Contract Practice Flashcards
1
Q
What is a contract?
A
- Legally binding agreement for one party to fulfil an obligation in return for consideration
- Basic binding contracts comprise offer, acceptance, consideration and intent to create legal relations
2
Q
Please define ‘express terms’
A
Terms of agreement explicitly agreed between parties, can be written or verbal
3
Q
What’s your opinion of oral contracts?
A
Whilst legally binding, there’s difficulty proving specific T&Cs of agreement. Written contract is preferred option
4
Q
What is a breach of contract?
A
- Where one party in a binding agreement fails to perform their promised obligations in the agreement.
- This can result in negotiations to resolve, claims against PI insurance, or legal action (litigation).
5
Q
Please define ‘implied terms’
A
Contractual terms not expressly agreed but implied either by common law / statute
6
Q
What is tort?
A
- Tort = civil wrong, part of civil law
- Claim in torts related to loss or harm
7
Q
How do statutory provisions and contract provisions differ?
A
- Statutory = set out by law, must be complied with regardless
- Contract provisions = terms that only apply to specific project
8
Q
What is the purpose of the Construction Act?
A
- Housing Grants Construction and Regeneration Act 1996
- Provide guidance and obligations for payment and dispute resolution
9
Q
What is the Local Democracy, Economic Development and Construction Act 2009?
A
2009 Act came into force in England and Wales October 2011 to amend 1996 Construction Act. Changed how construction contracts are entered into, particular with regime for payment and adjudication
10
Q
Key provisions under the 2009 Act?
A
The 1996 Construction Act was amended in the local democracy, economic development and construction act 2009.
This amended and sought to close loopholes in the previous Act with key provisions for:
- Oral contracts not fully in writing are now covered by the Act
- Pay-when-certified clauses can no longer be used to prevent paying a subcontractor the money they are due
- Payment notices - so if the client’s side doesn’t provide the correct documentation in time, the contractor will be due a default payment notice which the client must pay
- Pay less notices - The client can issue this if, say, the work applied for was inadequate or incomplete, but they must do it within the contractual timescales, which is usually 5 days before the final date for payment
- If the client doesn’t pay the monies due under the contract, the Contractor has a right to provide a notice and stop all or part of the construction works
11
Q
Are there any Acts governing third party rights?
A
Contracts (Rights of third parties) Act 1999
12
Q
What’s the overarching purpose of the Contracts Act 1999?
A
- Allows third parties to enforce contract terms they aren’t a party too, but which benefit them in some way
- Provides access to various remedies if contract terms are breached
13
Q
Basic principles of contract law?
A
Offer, acceptance, consideration, intention to create legal relationships
14
Q
What is a bespoke contract?
A
- Contract tailored to fit specific project requirements
- Used when standard forms not suitable
15
Q
Advantages of standard forms over bespoke contracts?
A
- Written by legal experts
- Detailed rights and obligations clearly set out
- Parties should be familiar with provisions in standard forms - greater consistency in application
16
Q
Disadvantages of bespoke contracts?
A
- Less familiarity
- More money and time to write and understand
- Clauses / provisions may be untested in court
17
Q
When are bespoke contracts appropriate to use?
A
When amending standard form won’t do- if bespoke is the most efficient means of meeting client requirements
18
Q
Have you amended a standard contract? How did you do this?
A
- QS’ don’t have the apt legal training so don’t amend the contract ourselves
- Amendments should be drafted by the legal team
19
Q
What are some typical contract amendments?
A
- Contractor satisfies themself that contractor’s proposals meet employer’s requirements
- Extend final date for payment beyond 14 days from due date
- Extend defects rectification period
20
Q
Risks associated with amending a standard contract?
A
- Can impact balance of risk allocation - cost premium to contractors
- Can create legal uncertainty
- Amendments must be reasonable and comply with legislation, otherwise courts can strike amendments out
21
Q
What is a limitation clause?
A
- Clauses that limit a party’s liability for potential losses
- i.e. limitation to a fixed sum / extent of PI insurance / loss that can be recovered from a third party / responsibility or net contribution clause, exclusion of consequential loss
22
Q
When does the scheme for Construction Contracts apply?
A
- In instances where construction act does not apply
- Ensures clear legal concept for payment mechanism
23
Q
What is a deed of variation?
A
- Mechanism to alter and amend original contract post agreement
- Used when there’s a requirement to significantly alter conditions under main contract
24
Q
What would you include in a deed of variation?
A
- As a QS I wouldn’t draft
- Would include alterations to original contract clauses and reference to original contract being changed
- Director’s signature
25
What is included in contract recitals?
JCT:
- Description of the works
- [CDP]
- Where drawings and numbers are listed
- Drawings and pricing document defining works
- Division of works into sections
- Whether the work is supplemented by a Framework Agreement
26
What's included within contract documents?
i.e. ICD:
- Tender drawings and specification
- Pre-Construction H&S Information
- Client policies
- Existing site photos
- Preliminaries
- Contractor's design portion
- Warranties and bonds
- Contract sum analysis
- Tender queries and correspondence
27
Which section of the JCT contract covers EoT?
Section 2 - relevant events that constitute EoT
28
What's included in your contract preliminaries?
- Project particulars (who different parties are, points of contact)
- Site information (access and logistics, investigations)
- Description of the work, form of contract
- CDP
- Tender conditions
- Minimum standards and targets (i.e. BREEAM), quality standards
- Management of works
- Documents to be sent to CA / EA
- Security / safety provisions and limitations
- Operation / maintenance of finished building
29
What's the difference between valuing works for D&B and standard contracts?
- Standard - QS is a specified role, contractually bound to value works even if contractor doesn't submit valuation
- D&B no obligation to value with no application
30
How do you ascertain loss and expense?
[RICS Black Book document now archived]
- Review contractor records of actual loss and expense incurred (i.e. programme and amendments, invoices, timesheets, site reports, dayworks, photographs)
- Review contract costs i.e. for prolongation of preliminaries, overheads and profit
- Consider disruption of labour, any aborted works
- Ensure correct notices in place under contract
- Assess any other provisions i.e. Fluctuations, inflation
[- Loss of profit - reference profit that would have been made with other projects - must deduct additional profit from current project]
31
What is a letter of intent?
- Describes a letter from an employer to a contractor (or from main contractor to subcontractor), indication their intention to enter into a formal written contract for works described
- Typically asks contractor to begin works before formal contract executed
32
What information is typically included in a letter of intent?
