Procurement of construction projects

Question 1

4 types of construction project contracts

Answer 1

traditional contract
design and build contract
management contracting
construction management

Question 2

What is a traditional contract

Answer 2

Construction and design are separate. Building contractors hired for construction and professional consultants hired for design.

Question 3

what is a design and build contract

Answer 3

The construction and design elements are in one contract. A building contractor is responsible to hire for both. May use own team or sub-contractors. Employer may create designs and then transfer them through novation to construction and design teams.

Question 4

what is novation

Answer 4

the transfer of rights and responsibilities within a contract

Question 5

what is a managing contract

Answer 5

Employer appoints a managing contractor who appoints contractors. They have limited liability to employer for failure of works contractors

Question 6

Construction management

Answer 6

employer appoints construction manager and professional consultants. Construction manager is responsible for managing the construction but employer enters into contracts with trade contractors even though manager organised them (this bit makes it different to managing contract

Question 7

obligations of an employer during construction

Answer 7

give up possession of premises and don’t interfere

Question 8

obligations of contractor during construction

Answer 8

complete works set out in specifications

Question 9

When does a contractor get paid

Answer 9

when the architect issues a certificate of practical completion the contractor is paid in full minus an retention monies withheld for snagging matters. The retention money is paid when a final certificate is issued.

Question 10

can the employer claim damages for delay

Answer 10

yes for amount agreed in contract but cannot be disproportionate to amount needed to enforce the obligations otherwise it would be an unenforceable penalty.

Question 11

Must the materials be of a particular standard

Answer 11

Yes S4 supply of goods and services act 1982 implies obligations to quality and fitness of building materials

Question 12

Must the works be of a particular standard

Answer 12

Yes S13 of the supply of goods and services act 1982 - implies a term that the contractor will exercise reasonable care and skill to see that works will be of satisfactory quality and reasonably fit for intended purpose.

Question 13

what standard of duty does the architect, consultant engineer and quantity surveyor owe the employer

Answer 13

standard of ordinary skilled man exercising and profession to have skills.
Duty by contract to carry out work with reasonable care, skill and diligence.

Question 14

how are contractual damages assessed

Answer 14

Hadley v Baxendale - c can recover:
losses arising naturally from the breach
losses in the reasonable contemplation of the parties at the time of contracting as possible results of breach

Question 15

what does the contracts ( rights of third parties) act 2000 allow

Answer 15

Allows a party to enforce the contract as if they were a party to it

Question 16

Requirements for the contracts ( rights of third parties) act 2000 to apply

Answer 16

contract entered into after 11 may 2000
contract must expressly confer right or purport to confer benefit 
must be expressly identified in the contract by name, class or description 
party doesn't have to exist at the time of contracting

Question 17

can liability for pure economic loss be recovered in tort

Answer 17

Not normally. only under Headley Byrne v Heller which allows pure economic loss to be recovered where a special relationship of close proximity exists which creates a duty of care to avoid loss due to negligent misstatement. a duty is owed to exercise reasonable care if he knew or ought to know that reliance was being placed on skill and judgement

Question 18

what is a collateral warranty

Answer 18

an agreement where they accept a duty of care towards someone they wouldn’t usually owe one to.

Question 19

Can you claim for pure economic loss under a contractual warranty

Answer 19

yes if loss suffered as a result of breach could have reasonably been contemplated at the time. Would need to show that contractual duty of care was breach and damage has ensued.

Question 20

Ways that a tenant or buyer can enforce the employers rights

Answer 20

assignment of rights
declaring a trust of rights (where employer retains interest in property)
forced enforcement of remedies (where employer agrees to enforce their rights against the contractor)