?
Answer: Construction insurance policies often exclude losses arising from defective design. Therefore, concurrent professional indemnity insurance cover for negligent design is desirable when the contractor is involved in construction design.
Question: Who benefits from the proceeds of the professional indemnity insurance policy in the case of these contract provisions?
Answer: The proceeds of the professional indemnity insurance policy benefit the Contractor who takes out the policy and pays the premium. However, due to the contractual relationship, these proceeds may be accessed by the Principal.
Question: When is the requirement for professional indemnity insurance for Contractor’s design considered unnecessary?
Answer: The requirement is considered unnecessary when the contract does not envisage a substantial Design/Build component.
Question: What considerations should be made regarding the six-year provision for professional indemnity insurance?
Answer: Professional indemnity insurance should be maintained for the term of the construction contract plus six years after Practical Completion. A procedure should be set in place to confirm the currency of the insurance each year, and evidence of insurance must be provided before work commences.
Question: What should be considered regarding the level of indemnity and excess for professional indemnity insurance?
Answer: The specific conditions require stating the amount of indemnity required and a maximum excess to be carried by the Contractor. Each case must be assessed based on the amount of risk involved, and separate advice should be sought.
Question: What should be done if a requirement for professional indemnity insurance is included in the contract?
Answer: Matters such as confirmation of Contractor’s insurance, excepted risks assessment, and insurance specification should be addressed. Seek advice if unsure about any aspects of professional indemnity insurance for Contractor design.

Question 29

Q

Q1: What is the purpose of PN 9.409?
A1: PN 9.409 serves to alert architects to the implications of Romalpa clauses, emphasizing the importance of protecting the supply of goods on credit and understanding the impact of the Personal Property Securities Act 1999 (PPSA).

Q2: What is a Romalpa clause?
A2: A Romalpa clause is a contractual mechanism allowing suppliers to retain legal ownership of goods until they are fully paid, particularly crucial in credit transactions.

Q3: What are the aims of a reservation of title clause?
A3: The reservation of title clause aims to protect suppliers from non-payment by purchasers and prevent the seizure of goods by a liquidator in case of purchaser insolvency.

Q4: What duties does a purchaser have under an effective Romalpa clause?
A4: Purchasers are obligated to fulfill various duties, including storing goods separately, designating goods as the supplier’s property, maintaining records, and facilitating repossession if needed.

Q5: What rights may a supplier retain under a Romalpa clause?
A5: A supplier’s rights may include reclaiming goods, retaining proceeds from resale, specifying storage requirements, repossession rights, and maintaining access.

Q6: How does the Personal Property Securities Act 1999 (PPSA) impact Romalpa clauses?
A6: The PPSA covers contracts with Romalpa clauses, creating a security interest that can be registered on the Personal Property Securities Register (PPSR) to secure priority.

Q7: What is the significance of a Purchase Money Security Interest (PMSI)?
A7: A PMSI holds super priority over other security interests in the same goods, irrespective of when those interests were established or registered.

Q8: What actions should architects take when certifying payment?
A8: Architects should conduct PPSR searches for Romalpa clauses, inform principals of supplier claims, and facilitate steps to obtain clear title before certifying payment.

Q9: What is the recommended course of action if in doubt about legal matters?
A9: Architects, if uncertain, should seek legal advice or recommend that the principal seek such advice.

Q10: How does NZIA SCC Schedule G3 relate to PN 9.409?
A10: NZIA SCC Schedule G3 addresses security for off-site goods and materials, aligning with the provisions outlined in PN 9.409.

Question 30

Q

Construction Contracts Act 2002 (CCA): A Quick Overview

Q1: What are the main goals of the Construction Contracts Act 2002 (CCA)?
A1: The CCA primarily aims to achieve three goals: facilitating regular and timely payments, providing a fast-track adjudication process for dispute resolution, and offering streamlined mechanisms for review and enforcement.

Q2: How does the CCA achieve regular and timely payments?
A2: The CCA establishes a strict payment process, incorporating specific time limits and legal requirements. This framework ensures fair and timely payments for construction work, including the regulation of retentions.

Q3: What is the role of adjudication in the CCA?
A3: The CCA introduces a fast-track adjudication process to resolve disputes, particularly those related to payment. This allows both payees and payers to efficiently address conflicts arising under construction contracts.

Q4: How does the CCA facilitate review and enforcement?
A4: The CCA provides streamlined mechanisms for enforcing payments due under a construction contract and allows parties to enforce adjudicator decisions promptly.

Q5: How do architects relate to the CCA?
A5: Architects fall under the CCA either as a payee recovering fees for design services, an “Architect” or “Engineer” to the construction contract, or a payer if they engage a sub-consultant recovering fees via the CCA.

Q6: Can parties contract out of the CCA?
A6: No, parties cannot contract out of the CCA once construction work is agreed upon. However, a payee can choose not to invoke the payment process by issuing a non-payment claim invoice.

Q7: Does the CCA distinguish between commercial and residential contracts?
A7: Yes, the CCA differentiates between commercial and residential construction contracts. Residential contracts have some exclusions from enforcement options.

Q8: What falls under the scope of the CCA?
A8: The CCA applies to all “construction work,” encompassing building-related tasks associated with commercial, civil, industrial, or residential building projects.

Q9: How has the CCA’s scope been extended?
A9: In 2016, the CCA extended its definition of construction work to include all design, engineering, and quantity surveying work associated with building-related projects.

Q10: Who does the CCA affect, and what is a construction contract?
A10: The CCA applies to parties involved in any construction contract, defined as any agreement for carrying out construction work. The payee performs construction work for the payer.

Question 31

Q

Understanding Construction Contracts Act 2002 (CCA) Payment Process

Q1: What is the importance of Part 2 of the CCA?
A1: Part 2 of the CCA is crucial for ensuring fair and timely payment for all individuals involved in construction work, emphasizing the significance of maintaining cash flow.

Q2: How is the CCA payment process initiated?
A2: The CCA payment process begins when a payee issues a payment claim, which is essentially a request for payment meeting specific criteria outlined in the CCA.

Q3: What criteria must a payment claim meet to be valid under the CCA?
A3: For a payment claim to be valid, it must be in writing, identify the construction contract and work period, state a claimed amount with the due date, explain the calculation, mention the CCA, and include a Form 1 Notice.

Q4: How does the CCA protect architects as payees?
A4: Architects, acting as payees, can benefit from CCA protections by issuing invoices that meet payment claim criteria, ensuring timely payments and facilitating fair processes. Utilizing the NZIA template is recommended.

Q5: How do payers respond to a payment claim?
A5: Payers can either pay the claimed amount or dispute it by issuing a payment schedule stating a lesser amount. Architects administering contracts are responsible for issuing a valid payment schedule on behalf of the payer.

Q6: What happens if a valid payment schedule is not issued on time?
A6: Failure to issue a valid payment schedule before the due date results in the full claimed amount becoming a debt due. The scheduled amount in a payment schedule also becomes a debt if not paid by the due date.

Q7: How does the CCA deal with non-payment situations?
A7: The CCA deems unpaid amounts under certain scenarios as enforceable debts. Payees can take legal action, refer the matter to adjudication, or apply for a charging order over a construction site.

