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Contract Administration Flashcards

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1
Q

What are the main duties of a contract administrator during the construction phase?

A

The primary duties of a contract administrator during the construction phase include:

Site Inspections:
Regularly visiting the site to ensure work is proceeding in accordance with the contract documents and the project timeline.

Issuing Instructions:
Providing instructions to the contractor when necessary, including clarifications or additional works, in accordance with the terms of the contract.

Assessing Variations:
Reviewing and assessing any changes to the work, such as variations, and their impact on cost, time, and quality.

Certifying Payments:
Issuing interim payment certificates based on work completed, and ensuring the contractor is paid in accordance with the terms of the contract.

Managing Delays:
Identifying delays or potential delays and working with the contractor to mitigate them. If necessary, granting extensions of time.

Managing Claims:
Evaluating and managing any claims for additional time, cost, or other circumstances that arise during the project.

Ensuring Quality Control:
Ensuring the contractor complies with the contract specifications and quality standards, and addressing any non-conformance.

Final Account:
Ensuring the final account is agreed and closed out at the end of the project.

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2
Q

How do you assess the validity of a contractor’s claim for an extension of time under a construction contract?

A

To assess the validity of a contractor’s claim for an extension of time (EoT), you would typically follow these steps:

  1. Review Contract Terms: First, check the contract to see the specific provisions regarding extensions of time, including the grounds on which an EoT may be granted.
  2. Cause of Delay: Assess whether the cause of the delay is a relevant event under the contract, such as:

Delays caused by the employer (e.g., late provision of site access, delayed instructions, etc.).

Delays caused by exceptional weather conditions.

Delays due to force majeure events (e.g., strikes, national emergencies).

Delays due to unforeseen conditions that could not have been reasonably anticipated.

  1. Critical Path Analysis: Check if the delay has impacted the critical path of the project. A delay not affecting the critical path might not justify an EoT.
  2. Notification Requirements: Ensure the contractor has followed the proper procedure for notifying the employer of the delay and requesting an EoT within the required time frame as specified in the contract.
  3. Mitigation Efforts: Consider whether the contractor took reasonable steps to mitigate the delay or reduce its impact.
  4. Supporting Evidence: Request detailed documentation from the contractor supporting their claim, including the cause, period of delay, and any relevant records (e.g., correspondence, progress reports, site records).
  5. Independent Assessment: If necessary, seek the input of specialists (e.g., a delay expert) to assess the impact of the delay on the project.
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3
Q

What are the different types of construction contracts, and how does contract administration vary for each?

A

There are several types of construction contracts, and the role of the contract administrator may vary depending on the form chosen. Some common types include:

Lump Sum Contracts: The contractor agrees to complete the works for a fixed price. Contract administration in this case involves monitoring progress against the agreed lump sum, ensuring the contractor performs in accordance with the scope, and managing any variations or changes to the scope.

Measurement Contracts (e.g., NEC, JCT): Payment is based on quantities measured as the work progresses. The contract administrator’s role involves ensuring that measurements are accurate and that the contractor is paid for the actual work completed as per the agreed rates.

Cost Plus Contracts: The employer agrees to pay the contractor for the actual cost of work plus a fixed fee or percentage. In these contracts, the contract administrator’s role is to verify costs, ensure transparency, and ensure compliance with the contract’s stipulations on allowable expenses and profit.

Design and Build Contracts: The contractor is responsible for both the design and construction of the project. The contract administrator’s role is to ensure that the design meets the required standards and that the project proceeds according to the agreed timeline and budget. This requires close coordination with the design team and the contractor.

For each contract type, the contract administrator’s role varies in terms of how payment is certified, how variations are handled, and how risk is allocated between the parties. The contract administration process must be closely aligned with the specific contract conditions.

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4
Q

How do you deal with a dispute between the client and contractor regarding a variation?