- Detailed description of work to be completed
- Contract sum (if agreed)
- Date for possession
- Date for completion
- Insurance provisions
- Method of payment
- Expiry date of letter
- ADR method
- Employers' right not to award main contract for whatever reason
33
Advantages of a letter of intent?
Allows work to commence before main contract agreed / signed
34
Disadvantages of a letter of intent?
- Could lead to complacency
- May dicincentivise parties from signing the main contract
- Contractually less robust than main contract
- Employer loses incentive in negotiations of main contract
35
Who issues the letter of intent?
Employer
36
In what circumstances might a letter of intent be used?
- If employer needs to commence works before a certain date
- Long lead in times, where early procurement would aid programme
- Starting construction works might trigger early founding
- Can instruct initial design / survey works to be carried out / procuring materials
37
Are letters of intent legally binding?
- No legal significance but courts will look at correspondence between parties to establish if contract has been formed
- If contract found, determines obligations
- If no contract, LOI has no contractual effect and quantum meruit applies
38
What is quantum meruit?
Reasonable sum of money to be paid for services rendered / work done when amount due is not stipulated in a legally enforceable contract
39
Who signs the letter of intent?
Both employer and contractor
40
What would you say if the client asked you to draft a letter of intent?
Legally binding agreement, like a contract- beyond my expertise so I wouldn't draft
41
Different types of letters of intent?
Comfort letter
- Expresses party's intention to act in a particular way at some point in the future or at the time of issuing the letter
Instruction to proceed with consent to spend
- "if" contract
- Allows work to proceed up to a certain value while contract itself being finalised
Recognition of contract
- Letter of acceptance, used by some forms of contract (i.e. FIDIC) to formally execute itself
- Only issued once contract substantially agreed
- Marks completion of negotiation between parties
42
Risks of using a short letter of intent (consent to spend)?
- Client committed to expenditure but no guarantee of agreeing contract sum
- Cannot have stringent contractual terms
43
Are you aware of any case law relating to letters of intent?
Ampleforth Abbey Trust v Turner and Townsend
- Defendent PMs retained by the Trust to build new school accommodation
- Defendent's retainer included obligations: "facilitating, assisting and being involved in the procurement of the building contractor and the building contractor"
- Contractor never signed building contract, whole of the works procured using letters of intent
- Trust could not claim damages under contract
- Judge deemed T&T negligent in taking steps reasonably required of a PM for finalising contract between Trust and contractor
44
Is a LOI that includes a spend limit any use to a contractor?
- Only useful to contractor if LOI legally binding
- To be legally binding, must have basis of simple contract (offer, acceptance and consideration) and both parties must intent to create legal relations
- Without either of these 4 criteria, LOI is worthless
45
What is a PCSA?
Pre-Construction Services Agreement
- Contract between employer and contractor for pre-construction services undertaken before signing the building contract
- Identifies T&C's under which services are to be performed
46
When might a PCSA be used?
Two-stage tender approach to facilitate early contractor involvement
47
How can a PCSA benefit the project?
- Early contractor involvement can help buildability
- May help cost-certainty of design
- Creates better integrated project team
- Reduces likelihood of disputes
48
What sort of activities can the PCSA be used for?
- Contribution to design process
- Advise on buildability, sequencing and construction risk
- Advise on selection of specialist subcontractors
- Help develop cost plan and construction programme
- Help develop method of construction
- Assist with planning application matters / approvals
49
What should be considered when drafting the PCSA?
- Arrangements don't commit employer to enter into building contract- employer should have the means of securing an alternative bid if second-stage negotiations fail
- Scope of services needs to be clearly defined - not ambiguous
- Usual programme and delay damage clauses carefully drafted by legal team
50
What is a fixed price contract?
Lump sum price agreed before the works begin, though often changes in context due to changes
51
What is a fluctuating price contract?
Contract sum adjusted for changes in the costs of materials and labour, as well as statutory contributions, taxes and levies
52
What are the main forms of building contract?
- JCT (Joint Contracts Tribunal)
- NEC (New Engineering Contract)
- FIDIC (International Federation of Consulting Engineers)
- Bespoke
53
Considerations when selecting the appropriate construction contract?
- Nature of the client
- Priorities - cost / time / quality / risk allocation
- Procurement choice
- Value, type / nature, complexity, location of work
- Public / private employer
54
What does JCT stand for?
Joint Contracts Tribunal
55
What are some of the contracts in the JCT family?
- Standard
- Intermediate
- Minor works
- Major project
- Design and Build
- Management
- Construction management
- JCT Constructing Excellence
- Measured Term
- Prime Cost
- Repair and Maintenance
- Homeowner
56
What are key project characteristics which influence which JCT contract is used?
- Size, value and type of project
- Need for contract design
- Final cost certainty
- Appetite for risk ownership and risk transfer
- Employer experience
- Programme requirements
57
When would you use the JCT Minor Works Contract?
- Smaller, basic construction projects with work of a simple nature
- Projects procured via traditional method
58
Key features of JCT Minor Works Contract?
- Employer responsible for design - employer('s designers / advisors) provide drawings, specification, work schedules to specify qty and quality
- MWD with contractor's design portion if the appointed contractor to be responsible for designing specific part of works
- Not suitable where project complex enough to require bills of quantities, detailed control procedures or provisions to govern work carried out by named specialist
- Administered by architect / CA
59
Why would you use the JCT intermediate contract?
- Construction projects involving all recognised trades and skills of the industry
- Fairly detailed contract provisions without building complex building services or other specialist work
- Suitable when projects procured via traditional method
60
When would you use the JCT standard building contract?
- Large / complex construction projects where detailed contract provisions needed
- Suitable when projects procured via traditional method
- Employer responsible for design, though have optional provision for CDP if appointed contractor responsible for design of specific parts of the works
- Works can be carried out in sections
61
When would you use the JCT major project construction contract?
- Large-scale construction projects where major works involved
- For employers that regularly procure large-scale construction work- to be carried out by contractors with experience and ability to take greater risk
- Suitable for projects procured via D&B method
62
Key features of the JCT major project construction project?
- 'Novation' agreement so architects / designers complete design under contractor's responsibility
- Employer usually appoint representative to exercise their powers and functions under the contract
- Project can be carried out in sections
- Employer and contractor have own detailed in-house procedures- limited ones set out in contract conditions
- Contractor responsible for design and construction (scale of design work varies)
63
When would you use the JCT design and build contract?
Construction project where contractor does both design and construction work; varies in scale but generally suitable where detailed provisions needed
64
Key features of the JCT D&B contract?