Q8: How can a payee suspend work under the CCA?
A8: A payee can suspend work if the payer fails to pay the debt within a specified notice period. However, the payee must return to work once the relevant debt due has been paid in full.

Q9: What terms can’t be negotiated under the CCA?
A9: Certain payment terms are deemed void and unenforceable, including conditional payment clauses and retention payment clauses with specific conditions.

Q10: Can parties negotiate payment terms under the CCA?
A10: Yes, parties can agree on variations to payment terms, but the CCA provides default terms that apply when the construction contract is silent. Examples of negotiated payment terms are provided in standard construction contracts.

Q11: What payment terms are deemed default by the CCA?
A11: Default terms include monthly progress payments, issuance of payment schedules within 20 working days, and payment due 20 working days after a valid payment claim.

Q12: How often should payees be paid under the CCA default terms?
A12: Payees are entitled to monthly progress payments, with the payment claim served at the end of each monthly payment period.

Q13: What is the role of architects administering contracts in payment schedules?
A13: Architects administering contracts are responsible for issuing valid payment schedules on behalf of the payer, ensuring compliance with the CCA.

Q14: What enforcement tools are available under the CCA in case of non-payment?
A14: Enforcement tools include court action, adjudication, and applying for a charging order over a construction site.

Q15: How does the CCA protect payees who suspend work?
A15: Payees who validly suspend work under the CCA are protected, retaining their rights under the construction contract and having the right to an extension of time to complete the contract. They can lift the suspension at any time, even before receiving payment.

Q16: What terms should architects administering contracts be cautious about?
A16: Architects should avoid enforcing prohibited payment terms, and if they appear in the construction contract, they should not seek to enforce them.

Question 32

Q

Q: What is adjudication under the CCA?

A: Adjudication is a fast-track process for resolving disputes that arise under a construction contract, providing a relatively speedy way to address issues and maintain cash flow.

Q: How does the adjudication process work?

A: The process involves a claimant initiating adjudication by serving a notice of adjudication to the respondent. The adjudicator is then selected, and each party presents their arguments in written submissions. The adjudicator delivers a determination, which is binding and enforceable.

Q: What disputes can be referred to adjudication?

A: Any “dispute or difference” under a construction contract, including disagreements over payments, work quality, contract interpretation, or breaches of contract, can be referred to adjudication.

Q: What are the benefits of adjudication?

A: Adjudication offers a speedy and cost-effective resolution, ensuring a final outcome is reached quickly. Its “pay first, argue later” approach helps maintain project cash flow, and the process is compulsory, preventing parties from contracting out.

Q: How is an adjudicator selected?

A: There are three options: parties can agree on an adjudicator (Option A), agree on a nominating body (NB) to select one (Option B), or the claimant can request an authorized nominating authority (ANA) to choose (Option C).

Q: What happens after an adjudicator is selected?

A: The selected person must confirm willingness and availability, and if eligible, serve a notice of acceptance. The adjudication claim is then submitted by the claimant, and the respondent responds within a specified timeframe.

Q: What if the respondent fails to respond?

A: The adjudication process proceeds without the respondent’s views. The adjudicator must not consider late submissions.

Q: What powers does the adjudicator have during the proceeding?

A: The adjudicator can request further submissions, appoint an expert adviser, call a conference, and inspect the construction site to determine the dispute fairly.

Q: What factors must the adjudicator consider in making a determination?

A: The adjudicator considers CCA provisions, the construction contract, all written submissions, expert reports, site inspections, and any other relevant matters.

Q: Can the determination be enforced?

A: Yes, the adjudicator’s determination is binding and immediately enforceable. The successful party can enforce it through measures like suspending work or legal action.

Q: Is there an option for appeal?

A: While the determination cannot be appealed, it can be overturned by initiating a new proceeding in a different forum, such as a court or another adjudication, while complying with the initial determination in the meantime.

Question 33

Q

CCA (Construction Contracts Act) Adjudication: Enforcement and Review Process

Enforcing an Adjudicator’s Determination:

Q: What remedies are provided in Part 4 of the CCA for recovering payments under a construction contract?

A: Part 4 of the CCA offers remedies that facilitate the swift recovery of payments due under a construction contract.

Q: How is an adjudicator’s determination enforced according to Part 4 of the CCA?

A: The determined party can enforce the adjudicator’s decision by applying various processes, such as obtaining a charging order.

Q: Describe the process of obtaining a charging order for enforcement.

A: If the adjudicator approves issuing a charging order, the determined party can enforce it through district court rules (DCR). The court will enter the determination as a judgment, allowing further enforcement actions.

Q: What are the steps involved in obtaining a charging order?

A: The determined party files a Form 104 application, requesting the court to enter the determination as a judgment. The Payer and Owner have 5 working days to oppose, after which the court makes a decision.

Q: How does the court treat the determination during this process?

A: If the court approves, any payment found due in the determination becomes a court-enforceable “judgment debt.”

Reviewing an Adjudicator’s Determination:

Q: Can an adjudicator’s determination be reviewed?

A: Yes, Part 4, sub-part 1AA of the CCA provides a fast-track review process, mainly for non-respondent construction site Owners.

Q: What triggers the Owner’s review process?

A: If an adjudicator’s determination directs the Owner to pay or approves issuing a charging order against their construction site.

Q: What are the key steps in the Owner’s review process?

A: The Owner files a review notice within 20 working days after the determination. The district court conducts a review, and the court issues a review decision, either upholding or quashing the determination.

Q: How does the review process affect enforcement?

A: Filing a review notice doesn’t prevent the determined party from enforcing the adjudicator’s determination. The court may replace the determination or uphold it, depending on the review.

Challenging an Adjudicator’s Determination:

Q: Can a party challenge an adjudicator’s determination in another forum?

A: Yes, although determinations can’t be appealed, an unsuccessful party can initiate new proceedings in a court or arbitration to challenge the outcome.

Q: What are the potential outcomes of challenging a determination in another forum?

A: The decision in the new forum could override the adjudicator’s findings. Parties might negotiate a different outcome, and court costs may be awarded.

Q: What is joint and several liability in the context of an adjudicator’s determination?

A: If an adjudicator determines joint and several liability, the determined party can choose to recover the full amount from one party or the other.

Enforcement Tools:

Q: What tools are available for enforcing a judgment debt under the DCR?

A: Enforcement tools include garnishee orders, sale orders, charging orders, and warrants to seize property.

Q: How is a judgment debt recovered using these tools?

A: The judgment creditor initiates recovery methods through applications as outlined in Part 19 of the DCR, using tools like garnishee orders, sale orders, charging orders, and warrants.

Q: Are there limitations to interest and court costs recovery?

A: The CCA doesn’t allow interest on top of costs, but court costs and actual, reasonable costs of enforcing unpaid amounts can be recovered.

Key Parties in the Process:

Judgment Creditor: The party enforcing a judgment debt.
Judgment Debtor: The party owing a judgment debt.
Plaintiff: Successful adjudication party seeking enforcement.
Defendant(s): Adjudication party ordered to perform an action.
Claimant: Party referring a construction contract dispute to adjudication.
Respondent: Other party in dispute with the claimant.
Owner: Non-respondent owner of the construction site.
Payee: Party performing construction work for the Payer.
Payer: Party engaging the Payee for construction work.