A

When a dispute arises regarding a variation, the contract administrator should take the following steps to resolve the issue:

  1. Review the Contract: Check the contract terms related to variations. Ensure the variation was properly instructed and documented.
  2. Documentation Review: Review the contractor’s submission, including pricing for the variation, and any supporting documents (e.g., quotations, alternative proposals).
  3. Communication: Open a dialogue with both parties to clarify the reasons for the disagreement. This helps to identify whether there is a misunderstanding or if the dispute is due to a contractual issue.
  4. Negotiation: If appropriate, attempt to negotiate a fair settlement, considering the best interests of both parties while staying within the boundaries of the contract.
  5. Third-Party Mediation or Adjudication: If a resolution cannot be reached, consider using an independent third-party mediator or adjudicator to provide an impartial view and suggest a resolution. In construction contracts, adjudication is often the first method of dispute resolution before moving to arbitration or litigation.
  6. Formal Decision: If mediation or negotiation fails, the contract administrator may need to issue a formal decision regarding the variation, which both parties can then either accept or dispute further according to the contract’s dispute resolution process.
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5
Q

What is the role of a Contract Administrator (CA)?

A

To administer the building contract impartially, including issuing instructions, certifying payments, monitoring progress, and managing variations and delays.

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6
Q

What certificates might a CA issue under a JCT contract?

A

Interim Certificates, Practical Completion Certificate, Non-Completion Certificate, Extension of Time, Final Certificate, Instructions for Variations, Certificate of Making Good Defects.

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7
Q

What is the difference between JCT Minor Works and Intermediate contracts?

A

Minor Works is for simpler projects with basic admin; Intermediate is for more complex projects with detailed procedures and subcontracting provisions.

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8
Q

What are NEC contracts known for?

A

Collaboration, flexibility, and proactive risk management.

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9
Q

What is the difference between NEC and JCT contracts?

A

NEC uses plain English and emphasizes programme and shared risk; JCT is more legalistic and traditional.

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10
Q

What is practical completion under a JCT contract?

A

When the works are complete except for minor defects that don’t prevent use.

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11
Q

Why is the defects liability period typically 12 months?

A

To cover all four seasons and identify seasonal defects.

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12
Q

What is a patent defect?

A

A defect that is visible and easily identifiable during inspection.

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13
Q

What is a latent defect?

A

A hidden defect not observable during standard inspection.

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14
Q

What is the timeline for handling a valuation under JCT?

A
  • Interim Valuation Date (IVD)
  • Due Date: 7 days after IVD
  • Interim Certificate: within 5 days of Due Date
  • Final Payment Date: 14 days from Due Date
  • Pay Less Notice: at least 5 days before Final Payment Date
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15
Q

What is a Pay Less Notice?

A

A notice to reduce the payment amount, served at least 5 days before the final payment date, with explanation.

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16
Q

What is a relevant event?

A

An event causing delay, entitling the contractor to an extension of time.

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17
Q

What is a relevant matter?

A

An issue caused by the client that may entitle the contractor to loss and/or expense.

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18
Q

What is sectional completion?

A

Completion of different parts of the project at different times, each with its own completion date.

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19
Q

What is partial possession?

A

When the employer takes possession of part of the works before full completion.

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20
Q

What are the three insurance options under JCT Minor Works Clause 5.4?

A

5.4A: Contractor insures the works
5.4B: Employer insures works and existing structures
5.4C: Separate policies for employer and contractor

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21
Q

What types of insurance are common in construction?

A

Employer’s Liability, Public Liability, Professional Indemnity, Contractor’s All Risks, Workers’ Compensation, and more.

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22
Q

What is a two-stage tender?

A

Stage 1: Prequalification and initial tender
Stage 2: Collaboration and final tender with fixed price

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23
Q

What are the types of tendering?

A
  • Open
  • Selective
  • Negotiated
  • Framework
  • Invited.
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24
Q

Why should late tenders generally not be accepted?

A

To maintain fairness, transparency, and avoid legal disputes.

