Contract Administration Flashcards

Question

What is the difference between 3rd party rights and a collateral warranty?

Answer 1

No difference with rights. Collateral Warranty is a separate physical document, 3rd party rights are listed in the documents to no separate one is required.

Answer 2

1. Under hand - simple contracts that are typically signed by an authorized representative of the company, clear offer, acceptance, consideration (something of value exchanged), and mutual intention to be legally bound, claim can be brought is six years from the date of the breach 2. As a deed - more formal and do not require consideration to be legally binding,Requires valid execution, typically by two directors or a director and the company secretary, period within which a claim can be brought is twelve years from the date of the breach

Answer 3

1. Administering the contract 2. Determining EoT & L&E claims 3. Issuing Practical Completion statements 4. Certifying interim payments to the contractor 5. Issuing instructions to expend Prov Sums 6. Notifying partial possession 7. Certifying sectional completion 8. Certifying non-completion

Answer 4

JCT D&B - Employer's Agent (EA) JCT MW, Int, Stnd - Contract Administrator (named in contract) NEC3&4 - Project Manager (named in contract)

Answer 5

Genuine pre-estimate loss suffered by the client due to late completion of the works. Should be calculated by the client. Should not be a penalty.

Answer 6

JCT Valuation Rules or RICS Valuing Change guidance

Answer 7

Interim - contractor is paid for works progressed during the period. Stage - contractor is paid at agreed stages at a previously agreed cost, regardless of progress. Milestone - contractor is only paid for work packages when the package is complete.

Answer 8

Performance Bond - Form of security provided by a contractor to an employer. A bank or insurance company will make a payment to the employer if the contractor defaults under the contract. Parent Company Guarantee - The parent company, who has a small contractor that defaults on their obligations, would take over the contractual responsibilities and obligations."

Answer 9

1. On Demand (no need to provide information) 2. Default (need to evidence the default made by the contractor).

Answer 10

Option C - Target Contract with Activity Schedule Similarities: Design Responsibility: Both contracts place significant design responsibility on the contractor. Fixed Price: Both can be structured as fixed-price contracts, although NEC Option C is typically a target cost contract.

Answer 11

Patent - obvious - observable from a reasonable inspection at the time (defective finish or incorrect paint color) Latent - hidden from reasonable inspection and may come to light at a later date (structural defects)

Answer 12

If a non-completion notice is issued. Written notice notifying the contractor that they are liable is issued by the Employer, not the EA, as they make the deduction. There is also no obligation to do so if the Employer doesn't want to.

Answer 13

If the contractor: ○ fails to proceed regularly and diligently with the works ○ suspends the carrying out of the works without reasonable cause ○ fails to comply with an instruction from the employer or the employer's representative ○ fails to comply with CDM regulations ○ becomes insolvent ○ commits a material breach of contract

Answer 14

Outlined in Clauses 5.4 to 5.7. 1. Similar Work and Conditions: If the additional or substituted work is similar and carried out under similar conditions to the original work, the rates included in the contract should be used. 2. Different Conditions or Dissimilar Work: If the work is carried out under different conditions or is not similar to the original work, fair rates and prices should be applied. 3. Notification and Instructions: While it's not a specific requirement for the contractor to notify the employer of a variation/change, it's recommended to maintain good practice and do so to avoid ambiguity. Instructions from the employer should ideally be in writing.

Answer 15

1. Changes in character (change of material, method of fixing, change of background) 2. Changes in conditions (varied depth - excavations, seasonal variation - winter v summer, working in completed areas - protection) 3. Valuing prelims (supervision, out of hours working, access equipment) 4. Dayworks (Opening up works, emergency works, repairing damage) 5. General considerations (Effects on other works caused by the variation, costs part of Loss & Expense claim?, Exclusions and Assumptions clearly set out)

Answer 16

Schedule 4 in the contract. Purpose is to assist in the fair and reasonable operation of the requirements of the clause 3.13.3 - Works not in accordance with the Contract. Provides a list of criteria that the architect/CA must consider when instructing opening up.

Answer 17

Designed to manage risks associated with price changes during the course of a construction project. Option A: Contribution, Levy, and Tax Fluctuations - This option covers adjustments to the contract sum for changes in contributions, levies, or taxes payable by the contractor in its capacity as an employer. It also includes changes to statutory refunds receivable by the contractor. Option B: Labour and Materials Cost and Tax Fluctuations - This option extends the coverage of Option A to include fluctuations in the costs of labour and materials, as well as taxes. Option C: Formula Adjustment Using the Formula Rules - This option uses a formula based on cost indices produced by the Royal Institution of Chartered Surveyors (RICS) to adjust prices. It provides a more comprehensive approach to managing price changes.

Answer 18

Option A - New Buildings – All Risks Insurance of the Works by the Contractor Option B - New Buildings – All Risks Insurance of the Works by the Employer Option C - Joint Names Insurance by the Employer of Existing Structures and Works in or Extensions to them

Answer 19

It is a specialised reinsurance scheme in the UK that provides comprehensive protection against terrorism-related risks.

Answer 20

The Joint Fire Code is a set of guidelines aimed at preventing fires on construction sites. First introduced in 1992, the code is supported by insurers, designers, contractors, and fire safety authorities. Key aspects of the Joint Fire Code include: Scope: It applies to all stages of a construction project, from design to completion, and covers renovation, demolition, refurbishment, repair work, and civil engineering works. Precautions and Practices: The code provides a series of fire prevention measures, safe working practices, and checklists to ensure comprehensive fire safety. Compliance: It generally applies to contracts worth more than £2.5 million but can also apply to lower-cost contracts if they are deemed high risk

Answer 21

One change is that 2024's has been modernised. Notices can now be served electronically via email to stipulated addresses (other than termination payments) which reflecting modern communication practices, and the contract now adopts gender-neutral language throughout. With regards to Extension of Time and Delay Provisions, The Employer must respond to extension of time claims within 8 weeks, reduced from 12 weeks, and must request any additional information within 14 days (there was no such limit under D&B 2016). Also new Relevant Events have been introduced, including epidemics affecting labour, services, or materials, and changes in law or guidance impacting the works. Others as back-up... The 2024 contract mandates that parties work in a co-operative and collaborative manner, in good faith and in the spirit of trust and respect. This was previously an optional supplemental provision in the 2016 edition and is now a default requirement. With regards to Building Safety Act Compliance. the contract appoints the Contractor as both the Building Regulations Principal Designer and Principal Contractor, aligning with the duty holder regime introduced by the Building Safety Act 2022. However, JCT does not recommend using this contract for Higher-Risk Buildings. (I know I'll get asked about this elsewhere so best be on top of it!)

Answer 22

CA - specifically identified in the contract and solely responsible for administering the contract for the employer. EA - identified in the contract that acts on the behalf of the employer in all matters. Should act impartially when carrying out certification and decision-making functions.

Answer 23

* Domestic - chosen by the contractor * Named - list of pre-approved contractors that is selected and becomes domestic * Nominated - selected by the employer (at their risk)

Answer 24

Fees / Duration / Scope / Key personnel Scope to include: * Prepare programme * Method statements * Construction Advice * Agree cost and contract * Design development * Procurement * H&S

Answer 25

Issue non-completion certificate. Issues Notice of Intent to deduct LDs (clause 2.23.1) Deducting LDs from a Payment - include the deduction in the next interim certificate or issue a Pay Less Notice if it’s not already accounted for.