This summary provides an overview of the CCA adjudication enforcement, review, and challenging processes, along with key parties and enforcement tools.

Question 34

Q

Q1: What options does an architect have when issuing an invoice for construction work under the NZIA Agreement for Architect’s Services (AAS) entered into after September 1, 2016?

A1: An architect can choose to issue either a ‘tax invoice’ or a ‘payment claim’ under the Construction Contracts Act (CCA).

Q2: What advantage does an architect gain by issuing a payment claim under the CCA?

A2: By issuing a payment claim under the CCA, an architect has the right to enforce the unpaid amount as a ‘debt due’ and can also suspend work.

Q3: How was the definition of construction work affected by the 2016 amendment to the CCA?

A3: The 2016 amendment expanded the definition of construction work to include design, engineering, and quantity surveying work.

Q4: What are the types of payments allowed under the CCA to ensure cash flow in the construction industry?

A4: The types of payments allowed under the CCA include deposit, advance payment, progress payment, variation, and final account.

Q5: What does section 14(2) of the CCA allow parties to a construction contract to agree upon?

A5: Section 14(2) of the CCA allows parties to agree upon a single payment, particularly applicable in cases of smaller projects.

Q6: How is the payment process outlined in the Conditions of Contract for Consultancy Services (CCCS)?

A6: In CCCS, the architect is entitled to render accounts for fees monthly or periodically.

Q7: According to the NZIA Agreement for Architect’s Services (AAS), when is payment due after a valid payment claim is served?

A7: Payment is due 20 working days after a valid payment claim is served, as per the NZIA AAS.

Q8: Describe the steps involved in the payment claim process under the CCA.

A8: The payee serves a payment claim, the payer must pay the claimed amount by the due date, or within 20 working days. If there’s a disagreement, the payer provides a payment schedule, stating the scheduled amount, reasons for differences, and the basis of calculation. The payer must then pay the undisputed amount.

Q9: Why is it important to include a defined completion term in agreements, especially when parties agree on a single payment?

A9: Including a defined completion term helps avoid disputes over the completion definition, particularly when parties agree on a single payment.

Q10: What rights does an architect have under the CCA when it comes to enforcing unpaid amounts?

A10: Issuing a payment claim under the CCA provides the architect with the right to enforce the unpaid amount as a ‘debt due’ and the ability to suspend work.

Question 35

Q

Q1: What are the standard information requirements for a tax invoice according to the Inland Revenue Department?

A1: A tax invoice must include:
1. ‘Tax invoice’
2. Practice name
3. GST number
4. Date of issue
5. Description of services.

Q2: What additional information is required for a tax invoice exceeding $1,000, including GST?

A2: For invoices over $1,000, include:
6. Client name and address
7. Quantity/volume of services
8. GST-exclusive, GST, and GST-inclusive amounts.

Q3: Define a payment claim under section 20(1) of the CCA.

A3: A payment claim is a formal demand for payment under the Construction Contracts Act (CCA) served by the payee (e.g., an architect) on the payer (e.g., a client).

Q4: What are the statutory requirements for a valid payment claim under section 20(2) of the CCA?

A4: A valid payment claim must:
1. Be in writing
2. Identify the construction contract
3. Specify the construction work
4. Indicate the payment period
5. Clearly state the claimed amount
6. Specify the due date
7. Show how the amount was calculated
8. State it is under the CCA
9. Be accompanied by Form 1
10. Be served at the agreed interval.

Q5: What is required to identify the construction contract and work in a payment claim under the CCA?

A5: Include project details for the contract and describe the work carried out during the relevant period.

Q6: When is the default due date for payment under the CCA if the contract doesn’t specify?

A6: The default due date is ‘20 working days after a payment claim is served’ (section 18).

Q7: Why must a payment claim be accompanied by Form 1 under the CCA?

A7: Form 1 ensures compliance with exact wording in the Construction Contracts Regulations 2003.

Q8: How often can an architect submit a payment claim under AAS 2018 and CCCS?

A8: Monthly or periodically under AAS 2018 (clause 7.1) and monthly or as per Appendix B in CCCS (clause 5.1).

Question 36

Q

Q1: What are the key requirements for a valid payment claim under the CCA?

A1: A valid payment claim under the CCA must be in writing, identify the construction contract, specify the construction work, indicate the payment period, state the claimed amount, identify the due date, show how the amount was calculated, state it’s under the CCA, be accompanied by Form 1, and be served at the agreed interval.

Q2: How do court decisions emphasize compliance with section 20 of the CCA for payment claims?

A2: Courts emphasize strict compliance with section 20, invalidating claims for reasons such as missing Form 1, not specifying a due date, and providing insufficient details of the claimed amount.

Q3: When is a payment schedule considered invalid under the CCA?

A3: A payment schedule is invalid if not provided within the specified time or within 20 working days after the payment claim. Failure results in the payer being liable for the full claimed amount without the ability to dispute.

Q4: What factors lead to the invalidation of payment schedules according to court decisions?

A4: Courts invalidate payment schedules submitted as emails that don’t meet section 21 requirements, including lack of identification, being outside the timeframe, and lacking necessary details.

Q5: How does non-response to a payment claim impact disputes under the CCA?

A5: Non-response to a payment claim makes the claimed amount immediately payable, forfeiting the payer’s right to dispute. Courts stress the importance of timely responses or immediate payment under the CCA.

Q6: Why are professional negligence claims unlikely to use adjudication under the CCA?

A6: Professional negligence claims’ complexity and short adjudication timeframes hinder consultants’ ability to engage insurers, prepare a defense, and gather materials. This limits an adjudicator’s ability to make informed decisions.

Q7: What challenges exist for adjudicating professional negligence claims under the CCA?

A7: Adjudication challenges for professional negligence claims include their complexity involving multiple parties and the fast-track nature of adjudication, restricting time for insurer involvement and defense preparation.

Q8: How does the CCA define a dispute?

A8: Under the CCA, a dispute involves whether there’s been a breach of a construction contract term, reasons for non-payment, or whether an amount is payable under the contract.

Question 37

Q

Q: Purpose of Proforma Letters:

A: Proforma letters aid architects in standard communication, offering a structured format for various project scenarios.

Q: Exhaustiveness of Proforma Letters:

A: Not exhaustive; architects customize based on specific project needs, using them as a guide rather than a one-size-fits-all solution.

Q: Decision on Proforma Letter Use:

A: Architects decide based on individual project circumstances, considering appropriateness and potential modifications.

Q: Components of Debt Recovery Proforma – First Reminder:

A: Gentle prompt after overdue invoice, including details like invoice number, amount, payment terms, and initial contact suggestions.

Q: Debt Recovery Proforma – Fourth Reminder:

A: Strong letter after 60 days of non-payment, outlining consequences like service suspension, debt recovery costs, and legal actions, urging immediate payment.

Q: “Notice of Intention to Suspend Work” Letters:

A: Inform clients about work suspension due to non-payment, citing contractual sections and consequences under NZIA AAS 2018 and the Construction Contracts Act 2002.