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25
What is a collateral warranty in a JCT contract?
A supplementary agreement giving third parties rights to rely on the contractor’s or consultant’s performance.
26
What is the purpose of a collateral warranty?
To allow funders, tenants, or purchasers to claim for losses due to contractor or consultant failure.
27
What is the difference between a relevant event and a relevant matter?
A relevant event affects time (e.g., weather); a relevant matter affects money (e.g., employer delay).
28
What is the purpose of liquidated damages?
To pre-agree compensation for delays, avoiding the need to prove actual loss.
29
Why is sectional completion useful in a JCT contract?
It allows phased handover and separate liquidated damages for each section.
30
What is partial possession?
When the employer takes over part of the works before full completion.
31
What is a provisional sum?
An allowance in the contract for undefined or uncertain work.
32
What is the difference between defined and undefined provisional sums?
Defined sums have known scope; undefined sums do not and carry more risk.
33
What is novation in construction?
The transfer of a design contract from the client to the contractor, often in design-and-build.
34
What is the purpose of preliminaries in a contract?
To cover general project costs like site setup, management, and welfare.
35
What is open tendering?
A method where any contractor can submit a bid.
36
What is selective tendering?
Only pre-qualified contractors are invited to tender.
37
What is negotiated tendering?
The client negotiates directly with a chosen contractor.
38
What is a two-stage tender?
Stage 1: early contractor involvement Stage 2: final price after design development.
39
What are the advantages of two-stage tendering?
- Early collaboration - risk reduction - better cost certainty
40
What must be in place to certify practical completion?
Works must be complete except for minor defects that don’t prevent use.
41
What happens if the contractor fails to complete by the end of the defects period?
The employer may withhold final payment or claim damages.
42
What is the purpose of a progress meeting?
To review project status, address issues, and document actions.
43
How is a variation identified and processed?
Identified by change in scope, instructed by CA, priced, and agreed.
44
What legislation governs construction payment timelines?
Housing Grants, Construction and Regeneration Act 1996.
45
What is Contractor’s All Risks (CAR) insurance?
Covers physical loss or damage to works, materials, and equipment
46
What is Professional Indemnity Insurance?
Covers claims for professional negligence or design errors.
47
What is Public Liability Insurance?
Covers injury or damage to third parties caused by construction activities.
48
What is the purpose of joint names insurance?
To protect both employer and contractor under one policy.
49
What is the JCT Intermediate contract best suited for?
Medium complexity projects with some contractor design.
50
What is the JCT Minor Works contract best suited for?
Simple, low-risk projects with fully designed works.
51
What is the NEC contract known for?
- Flexibility - collaboration - proactive risk management
52
What is the purpose of the RIBA Plan of Work?
To structure the design and construction process into clear stages.
53
What are the stages of the RIBA Plan of Works?
Stage 0: Strategic Definition - Establishing the project’s strategic brief and defining the client's requirements and objectives. Stage 1: Preparation and Brief - Developing the initial project brief, carrying out feasibility studies, and assembling the project team. Stage 2: Concept Design - Creating initial design concepts, exploring options, and developing the design brief. Stage 3: Spatial Coordination - Refining the design, coordinating spatial arrangements, and preparing for planning applications. Stage 4: Technical Design - Developing detailed technical designs and specifications, ready for construction. Stage 5: Manufacturing and Construction - Constructing the building according to the technical designs and specifications. Stage 6: Handover - Completing the construction, handing over the building to the client, and providing post-completion support. Stage 7: Use - Operating and maintaining the building, including post-occupancy evaluation and feedback.
54
What is the purpose of a Contract Particulars section in a JCT contract?
It sets out key project-specific information such as parties, contract sum, dates, and insurance arrangements.
55
What is the role of the CA in issuing Architect’s Instructions (AIs)?
To formally instruct variations or changes to the works under the contract.
56
What is the significance of the Final Certificate under JCT?
It confirms final account agreement and ends the contractual relationship, barring latent defects.