- Scale varies greatly
- Contractor completes design based on employer's concept / produces and completes design from outset
- Design requirements go beyond traditional contract with CDP
- Employer normally uses agent to administer contract
- Works can be carried out in sections
65
When would you use the JCT prime cost contract?
- Designed for projects requiring early start (alterations / urgent repair work)
- Nature and extent of works unknown until project underway - full design docs not complete until work has commenced
- Suitable for projects procured via traditional method - uses cost reimbursement or cost-plus payment structure
66
When would you use JCT MTC?
Measured term contract
- Employers with regular flow of maintenance, minor works and improvements and projects they want to be carried out by single contractor over specified period
- Suitable for projects procured via traditional method, using measurement payment structure
67
When would you use the JCT construction management contract?
- Employer appoints several trade contracts to carry out the works
- Contruction manager appointed to oversee works completion
- Projects procured via management method
68
What are the key features of the construction management contract?
- Works can be carried out in sections
- Separate responsibility for design, management and construction desired
- Employer provides design and enters into separate trade contracts
- Construction manager appointed to manage project and act as agent on employer's behalf
- Construction manager administers conditions of the trade contract
69
When would you use the JCT management building contract?
- Large, complex projects requiring flexibility and early start
- Series of separate works contracts which management contractor appoints and manages for a fee
- Management contractor employs works contractors to carry out construction
- Works can be completed in sections
- Employer responsible to design, usually supplied to management contractor by architect / design team working on employer's behalf
70
What are the different certificates you are aware of under JCT forms of contract?
- Interim certificate
- Practical completion / sectional completion certificates
- Non completion certificates
- Certificate of making good
- Final certificate
71
3 ways that benefits can be transferred under JCT contracts?
- Collateral warranties
- Third party rights
- Assignment
72
Does JCT have a target cost contract?
Yes, JCT construction excellence incorporates target cost option
73
What are the different sections of a JCT contract?
- Section 1 – Definitions
- Section 2 – Carrying Out the Works – e.g. relevant events, PC and certificates
- Sections 3 – Control of the works – e.g., Instructions form CA
- Section 4 – Payment
- Section 5 – Variations
- Section 6 – Injury, damage and Insurance
- Section 7 – Assignment, 3rd part rights and Collateral Warranties
- Section 8 – Termination
- Section 9 – Dispute Resolution
74
Intermediate vs standard building contract?
- Intermediate doesn't have 3rd valuation rule for receiving a quote for retentions
- IC doesn't have provision for retention bond
- IC retention 5% vs SBQ 3%
- No provision for third party rights
75
Intermediate vs minor works?
- MW doesn't have provision for possession (deferment, early use, partial possession)
- MW no provision for assignment, collateral warranties, performance bonds
76
JCT 2011 vs 2016?
- Payment provision more aligned to construction act
- Choice between PCG and performance bond in contract particulars
- Introduction of notice of delay by contractor
- Introduction of Insurance Option C
77
What legislation has been introduced between JCT 2011 and 2016?
- Public Contract Regulations 2015- rules for public sector procurement, fair valuation timescales, BIM provision
- CDM Regulations 2015 - Principle designer replaces CDM co-ordinator
78
What does NEC stand for?
New Engineering Contract
79
NEC vs JCT?
- NEC drafted in plain English- less use of legal ters
- NEC has early warning process
- JCT splits up dealing with time and cost, whilst NEC deals with them together
- JCT: Variations; NEC: Compensation events
- JCT - EA/CA; NEC - PM
- NEC has 6 main options, JCT has a larger suite of separate contracts
- No QS in NEC
- NEC considered more collaborative approach to working- work in spirit of 'mutual trust and cooperation'
- NEC - programme is a contract document (withhold 25% of monies if contractor doesn't submit accepted programme)
- NEC has 'periods of reply'
- NEC heavy on administration
- JCT allows for provisional sums, NEC does not
80
Similarities between NEC and JCT?
- Standard forms of contract
- Suites that accommodate for different circumstances
- Both set out provisions specifically for construction contracts
- Set out information and obligations for contractor and employer
- Provisions for change control, adjudication, payment
81
What is Contractor's Designed Portion (CDP)?
Typically on traditionally procured projects, design responsibility for specific building elements transferred to the Contractor
82
Difference between traditional procurement with CPD vs design and build?
- Trad with CPD - design responsibility lies with employer except CDP elements where responsibility is transferred
- D&B - all responsibility for design rests with contractor
83
How are CDP elements executed?
Performance spec provided at tender stage, contractor provides design proposals in response, which is reviewed by design team and either accepted / commented on / rejected
84
Can you list typical CDP elements which the employer may wish to transfer?
- Steelwork connections
- Cladding
- Roofing
- Temporary works
- MEP elements
85
What is the risk of not having a performance bond?
- If contractor goes into insolvency, employer liable to pay all costs to deal with this
- Costs include sourcing new contractor to complete works and any other premium
- Employer not able to pursue contractor as company in process of liquidation
86
What is an off-site materials bond?
- Covers employer against risk of paying contractor for materials manufactured off-site
- If contractor / subcontractor becomes insolvent, employer can claim on bond for goods paid for (if they're not delivered)
87
How would you make payment for a materials offsite bond?
As value of materials off site incorporated into the works onsite, the value of the bond reduces proportionally
88
How would you assess payment for materials off site?
(i.e. project)
- Ask for vesting certificate
- Visit factory
- Ensure materials stored safely and labelled appropriately
89
How can you minimise risk for payment of off-site materials?
- Off-site materials bond
- Value of bond can be reduced as it's delivered to site
90
What does JCT say about materials on-site?
- Should not be removed from storage except for use of works
- Become client's property upon payment
- Should not be brought prematurely
91
What is the difference between uniquely and non-uniquely listed items?
- Uniquely - contractor has provided bond for listed items from surety approved by employer
- Non-uniquely - contractor has provided bond that has not been put forward by client
92
What is an advanced payment bond?
- Protects and supports payments to contractors by employer in advance of works being done
- Some contracts require purchase of materials in advance of contract commencing - risk to employer in advancing money to contractor
- Allows purchase of goods
- Protects payment being advanced in exchange for bond by suitable guarantor - peace of mind
93
Is it your decision which bonds clients should obtain?
No- I can make recommendation but final decision is for client and their legal team
94
What is a collateral warranty?