Question 38

Q

Frequently Asked Questions about Construction Contracts and Buyer-Created Tax Invoices

Q1: What is a buyer-created tax invoice in construction contracts, and why is it important?

A: It’s an alternative to contractor-generated tax invoices. Principals use it to pay scheduled amounts promptly, complying with the GST Act.

Q2: How does the process of generating a buyer-created tax invoice work, and what role does the architect play?

A: Architects, in collaboration with principals and contractors, can issue buyer-created tax invoices, streamlining payment processes. Compliance includes stating ‘buyer-created tax invoice – IRD approved’ and listing GST numbers.

Q3: Can principals make amendments or deductions, and how does it affect payment schedules?

A: Yes, amendments or deductions are allowed. Buyer-created tax invoices provide a provisional schedule on Day 5, with a final version on Day 10 if changes occur.

Q4: What are the two options for timing the contractor’s tax invoice, and how do they affect payments?

A:
- Option 1: Tax invoice on Day 11, with six working days for payment.
- Option 2: Architect assesses amendments by Day 6; tax invoice issued by Day 8, providing nine working days for payment.

Q5: Why might a GST-registered principal prefer contractor-generated tax invoices?

A: Streamlined processes (Options 1 and 2) reduce the need for buyer-created tax invoices, making payment on non-tax invoices more practical and minimizing the risk of payment delays.

These concise FAQs cover key aspects of construction contracts, payment schedules, and the use of buyer-created tax invoices in New Zealand.

Question 39

Q

Q1: What does the recent Fletchers v Spotless case highlight regarding payment schedules in construction contracts?
A1: The case emphasizes the importance of adhering to the Construction Contracts Act 2002, specifically in providing clear and compliant payment schedules.

Q2: What triggered the dispute between Fletcher Construction (FCC) and Spotless Facility Services?
A2: Spotless claimed $2,067,715.86; FCC responded with a payment schedule showing Spotless owed $4,058,703.65, leading to a disagreement.

Q3: How did the High Court rule on the calculation aspect of FCC’s payment schedule?
A3: The High Court deemed FCC’s schedule compliant, stating that clear indications based on percentages were sufficient.

Q4: What was the issue with FCC’s payment schedule regarding reasons for deductions?
A4: FCC failed to provide adequate reasons for deductions. Small deductions were deemed acceptable, but larger ones required detailed explanations.

Q5: What lessons can be drawn from the Fletchers v Spotless case for payers in construction contracts?
A5: Payers must ensure payment schedules are clear, comply with the Construction Contracts Act, and provide detailed reasons for deductions.

Q6: What role does the architect play in ensuring compliance with the Act in payment schedules?
A6: Architects must clearly indicate calculations, reasons for differences, and, if applicable, reasons for withholding payment in compliant payment schedules.

Q7: What steps should architects take to ensure compliance with the Act in payment schedules?
A7: Architects should clearly display calculation methods, provide reasons for differences, and, if withholding payment, specify reasons, ensuring precise documentation and references.

Question 40

Q

Q1: Can architects reclaim overpayments from future interim certificates?
A1: Yes, architects can adjust future interim certificates to recover overpaid amounts, given no contractual restrictions.

Q2: What challenges arise when revaluing work for a future interim certificate, especially during events like COVID-19?
A2: Difficulty assessing sites may lead to inaccuracies in certified amounts. Over-certifying risks insolvency, while under-certifying invites legal challenges.

Q3: What does Hudson’s Building and Engineering Contracts suggest about interim certificates’ binding nature on employers?
A3: Hudson’s indicates that interim certificates typically represent an approximate value, not binding the employer’s satisfaction.

Q4: Are there express provisions in standard contracts restricting architects from adjusting previously issued certificates?
A4: Standard contracts lack such provisions, but modifications may include clauses limiting architects.

Q5: How can architects avoid disputes in calculating overheads and profit in variations?
A5: Define calculation methods during contract negotiations to ensure a common understanding.

Q6: What’s the difference between ‘mark-up’ and ‘margin’ calculations for overheads and profit?
A6: ‘Mark-up’ adds a percentage, while ‘margin’ subtracts the percentage. Clarity on the method used prevents misunderstandings.

Question 41

Q

Sure, based on the provided text, here are some questions and answers for flashcards:

Flashcard 1:
Question: What is the purpose of Practice Note PN 9.502?
Answer: The purpose of Practice Note PN 9.502 is to assist the Architect in deciding whether discrepancies in schedules of quantities, particularly undermeasures, are admissible.

Flashcard 2:
Question: According to NZIA SCC Schedule T3, what does Clause 3 state about the tender?
Answer: Clause 3 of NZIA SCC Schedule T3 states that the tender must be based on the tender documents, including a full Trade Summary.

Flashcard 3:
Question: In the context of NZIA SCC Schedule C2, what instructions does Clause 1 provide regarding the submission of a fully priced schedule of quantities?
Answer: Clause 1 of NZIA SCC Schedule C2 instructs on the submission of a fully priced schedule of quantities and what the Contractor must do to resolve discrepancies before submitting their tender.

Flashcard 4:
Question: According to NZIA SCC Schedule C2 Clause 5, what does it detail regarding discrepancies in measurement in the schedule of quantities?
Answer: NZIA SCC Schedule C2 Clause 5 details the process, including the Architect’s Direction, where discrepancies in measurement in the schedule of quantities have occurred.

Flashcard 5:
Question: What is the timeframe for notifying the Architect of any error or omission in the Contractor’s pricing, extension, or addition in the schedule of quantities?
Answer: The Contractor must notify the Architect “straight away,” and the parties have 10 days to rectify the problem once notified.

Flashcard 6:
Question: What is emphasized in NZIA SCC Schedule 2 Section 5 regarding discrepancies in a measurement in the schedule of quantities?
Answer: NZIA SCC Schedule 2 Section 5 emphasizes the responsibility for payment for re-measure in case of discrepancies in a measurement in the schedule of quantities.

Flashcard 7:
Question: Why is it not unreasonable to expect the Contractor to raise the matter of under-measure at the time the final claim for payment is being prepared?
Answer: As per the related provisions of NZIA SCC, all discrepancies, including under-measure, should be dealt with promptly. Thus, it is not unreasonable to expect the Contractor to raise the matter at the time of the final claim for payment.

Feel free to adjust or expand upon these flashcards as needed!

Question 42

Q

Certainly! Here are some flashcards based on the provided text:

Flashcard 1:
Question: What is the purpose of Practice Note PN 9.505?
Answer: The purpose of Practice Note PN 9.505 is to advise on the use of monetary allowances within construction contracts.

Flashcard 2:
Question: What are the key standard construction contracts mentioned in this Practice Note?
Answer: The key standard construction contracts mentioned are NZIA SCC (Standard Conditions of Contract) and NZIA SCC – SF (Standard Conditions of Contract Short Form).

Flashcard 3:
Question: What is a Prime Cost Sum, and what does it include?
Answer: A Prime Cost Sum is a material-related monetary allowance, including the net purchase price of specific materials, and a reasonable allowance for the Contractor’s Cost and profit. It excludes the cost associated with the installation of the materials.

Flashcard 4:
Question: What is a Provisional Sum, and what does it cover?
Answer: A Provisional Sum is a work or item-related monetary allowance that covers the carrying out of a specific part of the Contract Works, including all the Contractor’s Cost and profit.

