Professional Practice Issues

Question 1

There are several New Design Provisions within a practice, what are they?

Answer 1

• Contractor’s Design Submission Procedure
• Professional Indemnity insurance
• Copyright and licences
• Third party rights and collateral warranties

Question 2

What are the clauses involved in the procedure for the Contractor’s Design Submission?

Answer 2

Clause 2.2 – Contractor’s Designed Portion- ‘the Contractor shall…complete the design for the (CDP) including the selection of any specifications…(and) comply with the directions of the Architect / CA for the integration of the design of the (CDP) with the design of the Works as a whole…’

Clause 2.9.2.1 - ‘the Contractor…shall without charge provide…2 copies of such Contractor’s Design Documents, and (if requested) related calculations and information, as are reasonably necessary to explain or amplify the Contractor’s Proposals…’

Clause 2.9.3 - ‘The Contractor’s Design Documents…shall be provided…as and when necessary from time to time in accordance with the Contractor’s Design Submission Procedure set out in Schedule 1…and the Contractor shall not commence any work to which such a document relates before that procedure has been complied with’.

Question 3

How long is the Architect’s period for approval?

Answer 3

14 days from the date of receipt or if later then 14 days from the date stated in the Contract Documents. The Architect/CA shall then return a marked as an A, B, or C.

Question 4

What happens if the architect goes over this 14 day period?

Answer 4

If the architect goes over their agreed time then the drawings will be regarded as “A”

Question 5

What are the differences with marking the drawings A, B, or C?

Answer 5

‘A’ – carry out the CDP Works in strict accordance with that document;
‘B’ – carry out the CDP Works but incorporate comments and promptly resubmit.
‘C’ – do not carry out any work, address comments and resubmit or notify Architect/CA.

Question 6

How many copies of the Contractor’s Design Documents should be submitted?

Answer 6

2 and they should be submitted in sufficient time to allow any comments from the Architect

Question 7

Is the employer liable?

Answer 7

The employer shall not be liable to pay for any work…otherwise than in accordance with…‘A’ or ‘B’.

Question 8

If the contractor disagrees with the decision of the architect, what then happens?

Answer 8

If the contractor disagrees…notify with reasons…within 7 days. On receipt the Architect/CA must confirm or withdraw the comment…within 7 days.

Question 9

If the contractor does not reply to comments of notes made by the architect in the Contractor’s doncuments within 7 days, what happens?

Answer 9

It then gets treated as if there has been no variation.

Question 10

What is clause 6.11?

Answer 10

Obligation to Insure
‘the Contractor shall… take out…a Professional Indemnity insurance policy with a limit of indemnity of the type and in an amount not less than that stated…’
‘maintain such insurance until the expiry of the period stated…’
‘produce for inspection documentary evidence…’

Question 11

What is clause 6.12?

Answer 11

Increased cost and non-availability

‘If the Pll ceases to be available at commercially reasonable rates…notify… and discuss…’

Question 12

What is clause 2.13.2 and why is this important?

Answer 12

2.13.2 ‘the Contractor shall not be responsible for the contents of the Employer’s Requirements or for verifying the adequacy of any design contained within them.

Unfortunately in the current market, often employers and their lawyers will force contractors to take on responsibility to fulfil the employer’s requirements.

Question 13

How do JCT/SBCC aim to ensure that clause 2.13.2 remains intact?

Answer 13

For clarity JCT/SBCC have said that employers requirements should be the responsibility of the employer and that contractor’s proposals should be the responsibility of the contractor.
This then is a fair allocation of risk.

Question 14

What is clause 2.19?

Answer 14

Design liabilities and limitation
‘the Contractor shall…have the like liability to the Employer…as would an architect or, as the case may be, other appropriate professional designer holding himself out as competent to take on work for such design…’

Question 15

What is covered in clause 2.41 - Copyright

Answer 15

.1 ‘the copyright in all Contractor’s Design Documents shall remain vested in the Contractor’.

.2   ‘the Employer shall have an irrevocable, royalty-free, non-exclusive licence to copy and use the Contractors Design Documents…for any purpose relating to the Works…’

.3   ‘the Contractor shall not be liable for any use…other than that for which they were prepared’.

Question 16

What does the Scottish Minor Works Building Contract with contractor’s design MWD/SCOT involve?

