Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

JH APC > CONTRACT PRACTICE > Flashcards

CONTRACT PRACTICE Flashcards

1
Q

What does NECC stand for and what is it?

A

New Engineering Contract - A suite of construction contracts intended to promote partnering and collaboration between the contractor and client

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is X clauses X1 to X5

A

*Option X1 Price adjustment for inflation (used only with Options A, B, C and D)
*Option X2 Changes in the law
*Option X3 Multiple currencies (used only with Options A and B)
* Option X4 Parent company guarantee
*Option X5 Sectional Completion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is X clauses X6,X7,X12,X13,X14

A

*Option X6 Bonus for early Completion
*Option X7 Delay damages
*Option X12 Partnering
*Option X13 Performance bond
*Option X14 Advanced payment to the Contractor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is X clauses X15-X20

A

*Option X15 Limitation of the Contractor’s liability for his design to reasonable skill and care
*Option X16 Retention (not used with Option F)
*Option X17 Low performance damages
*Option X18 Limitation of liability
*Option X20 Key Performance Indicators

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a Z clause + provide an example

A

Z clauses are bespoke clauses or amendments to the standard form clauses added to NEC3

Conflict of interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Activity Schedule?

A

An activity schedule is a list of activities prepared by the Contractor which he expects to carry out in Providing the Works.

When it has been priced by the Contractor, the lump sum for each activity is the Price to be paid by the Employer for that activity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Bill of Quants? How is it priced? What does the Employer pay for?

A

A bill of quantities comprises a list of work items and quantities.

Tenderers price the items, taking account of the information in the tender documents and including for all matters which are at the Contractor’s risk.

The Employer pays for work done on the basis of actual measurement of those items with quantities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Target Cost? What does the employer pay for?

A

Target contracts are sometimes used where the extent of work to be done is not fully defined or where anticipated risks are greater.

The financial risk is shared between the Employer and the Contractor.

Employer\Contractor Pays for PWDD over or under the target cost.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Cost Reimbursable?

A

A cost reimbursable contract should be used when the definition of the work to be done is inadequate even as a basis for a target price and yet an early start to construction is required.

In such circumstances, the Contractor cannot be expected to take cost risks other than those which entail control of his employees and other resources.

He carries minimum risk and is paid Defined Cost plus his tendered Fee.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How is payment dates decided and what is the payment period?

A

First payment date decided by PM and then 4 weeks after that date + additional assessment occurs after completion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is retention?

A

In NEC Retention is an optional clause - provides security for the client, to protect it from the contractor’s failure to correct defects after completion and the insolvency of businesses in the construction supply chain.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is Option A contract and advantages & disadvantages?

A

Option A – Priced contract with Activity Schedule - fixed lump sum
- Less risk to client as cost is fully defined.
- Only risk is employers risk

DIS - Need full scope of works

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is Option B contract and advantages & disadvantages?

A

Option B – Priced contract with Bill of Quants –remeasurement -

ADV - Less risk to client, paid tender rates for works done – only risk is employers’ risks and time + cost of CEs.

DIS - Need full scope of works

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is Option C contract and advantages & disadvantages?

A

Option C – Target Cost with Activity Schedule - cost reimbursement with fixed target -even cost risk between all parties good when there is a half scope, gives contractor incentive to save money

DIS - actual cost remains unknown until end date

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is Option D contract and advantages & disadvantages?

A

Option D – Target Cost with Bill of Quants - cost reimbursement with remeasure target even cost risk between all parties. - good when there is a half scope

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is Option E contract and advantages & disadvantages?

A

Option E – Cost reimbursable no target – most risk to client - the Contractor is paid the Defined. Cost, as defined in the chosen main Option.  good when there is no scope

ADV - simple to manage

Dis - no fixed cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is Option F contract?

A

Option F – Management Contract - cost reimbursement for subbies and lump sum for contractor - Option F is essentially cost reimbursable but risk allocation can be varied by choosing appropriate main Options in the subcontracts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Compensation Events?

