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RICS SOE Hooks > JCT Contract Structure > Flashcards

JCT Contract Structure Flashcards

1
Q

Why would you use a SBC

A

For larger works designed or detailed on behalf of the employer

Drawings and specification supplied to the contractor which define scope and quality of the work.

The contract is administered via a CA

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2
Q

What are the articles of a contract

A

It sets out the parties obligations and agreed legal course of action.

1) contractors obligations
2) contract sum
3) Contract Admin / Architect
4) QS
5) Principle Designer
6) Principle Contractor
7) Adjudication
8) Arbitration
9) Legal proceedings

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3
Q

What is included in Section 1 of a JCT contract?

A

Interpretations

(Basically a table of definitions)

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4
Q

Where are interpretations found a JCT contract?

A

Section 1 - interpretations

(Basically a table of definitions)

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5
Q

What is included in Section 2 of a JCT contract?

A

The contractors obligations

1) General obligations

2) possession

3) supply of documents and construction info

4) errors discrepancies and divergences

5) CDP design work

6) fees, royalties and patent rights

7) unfixed materials and goods

8) adjustment of completion dates and relevant events

9) practical completion, lateness and Liquidated damages

10) partial possession

11) defects

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6
Q

Where are the Contractors Obligations found a JCT contract?

A

Section 2 - Contractors Obligations

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7
Q

What are some key clauses in Section 2 - Contractors Obligations

A

Clause 2.28 - EOT:

the Contractor shall not be entitled to any extension of time for the completion of the whole or any part of the Works if and to the extent that the delay arose by reason of any default, negligence or breach of contract or breach of statutory duty, whether by act or omission of the Contractor and/or the Contractor’s Persons (or their respective servants or agents).”.

Clause 2.29 - (List of) Relevant events

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8
Q

What is included in Section 3 of JCT contracts?

A

Section 3 = Control of the works

Contractor providing access to Architect/Contract Administrator

Site management

Co-operation with statutory bodies, CDM

Provision of sub contracts

H&S

Early Warning Notices

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9
Q

Where are the Control of the Works provisons found a JCT contract?

A

Section 3 = Control of the works

Contractor providing access to Architect/Contract Administrator

Site management

Co-operation with statutory bodies, CDM

Provision of sub contracts

H&S

Early Warning Notices

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10
Q

What are some key clauses in Section 3 - Control of the works.

A

Clause 3.1.2: “The Contractor shall provide access to enter upon the Site, all facilities and equipment for the Employer, the Landlord and/or the Architect/Contract Administrator and/or any other person(s) authorised by them:

Clause 3.23 (CDM Regulations): “Each Party undertakes to the other that in relation to the Works and the Site it will duly comply with the CDM Regulations.

Clause 3.26 (Early Warning Notice) The Contractor shall give an early warning by notifying the Architect/Contract Administrator in writing within five (5) Business Days of the Contractor becoming aware of any matter which could:

.1 increase the Contract Sum;

.2 delay a Completion Date; and/or

.3 impair the performance of the completed Works.

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11
Q

What is included in Section 4 of the contract?

A

Section 4 = Payment

Contract sum and adjustments

Interim payments

Payless notices

Retention

Loss and expense

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12
Q

Where are the Payment terms found a JCT contract?

A

Section 4 = Payment

VAT

Contractor’s Payment Applications and Payment Notices

Interim and final payments – final date and amount

Pay Less Notices and other general provisions

Retention

Relevant Matters

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13
Q

What are some key clauses in Section 4 - Payment.

A

Clause 4.10 (Contractor’s Payment Applications and Payment Notices)

Clause 4.11 (Interim and final payments – final date and amount)

Clause 4.12 (Pay Less Notices and other general provisions)

Clause 4.22 (Relevant Matters)

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14
Q

What is included in Section 5 of the contract?

A

Section 5 = Variations

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15
Q

Where are Variations found a JCT contract?

A

Section 5 = Variations

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16
Q

What are some key clauses in Section 5 - Variations

A

Clause 5.1 (Definition of Variations)

The term ‘Variation’ means:
·1 the alteration or modification of the design, quality or quantity of the Works including:
·1 the addition, omission or substitution of any work;
·2 the alteration of the kind or standard of any of the materials or goods to be used in the Works;
·3 the removal from the site of any work executed or Site Materials other than work,
materials or goods which are not in accordance with this Contract;

(This is a short section)

17
Q

What is included in Section 6 of the contract?

A

Section 6 = Injury, Damage and Insurance

Personal injury and property damage

Insurance of the works and existing structures

Professional indemnity insurance

Joint fire code

18
Q

Where are Injury, Damage and Insurances detailed in a JCT contract?

A

Section 6 = Injury, Damage and Insurance

Personal injury and property damage

Insurance of the works and existing structures

Professional indemnity insurance

Joint fire code

19
Q

What are some key clauses in Section 6 - Injury, Damage and Insurance

A

6.1 Contractors liability - The Contractor shall be liable for, and shall indemnify the Employer against, any expense,liability, loss, claim or proceedings whatsoever in respect of personal injury to or the death of any person arising out of or in the course of or caused by the carrying out of the Works, except to the extent that the same is due to any act or neglect of the Employer, any Employer’s Person or any Statutory Undertaker.

6.7 Insurance Options and period -
1: Insurance Options A, B and C - Options A and B are suited towards new builds. Option B should be chosen given that this puts the Employer in control.