Formal contractual agreement alongside another contractual agreement- creates contractual relationship between 2 parties where one would not otherwise exist
i.e. enables architect to be liable for defects even if not in contract with resident / housing association
95
There is a high probability that collateral warranties will be needed under a D&B contract, can you explain why?
Design team typically sits below contractor- enables employer to retain contractual link with design team
96
Can you provide a working example to explain how assignment might be applied?
- Arises where party to contract wants to assign benefit to a third party, i.e. purchaser / tenant
- Banks / funders frequently take assignment of benefit as additional security to their loan
- Banks want to acquire benefits to assume position of employer if they defaulted on financial obligations
97
What is novation?
- Process where design consultants (initially contracted to client) become contracted to the contractor
- Contractor manages remaining design process with existing design team
98
Are novation agreements required under traditionally procured projects?
Not usually- typically designers are retained by the employer
99
What are some of the advantages of novation?
- Reduced learning curve (design team can understand project requirements)
- Reduced contractual risk for employer - transfers responsibility to contractor
- Architect encouraged to consider buildability
100
What are some disadvantages of novation?
- Employer may require more collateral warranties
- Client may need to employ shadow team for compliance purposes
- Potential for a conflict of interest for services remaining to be performed
- Contractor unable to use preferred designers
101
What are domestic subcontractors?
- Subcontractors chosen by contractor to execute works package
- Employer's consultants nor employer influence appointment / conditions
102
What are named subcontractors?
- Employer provides list of named contractors pre-approved
- Contractor selects one from list through tendering process
- Once appointed, they become a domestic subcontractor
103
Advantages of naming subcontractors?
- Provides employer with more control to selection of subcontractor by the Contractor
- Leaves contractor with element of choice
- Contractor responsible for monitoring their performance
104
What are nominated subcontractors?
- Selected by employer to carry out an element of the works (still employed by contractor)
- Imposed upon contractor
105
Disadvantages of nominated subcontractors?
- Imposed - contractor can object under certain conditions (i.e. safety reasons)
- Contractor and subcontractor may have conflicting procedures / ethics / attitudes etc.
- May result in price premium
106
Advantages of nominated subcontractors?
Work should be of high quality / acceptable to the employer
107
What is available to protect clients from subcontractors failing?
- Collateral warranties provide employer a contractual remedy for breach of contract
- Performance bond
108
What are defects?
- Some deficiency in workmanship, design, materials or systems used - results in a failure of building project or structure that causes damage to people / property - leads to financial losses or harm to the owner
NEC definition:
- Part of the works not in accordance with works information or
- Part of works designed by contractor, not in accordance with applicable law / contractor's design which the project manager has accepted
109
What are patent defects?
Defects that can be discovered by reasonable inspection (i.e. wall cracks, snagging gutters, broken windows, missing tiles etc.
110
What are latent defects?
Defects that cannot be discovered by reasonable inspection (i.e. foundation problems) - may not be apparent for several years after completion when settlement causes cracking in the building
111
Why is the defect rectification period typically 12 months?
Allows building to go through all seasons- most defects (apart from latent ones) become apparent in this period
112
What is the rectification period?
Time after PC for the contractor to make good any defects, shrinkages or other faults that arise during this period
113
How long is the rectification period?
- Depends on form of contract
- Typically 12 months so building can be observed in all seasons
114
What is retention?
% of sums certified for payment under construction contract (typically 3-5%) held by employer during construction phase
115
What is the purpose of retention?
- Used as an assurance and incentive of project completion to required standard, intended as a safeguard against subsequent defects the contractor may fail to remedy
- Provides financial security to employer in the event of a contractor default
116
What can the employer use retention monies for?
- If contractor does not return to correct defects, retention can be used to fund others to correct
- PM / CA needs to check on contract on ability to do this and relevant notices that should be given to the contractor prior to appointing others to undertake the works
117
How is retention released to the contractor?
2 stages:
- Upon issue of PC statement 1st half certified and released
- 2nd half released upon expiry of rectification period
118
Who typically benefits from interest accruing on retention money?
Typically the employer
119
Alternatives to holding retention?
Retention bond
120
What is a typical retention percentage under JCT contracts?
3% or 5%
121
What items are not subject to retention?
- L&E
- Fluctuations
- Insurance options
- Costs incurred with contractor's suspension
122
Insurance vs indemnity?
- Indemnity protects against legal responsibility / compensate - open ended
- Insurance is a fund that enables indemnifying party to make payments that may arise, includes time and financial limits
- Contract sets out insurances required to cover indemnities the party is liable for
123
What is insurance?
Transfer of defined risk to an independent 3rd party (insurance company) in exchange for a premium
124
Two main types of insurance?
Liability and loss insurance
125
What is liability insurance?
Financial cover for legal liabilities that insured party owes to others
126
What is loss insurance?
Financial cover for losses that fall directly on uninsured party
127
What is professional negligence?
- When a professional fails to perform their responsibilities to the required standard or breaches a duty of care
- Poor conduct subsequently results in financial loss, physical damage or injury of their client / customer
128
How can the employer / client recover a loss if the consultant / contractor is professionally negligent?
Make a claim on PII
129
What is product liability insurance?
Manufacturers and/or suppliers of products incorporated in construction works at risk of claims made against them for damages if defects result in damage or injury - Products liability protects policy holder against liability from these defects
130
What is public liability insurance?
- Protects against liabilities for injury to third parties / their property
- i.e. member of the public could make claim if a fallen brick damaged their car or if supplier trips over unsecured cable
131
What is employer's liability insurance?
Pays the compensation and legal costs if employee claims compensation for a work-related illness or injury
132
What are the main options for insuring works under a JCT contract?
- Option A - Contractor takes out and maintains joint names all risks insurance of the work for new buildings
- Option B - employer takes out and maintains as above
- Option C - for renovations and existing structures-employer takes out and maintains joint names all risks insurance
133
What is contractor's 'all risk' insurance?
- Protection against physical loss / damage to works being undertaken
- Policy pays for repair / replacement of insured works following damage caused by insured event
134
What are specified perils?
Significant events causing significant damage to works, including but not limited to:
- Fire
- Explosions
- Earthquakes
- Flooding
135
What is subrogation?
- Concept allowing insurance company that has paid a loss to step into shoes of its ensured, then sue a party that may be responsible for causing loss
- i.e. contractor's crane drops steel beam causing damage, owner's builder's risk insurer pays loss, owner's insurer can sue contractor for loss it caused
136
What is a joint names insurance policy?
