Contract Admin Flashcards
(21 cards)
What rights are there under the construction act
The Local Democracy Economic Development Act 2009 was introduced in 2011 and amended the Housing Grants Construction and Regeneration Act 1996 (the Construction Act
OG:
-The right to be paid in interim, periodic or stage payments. >45 days.
The right to be informed of the amount due, or any amounts to be withheld.
The right to suspend performance for non-payment.
The right to adjudication.
Disallowing pay when paid clauses.
The act was amended in October 2011 to close loop holes within its provisions.:
-The dates for payments must be set out in the contract.
The client (or specified person) must issue a payment notice within five days of the date for payment, even if no amount is due. Alternatively, if the contract allows, the contractor may make an application for payment, which is treated as if it is the payment notice.
The client (or specified person) must issue a pay less notice (previously a withholding notice) if they intend to pay less than the amount set out in the payment notice, setting out the basis for its calculation.
The notified sum is payable by the final date for payment.
If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice. The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice. If the client does not issue a pay less notice, they must pay the amount in the default payment notice.
Pay when certified clauses are no longer allowed, and the release of retention cannot be prevented by conditions within another contract. So for example work contractors on a management contract project must have half of their retention released when their part of the works reach practical completion, not when the project as a whole reaches practical completion. This also applies to trade contractors on construction management contracts.
There are also changes to the right to suspend work for non-payment or to suspend part of the works and to claim costs and expenses incurred and extension of time resulting from the suspension.
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What was the purpose of the construction act
intended to ensure that payments are made promptly throughout the supply chain and that disputes are resolved swiftly.
What do you consider when undertaking a valuation on site
-valuation of whole work completed, not valuation of work since last payment.
-value = ‘total value of work properly executed by the contractor’
-too low = unreasonable financial problems for the contractor. Too high = risk to employer
-deductions: retention, previous certifications,
Even if the contractor hasn’t applied for payment, you still need to pay CA must still issue interim cert. STILL DO EVEN IF 0
What did you learn in: why professionals should e wary of practical completion
Practical completion is often easier to recognise than it is to define. Despite its importance, there is no precise legal interpretation of the term.
The article lays out the conclusion from different case law to define practical completion.
PC triggers a lot of things so it is important.
- The existence of latent defects cannot prevent practical completion
- In relation to patent defects, there is no distinction between an unfinished item (one that still needs to be completed) and a defective item that requires correction. Snagging lists typically identify both types of items without differentiating between them. Practically the works must be free from patent defects, other than those that can be considered as ‘trifling’
- Whether an item is trifling is a matter of fact and degree and should be measured against ‘the purpose of allowing the employer to take possession of the works and to use them as intended’
Consider:
Perfection is not possible , defects should be trifling, extent of disturbance to employer to put right. Paten or latent defect
How do interim payments work pn a d&b
Stage payments -as stages are completed, contractor submits application for payment
Periodic payments - dates set in contract. Value of work completed to date.
What does a jct contract include
JCT contracts generally follow the same structure for continuity and ease of use:
CONTRACT PARTICULARS
aspects of the contract that are particular to the project.
Eg.
-The contract sum.
-The retention percentage.
-The interim payment period.
ARTICLES OF AGREEMENT set out what is agreed
Articles such as
-contractors duty (i.e to complete the project)
-employers duty (to pay)
-names the contract administrator , PD, PC
RECITALS
7no.
-Contract drawings
-contractors design portion
-sets out the site
-spec / pricing documentation
ATTESTATION
The attestation is the process of confirming that something is correct or genuine
Deed -
Underhand
Differences between JCT and NEC
JCT:
Described as more traditional
Contract administrator
Time: no specific program requirements
Variations: relevant events. Time and cost separate.
Clearly allocate risk between employer and contractor
NEC:
Project manager
Time: more detail required. includes more detailed programme including float and time risk allowance. always need an up-to-date program.
Early warning systems & risk mitigation meetings
Variations: compensation events. Time and cost grouped together.
Collaboration
More common for large infrastructure projects
What is a named subcontractor, nominated, domestic
Naming sub-contractors allows the client to influence the main contractor’s selection of sub-contractors, whilst leaving responsibility for their performance with the main contractor. It can be seen as an alternative to nominating sub-contractors as the contractual relationship is less complicated, and indeed, some forms of contract (such as Joint Contracts Tribunal (JCT) contracts) no longer include provision for the nomination of sub-contractors.
A nominated sub-contractor is one that is selected by the client to carry out an element of the works. Nominated sub-contractors are imposed on the main contractor
A domestic sub-contractor is any sub-contractor, other than a nominated-sub contractor, that the main contractor sub-contracts to carry out part of the works. The work of the sub-contractor is the responsibility of the main contractor as far as the contract between the main contractor and the client is concerned.
What are some other forms of contract aside form JCT? Tell me a bit about each
NEC
-collaborative working
-proactive (early warning systems, dispute resolution boards)
-‘plain English’
-jct: risks to specific parties, NEC distributes risk more evenly
FIDIC
-international , large-scale
-less flexible
-even allocation of risk
How does NEC deal with delays?
Heading ‘compensation events’
An allocation of risk rather than blame.
Any risk not specifically identified as being attributed to the client is born by the contractor 
What is a relevant event
An event that causes delay to the completion date. Caused by client / neutral event
NEC contracts deal with these issues under the single heading ‘compensation events’. They do not treat compensation events as an allocation of blame, but rather an allocation of risk. Any risk that is not specifically identified as being attributed to the client is borne by the contractor.
Relevant matter?
When the client is responsible for an event that materially affects progress of the works. Allows contractor to claim direct loss and expense.
Doesn’t always mean delay to the completion date
Failure to give the contractor possession of the site.
