Random Q&A Practice Flashcards
Are there contracts that are particularly suited to managing risk well?
-To manage risk, I would advise the client to use a JCT D&B contract.
- The risk of design is transferred to the contractor who is obliged to carry out the works in accordance with the design which they have proposed.
- Minimising the risk the client faces.
What informs which JCT suite you should use?
- I would use the practice note ‘Deciding on the appropriate JCT contract 2016’
- It provides general guidance for employers, contractors and consultants involved in private and public sector procurement for the letting of construction contracts in the UK.
What is a collateral warranty and what is its purpose?
- Create contractual relationship between a third party and the contractor or professional consultant which sits alongside the building contract and grants rights to a third party which can be sued upon.
- . It is normally between the contractor and the subcontractor which allows the client to call upon the subcontractor if anything goes wrong
What is the difference between unliquidated and liquidated damages?
- Liquidated damages are a genuine pre-estimate of the loss suffered by the employer as a result of non-completion.
- Unliquidated damages are not capped and if they are to be used in the contract clause 2.29.2 will be left blank.
When can a client claim liquidated damages?
- Client can only claim for LAD’s once they have issued a non-completion certificate and pay less notice, the LAD’s will then be deducted in the valuation by the CA or EA.
What is alternative A payment and when would you recommend it ?
- Alternative A payment refers to payments made in stages on particular dates or milestones
- It used on smaller lower value D&B projects, therefore a QS is not listed in the contract as they are not required to value the works for a small amount.
What is the retention amount held?
- The standard retention amount held is 3% within MW, SBC and D&B contracts
- From my own experience 5% has been included within the contract due to the value of projects being worked on in order to ensure the client has sufficient funding for any defects in the rectification period.
What is the unamended rectification period?
6 months
What is the difference between under hand and as a deed when executing a project?
- The difference is the liability period – for under hand it is 6 years and for as a deed it is 12 years
What is meant by the liability period for under hand and as a deed?
- The liability period refers to the period the contractor can legally be taken to the court of law for the occurrence on any latent defects which occur after the rectification period.
Can the QS and EA be the same person?
- Yes they can be but I would recommend to separate the EA and QS on project to have two discrete individuals and for there to be different perspectives.
What is the purpose of a vesting certificate?
- Creates a contractual link between the client and subcontractors materials / goods off site which wouldn’t normally exist.
- This is to protect the client if contractor becomes insolvent another third party as creditors cannot claim the materials on site as the vesting cert shows the materials are the clients property.
Does a JCT Contract mention anything about a Vesting certificate?
Yes, JCT Contracts already include provisions that the contractor provides reasonable proof of:
- off-site property is vested in the client,
- materials are set apart or clearly marked
- they are insured.
What is meant by a rolling final account and what are the benefits?
- As per the final account procedures guidance note 2016 a rolling final account ensures all instructions and costs effects to a project are agreed and up to date at the point of the latest financial report.
- The QS must be organised as well as the contractor with regular discussions between parties to make agreements on an ongoing basis.
What is a provisional sum and what should the contractor include for within the sum?
- A provisional sum is a sum on money included within the contract works that cannot be described or measured in accordance with NRM2 at the time of tender.
When would you use a SBC CDP?
- When the client wants the contractor to design a discrete part of the works but not the majority, depending on the size and value of the project.
- For smaller lower value and shorter programme a minor building works contract with contractors design can also be used.
How many certificates are there under a SBC?
- Interim payment certificates
- Practical/sectional completion certificates
- Non completion certificates
- Make good defects certificate/rectification certificate
- Final account certificate
What is time at large and when would you use it?
- Time at large refers to the contractor no longer being obliged to complete the works by a particular date.
- But they must complete the works within a reasonable timeframe which is decided on a case by case basis.
- Time at large would be used where the clauses describing relevant events do not cover all eventualities
When do you issue the rectification certificate?
- On the day the rectification period ends
Is there any alternative to holding retention?
Retention bonds are way of avoiding problems associated with retention recovery.
- Amounts that would otherwise have been held as retention are instead paid, with a bond being provided to secure the amount.
- Similar to retention, the bond’s value will usually reduce after the certification of practical completion.
- Only if practical completion is not achieved by the subcontractor or if they prevent a certificate of making good defects from being issued will the retention bond take effect.
- The contractor is then able to ‘call’ on the retention bond.
Explain how you would measure for ceilings?
I would measure for ceilings by referring to NRM1, which states:
- Ceiling finishes are to be measured in m2.
- The area measured is the surface area of the ceiling.
- I would ensure to measure over all obstructions.