A

Compensation events are events which, if they occur, and do not arise from the Contractor’s fault, entitle the Contractor to be compensated for any effect the event has on the Prices and the Completion Date or a Key Date

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Advantages & Disadvantages of NEC

A

*Adv - Stimulate good management.
*Be clear and simple, written in plain English, in the present tense and without legal terminology.
*Be useable in a wide variety of situations from minor works to major projects
*Promotes collaboration

*Dis- Requiring too much expertise to operate, focusing too much on project management
*The number of companies involved on a large building project and the length of supply chains means that capturing cost information in relation to compensation events takes a long time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

JCT Contract Types

A
  • Standard Building Contract designed by design team and constructed by Contractor.
    -Design and Build - full or partly designed and constructed by contractor
    Construction Management
    -Minor Works
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

NEC3 VS NEC4

A

*New forms of contract - the Design Build and Operate Contract (DBO), the Alliance Contract (ALC), and the Facilities Management Contract (FMC)

*Improved clarity and simplicity across the NEC4 suite

*New and improved support for dispute avoidance, early contractor involvement, quality management, and more

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What 6 items make an offer valid?

A

Offer, acceptance, consideration, intent, legality and capacity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

CDM Regs 2015?

A

The Construction (Design and Management) Regulations (CDM Regulations) are intended to ensure that health and safety issues are properly considered during a project’s development so that the risk of harm to those who have to build, use and maintain structures is reduced.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

3 Types of Letter of Intent

A

Letter of comfort- extends tender period , Authority to spend- allows work to progress on site and recognition of contract - contract starts while conditions are being agreed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What is a performance bond

A

Insurance back surety which provides generally 10% of the contract sum should the contract fail in their insurance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Construction Act 1996

A

Introduced - interim payments, suspension, adjudication, pay when paid and applies to verbal contracts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What is a contractual Warranty

A

Side agreement to create a contractual link between parties who would not be linked.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What are a couple of contract types aside from lump sum?

A

Lump sum - Fixed price for works only extras are instructed.

Re-measure - based on approx quantities or schedule or rates

Cost reimbursable - Contractor gets actual cost plus OHP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

When does a performance bond expire?

A

PC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What is a divergence and discrepancy in terms of a contract?

A

Divergence -when contact docs does not comply with statutory requirements

Discrepancy - Inconsistency between contract docs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

3rd Party Rights

A

Removes the right of privy to the contract and allows 3rd parties to enforce the benefit of the contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Adv + dis of 3rd party rights

A

Adv - Simpler than collateral warranties
Less admin

DIS - Little case law & No physical warranty

33
Q

Adv + Dis of LOIs

A

ADV - allows for early start on site
Early order of materials

Dis - doesnt cover the client in the event of insolvency
Employer can lose the position to negotiate

34
Q

What is with without and approximate quantities?

A

Without quant - Lump sum contract, only change for CEs

With quant - Quantities measured frim the drawings and change is a CE

Approx Quant - Same as above but estimated

35
Q

Pre contract service agreement?

A

When a contractor is onboarded early within the precontract stage to assist with design and with services typically outside of a typical building contract

36
Q

When do you release retention?

A

PC and after the defects periods once all defects have been rectified

37
Q

What would you do if a contract became insolvent?

A

Secure site, valuation of materials on and off site, prevent the release of monies to the contractor, phone administrator and subbies

38
Q

What is insolvency?

A

The condition of having more debts than total assets

39
Q

Listed Item

A

Pre-agreed items to be included in interim payment for off site materials

Need vesting certificate

40
Q

What is a EWN

A

A EWN is a notice where a party becomes aware of any matter which may affect cost and time of the contract.

41
Q

Notification of Delay/Loss and expense

A

Loss and expense claims are addressed under the “compensation event” mechanism.

The contractor must notify the project manager of a compensation event within eight weeks of becoming aware of the event, or the claim may be disallowed.

The contractor must provide a quotation for the compensation event, including a breakdown of costs and time extensions.

The project manager assesses the claim and either agrees to or disputes the contractor’s quotation.

Compensation events can result in time extensions, additional payments, or both.

42
Q

Parent Company Guarantee

A

PCG is a guarantee where the parent company will fulfill the defaulting subsidiary under the contract and or cover loss and expense

43
Q

What is loss and expense claim

A

A claim by the contractor or Employer to recover monies relating to cost, time and quality. For example contractor recovers the above for CEs which may prevent PC and the employer may recover for defective works

44
Q

What is LADS

A

Liquated Ascertained Damages are a agreed rate within the contract which is applied for loss suffered for late completion.

Example loss of rent or production.

45
Q

Process of levying LADS

A

Issue non completion cert

Calculate LADs based on contract rate

Issue pay less along with valuation

Issued by employer

46
Q

What is expressed and implied terms?

A

Expressed Terms - agreed terms with parties

Implied terms- not been expressly agreed but has been implied by law or statute

47
Q

What is a contract

A

A Legally binding promise by one party to fulfill and obligation for another in return for consideration

48
Q

Tort?