Flashcard 5:
Question: How are Monetary Allowances adjusted?
Answer: Monetary allowances are adjusted by deducting the sum allowed and adding the actual cost (including profit and costs as applicable).

Flashcard 6:
Question: Can an item covered by a monetary allowance be deleted from the contract?
Answer: Yes, the inclusion of a monetary allowance does not guarantee that the work will necessarily be carried out or that the materials or item will be purchased.

Flashcard 7:
Question: Can a contractor include monetary allowances as part of their tender submission?
Answer: Yes, but it is typically a tagged or conditional inclusion in the tender, and the contractor needs to confirm that the sum allowed includes profit.

Flashcard 8:
Question: What advice does the Practice Note provide regarding the inclusion of sums in a contract?
Answer: The Practice Note advises minimizing the number of sums included in a contract to reduce cost uncertainty for the Principal.

Feel free to adjust or expand upon these flashcards based on your specific learning objectives!

Question 43

Q

Certainly! Here are flashcards based on the provided text:

Flashcard 1:
Question: What is the purpose of Practice Note PN 9.506?
Answer: The purpose of Practice Note PN 9.506 is to address the increasing trend of contractors requesting deposits during construction contracts and to provide advice on handling such situations.

Flashcard 2:
Question: According to the Practice Note, are deposits generally allowable under most forms of contracts used by Architects?
Answer: No, deposits are not generally allowable under most forms of contracts used by Architects.

Flashcard 3:
Question: What risk is associated with clients paying deposits or advances to subcontractors, as mentioned in the Practice Note?
Answer: The risk is that if the financial failure occurs either with the contractor or subcontractor, the payment made by the client may not be passed on to the intended party, leaving the contractor or subcontractor in financial distress.

Flashcard 4:
Question: What advice does the Practice Note provide regarding deposits in construction contracts in New Zealand?
Answer: The Practice Note advises that deposits are not normal within construction contracts in New Zealand. Clients should be informed of this, and alternative strategies for minimizing risk should be suggested.

Flashcard 5:
Question: What alternatives are suggested in the Practice Note instead of traditional deposits?
Answer: Alternatives suggested include making payments for off-site goods subject to usual provisions for their security, making special payments for goods before they leave the supplier or when they arrive on site, or agreeing to deposits only for specific items with predetermined maximum amounts.

Flashcard 6:
Question: What does the Practice Note recommend regarding deposits required by a contractor?
Answer: The Practice Note suggests that if deposits are required, a prudent Principal may consider making the required deposit payments directly to the party needing the deposit to ensure better control in the event of a contractor’s default.

Flashcard 7:
Question: What does the requirement for deposits by a contractor potentially indicate, according to the Practice Note?
Answer: The requirement for deposits may indicate that the contractor is insufficiently capitalized for the type of work being carried out or might be in poor financial health.

Feel free to adjust or expand upon these flashcards based on your specific learning objectives!

Question 44

Q

Certainly! Here are flashcards based on the provided text:

Flashcard 1:
Question: What is the purpose of Practice Note PN 9.507?
Answer: The purpose of Practice Note PN 9.507 is to advise on the security risk to the Principal when certifying payment for materials not fixed on site and to assist in administering contract payments for materials, goods, or fittings stored off-site when agreed to be a benefit.

Flashcard 2:
Question: What Contract Conditions does the Practice Note refer to regarding off-site goods or materials?
Answer: The Practice Note refers to NZIA SCC: 2013 Construction Contract Conditions Section 14, Rule 14.2.2, and Schedule G2, Security of Off Site Goods or Materials. Alternatively, NZIA SCC-SF 2011 may be used.

Flashcard 3:
Question: Under what circumstances can certification by the Architect for payment of materials stored off-site be done?
Answer: Certification for payment of off-site stored materials can only be done when agreed with the Principal and advised as an acceptable consideration in the contract documents.

Flashcard 4:
Question: What considerations must the Architect ensure when certifying payment for off-site stored materials?
Answer: The Architect must ensure a compelling reason for such payment, ownership security for the Principal, proper storage, identification, separation, labeling, insurance, and execution of SCC Schedule G2.

Flashcard 5:
Question: Provide examples of situations where payment for off-site materials may benefit the Principal.
Answer: Examples include early procurement to avoid cost increases, availability of materials only on indent, and storage of bulk materials off-site but progressively delivered to the site.

Flashcard 6:
Question: When should consideration of off-site payment provisions be given?
Answer: Consideration should be given during the tender, and documents should clearly state whether off-site payments will be accepted during the progress of the works.

Flashcard 7:
Question: What should the Architect do if a claim for an off-site payment is received and agreed to be considered?
Answer: The Architect should advise the Principal promptly, put the claim in place to avoid delays, additional costs, and risk.

Flashcard 8:
Question: What is the recommendation regarding off-site payment claims on smaller scale projects?
Answer: On smaller projects, the administrative costs may outweigh the benefits, and alternatives like direct pre-purchase or removal from the contract should be discussed and agreed upon.

Feel free to adjust or expand upon these flashcards based on your specific learning objectives!

Question 45

Q

Certainly! Here are flashcards based on the provided text:

Flashcard 1:
Question: What is the purpose of Practice Note PN 9.508?
Answer: The purpose of Practice Note PN 9.508 is to provide guidance and advice related to the obligations of the Architect under NZIA SCC when processing Contractor’s Payment Claims as per the Construction Contracts Act 2002.

Flashcard 2:
Question: According to NZIA SCC, when can the Contractor submit a Payment Claim?
Answer: The Contractor is entitled to submit a Payment Claim once a month, and the submission is deemed at the beginning of the first Working Day following the day the Payment Claim was received by the Architect.

Flashcard 3:
Question: What is the timeframe for the Architect to assess the Contractor’s Payment Claim and issue a Payment Schedule?
Answer: The Architect must assess the Contractor’s Payment Claim and issue a Payment Schedule within 5 Working Days of Payment Claim submission.

Flashcard 4:
Question: How long does the Principal have to notify the Architect of any amendments or deductions to the Scheduled Amount?
Answer: The Principal has 8 Working Days from Payment Claim submission to notify the Architect of any amendments or deductions to the Scheduled Amount.

Flashcard 5:
Question: When is the replacement Payment Schedule issued by the Architect if the Principal makes amendments or deductions?
Answer: The replacement Payment Schedule must be issued by the Architect within 10 Working Days of Payment Claim submission if the Principal makes amendments or deductions.

Flashcard 6:
Question: What is the timeframe for the Principal to pay the Scheduled Amount to the Contractor?
Answer: The Principal is required to pay the Scheduled Amount and GST within 17 working days of Payment Claim submission.

Flashcard 7:
Question: What is the timeframe for processing Final Payment Claims according to NZIA SCC?
Answer: NZIA SCC does not provide a stated period for submission of the Contractor’s final Payment Claim. Monthly Payment Schedules and payments continue until a Final Payment Schedule is issued.

Flashcard 8:
Question: What is the address for the submission of Payment Claims to the Principal?
Answer: Payment Claims must be submitted to the Architect and the Principal. The address for the submission of Payment Claims to the Principal is included in the Specific Conditions of Contract schedule.

