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Construction Law > Contract Compilation & Execution > Flashcards

Contract Compilation & Execution Flashcards

1
Q

What is a contract

A

A legally binding agreement

Needs offer, acceptance and consideration under English law and both parties must be intended to be bound and fit to enter into contract

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2
Q

Unilateral vs bilateral contract

A

Unilateral - one promise in exchange for another promise

Bilateral - exchange of mutual promises

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3
Q

Deeds vs under hand

A

Deeds - solemn promise, signed and witnessed, consideration not required, 12 year limitation period

Under hand - can have any form, simple signature required, 6 year limitation period

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4
Q

What is tendering

A

Process of finding and appointing a contractor

Client approaches market (invitation to treat)

Contractors submit bids (offers)

Bids are reviewed and evaluated

Most suitable tenderer becomes contractor (acceptance)

Best value or lowest price award

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5
Q

What is a letter of intent

A

A letter from an employer to a contractor (or from contractor to SC) indicating the employer’s intention to enter into a formal written contract for works described in the letter

And asking the contractor to begin those works before the formal contract is executed

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6
Q

What is determination

A

A contract being stopped before completion

Usually a result of one party not being able to continue (insolvency, default of payments from client)

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7
Q

What is discharge

A

Extinguishing rights and obligations

By performance (normal), agreement or frustration (contract now impossible to perform at no fault of the parties)

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8
Q

Unliquidated damages basis for assessment

A

Assessed on basis of reasonably arising loss

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9
Q

What are liquidated damages

A

A genuine attempt to pre-estimate loss in the event of specific breaches

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10
Q

What are the implications of privity of contract

A

No third party can be affected (obligations)

Only the parties can enforce terms (rights)

Third party cannot sue under contract they were not party to

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11
Q

What are collateral warranties

A

Agreements used where the contract creates an obligation from one party to provide a warranty to a third, independent party outside the contract (e.g. residential development extending to tenants)

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12
Q

Key elements of NEC4 contracts

A

Clauses (terms and conditions)

A section for project parameters (Contract Data)

Definition of works (Scope, site information)

Pricing information (the Prices)

Design content (Scope including drawings and specifications)

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13
Q

Composition of NEC4 Contract

A

Core clauses

Main option (provides payment method)

Secondary options (X clauses)

UK specific clauses (Y clauses)

Dispute resolution (W clauses)

Custom options (z clauses)

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14
Q

What is a compensation event

A

An event which can affect the cost to the client, the time when the works will be completed or both

There are up to 29 potential CE’s under NEC4 dependent on X clauses selected

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15
Q

What are early warnings

A

Obligation to notify other party of any event that may:

Increase the prices

Delay completion

Delay meeting a Key Date

Impair the performance of the works once in use

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16
Q

Contract Data part 1

A

Completed by client

States contract options

Describes key information (the works, contractor’s responsibilities, important dates, retention percentage if option used etc.)

17
Q

Contract Data part 2

A

Completed by each tendering contractor including:

Key persons

Programme

Completion date

Total of the Prices (main options A-D)

Payment structure

18
Q

What are the Prices

A

If there are no CE’s, the Prices are the amount the contractor will receive for completing the works

19
Q

Priced contract options

A

A - activity schedule

B - bill of quantities

20
Q

Target contract options

A

C - activity schedule

D - bill of quantities

Pain/gain share

21
Q

Reimbursable contract options

A

E - cost reimbursable contract

F - management contract

22
Q

What is Scope and what does it define

A

Work to be done

Defines:

Activity schedule

Client’s liabilities

CE’s

Early warning decisions

23
Q

Core clauses

A

1 General
2 Contractor’s main responsibilities
3 Time
4 Quality Management
5 Payment
6 CE’s
7 Title
8 Liabilities and Insurance
9 Termination

24
Q

Who is the Client

A

Legal entity executing the contract with the contractor

Pays for the works and the process of delivery

Appoints PM and Supervisor

Provides site and Key Dates

25
Q

Who is the Contractor

A

Legal entity executing the contract with the client

“Provides the works in accordance with the scope” (20.1)

Proposes programme

26
Q

Who are the Key Persons

A

Proposed in CD part 2

Specific individuals Contractor proposed as management team

Their presence and skills are part of the offer

27
Q

Who is the PM

A

Appointed by client to administer contract

Oversees works, instructs contractor, accepts Contractor programmes and quotations, assesses CE’s and certifies interim payments

Tells Contractor which “others” to allow onto site

28
Q

Who is the Supervisor

A

Appointed by client to oversee quality of the works

Performs tests and inspections, instructs Contractor to search for defects, issues Defect Certificate when all defects corrected (44.3)

29
Q

Who are named suppliers

A

Suppliers who require access to the Project Bank Account if required

30
Q

Who are the senior representatives

A

Senior members of the client and contractor’s organisations who are not involved in the project

Provide initial dispute resolution method in W1 & W2

31
Q

Who are the dispute avoidance board

A

Independent body of 1 or 3 people (both parties choose one and agree on the 3rd or agree on just 1)

Provided by option W3

32
Q

Who is the adjudicator

A

An experienced, trained, neutral and independent individual with specialist knowledge

Used under options W1 & W2

Investigates and provides a decision

33
Q

What is the tribunal

A

The next level in the hierarchy of dispute resolution

Forms are litigation and arbitration (both binding)

34
Q

Twintec Ltd v Volkerfitzpatrick Ltd 2014

A

Injunction granted to a SC to restrain the contractor from pursuing a reference to adjudication after the appointment of an adjudicator

In the absence of agreement by the parties as to the appointment, any decision made by the adjudicator would be a nullity

Construction Law (12 decks)

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