Answer 16

SECOND RECITAL ‘the Works include the design and construction of the Contractor’s Designed Portion’

THIRD RECITAL ‘the Employer has had the following documents prepared…showing or describing or otherwise stating his requirements…’

Question 17

What are the contractor’s obligations under the MWD/SCOT?

Answer 17

1 ‘using reasonable skill care and diligence complete the design for the CDP’
2 ‘not be responsible for the…Employer’s Requirements’
3 ‘comply with the directions of the Architect/ CA for the integration of the design of the CDP’
4 ‘comply with regulation 13 of the CDM regulations’
5 ‘without charge provide…as and when necessary…two copies of such drawings and details’
6 ‘not commence any work (that relate) within 7 days’

Question 18

How do you respond to variation in the MWD/SCOT and what clause does this relate to?

Answer 18

3.6 Variations

1 ‘The Architect/CA may… issue instructions effecting a change in the Employer’s Requirements.’

Question 19

What is the common misconception in terms of extension of time when it comes to contractors and employers?

Answer 19

It is common belief in the construction industry that extensions of time are solely for the benefit of contractor. Giving the contractor more time to complete the works, reducing his liability for liquidated damages, they do not appear to be to the advantage of the employer. However, the effect of the extension provisions is to maintain the contractor’s obligation to complete within the defined time, and in the absence of these provisions, time is put at large by prevention (that is delays caused by the employer or those for whom the employer is responsible) and the contractor’s obligation is to complete within a reasonable time. The contractor’s liability can then only be for general damages if it can be proved that she has failed to complete within this reasonable time.

Question 20

What do clauses 2.26 - 2.29 refer to? and what to they allow for?

Answer 20

Clauses 2.26 – 2.29 Adjustment of Completion Date allows the Architect
• To retain a defined Completion Date
• To preserve the Employer’s right to liquidated damages where the Employer or those for whom she is responsible have delayed the Contractor
• To give the Contractor relief in respect of delays caused by designated neutral events

Question 21

What is covered under clause 2.27?

Answer 21

‘it becomes reasonably apparent that the progress of the Works … is being or is likely to be delayed’ the Contractor not only shall ‘forthwith give written notice to the Architect/Contract Administrator of the material circumstances, including the cause or causes of the delay, and shall identify in the notice any event which in his opinion is a Relevant Event’ but also, with such notice or soon as possible thereafter, ‘give particulars of the expected effects , including an estimate of any expected delay in the completion of the Works …’. In addition she must notify the Architect of any material change in the estimated delay, or in any of the other particulars given, and provide such further information as the Architect may reasonably require

Question 22

What is covered under clause 2.28?

Answer 22

Under Clause 2.28, provided the Architect is of the opinion that: (i) any of the events stated by the Contractor to be a cause of delay is a Relevant Event; and (ii) completion of the Works is likely to be delayed beyond the current Completion Date because of that or those Relevant Events, the Architect is required to give such extension of time, if any, as she considers to be fair and reasonable.

Question 23

What is the common misconception in terms of extension of time when it comes to contractors and employers?

Answer 23

It is common belief in the construction industry that extensions of time are solely for the benefit of contractor. Giving the contractor more time to complete the works, reducing his liability for liquidated damages, they do not appear to be to the advantage of the employer. However, the effect of the extension provisions is to maintain the contractor’s obligation to complete within the defined time, and in the absence of these provisions, time is put at large by prevention (that is delays caused by the employer or those for whom the employer is responsible) and the contractor’s obligation is to complete within a reasonable time. The contractor’s liability can then only be for general damages if it can be proved that she has failed to complete within this reasonable time.

Question 24

What do clauses 2.26 - 2.29 refer to? and what to they allow for?

Answer 24

Clauses 2.26 – 2.29 Adjustment of Completion Date allows the Architect
• To retain a defined Completion Date
• To preserve the Employer’s right to liquidated damages where the Employer or those for whom she is responsible have delayed the Contractor
• To give the Contractor relief in respect of delays caused by designated neutral events

Question 25

What is covered under clause 2.27?

Answer 25

‘it becomes reasonably apparent that the progress of the Works … is being or is likely to be delayed’ the Contractor not only shall ‘forthwith give written notice to the Architect/Contract Administrator of the material circumstances, including the cause or causes of the delay, and shall identify in the notice any event which in his opinion is a Relevant Event’ but also, with such notice or soon as possible thereafter, ‘give particulars of the expected effects , including an estimate of any expected delay in the completion of the Works …’. In addition she must notify the Architect of any material change in the estimated delay, or in any of the other particulars given, and provide such further information as the Architect may reasonably require

Question 26

What is covered under clause 2.28?