Feel free to modify these flashcards based on your specific learning goals!

Question 46

Q

Certainly! Here are flashcards based on the provided text:

Flashcard 1:
Question: What is the purpose of Practice Note PN 9.509?
Answer: The purpose of Practice Note PN 9.509 is to outline the options available for issuing a payment certificate under SCC for work executed under a building contract following the Construction Contracts Act 2002 (CCA).

Flashcard 2:
Question: What are the two options available for issuing a payment certificate under SCC?
Answer: The two options are (a) Buyer Created (Architect generated) Tax Invoice and (b) Contractor Generated Tax Invoice.

Flashcard 3:
Question: How is the Buyer Created Tax Invoice generated in the first option?
Answer: The Contractor applies to the Architect for payment, and the Architect, on behalf of the Principal, issues a Buyer Created Tax Invoice. Both the Contractor and Principal must be registered for GST.

Flashcard 4:
Question: What is the process in the second option, Contractor Generated Tax Invoice?
Answer: The Contractor applies to the Architect for payment, and the Architect issues a Payment Schedule for the amount payable. The Principal must pay the Contractor the amount certified by the Architect (plus Goods and Services Tax).

Flashcard 5:
Question: In what situation is it appropriate to forward the Contractor’s Tax Invoice directly to the Principal without issuing a Payment Schedule?
Answer: For small contracts involving the supply of minor items where no assessment of the value of work executed is required, the Contractor’s Tax Invoice may be forwarded directly to the Principal under cover of a letter.

Flashcard 6:
Question: What factors need to be considered when deciding between the two procedures?
Answer: Factors include the requirement for the architect to ensure the Payment Schedule is in the form of a GST Invoice, agreement between Principal and Contractor, inclusion of GST registration numbers, and the possibility of canceling and reissuing Tax Invoices.

Flashcard 7:
Question: What action is recommended in the Practice Note?
Answer: Discuss the options and agree procedures with the Principal and Contractor. If procedures differ from SCC provisions, issue an Architects Direction. It is generally suggested that the Architect generates the Payment Schedule as a Buyer Created Tax Invoice.

Feel free to modify these flashcards based on your specific learning goals!

Question 47

Q

Certainly! Let’s convert the information into a question and answer format for flashcards:

Flashcard 1:
Question: What is the purpose of Practice Note PN 9.510 Contingency Sum?
- Answer: It serves as advisory information for NZIA practices, providing guidance on contingency sums for contracts.

Flashcard 2:
Question: When were the Published Status Notes for this practice note last updated?
- Answer: The first edition was in May 2007, and the second edition was updated in August 2008.

Flashcard 3:
Question: Which contracts is Practice Note PN 9.510 applicable to, and what advice does it offer?
- Answer: It is applicable to NZIA Standard Conditions of Contract (NZIA SCC), NZS 3910, and NZS 3915. It advises architects to discuss contingency sums with clients in a timely manner.

Flashcard 4:
Question: What are the key words associated with this practice note?
- Answer: Contingency, Contingency sum (e.g., 5%, 2.5%, 7.5%, 10%+), Contingency allowance, Allowance for variations.

Flashcard 5:
Question: How can the contingency sum be assessed, and what are the recommended percentages for different contract complexities?
- Answer: The contingency sum can be assessed as a percentage of estimated costs. Recommended percentages include 5% for most contracts, 2.5% for simple contracts, 7.5% for complex contracts, and 10% or more for alteration work with high uncertainty.

Flashcard 6:
Question: What actions should architects take regarding contingency sums according to this practice note?
- Answer:
- Advise clients on potential contract variations.
- Suggest making an allowance for a sum not less than specified percentages.
- Consider special circumstances for greater or lesser sums.
- Suggest keeping the contingency sum separate unless specific reasons dictate otherwise.
- If included in the Contract Price, inform the client that expenditure requires direction from the Architect, and the Contractor has no right to it.

Question 48

Q

Flashcard Set: Construction Contract and Liquidated Damages

Question: When was the first edition of Practice Note PN 9.511 on Liquidated Damages issued?
Answer: May 2001
Question: What is the purpose of Practice Note PN 9.511?
Answer: It provides brief guidance and a pro forma for use with the NZIA SCC Standard Conditions of Contract and may also be used with NZS 3910 Conditions of Contract for Building and Civil Engineering Construction.
Question: What is the key difference between liquidated damages and penalties for late completion?
Answer: Liquidated damages are an agreed genuine pre-assessment of the loss, while penalties are not always enforceable. Liquidated damages are part of the contract terms.
Question: According to Section 2.2, who decides the amount of liquidated damages in a construction contract?
Answer: It is not the Architect’s prerogative to decide the amount of liquidated damages; the amount is set and included in the contract.
Question: Why is it important to record the basis of calculation of liquidated damages on file?
Answer: It is crucial for substantiating the amount if questioned. The specific condition provides for damages to be set at $ per calendar day.
Question: If there are no liquidated damages, what alternative can a Principal claim?
Answer: The Principal may still claim general damages, but these have to be proven, involve a lengthier process, incur considerable costs, and the outcome may be uncertain.
Question: What actions are recommended in Section 3.0 of the Practice Note?
Answer:
- Appraise clients of the provision for liquidated damages in the contract.
- Assist clients in assessing the costs they may incur due to late completion.
- Provide advice on ongoing fees billable in the event of late completion.
- Insert the words “No Liquidated Damages” if the client decides against them.
Question: When should the pro forma letter to the client and the form for pre-assessment of liquidated damages be referred to?
Answer: Refer to them when the client decides on the inclusion or exclusion of liquidated damages in the contract.

Question 49

Q

Flashcard Set: Construction Retentions

Question: When was the first edition of Practice Note PN 9.512 on Retentions issued?
Answer: November 2007
Question: What is the purpose of Practice Note PN 9.512?
Answer: To advise on the reasons for the inclusion of retentions in construction contracts.
Question: What is the background regarding retentions in NZIA and NZS contracts according to Section 1.1?
Answer: Retentions are a standard part of the most widely used conditions of contract (NZIA and NZS). NZIA SCC provides for both a standard default requirement and an option for the author to set contract-specific retentions.
Question: According to Section 2.0, what are the twofold reasons for retentions?
Answer: To ensure that the Contractor carries out the contract works and achieves practical completion, as well as to correct defects during the defects liability period.
Question: What is the standard rate for retentions according to Section 2.2?
Answer:
- 10% on the first $200,000.00
- 5% on the next $800,000.00
- 1.75% on the balance to a maximum of $200,000.00
Question: What percentage of retentions is payable upon achieving Practical Completion, and how does it compare with NZS 3910 and 3915?
Answer: 40%; NZS 3910 and 3915 provide for 50% to be payable.
Question: List three alternative retention regimes mentioned in Section 3.0.
Answer:
- Retentions at a lower rate (e.g., 50% of the normal rate).
- Retentions only on the last few payments before practical completion.
- Retentions as normal but capped at a low figure.
Question: According to Section 4.2, what significant shift occurs if there are no retentions in a contract?
Answer: A significant shift in the balance of risk from the contractor to the Principal.
Question: What is the advice given in Section 4.4 regarding retentions?
Answer: It is always better to have some retentions rather than none at all.

