Contract Administration

Question 1

What is your understanding of latent defects and what contractual issues are associated with them?

Answer 1

• Latent defects are defects which only come to fruition some time after building completion and may take many years to become identifiable.
• A claim in contract can only be brought about within the limitation period of the contract, 6 or 12 years depending on whether the contract was executed as a deed or underhand.

Question 2

What is the contractor deemed to have allowed on the
inclusion of a defined provisional sum?

Answer 2

• They are deemed to have made proper allowances for carrying out the work in their programme and preliminaries.

Question 3

What is the contractor deemed to have allowed for with undefined provisional sums?

Answer 3

• Expenditure of the undefined provisional sum may carry additional costs for programme or preliminaries as a result of carrying out the works.

Question 4

How are provisional sums dealt with in the final account?

Answer 4

• The provisional sums included in the contract are deducted and the actual amount substituted.

Question 5

What does NEC stand for?

Answer 5

• New Engineering Contract.

Question 6

What are the main parts of the JCT contracts?

Answer 6

-Agreement
-Recitals
-Articles
-Contract Particulars
-Attestation
-Conditions
-Schedules

Question 7

What is a bespoke contract?

Answer 7

• Contract conditions that are drafted specifically for a particular project.

Question 8

What the advantages of standard forms of contract?

Answer 8

• They are written by legal experts.
• Parties should be familiar with the provisions in the form providing greater consistency.
• Rights and obligations of each party are clearly set out

Question 9

What the disadvantages of standard forms of contract?

Answer 9

• They may not be appropriate to the needs of a particular project or client.
• Using an inappropriate standard form for the project will cancel out any advantages

Question 10

When would use a bespoke contract rather than a standard form?

Answer 10

• They should generally be used for major projects with novel obligations.
• When specialist advisors can undertake the amendments as this requires great skill and knowledge.

Question 11

What are the types of dispute resolution in JCT contracts?

Answer 11

Negotiation: Parties engage in informal discussions and negotiations to reach a mutual resolution without involving a third party.

Mediation: A neutral third party, called a mediator, helps facilitate discussions and assists the parties in finding a mutually agreeable solution.

Adjudication: A statutory process that provides a quick and interim resolution to disputes. An adjudicator, usually an industry expert, makes a binding decision on the dispute.

Arbitration: A formal process where an independent arbitrator or panel hears the dispute and issues a binding and enforceable decision known as an award.

Litigation: If all other methods fail, parties can take the dispute to court, where a judge or jury issues a judgment. Litigation is a formal and public process, often more time-consuming and expensive than alternative methods.

Question 12

What is the hudson formula?

Answer 12

A method used to calculate a contractor’s loss of profit and overheads arising from delay

L&E=((CSA x OH&P)/Contract Period))/Delay Period)