- Policy in the names of 2+ parties (i.e. contractor and employer)
- Joint names -> insurer has no right of subrogation against insured parties, even if they have caused loss the insurer has to pay for
137
Different insurance provisions included in JCT contracts?
- Risk for the works - insurance Options A/B/C
- Pool Re Cover
- Professional Indemnity
- Employers Liability
- Contractor Public Liability
138
What can be done at tender stage to identify potential contractor insolvency?
- Thoroughly check financial accounts for stability
- Check for front loading tender submission
- Bank references
- Credit checking (i.e. Dun and Bradstreet report)
- Previous references
- Request a bond and/or PCG (gives comfort in the event of default)
139
What is termination?
Parties to the contract no longer obligated to perform their duties under the Contract
140
Can the contractor suspend works for non-payment?
- Construction Act 2009 (LDEDC) puts payee in stronger position - contractor can suspend performance of any / all obligations
- Contractor can stop insuring works, postpone applying for necessary consent / refuse to iimplement variation instruction
- Payee entitled to "reasonable amount" for re-mobilisation costs and extension of time
141
What is a Notional Final Account?
- Final Account prepared when Main Contractor is facing insolvency
- Typically of greater value than the original forecast final account due to costs incurred by client to appoint new Contractor to complete works
142
What is the meaning of insolvency?
- Company enters into administration - cannot pay debts on time
- Winding up order placed against company
- Individual becomes insolvent if declared bankrupt
143
What is the definition of bankruptcy?
Administration of a sole entity
144
Instances where employer can terminate the contract?
- Default - contractor not undertaking works in accordance with obligations
- Insolvency
- Bribery and corruption
- Suspension period ending
145
How would an employer terminate a contract as a result of contractor default?
- 1st stage - notice of default setting out reasoning and justification
- Contractor has 14 days to rectify
- 2nd Stage - after 21 days of expiry of 14 days employer gives further notice to terminate contract
146
Considerations when terminating a contract?
- Don't terminate unreasonably, can be taken as opportunity to harass, oppress or annoy
- Select correct grounds for termination
- Give proper notice and timelines - consider additional timescales for postage times
147
What are the consequences for employer termination?
- Contractor supplies contract design completed to date
- Remove plant and equipment from site
- Potential additional costs to retender works could be contractor's liability
- Employer has to justify additional costs, and refund monies if additional
148
What if the employer decides not to complete the works after termination?
Within 6 months, notify contractor of final value of works, date of termination and any sums considered due
149
When can the contractor terminate the contract with the Employer?
- Employer insolvency
- Default - doesn't pay by final date, non compliance with CDM regs, failure to release information, suspension for 2+ months
150
Are there instances in which both parties can opt to terminate?
Yes if works are suspended for given period following relevant events, force majeure, government legislation, employer instructions, terrorism
151
What are delay damages / LDs?
- Genuine pre-estimate of loss suffered by employer because of late completion of works
- Damages inserted into contract prior to signing by contracting parties
- NOT a penalty
- Quick remedy to avoid having to prove actual loss and contractor aware of the liability
- Employer calculates figure
152
What sort of expenses / costs can the employer include in the damage calculation?
- Loss of rent / other income
- Additional professional fees
- Expected costs incurred by other parties
- Costs for not having facility (storage, rent, abortive costs etc)
- Capital salaries
- Associated legal costs
153
What if your client tells you the damages are £100,000 per week?
- Exercise due diligence - check they do believe this is a genuine pre-estimate of likely loss
- If there is a concern, explain dangers that damages might be construed to be a penalty (no longer enforceable)
154
Under JCT contracts, what contractual documents need to be in place before damages can be deducted?
- Non-completion notice / certificate
- Formal notification to contractor that the employer intends to levy
- Pay less notice served
155
What is a non-completion certificate?
Issued by CA to certify that works / works section have not been completed by relevant completion date
156
What are consequences of a non-completion certificate?
Employer has a right to withhold liquidated damages, as long as withholding notice has been given
157
What is a LD holiday / LD-free period?
Grace period during which contractor has no commercial liability for delay (i.e. contractor has 2 weeks with no LDs and they only begin accruing after
158
What is the implication of inserting 'nil' against damage clause?
No liquidated damages- may prevent employer pursuing contractor for unliquidated damages
159
What is the implication of leaving the damage clause blank?
Employer can pursue contractor for unliquidated damages if they choose to do so
160
Liquidated vs unliquidated damages?
- LDs - contracting parties may agree to pay certain amount on breach of contract
- Un-LDs - granted by courts based on assessment of loss / injury caused to party suffering such breach
161
If the date for completion is adjusted, what affect would this have on delay damages?
Damages levied from revised PC date
162
Can the employer levy liquidated damages if they do not actually incur the loss identified in the initial calculation?
In essence yes, provided that:
- Damages not deemed to be penalty on contractor
- Original calculation is a genuine pre-estimate of loss
163
What are relevant events?
Event causing delay to completion of the works that entitles contractor to en EoT
i.e. something during design and manufacture causing delays or a site event prolonging installation
164
Can you provide examples of relevant events in JCT Contracts?
Depends on the contract, generally:
- Variations / instructions
- Deferment of possession
- Suspension for non payment
- Carrying out work of statutory undertakers / exercising statutory power by government or local authority
- Employer impediment / prevention / default
- Loss or damages occasioned by Specified Peril
- Exceptionally adverse weather conditions
- Strike / lockout
- Civil commotion / terrorism
- Force majeure
- Execution of approx. quantity not reasonably accurately forecasted
165
What is force majeure?
Defined as certain acts, events or circumstances beyond the control of the parties (i.e. natural disasters, national lockdowns)
166
Can you provide some examples of a force majeure event?
- War, hostilities, invasion, act of foreign enemies
- Rebellion, revolution, insurrection, civil war
- Contamination by radioactivity
- Riot, commotion, strikes, disorder
- Acts or threats of terrorism
167
What happens when a relevant event occurs?
- Upon being reasonably apparent that a delay will occur, contractor notifies CA in writing, stating particulars and extent
- Contractor must state relevant events in detail, how and why delay is occurring or likely to occur
- Contractor should give an estimate of delay in his notice so CA can form their own opinion
- CA responds within 12 weeks stating whether relevant event has / not occurred
- If it has occurred, CA assesses delay
- New completion date fixed (EoT granted)
168
Assuming the relevant event has occurred and is accepted by the CA is the contractor entitled to loss and expense?
- Relevant events entitle contractor to EoT only
- Contractor also needs to demonstrate relevant matter has occurred
169
What is an extension of time?