Question 50

Q

Flashcard Set: Contract Procedures in SCC1

Question: When was the second edition of Practice Note PN 9.513 on Contract Procedures in SCC1 published?
Answer: July 2002
Question: What is the purpose of Practice Note PN 9.513?
Answer: It is to assist members in the administration of SCC1-based contracts. The pro-formas are for guidance and not mandatory for use but can be adapted for specific contracts.
Question: What has been revised and moved to Practice Note PN 9.509 according to the note?
Answer: The pro forma payment certificate and combined payment certificate/Tax invoice have been revised and moved to PN 9.509 Tax Invoices/Payment Certificates.
Question: What is the purpose of a Variation Price Request (VPR) according to Section 1.0?
Answer: It is a request to the Contractor to price and potentially claim an extension of time for a contemplated change in the contract works. It is not to be confused with Variations or other Architect’s Directions.
Question: How should Architects use VPRs in their procedures?
Answer: Some Architects use VPRs as part of a formal procedure, issuing one with each change envisaged in the Contract Works, as described in the tender documents.
Question: Who issues all Directions to the Contractor according to Section 2.0?
Answer: The Architect issues all Directions to the Contractor, including Variations to change the Contract Works.
Question: How does the pro-forma in Section 2.0 handle the recording of the Contractor’s receipt of Directions?
Answer: It provides for the Contractor to sign a duplicate copy of each Direction, which is then returned to the Architect. This is an optional procedure, and confirmation of receipt can also be recorded at site meetings.
Question: What does SCC1 Section 19 define as “Direction” according to Section 3.0?
Answer: SCC1 Section 19 defines “Direction” to cover a wide range of matters. The attached pro forma is for general use in matters that do not constitute a Variation.
Question: What is the purpose of the Contract Price Adjustment Statement according to Section 4.0?
Answer: It is to assist the Architect in recording agreement with the Contractor on the adjusted Contract Price, providing a basis for a financial report to the Principal, including estimates of the cost of Variations that have not been agreed and other known or estimated forward costs.

Question 51

Q

Flashcard Set: Retentions Regime in Construction Contracts

Question: When was the first edition of Practice Note PN 9.514 on Retentions Regime published?
Answer: February 2017
Question: What is the purpose of Practice Note PN 9.514?
Answer: To advise practices about changes to the Construction Contracts Act 2002, introducing a mandatory retentions regime.
Question: What are the key points related to the retention provisions as mentioned in Section 1.2?
Answer:
- The rules apply to all commercial construction contracts entered into or renewed on or after March 31, 2017.
- Some contracts involving domestic dwellings may be affected if they fall within the definition of a commercial construction contract.
- The regime applies to all retentions, regardless of value.
Question: What does Section 1.2(e) state about the value of retentions?
Answer: The rules will apply to all retentions, regardless of the value. No regulations proposing a minimum value have been issued.
Question: According to Section 1.2(f), how should retentions be held?
Answer: Retentions should be held in cash or other liquid assets that are readily convertible into cash.
Question: What is recommended regarding the handling of retention money according to Section 1.2(g)?
Answer: While section 18E(2) provides that retention money does not need to be paid into a separate trust account, it would be prudent to keep the money separate.
Question: When must retention money be paid out according to Section 1.2(h)?
Answer: The retention money must be paid out when the contractor’s obligations under the contract, including rectification of defects, have been performed to the required standard.
Question: What is mentioned about the final retentions payment in Section 1.2(i)?
Answer: The final retentions payment is typically due at the conclusion of a defects notifications period, less the value of any uncorrected or uncompleted work.
Question: What contracts does the retentions regime specifically apply to, as stated in Section 2.1?
Answer: Contracts that provide for a specified portion of the amount claimed to be withheld to secure the rectification of defects before the end of the defects liability period.
Question: According to Section 2.4, what is the basis assumed for this Practice Note?
Answer: The Practice Note is on the basis that there is a Construction Contract with a Defects Notification Period.

Question 52

Q

Flashcard Set: Times for Starting & Completing - NZIA SCC

Question: When was the first edition of Practice Note PN 9.601 on Times for Starting & Completing published?
Answer: October 2007
Question: What is the purpose of Practice Note PN 9.601?
Answer: It deals with issues related to the times the Contractor has to start and complete the Contract Works as covered in Section 11 of NZIA SCC.
Question: According to Rule 7.1 in NZIA SCC, what does the Principal need to provide after the notice of acceptance of Tender?
Answer: The time, in working days, after the notice of acceptance of Tender, for the Principal to give possession of the Site to the Contractor.
Question: When must the Contractor start work, according to Rule 11.1.1 in NZIA SCC?
Answer: The Contractor must start work within 5 Working Days of being given possession of the site or when directed by the Architect.
Question: If the Contractor has not started work after five working days, what action should be taken according to Section 1.3?
Answer: Write to the Contractor instructing him to explain the delay and to commence the work immediately.
Question: When does the time for completion commence, according to Section 1.4?
Answer: The time for completion commences when the Contractor is given possession of the site, not when he actually starts on site.
Question: What does Rule 11.3 in NZIA SCC specify regarding the progress of the contract works?
Answer: It provides the date by which the Contractor is to provide a program of the works, and simple bar charts should be insisted upon even on smaller jobs.
Question: Why is keeping clear records of actual progress important, as mentioned in Section 2.6?
Answer: It is important for later reference in case the Principal decides to end the Contract for failure to make regular progress (see Rule 16.6(a)).
Question: According to Rule 12.1 in NZIA SCC, when is the Contractor’s advice of achieving Practical Completion required?
Answer: It is required on Schedule E1, and a Schedule E2 Producer Statement Construction form may also be required.
Question: When is the Contract considered complete, according to Section 3.3?
Answer: The Contract is not actually complete until all the items on the Defects Liability list have been remedied.

Question 53

Q

Flashcard Set: Architect’s Authority to Decide Practical Completion - NZIA SCC

Question: When was the first edition of Practice Note PN 9.602 published?
Answer: March 1999
Question: What is the purpose of PN 9.602?
Answer: Provides advice on the Architect’s authority and responsibilities for deciding Practical Completion under NZIA SCC and NZIA SCC – SF.
Question: What is emphasized regarding the Architect’s role?
Answer: The Architect is solely appointed to administer the Contract impartially (NZIA SCC Rule 1.3).
Question: Can the Architect delegate responsibilities?
Answer: Yes, but responsibility remains. The Architect can appoint a representative with specified powers.
Question: What power cannot be given to a representative?
Answer: The power to review matters in dispute (NZIA SCC Rule 4.2.1).
Question: What assumption is made in NZIA SCC – SF?
Answer: It’s assumed that, for short-form contracts, there’s no appointment of a representative.
Question: What should the Architect do if lacking knowledge or experience?
Answer: Seek expert advice but retain sole responsibility for the decision.
Question: What does Section 3.3 highlight about the Architect’s actions?
Answer: Handing over responsibility for Practical Completion to another person changes the Contract, which requires agreement from the Principal and Contractor.
Question: Can the Architect change the Contract?
Answer: No, only the Principal and Contractor, by agreement, can change the Contract.
Question: What authority does the Architect have regarding Directions and Variations?
Answer: The Architect can issue Directions, including Variations that change the Contract Works, but cannot change the Contract itself.