Answer 26

Under Clause 2.28, provided the Architect is of the opinion that: (i) any of the events stated by the Contractor to be a cause of delay is a Relevant Event; and (ii) completion of the Works is likely to be delayed beyond the current Completion Date because of that or those Relevant Events, the Architect is required to give such extension of time, if any, as she considers to be fair and reasonable.

Question 27

Whether or not an extension is given the Architect must write to the Contractor giving a decision ‘as soon as is reasonably practicable and in any event within 12 weeks’. If less than 12 weeks is left to the Completion Date the Architect ‘shall endeavour to do so’ prior to the Completion Date.

Answer 27

1. The extension of time attributed to each Relevant Event

2. The reduction is time attributed to a Relevant Omission (see 2.26.3) if applicable

Question 28

What is the architects role after practical completion?

Answer 28

Under Clause 2.28.5 the Architect is required to review and deal finally with extensions of time within 12 weeks after the date of practical completion. The Architect can have regard to any Relevant Events whether notified to her by the Contractor or not and can review and revise any previous decisions.

Question 29

What does clause 2.28.6 state?

Answer 29

Clause 2.28.6 ‘the Contractor shall use constantly his best endeavours to prevent delay … howsoever caused’

Question 30

The architect is required to give notice under which clause?

Answer 30

Clause 2.27

Question 31

Under clause 2.29 thirteen relevant events where extensions of time can be claimed are listed, what are they?

Answer 31

1. Variations
2. Architect’s Instructions
3. Deferment
4. Approximate Quantities not reasonably accurate
5. Suspension
6. Any impediment, prevention or default by Employer or Employer’s Persons or Architect & QS except to the extent contributed to by Contractor or Contractor’s Persons
7. Statutory undertakers
8. Exceptionally adverse weather conditions
9. Loss or damage by Specified Perils
10. Civil commotion / terrorism
11. Strike, lock-out or local combination of workmen
12. Statutory powers
13. Force majeure

Question 32

Define clause 2.32 Payment or allowance of liquidated damages.

Answer 32

• The rules on penalty clauses only apply to payments made as a result of a breach. If a sum is payable for an event which is not a breach then the rules do not apply. Any such payment should relate to a specific breach such as delay in completion and will not necessarily preclude recovering common law damages for other breaches
• ‘The essence of a penalty is a payment of money stipulated as in terrorem of the offending party; the essence of liquidated damages is a genuine covenanted pre-estimate of damage.’

Question 33

How are the fees for liquidated damages defined?

Answer 33

This estimate of loss, however, must be the client’s estimate of loss and not a figure simply calculated by the architect or the QS and inserted in the tender documents. The client must write to the architect confirming the overall figure to be inserted, and either in the same letter or under separate cover providing such detail as to allow the architect to confirm what has and what has not been included, e.g. professional fees and interest charges.

Question 34

How does clauses 4.23 and 4.24 enable the contractor in making the claim for Loss or Expense?

Answer 34

‘If … the Contractor incurs or is likely to incur direct loss and/or expense for which he would not be reimbursed by a payment under any other provision of these Conditions … because the regular progress of the Works or any part of them has been or is likely to be materially affected by any of the Relevant Matters, the Contractor may make written application to the Architect/Contract Administrator. … if … the Architect/Contract Administrator is of the opinion that the regular progress has been or is likely to be materially affected as stated in the application … , the Architect/Contract Administrator shall from time to time thereafter ascertain, or instruct the Quantity Surveyor to ascertain, the amount of the loss and/or expense which has been or is being incurred.’ [There are equivalent provisions regarding deferment of possession which have been omitted]
The Contractor is required:
• To make the application as soon as it has become, or should reasonably have become, apparent that the regular progress has been or is likely to be affected.
• The Contractor shall, upon request, support her application with such information as should reasonably enable the architect to form an opinion.
• The Contractor shall submit to the Architect or to the Quantity Surveyor upon request such details of such loss and/or expense as are reasonably necessary for such ascertainment.

Question 35

There are 5 non-mutual recurring issues which influence extensions of time, what are they?

