Contract Practice Flashcards
Give some examples of contract particulars you included in your JCT Contract.
Pricing Document
Base Date
Date of possessions
Date for Completion
CDP
LAD’s
Rectification Period
Fluctuations
Interim Payments - (first date for payment)
NEC Options
Option A: Priced contract with activity schedule.
Option B: Priced contract with bill of quantities.
Option C: Target contract with activity schedule.
Option D: Target contract with bill of quantities.
Option E: Cost reimbursable contract.
Option F: Management contract.
Option G: Term contract
Whats are LAD’s
- Liquidated and ascertained damages
- Predetermined and agreed between parties in contract
How do you review contractor variations
- check scope
- check validation
- check rates
- check measures
How does JCT differ from NEC
- EW and risk register encourage proactive approach on NEC, JCT is more reactive
- CEs deal with money and time, JCT has variations for money and L&E/EOT for time
- No QS mentioned in NEC
- Programme is contract doc in NEC
- Short periods of reply on NEC which incentivises responses
- NEC concise and plain english
If a client is late to pay a contractor, what could the contractor do?
Contractor can notify to suspend the works
How would you advise your Clients on using standard v bespoke forms of Contract
Standard contracts
Pros
- Widely recognised & understood within the industry
- More cost effective and time efficient
Cons
- May not cover all unique aspects of project
Bespoke
Pros
- Tailored to specific requirements
- Can address specific risks
Cons
- Usually more expensive
- Time consuming to draft
What forms the basis of a contract?
- Offer
- Acceptance
- Consideration
- Certainty of terms
- Intention to enter contract
- Legality of Contract
- Capacity to make agreement
Can you tell me what elements you have included in a Valuation from one of the projects you have worked on
- Prelims
- Measured works
- Variations
- MOS/Materials off site
- Loss & Expense/Retention
What are the relevant events in the contract?
There are 13 events set out in JCT forms including:
Variations
Instructions
Carrying out of works by statutory authorities
Execution of an approx quantity that is not a reasonably accurate forecast
Deferment of possession of the site
Suspension by the contractor for non-payment
Loss or damage occasioned by the Special Perils
Impediment, prevention or default by the employer
Civil commotion or terrorism
Exceptionally adverse weather conditions
Strike or lock out
The exercise of any statutory power after the base date by the UK gov
Force majeure
Can you give some examples of relevant matters?
- Failure to give contractor possession of site
- Failure to give contractor access to and from the site
- Delays in receiving instructions
- Opening up the 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 or provisional sums
- Inaccurate forecasting of works described by approximate quantities
- Issues relating to CDM
What are the common items of claim in L&E applications?
- Prolongation (extra site overheads i.e. prelims)
- Thickening of prelims (e.g. extra supervision required due to variation)
- Disruption (causing plant / labour to be underemployed - hard to prove)
-Increases in labour / material costs during the period of delay - Head office overheads
- Loss of profit (commonly combined with head office overheads)
- Finance charges (i.e. interest)
- Acceleration costs
What is concurrent delay?
A situation where a construction project is delayed by two events at the same time, one being an event for which the employer takes responsibility under the contract and the other for which the contractor takes responsibility
What sort of costs can the employer included in LDs
- Loss or rent or other income
- Additional fees
- Capital salaries
Under JCT, what contractual documents must be in place before damages can be deducted
- Non-completion certificate
- A pay less notice
What determines the type of JCT contract
- Size, Value, and type of project
- Need for contractor design
- Certainty on final cost
- Time constraints
- Risk ownership
Intermediate Building Contract
- Traditional procurement
- Works fully designed by employer. Can have it CDP
- Works not complex in nature / Don’t involve high degree of building services
- Fairly detailed procedures or named sub contractors
Standard Building Contract
- Traditional procurement
- Works fully designed by employer. Can have it CDP
- Works are complex in nature / Involve high degree of building services
- Detailed procedures or named sub contractors
Minor Works
- Traditional procurement
- Works fully designed by employer. Can have it CDP
- BoQ not required
- Works not complex in nature / Don’t involve high degree of building services
- Doesn’t require detailed procedures or names sub contractors
- No sectional completion
Key updates from NEC3 to NEC4
- Two new contracts - Design Build and Operate Contract - Alliance Contract
- Risk register now names Early warning register
- Employer becomes client
- Works information becomes scope
- Gender neutral
Detail some key changes introduced in JCT 2024
- Gener neutral language
- New Relevant events to include epidemics
- Incorporation of new Fluctuations Hub
- Legislative changes
- New JCT Target Cost Contract (alternative to NEC OP C)
When would you recommend NEC to a client?
- Complex projects with clear objectives
- Collab approach (open communication, shared goals, early problem identification)
- Risk management and clarity
- Typically large building or infrastructure projects
Why did you choose to use an Option A on the DWP expansion programme?
- The government construction board recommends that public sector organisations use NEC
- Done off a framework, collab, very little time so didn’t want BoQ
- Client wants cost certainty so Option A
Which NEC ECC poses most and least risk for employer
Option E - contractor reimbursed for actual loss plus fee
Option A - fixed priced contract