57
What is the difference between sectional completion and partial possession?
Sectional completion is pre-agreed in the contract; partial possession is requested during the project.
58
What is the purpose of a Non-Completion Certificate?
To notify the contractor that the completion date has not been met, potentially triggering liquidated damages.
59
What is a Certificate of Making Good Defects?
A certificate confirming that all notified defects have been rectified during the defects liability period.
60
What is the CA’s responsibility regarding extensions of time?
To assess and grant justified extensions based on relevant events and evidence.
61
What is the purpose of a Schedule of Works in contract administration?
To itemise the scope of work, aiding pricing, programming, and progress monitoring.
62
What is the difference between a Bill of Quantities and a Schedule of Works?
A Bill of Quantities is more detailed and used in larger projects; a Schedule of Works is simpler and descriptive.
63
What is the purpose of retention in construction contracts?
To withhold a portion of payment as security for the contractor completing the works and remedying defects.
64
What is the CA’s role in dispute resolution under JCT?
To act impartially, maintain records, and support resolution through adjudication or arbitration if needed.
65
What is a Contract Sum Analysis (CSA)?
A breakdown of the contract sum used for valuing interim payments and variations.
66
What is the purpose of a Pre-Start Meeting?
To clarify roles, responsibilities, programme, and site logistics before works commence.
67
What is the CA’s responsibility regarding Health & Safety under CDM 2015?
To ensure the Principal Designer and Principal Contractor are appointed and competent.
68
What is the difference between a lump sum and a remeasurement contract?
Lump sum has a fixed price; remeasurement adjusts based on actual quantities of work done.
69
What is the purpose of early warning notices in NEC contracts?
To notify potential issues early, allowing proactive risk management.
70
What is the CA’s role in managing contractor design portions (CDP)?
To review and approve contractor’s design proposals and ensure compliance with employer’s requirements.
71
What is the purpose of a performance bond?
To provide financial security to the employer if the contractor fails to perform.
72
What is a parent company guarantee (PCG)?
A guarantee from the contractor’s parent company to fulfil obligations if the contractor defaults.
73
What is the purpose of a snagging list?
To record minor defects or incomplete works that must be rectified before final completion.
74
How should a CA handle a contractor’s request for an extension of time?
Review the cause, assess evidence, and determine if it qualifies as a relevant event.
75
What is the CA’s role in managing provisional sums?
To instruct when and how provisional sums are to be expended and ensure proper valuation.
76
What is the purpose of a mobilisation period in a contract?
To allow the contractor time to prepare for site commencement after contract execution.
77
What is the CA’s responsibility during the defects liability period?
To inspect reported defects, instruct rectification, and issue the Making Good Defects Certificate.
78
What is the purpose of a delay notice from the contractor?
To formally notify the CA of a delay and preserve the contractor’s right to claim time or cost.
79
Why must a CA act impartially even if appointed by the client?
To uphold professional integrity and ensure fair contract administration.
80
What RICS guidance note supports contract administration competency?
“Contract Administration – RICS Guidance Note” (1st edition).
81
What is the importance of accurate record-keeping in contract administration?
To support decisions, resolve disputes, and provide an audit trail.
82
What is the CA’s role in issuing instructions for variations?
To ensure variations are clearly defined, costed, and agreed before implementation.
83
What is the purpose of a final account statement?
To summarise the total cost of the works, including variations, and confirm the final payment due.
84
What is the purpose of the Articles of Agreement in a JCT contract?
To formally bind the parties and summarise the key contract terms.
85
What is the role of the Employer’s Agent in Design & Build contracts?
To act on behalf of the employer, often combining project management and contract administration duties.
86
What is the difference between the CA and the Project Manager in NEC contracts?
The CA administers the contract under JCT; the Project Manager performs a similar role under NEC.
87
What is the role of the Quantity Surveyor in contract administration?
To manage costs, value variations, and advise on financial aspects of the contract.
88
What is the difference between the Principal Designer and the CA?
