U6 Nature construction contracts

Question 1

Describe the similarities between construction contracts and other contracts? (6)

Answer 1

Offer and acceptance
Intention to create legal relationships
Form or consideration
Genuineness of consent
Capacity of parties
Legality of aims

Question 2

List the factors which often make construction contracts more complex? (5)

Answer 2

Changing requirements
Multiple parties
Unforeseen developments
Changing circumstances
Misunderstanding

Question 3

Identify the contracts to which the Housing Grants, Construction and Regeneration Act 1996 applies? (5)

Answer 3

Building contracts
Subcontracts
Engagement of architects, engineers and surveyors
Management contracts
Construction management agreements

Question 4

Identify which clauses you would expect to find in a construction contract and which are desirable? (11)

Answer 4

Possession
Completion
Non-completion
Liquidated damages
Defects liability
Variations
Payments
Retention
Insurance
Determination
Dispute resolution

Question 5

Explain the contractual machinery and the role of the contract administrator?

Answer 5

Detailed information of the design and construction of the building. Inconsistencies and discrepancies any ambiguity is for the contract administrator to resolve.

Question 6

Discuss the rights and obligations of the parties and the methods by which the position of each is protected under the act?
EMPLOYER

Answer 6

He must NOT cause delay to the works
He must not interfere with the supply of materials
Interfere with the duties of the CA.

He MUST
Give possession of the site
Supply all necessary information/documentation
Dismiss CA who doesn’t carry out duties
Where no price is agreed, pay fair and reasonable amount.

Question 7

Discuss the rights and obligations of the parties and the methods by which the position of each is protected under the act?
CONTRACTOR (3)

Answer 7

Complete works within reasonable time
Use material of satisfactory quality
Use satisfactory workmanship

Question 8

What is the role of the Contract Administrator?

Answer 8

The CA acts as an agent of the employer e.g providing information, instructions and documentation to the contractor and certification.

Independent adjudicator

Liability to the employer and the contractor.

Question 9

Describe the mischief which the act seeks to remedy?

Answer 9

Privity of contract, where only parties to a contract can sue on a contract.

Question 10

Describe the provisions of the ACT in relation to payment?

Answer 10

Entitlement to interim payments unless contract specifics or work takes less than 45 days.
Agreed payment milestones

Question 11

Describe the provisions of the ACT in relation to adjudication?

Answer 11

Rights of the parties to refer a dispute for adjudication.
If the contract does not comply with the act.
The provisions are not contained in the contract
The contract was oral only.

Question 12

Explain the application of the CDM regulations to construction contracts?

Answer 12

CDM regulations place legal duties on everyone involved in construction work.
CDM co-ordinators appointed for projects > 30 days or > 500 person days.
Ditto main contractor.

Question 13

Explain the circumstances in which contractor may seek loss and expense? (3)

Answer 13

Disruption caused by the employer

Expense, loss of profit.

Can be limited to direct and consequential loss or damage.