Contract Practice Level 1 Flashcards
How do variation requests work?
A variation is an agreement supported by consideration to alter terms of a contract. There must be express terms within contracts to instruct variations.
Standard forms of contract generally contain express terms for the contract administrator to instruct variations. Written notice of the variation must be given to the contractor and they must comment upon the impact of the variation in relation to cost and programme.
What are the JCT Suite of Contract options?
- Standard Building Contract
- Intermediate Building Contract
- Minor Works Building Contract
- Major Project Construction Contract
- Design and Build Contract
- Management Building Contract
- Construction Management Contract
- Constructing Excellence Contract
- Measured Term Contract
- Prime Cost Building Contract
- Repair and Maintenance Contract
- Homeowner Contract
- Tracked Change Contract
What are the NEC alternatives to JCT Suites?
A - Priced Contract with Activity Schedule
B - Priced Contract with BOQ
C - Target Contract with Activity Schedule
D - Target Contract with BOQ
E - Cost Reimbursable Contract
F - Management Contract
How do JCT and NEC suites differ?
NEC attempts to eliminate legal terms & is said to be written in plain english & explains terms in their natural meaning
NEC operates ‘early warnings’ where both the PM and contractor are responsible for highlighting any event which can impact time, cost or quality
JCT deals with time and cost separately, whereas NEC deals with the effects of time and cost together
JCT uses variations - NEC uses compensation events
JCT uses a contract administrator - NEC uses the project manager
NEC does not contain provisional sums
How does standardisation provide benefit for a project?
What typical contractual amendments have you encountered?
Do you agree with the typical contractual amendments you have encountered?
What would you do if you were asked to provide advice on contractual amendments you have encountered?
What are the parties’ responsibilities and duties under a contract?
What is the significance of the Local Democracy, Economic Development and Construction Act 2009?
It caused changes to the operation of construction contracts which had a knock on to the Housing Grants, Construction & Regeneration Act 1996
What changes did the Local Democracy, Economic Development and Construction Act 2009 bring to the construction industry?
- Section 109 - a party’s entitlement to stage / periodic payments & instalments
- Section 110 - ensures every contract provides adequate mechanisms for payment due dates
- Section 111 - means payment cannot be held without notice
- Makes both written and oral contracts subject to the act
How is the Local Democracy, Economic Development and Construction Act 2009 recognised in standard forms of construction contracts?
What are the essential components of a valid contract?
Offer
Acceptance
Consideration - the promise made by both sides to do something e.g. providing a building in return for money
Intent - the intent to create legal relation, could be in the form of a letter of intent
By way of examples, can you tell me how the essential components of a valid contract find their way into a JCT construction contract?
What is the principal difference between a parent company guarantee and a performance bond?
A PCG in its simplest form is where the parent company promises the employer than the subsidiary company will perform their contract with the employer, and this is in the nature of a secondary obligation.
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