Question 54

Q

Flashcard Set: Practical Completion & Defects Liability Certificates - NZIA SCC

Question: When was the first edition of Practice Note PN 9.603 published?
Answer: May 2011
Question: What is the purpose of PN 9.603?
Answer: Advises members on the new definition of Practical Completion and other changes to the Practical Completion Certificate.
Question: Who receives the Practical Completion Certificate and Defects Liability Period Certificate?
Answer: Issued to the Principal and copied to the Contractor, with specific instructions not to be issued or relied upon by any other party.
Question: How is Practical Completion defined in NZIA SCC 2011 Schedule E3?
Answer: (a) Able to be used without material inconvenience, (b) Generally built in accordance with Contract documents, (c) Complete except for minor defects, omissions, agreed deferred work, undiscovered defects, and provided information/warranties.
Question: What must be complete for the works to attain Practical Completion?
Answer: Fully available for use, ready for occupation, and permitting uninterrupted occupation except for minor omissions or defects at convenient times.
Question: What should be attached to the Practical Completion Certificate regarding defects and omissions?
Answer: A list of agreed minor omissions, defects, and deferred work consistent with the definition of Practical Completion.
Question: Can Practical Completion and Defects Liability Period certificates be issued subject to conditions?
Answer: No, they must be unconditional. Any conditions should be listed separately.
Question: Who makes decisions about Practical Completion and the Defects Liability Period?
Answer: The Architect. While information may be received from others, the decision cannot be delegated.
Question: What are the flow-on effects of the Practical Completion Certificate?
Answer: Affects liquidated damages, release of retentions, Defects Liability Period, insurances, and bonds.
Question: What is emphasized regarding signing the certificates under NZIA SCC 2011?
Answer: The certificates should be signed by the limited liability NZIA Practice, not by the individual signing, to avoid personal liability.

Question 55

Q

Flashcard Set: Extension of Time - PN 9.604

Question: When was the first edition of Practice Note PN 9.604 published?
Answer: December 1995
Question: What is the purpose of PN 9.604?
Answer: To guide the Architect in confirming extensions of time in writing to avoid ambiguities, establish a new completion date, and remind the contractor of the need to maintain insurances.
Question: Why is it crucial to have a clear due date for completion in the Contract Documents?
Answer: Ambiguities in the completion date can expose the Employer to claims for additional costs, and the right to Liquidated Damages may be lost.
Question: What are the suggested actions in PN 9.604 regarding wet weather or other potential disruptions?
Answer: Consider all possible factors that could affect the progress of the Works, including fine weather that might interfere with certain tasks.
Question: How should claims for extensions of time be handled according to PN 9.604?
Answer: Evaluate claims as per the General Conditions of Contract. Call for additional information if necessary, especially regarding critical items for achieving practical completion.
Question: What is the purpose of confirming any extension of time in writing?
Answer: To clearly communicate the extension, establish a new completion date, and remind the contractor of the need to maintain insurances.
Question: What does the Pro-forma provided in the Appendix include?
Answer: A Notice to Contractor, details of the contract, the extension of time granted, and the reasons for the extension, along with a section for cost adjustment resulting from the extension.
Question: What must the contractor ensure regarding insurances when an extension of time is granted?
Answer: Ensure that all insurances cover the period to the extended date and provide evidence of the new expiry date of insurances.
Question: According to the Pro-forma, how is the extension of time granted under different circumstances specified?
Answer: It is specified by referencing relevant clauses in NZIA Standard Conditions of Contract (SCC) and NZIA SCC - SF, and by selecting applicable subclauses, such as unforeseeable physical conditions, variations, weather interference, etc.
Question: What is the significance of having a clear completion date in the Contract Documents?
Answer: It helps avoid serious implications, such as potential claims for additional costs and the loss of the Employer’s right to Liquidated Damages.

Question 56

Q

Flashcard Set: Suspending Work / Ending Contract - PN 9.605

Question: When was the first edition of PN 9.605 published?
Answer: October 2007
Question: What is the purpose of PN 9.605?
Answer: Deals with issues related to Suspending of Work and Ending of the Contract, Section 16 of NZIA SCC.
Question: What’s the advice regarding legal steps when suspending or ending a contract?
Answer: Obtain legal advice, secure clear written instructions from the Principal, and ensure compliance with time limits.
Question: Under what circumstances can the Contractor suspend or end the contract?
Answer: As outlined in NZIA SCC Section 16, Rules 16.1, 16.2, and 16.3.
Question: What authority does the Architect have regarding suspending work?
Answer: Architect can suspend work under Rule 16.4, and the Contractor must comply.
Question: What circumstances allow the Principal to end the contract?
Answer: As outlined in Rules 16.5, 16.6, and 16.7.
Question: Consequence if the Principal ends the contract under Rules 16.5 and 16.6?
Answer: Principal gains automatic possession of the Site; Contractor’s interests transfer to the Principal.
Question: How might the Architect be pressured when the Contractor suspends work?
Answer: Pressure arises with claims for additional costs; Contractor must provide evidence for such claims.
Question: What additional work might be required for the Architect?
Answer: Inevitable additional work; Client notification is crucial, outlining proposals for charging extra work based on the Agreement for Services.
Question: Why is documenting the construction stage important if work is suspended or the contract ends?
Answer: Crucial for assessing project progress; includes comprehensive photography and written records.

Question 57

Q

Flashcard Set: As Soon As Practicable - PN 9.607

Question: When was the first edition of PN 9.607 published?
Answer: November 2007
Question: What does PN 9.607 provide advice on?
Answer: The meaning of the term ‘as soon as practicable’ used in NZIA and NZS conditions of contract.
Question: How is the term “as soon as practicable” typically used in contracts?
Answer: Often used in conjunction with a stated period of time, acknowledging the possibility of delays for valid reasons.
Question: What is the objective of including the term “as soon as practicable” in contracts?
Answer: To recognize that there might be valid reasons for delays in performing an action within a specified time.
Question: Is the time open-ended when “as soon as practicable” is used?
Answer: No, time may be benchmarked by a set period, and additional time may be required based on reasonable reasons.
Question: What is the expectation when no specific time is stated with “as soon as practicable”?
Answer: The matter should be addressed promptly, considering other priorities and factors related to the contract.
Question: How should time-related issues be managed by both parties involved in the contract?
Answer: Maintain a reasonable balance between obligations and rights; obtain written confirmation when no claim will be made regarding the item.
Question: What is the advice regarding the rules mentioned in PN 9.607?
Answer: Do not delete or alter these rules as they provide equity within the contract.
Question: How should parties address contractual issues related to time?
Answer: Work cooperatively with the other party, considering reasons for delays and aiming for a reasonable resolution.
Question: If someone seeks advice on “reasonably practicable,” where should they refer?
Answer: Refer to Practice Note 9.107 for advice on “reasonably practicable” as used in the Building Act.

Brainscape's Knowledge GenomeTM

PN 9.100-9.600 - CHATGPT Flashcards

Brainscape's Knowledge Genome^TM