Contract Practice Flashcards
What are included within the Contract Documents for a project
- JCT Contract
- Preliminaries
- Contract Drawings/Specifications
- Contract Sum Analysis
- Surveys & Reports
- Advanced payment schedule
- Collateral warranties
- Employers requirement’s/Contractors proposals (CDP)
What are the key parties involved in a construction contract
- Employer/Client
- Contractor
- Contract Administrator; Contractor must comply with their formal instructions/ Expected to maintain impartial
Design & Build
- Employers Agent; Contractor must comply with their instructions
Quantity Surveyor
- SBC: Party to the contract
- DB: not a party to the contract but expected to maintain impartial if involved in administrating
What is the role of the Quantity Surveyor in construction contracts
To deal with all cost related matters, such as:
- Deal with interim valuations, raise payment recommendations/certificates
- Deal with cost when a variation occurs
- ascertain loss & Expense
- Deal with the Final Account
What is the Contractors obligations in construction contracts?
Th contractors obligations are identified in clause 2.2 of the JCT SBC and 2.1 of the JCT DB contract
1. Complete and carry out the works in a proper and workmanlike manner
2. All materials and goods are of the standard described in the specification/ Employers requirements
3. Give all notices required by the statutory requirements and comply
What is the clients obligations in construction contracts
- Payment of the Contractor on time
- Do not disturb the contractor from working with reasonable skill and care
What are the five key elements for contract formation
- Offer
- Acceptance
- Consideration
- Capacity & Competence
- Intention to Create Legal Relations
How are construction contracts executed and what are the main differences
Under hand - 6 year limitation/liability period
Deed - 12 years limitation/ liability period
What is a standard form of contract
set of formal, pre-determined arrangements and mechanisms that form the basis of agreement between parties
What are the typical amendments made to standard forms of contract
Transfer risk to the contractor by reducing the list of relevant events/matters
Final date for payment due to the contractor lengthened, from 14 to 28
Rectification period extended from 6 to 12 months (to allow the building to go through all 4 seasons)
What are the types of contract under traditional procurement
-Lump sum contract, where contractors agree to execute the work for a fixed total sum of money
-Re-measurement contract, where the contract sum is not finalised until after completion (Pros: flexibility, reduced risk/ cons: potential for disputes, cost overruns/hard project planning)
- Cost Reimbursement Contract, where the sum is arrived at on the basis of prime costs of labour, plant and materials to which there is an added amount of OHP (Pros: shared risk, reduced contractor risk/ Cons: cost uncertainty, inflated costs, close monitoring required)
What are the types of contract under Design and Build Procurement
Turnkey Contract - Client settles on a complete package (ready to move in) to a specification provided by a contractor
Design and Build - Employers requirements will be written stating the Contractors design obligations for the whole of the works.
What is the different between JCT and NEC contracts
NEC references compensation events as events which may entitle a contractor to claim both additional time and cost.
JCT references time and cost differently: such as relevant events and relevant matters.
JCT contains provisional sums whilst NEC does not.
The activity Schedule is a key contractual document of the NEC and is to be updated regularly
When is the JCT SBC used and who is responsible for administrating the contract
It is used for large complex projects where the client wants to retain control over the design. Traditional procurement route has been chosen
The Contractor Administrator administers the contract.
What are the types of contract under SBC
Standard Building Contract with Quantities
- Fixed price lump sum contracts with monthly interim payments
Standard Building contract with out quantities
- Contract Sum Analysis completed by the Contractor defines the work
Standard Building Contract with Approximate Quantities
- Re-measurement contracts are used in situations where design/type of works can be described in reasonable detail but the amount cannot be given
What is a SBC with contractors Design Portion
- option that allows the client to require the contractor to design discrete parts of the works
When is the JCT Minor Works contract used and who is responsible for administrating the contract
- When traditional procurement has been chosen
- Smaller, low value, basic projects
- Architect/CA and QS administer the performance of the contractual obligations
What are the types of contract under the minor works Contract
-Minor works (employer must provide a pricing document, drawings and specifications)
- Minor works with CDP (Employer must detail the requirements for parts of work the contractor must develop)
When is the JCT D&B contract used and who is responsible for administrating the contract
- Can vary in scale but generally suitable where detailed provisions are required.
- The EA administers the performance of the contractual obligations
What are the Employers Requirments in a DB contract
A set document which aligns with the clients brief and project requirements for the project, that the contractor has to adhere to.
Scale of design work can vary: contractor may be required to complete the design produced by a design team or they might be required to carry out all of it
What are the Contractors Proposals in a DB contract
- Design prepared in response to the ER
- Set out their proposals for designing and constructing the project, along with their price
What is Novation
Novation is where an existing contract is replaced by a new one. both parties in an existing agreement must mutually agree that one of the parties will be replaced by another, which generates a new contract. (transfers al rights and obligations from one party to a third party)
- For example; design team initially engaged by the employer should be transferred from the employer to the contractor to complete the design
What are the key differences between standard building contracts and D&B contracts
- Full design at tender stage with SBC, where as DB could range from simple set of ERs to full design
- Client retains control over design in SBC so quality is perceived to be higher
- CA in SBC and EA in DB
What are the recitals under JCT contract suits
Recitals contextualise the agreement, giving factual explanations for the basis of the contract
What are the articles under the JCT Suites
The articles set out what is agreed between parties