Option C is the only option available if there is already an existing structure in place.
2: In each case the Party responsible for effecting a Joint Names Policy under the Insurance
Option that applies (the ‘Works Insurance Policy’) shall maintain that policy up to and
including the date of issue of the Practical Completion Certificate

20
Q

Can you describe insurance options A B & C in a JCT contract?

A

NOTE option C most common in Interior Fit-out, taken by employer and covers: exisiting structure, contents and ALL risks)

Option A requires the Contractor to take out and maintain all risks insurance of the works;
Option B requires the Employer to take out and maintain all risks insurance of the works;
Option C requires the Employer to take out and maintain (a) insurance in respect of the existing structures and their contents and (b) all risks insurance of the works. (Used on Linklaters).

Options A and B are suited towards new builds. Option B should be chosen given that this puts the Employer in control.
Option C is the only option available if there is already an existing structure in place

21
Q

What insurance option is most common in interior fit-out?

A

Option C most common in Interior Fit-out, taken by employer and covers: exisiting structure, contents and ALL risks)

22
Q

What is Insurance Option A? And when is it used?

A

Option A requires the Contractor to take out and maintain all risks insurance of the works;

Options A is suited towards new builds.

23
Q

What is Insurance Option B? And when is it used?

A

Option B requires the Employer to take out and maintain all risks insurance of the works;

Options B is suited towards new builds.

24
Q

What is included in Section 7 of the contract?

A

Section 7 =
Assignment
Performance Bonds
Guarantees
Third party rights
Collateral warranties

25
Q

Where are Assignments, Performance Bonds, Guarantees, Third party rights and Collateral warranties detailed in a JCT contract?

A

Section 7 =
Assignment
Performance Bonds
Guarantees
Third party rights
Collateral warranties

26
Q

What are some key clauses in Section 7 - Assignments, Performance Bonds, Guarantees, Third party rights and Collateral warranties

A

7.3 Performance bonds: The Contractor shall on the execution of this Contract provide to the Employer whichever of the following the Contract Particulars state as being required:

  1. a performance bond or guarantee of the Contractor’s due performance of the Contract
    from a bank or other surety approved by the Employer in an amount equal to the
    percentage of the Contract Sum and for the period stated in the Contract Particulars;
  2. a guarantee by the Contractor’s parent company identified in the Contract Particulars

7.6 Execution of collateral warrenties: Where this Contract is executed as a deed, any collateral warranty to be entered into by the Contractor pursuant to clause 7C or 7D shall be executed as a deed. Where this Contract is executed under hand, any such warranty may be executed under hand.[59]

27
Q

What is included in Section 8 of the contract?

A

Section 8 = termination

By employer

Default by contractor
Insolvency of contractor
Corruption and regulation

By contractor

Default by employer
Insolvency of employer

28
Q

Where is Termination detailed in a JCT contract?

A

Section 8 = termination

By employer

Default by contractor
Insolvency of contractor
Corruption and regulation

By contractor

Default by employer
Insolvency of employer

29
Q

What are some key clauses in Section 8 -Termination

A

8.1 Meaning of insolvency a company becomes Insolvent:
·1 when it enters administration within the meaning of Schedule B1 to the Insolvency
Act 1986;

·2 on the appointment of an administrative receiver or a receiver or manager of its
property under Chapter I of Part III of that Act, or the appointment of a receiver
under Chapter II of that Part;

·3 on the passing of a resolution for voluntary winding-up without a declaration of
solvency under section 89 of that Act; or

·4 on the making of a winding-up order under Part IV or V of that Act.

30
Q

What is included in section 9 of the contract?

A

Section 9 = Settlement of disputes

Mediation
Adjudication

31
Q

Where is Settlement of disputes detailed in a JCT contract?

A

Section 9 = Settlement of disputes

Mediation
Adjudication

32
Q

What are some key clauses in Section 9 - Settlement of disputes

A

9.1 Mediaiton : Subject to Article 7, if a dispute or difference arises under this Contract which cannot be resolved by direct negotiations, each Party shall give serious consideration to any request by the other to refer the matter to mediation.[61

9.2 Adjudication : If a dispute or difference arises under this Contract which either Party wishes to refer to adjudication, the Scheme shall apply, subject to the following:
·1 for the purposes of the Scheme the Adjudicator shall be the person (if any) and the nominating body shall be that stated in the Contract Particulars;

33
Q

What are contract recitals?

A

The statements that provide background information about the intent of a contract.

34
Q

What is the liability of CDP portions

A

£10,000,000
Ten million

35
Q

How long is the defects liability period

A

12 months

36
Q

What is retention set at

A

5%

37
Q

What is the contractors public liability insurance set as?

A

£20,000,000
20 million

38
Q

How is PC defined and certified?

A

When works are complete to a standard when the employer can occupy the space, aside from minor snagging. Beginning of the defects liability period. Approval from the project architect, building control, and any relevant subcontractors. As the contract administrator:

The CA will issue a certificate of practical completion which may include

  • PC Cert
  • O&M
  • List of defects
  • Comissioning certs
  • Building control sign off
  • Letters of reliance
  • Health and safety file,
  • Contractor confirmation works are complete
  • Confirmation all planning conditions are discharged

RICS SOE Hooks (5 decks)

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