Failure to give the contractor access to and from the site.
Delays in receiving instructions.
Opening up works or testing works that then prove to have been carried out in accordance with the contract.
Discrepancies in the contract documents.
Disruption caused by works being carried out by the client.
Failure by the client to supply goods or materials.
Instructions relating to variations and expenditure of provisional sums.
Inaccurate forecasting of works described by approximate quantities.
Issues relating to CDM.
How did you navigate issuing an EOT? (Hill street)
The variation counted as a relevant event and therefore the contractor was entitled to an EOT.
Was the contractor entitled to loss and expense at 7 hill street?
No. There was no direct loss and expense incurred
Name some other contract types(aside from jct)
FIDIC
Suite of contracts (Red Book, Yellow Book, Silver Book, etc.) tailored to project types.
Engineer acts as administrator and certifier.
Emphasis on dispute avoidance through procedures like Dispute Adjudication Boards.
International
NEC
Approach: Collaborative, proactive.
Key Features:
Promotes early warning and risk mitigation.
Uses plain English and a flexible modular structure.
Encourages cooperative relationships and good project management.
Strong emphasis on time, cost, and quality control.
ICE Institution of Civil Engineers
Key Features:
Engineer has significant authority in administering the contract.
Clear procedures for variations, extensions of time, and disputes.
Largely replaced by NEC in many public sector projects.
Variations
JCT: Instructed by the Contract Administrator; priced using contract rates or fair valuation.
FIDIC: Initiated by the Engineer; can proceed without prior pricing agreement.
NEC: Handled as Compensation Events; require notification and prompt assessment.
ICE: Ordered by the Engineer; valued per contract rates or fair value.
Delays
JCT: Extension of Time (EoT) granted for defined “Relevant Events” (e.g., variations, weather).
FIDIC: Contractor entitled to EoT and/or costs for Employer-caused or exceptional delays.
NEC: Delays are managed via Compensation Events and updated programme; proactive risk management.
ICE: Engineer assesses EoT based on cause and impact; traditional delay analysis.
Payments
JCT: Interim payments typically monthly; based on valuations with retention held.
FIDIC: Contractor submits monthly statements; Engineer certifies payments.
NEC: Payments tied to an activity schedule or target cost; regular assessments.
ICE: Interim certificates issued by the Engineer based on measured work.
Intermediate contract
Medium-sized projects with moderate complexity
Design Responsibility: On the employer, but more scope than MW for specifications and detailed design.
Contract Administrator: Yes.
Suitability: When project needs more detailed provisions but doesn’t justify a full SBC.
Key Features:
More detailed clauses for instructions, payments, and variations.
Standard building contract
Large or complex projects (e.g., multi-storey buildings, complex refurbishments).
detailing, valuation procedures, and rigorous administration.
Key Features:
Comprehensive provisions for payment, variations, delays, insurance, and disputes.
Allows for sectional completion, performance bonds, and liquidated damages.
Used for both traditional and design-and-build arrangements.
How did you construct your sound lock partition
Parts of a contract
Articles of Agreement, comprising:
an agreement setting out the party details;
recitals, setting out important context as to the nature/type of works being procured and what documents are included in the contract (e.g. specification and pricing documentation); and
articles, setting out certain factual information in relation to the works, including the contract price and the identity of, for example, the Employer’s Agent for the works.
Contract Particulars: this is a “fill the blanks” section that sets out some project-specific factual elements that need to be completed properly for the contract to work as intended (e.g. the completion date, date of possession, defects rectification period, liquidated/delay damages details etc. must be inserted).
Conditions: the core terms and conditions of the contract.
Schedules: these cover some of the more commonly used “add-ons” to a construction contract such as different insurance options, a design submission procedure, fluctuation provisions and template forms of bonds.
Recitals
e.g location, overview, drawings, employer under CIS
Difference between jct and NEC
JCT deals with time and price variations separately, therefore an extension of time does not guarantee price adjustment. Unlike the NEC where both time and cost are grouped together under the Compensation Event.
Structure of jct contract
The majority of JCT forms follow the standard format of:
Articles of Agreement
Contract Particulars (where the parties set out project-specific information)
Conditions of Contract; and
Schedules (which can be added into the contract if desired)
Articles of Agreement .. .recitals:
1 Contractor’s obligations 2 Contract Sum 3 Collaborative working 4 Architect/Contract Administrator 5 CDM Regulations – Principal Designer and Principal Contractor 6 Building Regulations – Principal Designer and Principal Contractor 7 Adjudication 8 Arbitration 9 Legal proceedings
Contract Particulars
The contract particulars in a construction contract (or appointment agreement) set out the aspects of the contract that are particular to the project to which the contract relates.
§ The contract sum.
§ The retention percentage.
§ The interim payment period.
§ Requirement for collaborative working.
§ Requirement for early warning notification.
§ Addresses for servicing notices.
§ Nominees for negotiations.
§ The details of the adjudicator / arbitrator or appointing body.
§ Third party rights and collateral warranties.
§ The contract base date.
§ Insurance requirements
§ Dates for possession
Contract conditions
Definitions and interpretation
Carrying out the works (materials and workmanship, comply with contract documents
Control of the works (must be person in charge on site, instructions in writing (non-compliance-can instruct csomeone else)
Payment (CIS if applicable, contract sum excludes vat, interim payments, add interest if not paid & recoverable as a debt)
Injury, damage and insurance. (contractor indemnifies employer against death/injury, damage to structure = either party can terminate contractors employment)
Termination. When termination is allowed (eg insolvency of either party,
Settlement of disputes. First consider mediation, then adjudication (nominated body in contract particulars)
Schedules
Procedures for arbitration.
Fluctuations
Supplemental provisions