The Principal Designer manages health and safety in design; the CA manages the contract.
89
What is a Letter of Intent (LOI)?
A temporary agreement allowing works to begin before the full contract is signed.
90
What are the risks of using a Letter of Intent?
Unclear scope, limited cost certainty, and potential legal disputes.
91
What is the purpose of a Pre-Construction Information (PCI) pack?
To provide health and safety information to contractors before work starts.
92
What is a mobilisation schedule?
A plan detailing how the contractor will prepare for site commencement.
93
What is the purpose of a site possession date?
It marks the formal handover of the site to the contractor.
94
What is a Variation Instruction?
A formal instruction from the CA to change the scope of works.
95
What is a Daywork Sheet?
A record of labour, materials, and plant used for work not covered by the contract sum.
96
What is a Valuation Certificate?
A document certifying the value of work completed to date for payment purposes.
97
What is a Delay Analysis?
A method used to assess the impact of delays on the project programme.
98
What is a Critical Path Method (CPM)?
A scheduling technique identifying the sequence of tasks that determine project duration.
99
What is the purpose of a Payment Notice?
To confirm the amount due to the contractor and the basis of calculation.
100
What is the difference between gross valuation and net payment?
Gross valuation is the total value of work done; net payment is after deductions like retention.
101
What is a retention release?
The return of withheld retention money, typically in two stages: practical and final completion.
102
What is a fluctuation clause?
A clause allowing adjustments to the contract sum for changes in market prices.
103
What is a final account?
The agreed total cost of the works, including all variations and adjustments.
104
What is Force Majeure in a construction contract?
An unforeseeable event beyond the parties’ control that may excuse performance.
105
What is the purpose of a Risk Register?
To identify, assess, and manage project risks.
106
What is adjudication in construction contracts?
A fast-track dispute resolution process under the Construction Act.
107
What is the difference between adjudication and arbitration?
Adjudication is quicker and binding unless challenged; arbitration is more formal and final.
108
What is a dispute escalation clause?
A clause outlining steps to resolve disputes before formal proceedings.
109
What is the purpose of a Completion Checklist?
To ensure all contractual and practical requirements are met before handover.
110
What is a Building Manual?
A document containing as-built drawings, warranties, and maintenance instructions.
111
What is a Soft Landing Strategy?
A process to support building users post-handover and ensure performance meets expectations.
112
What is the difference between Practical Completion and Final Completion?
Practical Completion allows occupation; Final Completion follows defect rectification.
113
What is the purpose of a Post-Occupancy Evaluation (POE)?
To assess building performance and user satisfaction after occupation.
114
What is the Construction Act 1996?
Legislation governing payment and dispute resolution in construction contracts.
115
What is the Procurement Act 2025?
Legislation mandating fair procurement and 30-day payment terms in public contracts.
116
What is the Building Safety Act 2022?
Legislation improving safety and accountability in high-risk buildings.
117
What is the role of the Building Safety Regulator (BSR)?
To oversee compliance and safety in building design, construction, and occupation.
118
What is the Golden Thread of Information?
A digital record of safety-critical information maintained throughout a building’s lifecycle.
119
What is the CA’s role in managing contractor performance?
To monitor progress, quality, and compliance with contract terms.
120
What is a snagging inspection?
A detailed check to identify minor defects before handover.
121
What is the purpose of a site diary?
To record daily site activities, weather, labour, and incidents.
122
What is the CA’s responsibility in issuing instructions?
To ensure clarity, compliance with the contract, and proper documentation.
123
What is the purpose of a project close-out report?
To summarise project outcomes, lessons learned, and final documentation.
124
Why must a CA maintain impartiality?
To ensure fair contract administration and avoid conflicts of interest.
125
What is the RICS requirement for acting with integrity?
Members must act honestly and transparently in all professional dealings.
126
What is the importance of CPD for a CA?
To maintain competence and stay updated with legal and contractual changes.
127
What is the RICS Complaints Handling Procedure (CHP)?
A mandatory process for handling client complaints professionally and fairly.