Answer 35

1. Variations
2. Architect’s Instructions
3. Suspension
4. Approximate Quantities not reasonably accurate
5. Any impediment, prevention or default by Employer or Employer’s Persons or Architect & QS except to the extent contributed to by Contractor or Contractor’s Persons

The non-mutual events. Contractor will claim before practical completion. After pracitcal completion you can claim mutual events.

Question 36

Whether or not an extension is given the Architect must write to the Contractor giving a decision ‘as soon as is reasonably practicable and in any event within 12 weeks’. If less than 12 weeks is left to the Completion Date the Architect ‘shall endeavour to do so’ prior to the Completion Date.

Answer 36

1. The extension of time attributed to each Relevant Event

2. The reduction is time attributed to a Relevant Omission (see 2.26.3) if applicable

Question 37

What is the architects role after practical completion?

Answer 37

Under Clause 2.28.5 the Architect is required to review and deal finally with extensions of time within 12 weeks after the date of practical completion. The Architect can have regard to any Relevant Events whether notified to her by the Contractor or not and can review and revise any previous decisions.

Question 38

What does clause 2.28.6 state?

Answer 38

Clause 2.28.6 ‘the Contractor shall use constantly his best endeavours to prevent delay … howsoever caused’

Question 39

The architect is required to give notice under which clause?

Answer 39

Clause 2.27

Question 40

Under clause 2.29 thirteen relevant events where extensions of time can be claimed are listed, what are they?

Answer 40

1. Variations
2. Architect’s Instructions
3. Deferment
4. Approximate Quantities not reasonably accurate
5. Suspension
6. Any impediment, prevention or default by Employer or Employer’s Persons or Architect & QS except to the extent contributed to by Contractor or Contractor’s Persons
7. Statutory undertakers
8. Exceptionally adverse weather conditions
9. Loss or damage by Specified Perils
10. Civil commotion / terrorism
11. Strike, lock-out or local combination of workmen
12. Statutory powers
13. Force majeure

Question 41

Define clause 2.32 Payment or allowance of liquidated damages.

Answer 41

• The rules on penalty clauses only apply to payments made as a result of a breach. If a sum is payable for an event which is not a breach then the rules do not apply. Any such payment should relate to a specific breach such as delay in completion and will not necessarily preclude recovering common law damages for other breaches
• ‘The essence of a penalty is a payment of money stipulated as in terrorem of the offending party; the essence of liquidated damages is a genuine covenanted pre-estimate of damage.’

Question 42

How are the fees for liquidated damages defined?

Answer 42

This estimate of loss, however, must be the client’s estimate of loss and not a figure simply calculated by the architect or the QS and inserted in the tender documents. The client must write to the architect confirming the overall figure to be inserted, and either in the same letter or under separate cover providing such detail as to allow the architect to confirm what has and what has not been included, e.g. professional fees and interest charges.

Question 43

How does clauses 4.23 and 4.24 enable the contractor in making the claim for Loss or Expense?

Answer 43

‘If … the Contractor incurs or is likely to incur direct loss and/or expense for which he would not be reimbursed by a payment under any other provision of these Conditions … because the regular progress of the Works or any part of them has been or is likely to be materially affected by any of the Relevant Matters, the Contractor may make written application to the Architect/Contract Administrator. … if … the Architect/Contract Administrator is of the opinion that the regular progress has been or is likely to be materially affected as stated in the application … , the Architect/Contract Administrator shall from time to time thereafter ascertain, or instruct the Quantity Surveyor to ascertain, the amount of the loss and/or expense which has been or is being incurred.’ [There are equivalent provisions regarding deferment of possession which have been omitted]
The Contractor is required:
• To make the application as soon as it has become, or should reasonably have become, apparent that the regular progress has been or is likely to be affected.
• The Contractor shall, upon request, support her application with such information as should reasonably enable the architect to form an opinion.
• The Contractor shall submit to the Architect or to the Quantity Surveyor upon request such details of such loss and/or expense as are reasonably necessary for such ascertainment.

Question 44

There are 5 non-mutual recurring issues which influence extensions of time, what are they?

Answer 44

1. Variations
2. Architect’s Instructions
3. Suspension
4. Approximate Quantities not reasonably accurate
5. Any impediment, prevention or default by Employer or Employer’s Persons or Architect & QS except to the extent contributed to by Contractor or Contractor’s Persons

The non-mutual events. Contractor will claim before practical completion. After pracitcal completion you can claim mutual events.