A

Civil wrong

49
Q

What is statutory and contract provisions ?

A

Statutory are set out by law and must be complied with.

Contract is provisions related to a contract only and only applies to that project

50
Q

Breach of contract

A

When one party fails to fulfill their contractual obligation in accordance to the terms of the agreement.

51
Q

Third party rights

A

Contracts Act 1999 - allows third parties to enforce term of the contract they are not party to but will benefit them in someway.

52
Q

ADV + DIS OF third party rights

A

ADV - reduced time and cost as there is no separate document

DIS - Lack of flexibility - limited room for negotiation

53
Q

Difference between bond and CW

A

Bond is 3rd party financial commitment within the contract which protects the owner against non- payment, lack of performance and warranty issues where as a CW is separate to the contract

54
Q

What is a performance bond

A

a form of security provided by a contractor to an employer, the insurer will make a payment to the employer if the contractor defaults under the contract.

May need for new contractors or ones with uncertain finance

55
Q

Potential problems with Z clauses?

A

Poorly drafted clauses can be problematic as edited core clauses may result in further clauses being changed.

56
Q

Total float, Time risk allowance and Terminal float?

A

Total float - the time and activity can be delayed frim its early start date without delaying planned completion

Risk allowance - duration allowed in each activity by the contractor to account for risk for not completing that activity in the minimum possible period.

Terminal float- duration between planned and current contract completion

57
Q

How can completion dates change

A

Via CEs or acceleration

58
Q

Difference between NEC & JCT

A

NEC has no QS
NEC is CE not variation
NEC is in plain English
NEC is more collabarative

59
Q

Dispute resolution clauses

A

W1 & W2

60
Q

Y (UK) 2 & 3

A

2 - The housing grants, construction and regeneration act 1996

3 - The contracts (rights of third parties at 1999

61
Q

What is on-demand bond and conditional

A

On-demand - bond is immediately available thought needing to satisfy and preconditions where as conditional requires obligation have been fulfilled

62
Q

Tender Bond

A

Bond in place if the successful tenderer fails to enter contract

63
Q

Retention bond adv+dis

A

DIS - Employer pays premium for taking out the bond

ADV- protects payments to contractors by employer in advance of works being done

64
Q

Defects under NEC

A

A part of the work which is not in accordance with the works information

65
Q

Patent and latent defect

A

Patent obviously to the eye on inspection

Latent - cant see i.e foundations

66
Q

Novation

A

Contracted by the client and then novated to contractor

Adv - reduces learning curve, designers are there throughout

Dis -Employer requires CW

67
Q

What can be done to reduce the risk of insolvency at tender stage

A

Check contractors account
Bank references
Credit checking

68
Q

Consideration for contract selection

A

Nature of client
Priorities - cost, time and quality
Complexity of work

69
Q

Detail payment timeline

A

Assessment date

Assessment Period - 7 days

Due date - 5 days after

Last date to issue interim certificate

No interim certificate = default payment by contractor

Pay less notice - 7 days before final payment

70
Q

Vesting cert?

A

A vesting certificate is a document evidencing that ownership of goods or materials will transfer from one party to another on payment.

71
Q

Core clauses

A

1.General
2. Contractor responsibilities
3. Time
4. Quality Management
5. Payment
6. CE
7. Title
8.Risk and Insurance
9.Termination

72
Q

Contract data

A

The Contract Data deals with the who, where and when questions of the contract.

-Parties of contract as well as PM & Supervisor
-Contract start + end dates
-Risks

73
Q

CE process

A
  • Notification
    -Quote
  • Assessment
  • Implementation
74
Q

CE Timelines

A

Contractor notifies within 8 weeks issues CE , 1 week period for pmi and contractor quote, accepted or 2 weeks until CE is accepted

75
Q

What is the risk of non payment from the client?

A

Suspends performance on site

Termination

Increase in cost and time to redo procurement process

76
Q

What is PCIP and what does it include

A

PCIP allows safe designs to be developed and enable the Principal Contractor to plan and manage the construction phase of the project.

  • H&S file
    -Risk Register
77
Q

What is a interim valuation and what is its purpose?

A

It is an assessment of all works on site and provides advice to the certifier for the issue of interim certs and payment notices

78
Q

QS role in valuation process

A

1 Planning - understand requirements

2 Pre- valuation -desk top study

3 Valuation - conduct on site

4 Documentation - check valuation & documents

5 Issue - sign and issue

6 - Post Valuation - Maintain records

JH APC (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions