Sept 2023 Flashcards
- What is the concept of “novation” in construction contracts, and how does it differ from “assignment”?
• Novation is when a new contract transfers both rights and obligations from one party to a new third party. Assignment transfers only contractual rights or benefits.
- What are the key issues after a design team has been novated in a construction project?
• Key issues include whether the new party can take action against the novated party for breaches that occurred before the novation.
- Explain the term “assignment” in contract law.
• Assignment refers to the transfer of contractual rights or benefits from one party to a third party.
- What is the limitation on assignment without consent in most contracts?
• Generally, contracts allow assignment of rights twice without consent, with written notification to the other party.
- How is “novation” different from “assignment” in contract law?
• Novation involves a new contract that transfers both rights and obligations from one party to a new third party, while assignment transfers only contractual rights or benefits.
- What are the criteria for frustration to occur in a contract?
• Frustration requires that the event is beyond the control of both parties, makes the contract impossible or illegal to fulfill, is not caused by either party’s default, and is not covered by the contract.
- When would you use a JCT Minor Works Form in construction projects?
• The JCT Minor Works Form is suitable for short-duration projects with straightforward construction, typically with a value of up to £200,000, where design is completed before execution.
- In what situations would you use JCT Intermediate Contracts in construction projects?
• JCT Intermediate Contracts are recommended for projects of short duration,
where detailed contract provisions are not necessary, but a fair allocation of risk is required.
- What is the purpose of the “design and build” procurement method in construction projects?
• The design and build method combines the design and construction phases under one contract, simplifying the process and often transferring design responsibility to the contractor.
- Explain the term “standard forms of contract” in the context of construction.
• Standard forms of contract are pre-drafted, widely recognized contract templates that provide consistent terms and conditions for construction projects. They help reduce disputes and save time.
- What are the key considerations when selecting a standard form of contract for a construction project?
• Project size, complexity, risk allocation, industry standards, and whether customization is needed.
- How does the “pay when paid” clause affect subcontractors in construction contracts?
• A “pay when paid” clause means subcontractors are paid only when the contractor receives payment from the employer. It can delay payment to subcontractors and is subject to legal regulations.
- What are “liquidated damages” in construction contracts?
• Liquidated damages are predetermined amounts of money specified in the contract that a party must pay if they fail to meet certain contractual obligations, typically related to project completion time.
- What is the purpose of a “payless notice” in construction contracts?
• A payless notice is issued by the paying party to the party expecting payment, indicating the amount to be paid and any deductions. It allows parties to manage disputes related to payment.
- What is “practical completion” in construction contracts?
• Practical completion signifies that the construction work has been completed, except for minor defects that do not significantly affect the intended use of the project. It triggers the defects liability period.
