Contract Administration

Question 1

What are the main parts of the JCT Contract ?

Answer 1

Recitals
Articles
Contract particulars
Attestation
Conditions
Schedules

Question 2

When would you use JCT Minor works?

Answer 2

Project works have a value of up to £200,00
Works are of a simple nature and a short duration
Design to be completed prior to contract execution
Lump sum contract

Question 3

When would you use JCT intermediate contract ?

Answer 3

Project duration is within one year
Straight forward construction
Design complete prior to execution

Question 4

JCT standard contract with quantities ?

Answer 4

Design completed prior to contract execution
Contractor takes risk of rates
Employer takes risk of errors in the bill
Bill of quants is used
Lump sum

Question 5

When would you use standard building contract without quantities?

Answer 5

Design completed prior to execution
No bill of quants
Contractor owns risk for both rates and quants
Lump sum
Contract docs include drawings, specifications and schedule of rates

Question 6

When would you use standard building contract with approximate quantities ?

Answer 6

Re measurable contract
Design incomplete prior to contract execution
Approx BOQ is prepared
No fixed contract sum

Question 7

When would you use JCT D&B?

Answer 7

Contractors proposals form the basis of the contract
Contractor is responsible for design and construction
Role of EA is used instead of QS

Question 8

What do relevant events mean?

Answer 8

Contractor is granted an extension of time

Question 9

What does an extension of time mean?

Answer 9

Employer cannot claim liquidated damages

Question 10

What are liquidated damages?

Answer 10

A genuine pre-estimate of the financial loss incurred due to project programme delay

Question 11

What are some examples of relevant events?

Answer 11

There are 13 relevant events
Examples include: exceptionally adverse weather conditions, deferment of site possession, variations, instructions

Question 12

What are relevant matters?

Answer 12

specific events or issues for which the employer is responsible that cause disruption to the regular progress of the works, entitling the contractor to claim direct loss and/or expense. For example, failure to provide access to the site

Question 13

How much retention should be retained ?

Answer 13

Typically 3%-5%

Question 14

What are the contract limitation periods ?

Answer 14

6 years if executed as an underhand
12 years If executed as a deed

Question 15

What are the advantages of using the JCT contract suite ?

Answer 15

Considered to be industry standard
Covers most forms of procurement and building types
Comprehensive in detail
Considered fair and reasonable and not bias to either party

Question 16

What are the Disadvantages of JCT suite of contracts?

Answer 16

Long and complex.

Question 17

What is insurance option A in a JCT contract?

Answer 17

Option A: All risks insurance of the works by the contractor

Question 18

What is insurance Option B in a JCT contract?

Answer 18

Option B: all risks insurance of the works by the employers

Question 19

What is insurance option C in a JCT contract?

Answer 19

Option C: the employer is required to take out and maintain
(a) a joint names policy in respect of the existing structures and their contents, and
(b) a joint names policy for all risks insurance for the works

Question 20

When are the different insurance options in jct used?

Answer 20

Options A and B are used on new build structures
Option C is used for refurbishment or remediation projects to an existing building

Question 21

How does JCT define a joint names policy ?

Answer 21

Where the employer and contractor are both included as composite insureds, meaning the insurer cannot recover costs from either party after a payout. Protects both the employer and subcontractor by removing all abilities for the insurer to sue one part and recoup its losses, thereby preventing delays and disputes related to fault during the claim process.

Question 22

What is a joint names policy?

Answer 22

A policy that is in the names of two parties (the employer and contractor). Under this policy the insurance provider will have no right to subrogation, even if it is one of the insured parties that have caused the loss for which the insurance provider has to pay out.

Question 23

What is subrogation?

Answer 23

Is a concept that allows an insurance company that has paid a loss to step into the shoes of who it is insuring to then sue the party that has caused the loss

Question 24

What are the key differences between JCT and NEC

Answer 24

• NEC is drafted in plain English and provides for simpler language so is easier to understand
• NEC uses early warnings and compensation events
• NEC uses 6 main options and various secondary clauses whereas JCT uses separate contracts
  -NEC the programme is a contract document
• JCT allows for provisional sums and NEC does not

Question 25

What is the difference between NEC3 and NEC4?

Answer 25

NEC4 has introduced 2 new contracts: - Design build and operate contract - combines design, construction, operation and/or maintenance to enable procurement from a single supplier - Alliance contract - clients who wish to enter into a single contract with several participants - contract language is gender neutral - contractor is to submit an application for payment rather than the PM being obliged to assess if they fail to submit the application

Question 26

Can you give me an overview of the NEC4 contract?

Answer 26

It was developed by the institution of civil engineers and is known for its collaborative and flexible approach. It aims to promote cooperation, clarity and fair risk allocation for the parties involved. There are six main options to choose from (options A to F)

Question 27

What is a LD holiday or LD free period?

Answer 27

This is essentially just a grace period during which the contractor has no commercial liability for delay.

Question 28

What is the implication of leaving the damage clause blank?

Answer 28

If the Claude is left blank , then the employer can pursue the contractor for unliquidated damages if they choose to do so.

Question 29

What is the difference between liquidated and unliquidated damages?

Answer 29

Contracting parties might agree to pay a certain amount on breach of the contract. When such provisions are created in the contract they are known as liquidated damages. Unliquidated damages are granted by the courts based on an assessment of the loss or injury caused to the party suffering such breach of contract.

Question 30

What are the advantages of standard forms over bespoke contracts?