128
What is the role of the RICS Professional Statement on Conflicts of Interest?
To guide members in identifying and managing conflicts in practice.
129
What is the ACA PPC2000 contract?
A partnering contract promoting collaboration and early contractor involvement.
130
What is the GC/Works contract used for?
Government construction projects, often with standardised terms.
131
What is the ICE contract used for?
Civil engineering works, often administered by engineers.
132
What is the purpose of the RIBA Domestic Building Contract?
To provide a simple contract for residential projects.
133
What is the difference between JCT and NEC contracts?
JCT is more traditional and prescriptive; NEC is flexible and promotes collaboration.
134
Under JCT Intermediate, what is the contractual implication of failing to issue an Interim Certificate on time?
The contractor may be entitled to suspend works or claim interest under the Late Payment of Commercial Debts Act 1998.
135
How does the Construction Act 1996 affect the timing and structure of payment notices in construction contracts?
It mandates strict timelines for payment notices and pay less notices, and provides a statutory right to adjudication.
136
What is the legal status of an Architect’s Instruction (AI) if it is not confirmed in writing?
It may be unenforceable unless the contract allows for oral instructions or they are later confirmed in writing.
137
In what circumstances can a contractor claim loss and expense under JCT Intermediate?
When a relevant matter causes disruption or prolongation, and the contractor incurs additional costs.
138
What is the difference between a “relevant event” and a “qualifying cause of delay” under JCT and NEC respectively?
JCT uses “relevant event” for time extensions; NEC uses “compensation events” for both time and cost implications.
139
What is the purpose of the “Employer’s Requirements” in a Design & Build contract?
To define the scope, performance criteria, and standards the contractor must meet in their design and construction.
140
How does the CA assess whether a variation is a “change to the Employer’s Requirements” under JCT D&B?
By comparing the proposed change to the original Employer’s Requirements and determining if it alters scope or quality.
141
What is the significance of the “Time at Large” doctrine in contract law?
If the contract completion date becomes invalid (e.g., due to failure to grant EoT), the contractor must complete in a reasonable time.
142
What is the difference between a “Condition Precedent” and a “Condition Subsequent” in contract administration?
A condition precedent must be fulfilled before a right arises; a condition subsequent extinguishes a right if it occurs.
143
How does the CA determine whether a delay is excusable, compensable, or concurrent?
By analysing causation, contract terms, and whether delays are attributable to the employer, contractor, or both.
144
What is the purpose of a “Schedule of Amendments” in a JCT contract?
To record negotiated changes to standard contract clauses, forming part of the legally binding agreement.
145
How does the CA handle a contractor’s claim for acceleration?
By assessing whether the employer instructed or agreed to acceleration and whether the claim is supported by evidence.
146
What is the role of the CA in managing early warnings under NEC contracts?
To encourage proactive risk management by facilitating early identification and resolution of potential issues.
147
What is the difference between “liquidated damages” and “general damages”?
Liquidated damages are pre-agreed sums; general damages must be proven and are assessed by the courts.
148
What is the implication of failing to issue a Pay Less Notice under the Construction Act?
The full amount claimed by the contractor becomes due, even if disputed.
149
How does the CA assess whether a provisional sum should be converted to a fixed price?
By reviewing the scope, design development, and contractor’s pricing once sufficient detail is available.
150
What is the purpose of a “Notice of Completion of Making Good Defects”?
To confirm that all notified defects have been rectified and the defects liability period has ended.
151
What is the CA’s responsibility in relation to the contractor’s programme under JCT Intermediate?
To monitor progress against the programme, though the programme is not contractually binding unless stated.
152
What is the difference between “termination for convenience” and “termination for default”?
Termination for convenience allows the employer to end the contract without cause; for default requires breach.
153
How does the CA ensure compliance with the Building Safety Act 2022 during contract administration?
By verifying that dutyholders are appointed, safety case reports are maintained, and the golden thread is preserved.

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