Adjust completion date and relieves contractor's liabilities
170
Benefits of being able to grant an extension of time?
- Relieves contractor's liability for liquidated damages for a delay they did not cause
- Enables another completion date to be set, which maintains the employer's ability to deduct liquidated damages if another delay occurs
171
What does a contractor need to demonstrate has occurred to merit an EoT?
Demonstrate a relevant event in section 2 of JCT contracts
172
What happens when 'time is at large'?
- No set completion date
- Contractor only has to complete works in a 'reasonable time'
- Liquidated damages cannot be claimed- there's no date to take them on
- Employer would have to try and prove the contractor had not completed the project in a reasonable time
173
How do you ascertain an extension of time?
- Overview of the facts
- Cause and effect
- Look at guidance notes
174
What are relevant matters?
- Matter which employer is responsible that materially affects progress of the works
- May enable contractor to claim direct loss and/or expense that has incurred
175
Can you give some examples of relevant matters?
- Failure to give contractor possession of site
- Failure to give contractor access to and from site
- Delays in receiving instructions
- Disruption caused by work carried out by employer
176
Relevant event vs relevant matter?
- Relevant event -> contractor claims additional time
- Relevant matter -> additional cost
177
What is a loss and expense claim?
Often associated with delays but can be for any event where Contractor incurs loss due to failure of the employer (relevant matter)
178
Key thing to remember when assessing loss and expense claims?
- Should be actual loss incurred by the contractor
- Prices in BoQ, contract schedule of rates or preliminaries should not be used (actual costs could be more or less)
179
What are common heads of claim in loss and expense?
- Prolongation (extra site overheads, prelims)
- Thickening of prelims (more supervision)
- Disruption (causing plant and labour to be underutilised / unproductive)
- Increased material and labour costs
- Finance charges (i.e. interest)
180
What are prolongation costs?
- Financial claim made by contractor related to running late projects
- Typically include claims for cost of time-related resources such as site management, site accommodation, plant, machinery
181
Which section of the contract are relevant matters listed under?
Section 4 - payment
182
What is a global claim?
- Multiple claims stemming from multiple relevant matters wrapped into 1 L&E claim
- Can distort the reality of situation and what the actual L&E is
183
What is acceleration?
Acceleration is the completion of works in a shorter time frame than that anticipated at tender / act of programme recovery by the contractor if they are in delay
184
What options may be considered to achieve acceleration?
- Re-sequencing the works or making sequential activities parallel
- Working longer hours
- Increasing the resources employed
- Changing the working methods i.e. using a dehumidifier to dry out the works faster
- Increasing incentives for example offering bonus payments
185
What are the most and least efficient acceleration options?
- Most cost effective and efficient - re-sequencing
- Least efficient - increasing working time and resources
186
What fluctuation provisions does JCT have?
D&B
- Option A - Change Contract Sum in line with contribution, levy and tax fluctuations - DEFAULT
- Option B - Change Contract Sum in line with tax and insurance changes + changes in labour and material costs
- Option C - Change Contract Sum in line with specific index, i.e. BCIS
- No fluctuations provision
187
Is adjudication legally binding?
Yes but can be overturned by arbitration / litigation
188
What is the process for resolving disputes under JCT?
- Negotiation
- Mediation
- Adjudication
- Arbitration
189
Adjudication vs arbitration?
- Governed by separate acts
- Adjudication - HGCRA and LDEDC
- Arbitration Act 1996
- Arbitration can overturn adjudication
- Arbitration not legal necessity
190
If the contractor advises you he will handover the building 3 months early, what would you do?
- See if client accepts taking possession- contractually they don't have to
- Check cashflow is acceptable
- If yes to both of above, issue PC certificate and relevant sundries (half retention, defects liability etc.)
191
What is partial possession?
- Contract allowing employer to take possession of part of the works before they have been formally completed
- Often requires contractor agreement, allows employer to use portion for its intended purpose
192
Key points of partial possession?
- Not agreed prior to signing building contract
- Completion deemed occurred for that section
- Contractor must give consent
- Voluntary agreement between employer and contractor
193
Can the contractor refuse to give partial possession?
- Consent cannot be unreasonably withheld
- Contractor could withhold occupation if it hinders their ability to complete the remaining areas
194
What are the typical implications of partial possession?
- Half retention released (proportionate to area of possession)
- Contractor's responsibility for insuring works there ends
- Contractor's liability for damages ends (proportionate as above)
- Employer responsible for any damages to the works
- Defect rectification period commences
195
What does the CA have to do at partial possession?
Issue written statement to the contractor showing relevant part and stating relevant date
196
What is sectional completion under a JCT contract?
- Provision allowing different completion dates for different sections of the works
- Contractor has obligation for achieving sectional completion dates
- Liquidated damages agreed up front should section be delivered late
197
Sectional completion vs partial possession?
- Sectional completion is pre-planned and defined in contract documents - typically contract should provide if employer knows in advance
- Partial possession relies on contractor's consent
198
What are the benefits of sectional completion over partial possession?
- Sectional completion leaves less to chance - parties have agreed many practical consequences
- If something goes wrong (i.e. delay), easier for CA to deal with delays, changes and acceleration
199
What is early use?
- Employer can occupy site / part of site for storage or otherwise before PC
- Contractor gives consent, subject to confirmation that this doesn't impact insurance
- Insurance option A / if Contractor covers own risks and this results in insurance premium, contractor notifies employer to be added to contract sum if still required (contractor produces receipt if requested)
200
What is the date for completion?
Date fixed and stated in contract particulars for finishing works
201
How does the date for completion differ from the completion date?
Date for completion of the works that might be adjusted to take into account agreed EoT
202
What is practical completion?
- When works substantially complete with minor defects only
- Employer able to gain beneficial occupancy of the development
- Triggers half of retention monies being released
- Employer surrenders right to apply liquidated damages
- Employer takes back possession of works and responsible for arranging insurances
203
What is sectional completion?
Completion and handover of works to the employer in agreed stages
204
Do the works have to be totally completed before practical or sectional completion is achieved?
- PC is a vague concept not defined in JCT
- Reliant on CA's opinion that works are complete- should not be conditional
- There may be minor defects / omissions that don't prevent employer taking beneficial occupancy
205
What if the client tells you the LADs are to be £100,000 per week?
* I would check that the LAD figure is based on a genuine pre-estimate of financial loss and explain that in the event LAD’s are to be applied, they would need to substantiate this figure.
