Standard Forms of Main and Sub-Contract

Question 1

What is a bespoke contract?

Answer 1

Contract conditions that are drafted specifically for a particular project

Question 2

What the advantages of standard forms over bespoke contracts?

Answer 2

a) Written by legal experts
b) Rights and obligations of each party are clearly set out to the required level of detail
c) Risks should have been allocated equitably between the parties
d) Parties should be familiar with the provisions in the form – greater consistently in application and fewer unforeseen anomalies
e) The time and expense of preparing a fresh document for each occasion is avoided
f) Case law is built up over time – provides good source of knowledge and clarity of terms

Question 3

What are the disadvantages of standard forms over bespoke contracts?

Answer 3

a) Apportionment of risks is rarely questioned and therefore becomes implicit – not taken account of
b) Familiarity is decreased as they are rarely used as printed – amendments
c) May not be appropriate to the needs of a particular project or client
d) Using an inappropriate standard form for the project will cancel out advantages

Question 4

When would use a bespoke contract rather than a standard form?

Answer 4

• Generally used for major projects with novel obligations
• Drafting them needs great skill and knowledge
• Drafting from first principles is too daunting for most in the industry

Question 5

What is the legal principle of ‘contra proferentum’?

Answer 5

• It is where ambiguous clauses are construed against the party who put the contract forward
• If a contract has been prepared by only one of the parties, who may use superior bargaining power to get the other party to accept it, this may apply
• Does not apply to industry standard form contracts (would amendments)
• Would apply to a bespoke contract

Question 6

What are the main suites of construction contract?

Answer 6

• JCT
• NEC 3
• ICE 7
• GC Works
• FIDIC

Question 7

What does ‘JCT’ stand for?

Answer 7

Joint Contracts Tribunal

Question 8

What does NEC stand for?

Answer 8

New Engineering Contract

Question 9

What does ECC stand for?

Answer 9

Engineering and Construction Contract

Question 10

What does FIDIC stand for

Answer 10

It stands for:

International Federation of Consulting Engineers

(But in french)

Question 11

What does ICE stand for?

Answer 11

Institution of Civil Engineers

Question 12

Who publishes the GC/Works suite of contracts?

Answer 12

PACE – Property Advisors to the Civil Estate

Question 13

What are the main parts of the JCT contracts?

Answer 13

• Recitals
• Articles
• Contract Particulars
• Attestation
• Conditions – divided into 9 sections
• Schedules
• (Ammendments if included)

Question 14

Name the main types of JCT contract

Answer 14

a) Minor works
b) Intermediate
c) Standard building contract
d) Major Projects
e) Design and Build
f) Prime cost contract
g) Measured Term contract
h) Construction Management Agreement
i) Management Contract
j) Framework Agreement

Question 15

What different types are there of standard building contract?

Answer 15

• Three types:
  a) With quantities
  b) Without quantities
  c) With approximate quantities

Question 16

When would you use JCT Minor Works?

Answer 16

• Projects that are short in duration, small and simple
• Guidance is for a value up to £150,000
• It is a short, easy to follow contract
• It is a lump sum form; design should be completed prior to execution
• Not as comprehensive as others – limited claims provisions, no fluctuations

Question 17

When would you use JCT Intermediate Contract?

Answer 17

• Recommended for project that do not exceed one year’s duration
• For projects that are simple in content, require only basic skills and trades and where services are not complex and where the works are already designed

Question 18

When would you use JCT Standard with quantities?

Answer 18

• Work has already been designed
• Where there is a bill of quantities
• It is a lump sum form
• The contractor’s risk is limited to price only
• The employer takes the risk of errors in the bill

Question 19

When would you use JCT Standard without quantities?

Answer 19

• Work has been designed prior to contract but there is no bill
• Contract documents will include drawings, specification and schedule of rates
• It is a lump sum form of contract
• The contractor’s risk includes both price and quantity

Question 20

When would you use JCT Standard with approximate quantities?

Answer 20

• This is a remeasurement form of contract
• There is no contract sum
• Used where the design is not completed at time of execution
• An approximate bill of quantities has been prepared
• Construction is wished to commence prior to the design being completed

Question 21

When would you use JCT Major Works?

Answer 21

• Projects that are significant in both size and quantity
• Generally for clients that have their own in house contractual procedures

Question 22

When would you use JCT DB?

Answer 22

• When the contractor is responsible for design and construction
• Similar in complexity to the standard building contracts
• The contactor’s proposals form the basis of the contract
• There is no mention of an architect or QS

Question 23

When would you use the prime cost contract?

Answer 23

• Broadly based on the provisions of standard building contract
• The contractor is paid the cost of carrying out the work plus a fee to cover OH&P
• Might be used if another contractor is hired to complete the works after an insolvency
• The employer bears the majority of the financial risk
• The total cost is not known until completion

Question 24

When would you use a JCT Measured Term Contract?

Answer 24

• Where the employer requires maintenance / minor works to be undertaken on a regular basis over a defined period of time on a defined list of properties
• Contract agreed on a schedule of rates for carrying out certain types of work
• Can be let on a fixed or fluctuating price basis
• Contains a break provision for terminating the contract early

Question 25

When would you use JCT Construction Management Agreement?

Answer 25

• When the construction management procurement route is picked
• When the employer wants an early start on site etc
• Construction Management Trade Contract also used as the standard form for the agreements between employer and trade contractors