Week 1 Flashcards by Martin Xiang

What is a Contract?

Promise:
- between capable parties
- creates obligation
- enforceable by law
Dispute hearing:
- is it a contract?
- if so, what is the exact meaning of the working

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Types of Laws

Public Law:
- Criminal law
- Revenue and taxation law
Private Law:
- Contract law
- Law of tort (Happiness)
International Law

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Sources of Law

Statute Law:
- Building act
- Health and Safety
- Construction contracts
Common law
Secundary Law (codes, standards, regulations)
By-laws

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What is the purpose of Building Act

Performance Standard
Safe
Evacuation
Sustainable

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What is the purpose of CPEng

Mark of Quality
Registered System
Code of ethics, disciplinary

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what is the purpose of Contracts

Protection
Fair and balanced
fast and effective dispute resolution
enforcement

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what is Privity of Contract

The relation between two contracting parties - only the person who is a party of the contract can sue on it

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what are the 2 forms of contract

Contract

Deed - Covenant

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Contract elements

Offer
acceptance
consideration
capacity
legality
intention to be bound
consent

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what is an offer

a promise
expressed or implied
intend to be in a binding obligation
time dependency
revocable

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what are offer revocations

withdraw before acceptance
Schedules revocation “Good until”
Offer revoked by counter-offer

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what is a Quote

an offer to do the job, quoting person is bound by the offer

should include: work type, dates, rates and costs.

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How do you accept an offer

Formal notification
placing an order
standard of industry
reliance
tacit acceptance

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what does Capacity mean in terms of contract law

whether the person have ability to enter contracts
- age
- unintoxicated

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what is the reality of Consent

Mistake - e.g. wrong calculation (common practise is to accept)

Misrepresentation
Duress

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what are the Interpretation aspects of a contract

Implied vs expressed
correspondence
Language
Exclusion

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what is Discharge

suspend contract
- performance
-agreement
-frustration
-operation of law
-breach

what are the Tender qualities

Responsive: All terms are met

Responsible: meets the requirements to submit offer

how are Tenders Selected

Award metric
- lowest price
- best qualified
- best proposal at fixed price
- best value

name the types of Delivery Methods

Negotiated
DBB
Design and construct
Project Manager Agent
Alliances
PPP

what is DBB Design-bid-build (traditional) method?

3 Linear Phases
3 Primary Players
2 Contracts

designer - qualification
GC - lowest bid

what are DBB advantages

Owner:
- Historically accepted
- Fixed price
- Low involvement
- Contractor takes risk
Contractor
- Contractor sets price
- Innovation = opportunity

what DBB disadvantages

Owner:
- Long delivery time
- No advice during design
- Can have conflicts
Contractor:
- Low margins of profit
- High risk for unforeseen conditions

what is PMA (project manager agent)

3 Linear phases
4 Primary players
3 Contracts (all with owner)

PM - qualification
A/E - qualification
GC - lowest bid

what are PMA Advantages

Owner - Increased representation - Independent evaluation - Increased constructability - Increased value engineering Contractor - Contractor sets price - Owner involvement low - Innovation

what are PMA Disadvantages

Owner: - PM assumes no risk - not guarantee cost - PM licensing not available - High owner/pm involvement Contractor - low margins - high risk for unforeseen conditions

what is Design and construct (Design-build) method

2 continuous phases 2 primary players (owner - db) 1 contract (owner - db) DB - qualifications/low bid

Design and construct (Design-build) Advantages

Owner: - sole responsibility - reduction of project duration - high constructability - claims reduction Contractor - receive both design and construction fees - non-adversarial relationship -react to scope changes

Design and construct (Design-build) Disadvantages

Owner - fewer checks and balances - reduced owner involvement -difficulty of selection Contractor - Large staff - additional risk - scope changes are difficult to track

what is an Alliance

major contractors and consultants become stakeholders. form a group of innovation and cooperation to manage the project.

what are Alliance details

- qualification based - initial scheduling and designs - higher initial cost but better outcome value

what is PPP (Public-Private-Partnership)

- Large scale - Long duration - complex -output focused -private expertise required -asset delivery - high maintenance requirements -risk transfer -opportunity for innovation -value for money

Define: Practical completion Provisional sum Prime cost amount

- Practical Completion: when all building work is completed - Provisional sum: sum that can be used when there is not enough detail to set a fixed price - Prime cost amount: the estimated cost that can be adjusted later

What is Adjudication

Last resort, the step before a lawsuit

what is Cost risk sharing

- Actual cost is compared with an agreed cost. - If actual cost exceeds the target cost, they will be allocated as agreed by the parties. -Helps to align the interest of the parties.

what is Guaranteed maximum price (GMP)

- A Principal shares in cost savings - Contractor will not be paid more if it is in excess of the GMP

What is bonds

a guarantee that the terms of a contract are met. If the contractor fails to met the conditions, the owner can claim the bond to recover financial losses

what is retention

am amount withheld by Party A to a contract as security for the performance Party B

What is subcontracts/subcontractors

The engineer/contractor may subcontract out to a 3rd party to supply materials or services under a contract.

what are the risks of using subcontractors

if the sub behind on schedule, it will result in an extension of the project time for the contractor