* I would also explain that if the figure inserted into the contract is shown to be punitive and not based on genuine financial loss it is not likely to be enforceable.
* In this scenario the employer will have to pursue the Main Contractor for any actual direct loss that can be substantiated through a formal dispute resolution procedure.
206
What are extensions of time?
Extensions of time adjust the completion date and relieves the contractor’s liability to pay liquidated damages for the period of the extension.
207
What are liquidated damages?
A genuine pre-estimate of the likely loss incurred by the employer should the completion date not be met.
208
What must be in place before LDs can be deducted?
* A non-completion certificate.
* A withholding notice.
209
What is a withholding notice?
A withholding notice is a document that a paying party issues to a contractor to withhold payment under a construction contract. It's also known as a "pay less notice".
210
What if the employer actually suffered no loss or damage?
* It doesn’t matter.
* The damages can still be deducted at the value stated in the contract.
211
What is a pay less notice?
A "pay less notice" in construction is a formal document issued by a project owner (employer) to a contractor, indicating their intention to pay less than the amount claimed by the contractor in a payment application, due to discrepancies or disputes regarding the work completed
212
What are Relevant Events in a JCT form of Contract?
They are events that entitle the contractor to an extension of time.
213
What are the relevant events?
There are 13 relevant events set out in JCT forms including:
o Variations.
o Instructions.
o Execution of an approx. quantity that is not a reasonably accurate forecast.
o Deferment of possession of the site.
o Suspension by the contractor for non-payment.
o The carrying out of work by statutory authorities.
o Impediment, prevention or default by the employer.
o Loss or damages occasioned by the Specified Perils.
o Exceptionally adverse weather conditions.
o Strike or lock out.
o Civil commotion or terrorism.
o The exercise of any statutory power after the base date by the UK gov.
o Force majeure.
214
What are the main elements you would include within an interim valuation?
* Preliminaries.
* Measured work.
* Variations.
* Materials on site.
* Materials off site.
* Loss and expense.
* Retention.
215
What needs to be in place for you to include payments for materials on site?
* The materials should be for the works.
* They should be adequately protected.
* Delivered to programme.
* In a reasonable quantity.
216
What needs to be in place for you to include payments for materials off site?
* Proof that ownership will transfer to the employer upon payment (vesting certificate).
* Insurance until materials arrive at site.
* Materials are clearly labelled as for the site and set apart from other materials.
* A materials off site bond has been provided if required.
217
What is a retention of title clause?
* Where the sub-contractor or supplier retains ownership of materials until they are paid for them by the contractor.
* This highlights the importance of vesting certificates as the employer may subsequently pay for materials that are not owned by the contractor.
* This legal principle can lead to disputes in the event of insolvency.
218
How do you evaluate interim valuations?
* Go to site and inspect the works to form a view on the percentage of works undertaken.
* Check for materials on site and materials off site.
* Value time related and fixed preliminaries items undertaken.
* Value any agreed variations and claims.
* The valuation amount is presented as the gross valuation, less previous payment made and retention.
* Finally I would send my recommendation to the Architect or Contract Administrator for them to prepare the payment certificate.
219
How do stage payments work?
* The stages and their values are set out in the contract particulars.
* The stages are usually related to the completion of significant design items for example completion of the substructure or achieving a water tight structure.
220
What is the interim certificate conclusive of?
* Interim certificates are not conclusive.
* They carry no contractual significance to state that the quality of materials or workmanship is satisfactory.
* It is only the final certificate that is conclusive.
221
What is a retention bond?
* This is a bond provided by the contractor in lieu of taking retention from interim payments.
* It should be equal to the same value as the retention deducted.
* The requirement for the bond should be stated in the contract particulars.
* A standard form is provided in the JCT contract schedules.
222
What happens if the contractor does not maintain the retention bond?
* The employer can deduct retention from interim payments.
* If the bond is subsequently taken out, the retention deducted must be repaid to the contractor.
223
Why might a retention bond be used?
It may be used in difficult market conditions to aid the contractor’s cashflow
224
What are the disadvantages of a retention bond?
* The employer would have to pay the premium for taking out the bond.
* It may reduce the contractor’s incentive to complete making good defects promptly.
* It reduces the employer’s cashflow.
* The employer would not get the interest accruing on the amount of the retention bond.
225
What does it mean when ‘time is at large’?
* There is no fixed completion date.
* The contractor must only complete the works in a reasonable time.
226
What are collateral warranties?
* They create contractual relationships between the main parties of a contract with an external third party.
* The contractual relationship would not exist with the third party due to privity of contract.
227
Why are they used?
* Due to the principle of privity of contract, the rights and obligations under a contract can only be enforced by a party to that contract.
* Collateral warranties give remedies to external third parties that due to privity of contract would not otherwise have them.
228
Who might want a collateral warranty?
* Any third party with a financial investment in a project but not party to the main contract.
* Funding institutions, future tenants or purchasers may use collateral warranties.
* The employer may want a collateral warranty with key subcontractors or suppliers, as if the main
contractor were to go into liquidation, they would have no contractual link with them for redress in case of defective workmanship.
229
What are the common clauses / terms in collateral warranties?
* The obligations of the collateral warranties should mirror that of the main agreement.
* Therefore, if a party is in breach of the main agreement they would also be in breach of the warranty.
* Common terms include:-
o Limitation of liability.
o Reasonable skill and care or fitness for purpose.
o Requirements for PI insurance.
o Assignment rights.
o Novation rights.
230
Name some standard forms of collateral warranty that may be used
* Contractor Collateral Warranty for a Funder (CWa/F) – JCT standard form of collateral warranty for a funder.
* Contractor Collateral Warranty for a Purchaser or Tenant (CWa/P&T) – JCT standard form of collateral warranty for a future purchaser or tenant.
231
What is assignment?
* Where the rights and benefits of one contractual party are transferred to a third party.
232
What is the standard commercial position regarding assignment?
* It is standard to allow assignment of rights twice without consent.
* The assignment should be notified in writing to the other party.
233
What is novation and how does this differ from assignment?
* Novation is where a new contract transfers the rights and obligations of one contractual party to a new third party.
* Assignment is the transfer of contractual rights or contractual benefits only as burdens cannot be assigned.
234
What is the key issue after a design team has been novated?
* Whether the new party has the right to take action against the novated party for breaches that occurred before the novation.
235
How does novation affect the employer’s rights?
* They lose all contractual relations with the novated party and therefore the right to take action for a breach.