Answer 30

Written by legal experts. Rights and obligations of each party are clearly set out to the required level of detail. Parties should be familiar with the provisions

Question 31

What are the disadvantages of bespoke contracts?

Answer 31

Familiarity are decreased as they are rarely used. Expensive to draft (legal fees). May be poorly drafted and lead to ambiguity. Clauses/provisions might be untested in court.

Question 32

What are some risks associated with amending a standard contract?

Answer 32

Amendments can spoil the balance of risk allocation. Can create legal uncertainty. Amendments must be reasonable and comply with legislation . Courts can strike out amendments if contrary to good faith.

Question 33

When would you use the JCT Intermediate Contract.

Answer 33

The contract is designed for construction projects involving all recognised trades and skills of the industry. Intermediate building contracts are suitable for ‘ Projects Procured via the Traditional Method’.

Question 34

What are the 6 main options under the NEC4 ECC contract?

Answer 34

Option A: Priced contract with activity schedule. B: Priced contract with bill of quantities. C: Target contract with activity schedule. D: Target contract with bill of quantities. E: Cost-reimbursable contract. F: Management contract.

Question 35

What is net contribution clause ?

Answer 35

This clause comes into effect when a loss is caused by more than one party, such as an architect and a contractor both contributing to a design defect. The party with the net contribution clause is only responsible for paying their specific share of the loss, as determined by the court.

Question 36

What are general damages?

Answer 36

Compensation for actual, unquantified losses resulting from a breach in contract. They are used when liquidated damages are absent or the contractual remedies do not apply. Also known as unliquidated damages

Question 37

What is the implication of inserting ‘nil’ or £0 against the damage clause?

Answer 37

This would mean that liquidated damages do not apply and could also prevent the employer from perusing the contractor for unliquidated damages.

Question 38

What collateral warranty type did you use for the NDA project and which clause in the contract covers this?

Answer 38

This was a sub- contractor warranty and the information concerning this in the contract is clause 7.8

Question 39

Why was it advised for a colateral warranty to be drawn between the client and the electrical sub contractor ?

Answer 39

Electrical systems are complex and require expert knowledge to design and implement correctly, this collateral warranty link provides a safety net for the client in regards to design liability, allowing the client to seek redress for defects.

Question 40

What are the key changes from JCT 2016 to 2024

Answer 40

- more inclusive language - implementation in article 7 to identify duty holders under the Building Safety Act 2022 (principal designer and principal contractor) - epidemic clauses have been added in relation to relevant events and matters - integration of sustainability - clause 21.5 includes a provision for the contractor to make a suggestion where changes to the works will benefit the environment

Question 41

What schedule deals with extensions or times and relevant events in JCT ?

Answer 41

Section 2

Question 42

What schedule deals with relevant matters in JCT?

Answer 42

Section 4 Clause 4.12 for D&B Clause 4.5 for Standard building contract

Question 43

What clause is the final statement/certificate and payment under in JCT standard, intermediate and D&B contracts?

Answer 43

D&B - 4.24 Intermediate - 4.21 Standard - 4.26

Question 44

How is a contract administrator defined?

Answer 44

Person appointed by the employer to manage the contract, acting as their gent whilst also performing impartial duties to ensure the contract is followed correctly

Question 45

What is n employers agent?

Answer 45

Acts as the clients representative on a D&B contract, administrating the contract and managing the project on their behalf

Question 46

What are the consequences of a non completion certificate ?

Answer 46

- certificate of non completion issued by the CA - employer must write to the contractor to notify them of their intent to levy LADs - employer must issue a pay less notice to recover the LAD’s

Question 47

What are the Certificates issued by a contract administrator?

Answer 47

- interim payment certificates - practical completion certificate - certification of making good defects ( all defects identified after PC have been fixed) - final certificate (end of defects liability, all accounts settled and final release of retention) - certificate of non completion - extension of time

Question 48

What is included in contract documents?

Answer 48

- actual contract - working drawings - pricing document - specifications - schedule of contract amendments

Question 49

How is the final statement and payment executed under JCT Standard Building Contract

Answer 49

Practical completion occurs and within 6 months the contractor must submit their adjusted contract sum (if they fail to do so a 1 month notice to supply is given) . After this has been received the QS has 3 months to prepare the statement showing the adjusted contract sum. At the end of the rectification period, the certificate or making good defects or copies of statement and ascertainment, the contract administrator has 2 months to issue the final certificate. The due date for payment is the final day of this 2 month period

Question 50

How is the final statement and payment executed under JCT intermediate Building Contract

Answer 50

At practical completion, the contractor has 6 months to submit their adjusted contract sum (if they fail to do so a further 1 month notice is given). The QS then has 3 months to prepare the statement showing the adjusted contract sum. At the end of the rectification period, certificate of making good defects or issue of statement and ascertainment the contract administrator must issue the final statement within 28 days and the final date for payment is the last day do this 28 day period.

Question 51

How is the final statement and payment executed under JCT Design and Build Contract

Answer 51

The final statement must be submitted to the employer within 3 months of practical completion. If they fail to do this, the employer notifies that unless they submit within 2 months from the date of the notice, the employer may issue the final statement. The final date for payment is 1 month after : - end of the rectification period - certificate of making good defects - date of submission of final payment

Question 52

How is the final statement and payment executed under JCT Minor works Contract

Answer 52

after practical completion (as per period stated in the contract) the contractor must the provide the CA with documentation required for the final payment. The final date for payment is 28 days after this information is provided The final certificate is then issued 5 days after the final payment due date