Contract Practice

Question 1

What are the different suites of construction contracts available?

Answer 1

1. JCT suite of contracts
2. NEC4
3. FIDIC
4. DEFCON

Question 2

Give 3 examples of JCT contracts

Answer 2

1. JCT Standard Building Contract
2. JCT Design & Build
3. JCT Minor Works Building
4. JCT Prime cost

Question 3

When would the JCT standard building contract be appropriate?

Answer 3

When the design is complete for construction and a detailed BoQ can be provided. When the client wants to retain all control over the design. To get the most competitive form of tender.

Question 4

When would a JCT design & build contract be most appropriate?

Answer 4

1. When the designs are incomplete
2. When contractor input is of value or to get an PCSA agreement
3. To speed up the process so design and construction can overlap

Question 5

When do you use a minor works contract?

Answer 5

Smaller less complex projects typically for domestic projects where work is valued at no more than £500,000

Question 6

When would a prime cost contract be appropriate?

Answer 6

When there is a good relationship between the contractor and client. The scope of works is hard to define. Time is a much higher priority than cost.

Question 7

Give the options of contract available under the NEC4

Answer 7

1. Op A priced with activity schedule
2. Op B Priced with BoQ
3. Op C target cost with A S
4. Op D target with BoQ
5. Op E cost reimbursable
6. Op F constriction management

Question 8

What types of projects typically use NEC contracts?

Answer 8

Infrastructure projects

Question 9

Explain how an NEC Option C contract works

Answer 9

NEC used an activity schedule with a target cost which means if the project cost is over or under the budget there is a pain/gain shared between the client and contractor

Question 10

What are the principles of the NEC contract?

Answer 10

1. Good relationship management
2. Flexibility, for a variety of projects
3. Clarity, simple and straightforward

Question 11

What are the key differences between the JCT & NEC

Answer 11

1. NEC includes a contract as a contractual document that is reviewed on a monthly interval
2. JCT deals with relevant events and relevant matters separately as opposed the CEs that deal with it together
3. Early warning notices must be raised under an NEC and have time bars associated

Question 12

What are the 4 things necessary to form a contract

Answer 12

Offer
Acceptance
Consideration
Legality

Question 13

What is a collateral warranty?

Answer 13

A collateral warranty is a separate document that sits besides the main contract to bridge the contractual gap between designers and subcontractor and the client in the case of the main contractors insolvency.

Question 14

Why are collateral warranties needed?

Answer 14

Due to privity of contract between the two parties which means only those party to a contract can enforce it

Question 15

What are the key elements that make up a JCT contract?

Answer 15

1. Article of Agreement (who)
2. Recitals (what)
3. Articles (how much and EA, PD)
4. Contract Particulars (Dates and insurances)
5. Conditions
6. Contract amendments
7. Employers Requirements
8. Contractors proposals
9. Contract Sum Analysis

Question 16

Give an example of where you have negotiated a contract

Answer 16

On my Bath Road project I negotiated a 2.5% discount on. The Brickwork subcontractor in exchange for a reduction of payment terms from 35 days to 14 day terms

Question 17

What differences would there be in the contract docs between a £1m cladding subcontract and a £25k scaffolding subcontract?

Answer 17

1. Cladding is higher risk and had design so would need more comprehensive contract amendments specific to design.
2. A detailed programme for cladder
3. Collateral warranty
4. Professional Indemnity insurance
5. More comprehensive construction info and details.
6. Tender pre start giving details of their construction methodology
7. Retention, bonds, PCG

Question 18

Give an example of when you might use a Sub-contract Tender Sum and where you would find that in the contract

Answer 18

For a remeasurable contract such as fire stopping or diamond drilling where the full scope is undefined and Article 3B in the contract

Question 19

What is the clause for a relevant events and give 3 examples

Answer 19

2.26
.2 Employers instructions
.3 Deferment of possession
.8 adverse weather conditions
.14 Force Majeure

Question 20

What is the clause for relevant matters and give 3 examples

Answer 20

4.21
.1 Changes
.2 Employers Instructions
.3 any impediment, prevention or default from the employer