* It is therefore common for there to be a collateral warranty between the employer and novated party.
236
What is available to protect clients from sub-contractors failing?
* Collateral warranties can be used as a direct link between the employer and subcontractor.
* In the event that the subcontractor fails to carry out his obligations the employer can have a contractual remedy to sue the subcontractor for breach of contract.
* They could also use a performance bond.
237
What are step in rights and why do they exist?
* They typically permit funders to step into another parties’ shoes, usually the employer.
* They provide funders protection in the event employer defaults on its loans.
* The funder can then take ownership of the development and sell it off if required.
* A key problem is that the main cause will often result from the developer not being able to sell the development resulting in them being in arrears.
* The funder will stand less of chance of selling the asset than an experienced developer.
238
What is reasonable skill and care?
* The ordinary skill and care expected of an ordinary competent man carrying out the particular service.
239
What is fitness for purpose?
* The provision of a service that is suitable for the employer’s intended purpose.
* It is clearly a more onerous obligation than reasonable skill and care.
240
What is a bond?
* A surety bond is a guarantee from the surety in favour of the employer that the contractual obligations will be fulfilled by the main contractor.
* The bond if called upon will provide financial compensation up to a stated value if the other party does not fulfill their obligations under the contract.
* It does not guarantee the completion of the works.
241
What form must a bond be in?
* It must be in writing, it is common for it to be executed as a deed.
* It will contain a duration, usually until practical completion and a financial limit.
242
What is a parent company guarantee?
* An arrangement where the contractual performance of one company in a corporate group is underwritten by the other members of that corporate group.
* This means that it must complete the works itself if it can or pay the financial equivalent.
243
Which is the most common type of bond / guarantee in the construction industry?
Performance bonds.
244
What does a performance bond do?
* Performance bonds are typically provided by banks or insurance companies.
* They give the employer a guarantee of payment up to a stated amount of money should they suffer a loss as a result of the contractor's breach of his contractual obligations.
245
What is the standard value of a performance bond?
* 10% of the contract value, the premium for taking out the bond is added to the contract sum.
246
How can the employer call for payment?
* They have to prove that the contractor has defaulted in their obligations under the main contract and that loss has been suffered
247
What is the purpose of a tender bond?
* This covers the party inviting the tender if the lowest tenderer refuses to enter into a contract with them.
* This can be important if the inviting party is in turn tendering for work on the basis of that tender.
* It should also prevent idle tendering as there is an incentive to submit a price.
248
What is the standard value of Notional Final Account?
* 1-5% of the tender sum.
249
What is the purpose of a materials off site bond?
* It covers the employer against loss or damage to materials already paid for through interim valuations before the materials are delivered to site.
250
What are the arguments against requesting bonds?
* They shouldn’t really be needed if the tenderer selection process is operated effectively as only reliable and capable contractors are then selected.
* Unnecessary premiums are added to the contract sum, which are unlikely to be called upon.
* If the developer is a serial developer this may add a lot of money to their project costs.
251
Where might bonds be appropriate?
* If the contractor is new or unproven.
* To protect the interests of a ‘one off’ developer.
* In a difficult economic climate, when the risk of insolvency is higher and PCGs are risky.
252
What are the pro’s and con’s of Parent Company Guarantees?
* They are not as secure as Bonds because of the financial link between a parent company and subsidiary whereas a performance bond is provided by a third-party finance institution.
* Advantages are that they do not need to be paid for, they can be unlimited, and they can make the parent company responsible for performance as well as a financial guarantee.
253
What is an ‘on demand’ bond?
* An 'on demand' bond is one which is paid straight away upon the default occurring and request for payment.
* There is no requirement to satisfy any review or specific condition to demonstrate the default.
* Whereas with conditional Bonds, the employer must satisfy the surety that the default has occurred and the bond must identify what this condition is. It may also require litigation or arbitration resulting in delays and costs.
254
What is a Highway Bond?
* A Developer who undertakes speculative housing developments will frequently be required to enter into an agreement with a Local Authority for the adoption of roads and sewers.
* If for any reason the Developer fails to complete the adoption of the roads and sewers to the required standards then the Local Authority will complete this on his behalf and call on the bond to claim back costs.
255
What provisions are available for ensuring Contractor carries out works properly?
* To provide assurance that the contractor will perform these obligations, a Parent Company Guarantee (PCG) or a Performance Bond may be provided.
* A PCG can only be used where the contractor is a subsidiary to another company.
* The parent company guarantees the performance and will become liable if it does not perform.
* Alternatively, a performance bond can be provided by the assurers and is used to protect the client in the event the contractor does not perform in the event that specific performance requirements are not met.
256
Is an LOI that includes a spend limit any use to a contractor?
* It is only useful to the contractor if the LOI is legally binding.
* In order for an LOI to be legally binding it must have the basis of a simple contract (offer, acceptance & consideration) & both parties must intend to create legal relations.
* Without either of these 4 criteria the LOI is worthless.
257
When are LOI’s used?
* Letters of Intent are used when an early start on site is required.
* They can be used to instruct initial design or survey works to be carried out or procurement of materials on a tight programme.
* LOIs are issued to commence works while discussions are ongoing regarding the main contract.
258
Are they LOI's legally binding?
* There is no legal significance of letters of intent.
* The courts will look at all the correspondence between the parties to establish if a contract has been formed.
* If it is found that a contract exists, then it will determine obligations.
* If there is no contract, then the letter of intent will have no contractual effect and quantum merit will be applied.
259
What is a Deed?
* Deed must be clearly labeled
* Deeds do not require consideration
* The limitation period under a deed is 12 years
* Deeds must be signed in the presence of a witness
260
What is Under Hand?
* A simple contract can be executed with less formality
* Consideration is required
* The limitation period under a simple contract is 6 years
* Easier to execute, often just a single signature
261
What are the key chnages form JCT 2016 to 2024?
* Enhanced Collaborative Working: stronger emphasis on collaborative working practices.
* Modernizing Relevant Events and Delays: updates relating to dealing with pandemics.
* Sustainable Development: incorporates provisions that encourage sustainable construction practices.
* Legislative Changes: contracts have been updated to reflect the building safety act.
* Modernized Language and Structure: revised to use more modern and accessible language
262
What are advance payments?
allow the contractor to receive a pre-agreed sum of money from the employer before works commence or materials are received
263
How do you select appropriate contracts?
* Identify procurement method
* Identify complexity and specilist requirments
* Use JCT Contract Selction flowgraph
