APC - Contract Practice

Question 1

What are the various JCT Contract Suites?

Answer 1

• JCT SBC Contract (with/without/approx)
• JCT Design & Build
• JCT Intermediate Contract
• JCT Minor Works Contract
• JCT Management Contract
• JCT Construction Management Contract

Question 2

How are JCT Contracts Governed in the UK?

Answer 2

• JCT Contracts are Governed by the Law of England & Wales
• They operate within the framework of English Contract Law including common law principles (Case Law) and Statutory Legislation (HGCRA 1996)

Question 3

Are you aware of any Case Law?

Answer 3

I am aware of the T&T VS Ampleforth Abbey Trust, where construction began based on a LOI and no contract. There were delays which client could not claim LDs for. T&T found negligent.

Question 4

What is a LOI?

Answer 4

A LOI is a document issued to a contractor indicating the intention to enter a formal contract at a later date. Allows contractor to start work in the meantime.

Can be binding depending on wording/intent.

Question 5

Can you tell me about the House Grants Construction and Regenerations Act 1996?

Answer 5

• Form of Statutory Legislation that governs UK Construction Law
• Improve Payment Practices (prohibiting ‘Pay When Paid’)
• Providing Statutory Right to Adjudication (in all contracts)

Question 6

Why did you use JCT SBC on your project?

Answer 6

• Procurement strategy was largely defined by this point.
• I advise my client that since the programme had only allowed for 2 weeks to prepare, review and issue tender documents that producing a BOQ would delay the programme by circa 3 weeks.
• Also would be an additional cost for producing them.
• Not commonly used in the London fit out market.
• Risk for quantities also sat with Contractor.

Question 7

When would you advise on using a JCT Intermediate Contract?

Answer 7

• Medium size project
• Works expected to finish within 1 year

Question 8

When would you advise on using a JCT Minor Contract?

Answer 8

• Projects under £250-£500k
• Completed within a few months - year
• Simple project Design

Question 9

When would you advise on using a JCT Major Contract?

Answer 9

• High Value £10m+
• Complex Projects w Significant Design
• 18months to several years

Question 10

Difference between a Contract signed under Hand vs Deed

Answer 10

Under Hand - 6 year limitation period.
As a Deed - 12 year limitation period (2 directors and witnessed)

Question 11

What are the Valuation Rules under the JCT SBC/Intermediate Contract?

Answer 11

Valuation based on work properly executed on site and materials delivered to site. Measured Works.

Question 12

Can you name the Sections under a JCT?

Answer 12

Section 1 - Definitions and Interpretation
Section 2 - Carrying out the Works
Section 3 - Control of the Works
Section 4 - Payment
Section 5 - Variations
Section 6 - Injury, Damage and Insurance
Section 7 - Assignment, Performance Bonds and Guarantees & Collateral Warranties
Section 8 - Termination
Section 9 - Settlement of Disputes

Question 13

Why was the EOT for Spetisbury not granted?

Answer 13

There was no relevant event. The OOHs were already specified in the contract, therefore there was no change to the working condition following the instruction.

Question 14

What steps did you take in the EOT Process?

Answer 14

• No Relevant Event so NO EOT was granted.
• There was a letter agreed to extend the Completion Date, LDs remained.

Question 15

How would you assess the EOT if it was true?

Answer 15

*Review the Supporting information
* Validate the Build Up (Labour/Materials/Site Operations)
* Consider any Mitigation, how has the contractor taken reasonable steps to mitigate this?
* Assess time related cost.

Question 16

How as CA did you determine the EOT Claim?

Answer 16

• Upon receiving the Notice of Delay I referred to Clause 2.20 Relevant Events to determine.
• Confirm if this was a Relevant Event (in this case NO)

Question 17

Relevant Events vs Relevant Matter?

Answer 17

Relevant Event - Grant the contractor an EOT
Relevant Matter - Grant the contractor Loss & Expense

Not all RE’s are RM’s. Adverse Weather & Forece Majure are RE’s not RM’s.

JCT 2024 includes Epidemics as RE/RM

Question 18

How would you assess a Loss & Expense Claim?

Answer 18

• Request all supporting information
• Assess Claim (site overheads, labour, plant costs) referring to contract prelim rates
• Ensure the information aligns to time delay.

Question 19

What are the JCT Timelines for Valuations?

Answer 19

• Interim Valuation Date - 1 month form Possession of Site
• Interim Valuation Date - 1 month thereafter
• Due Date - 7 days after the IVD
• Payment Notice - 5 days from Due Date
• Final Date for Payment - 14 Days after Due Date
• Pay Less Notice - 5 days before final date for payment

Question 20

What insurances are you aware of under the JCT?

Answer 20

• Public Liability Insurance - Covers claims for injury or harm to public, property or third parties.
• Employers Liability Insurance - Covers for Injury or harm to employees.
• Works Insurance (Options A-C) - Covers for loss or damage to works during construction.
• Professional Indemnity Insurance - Covers for negligence in working practice.

Question 21

What is a Performance Bond?

Answer 21

Is a surety provided by a third party which covers the client should the contractor fail in their obligations to the contract or to complete the works.

If the contractor defaults, the bond provider pays the client usually 10% of the construction works.

Question 22

What is a Parent Company Guarantee?

Answer 22

Legal Agreement where the parent company of the contractor guarantees the performance of its subsidiary under the contract, should the contractor:
* Fail to perform
* Becomes Insolvent
* Breaches Contract