Contract Mechanisms Legal Terms Flashcards
(11 cards)
What is a construction contract?
A legally binding agreement between a client and contractor to deliver construction works under specified terms.
What is the purpose of retention?
To protect the client against defects or non-performance by withholding part of the payment.
What is practical completion?
The stage when the project is substantially complete and ready for occupation, triggering release of part of retention.
What does ‘liquidated damages’ mean?
A pre-agreed sum payable by the contractor for delay, reflecting estimated losses.
What is a pay-less notice?
A formal notice issued by the payer to reduce the amount due under an interim payment.
What is the role of the Contract Administrator?
To administer the contract impartially, including issuing instructions, certificates, and notices.
What are cumulative payments?
Total payments made to the contractor up to a specific point, aggregating all previous amounts.
What does the final account include?
A detailed statement of the agreed contract sum, variations, and adjustments upon completion.
Define a variation in a construction contract.
A change to the scope of works instructed formally, which may affect time and cost.
What is a schedule of rates?
A pricing document listing unit rates used to value measured work or variations.
What is a condition precedent?
A condition that must be met before a party becomes entitled to a contractual benefit (e.g., notice of delay).
