1
Q
What is a contract?
A
Contains a set of promises that each party has made to the other.
2
Q
What are the principles of a contract?
A
Offer
Acceptance
Intention
Consideration
Lawful
3
Q
What is under hand and a deed?
A
It is how a contract is executed.
Under hand is when the limitation period for initiating proceedings is 6 years whereas a deed is 12 years
4
Q
What are express terms and implied terms?
A
An express term is defined in the contract, Implied terms are not defined in the contract
5
Q
What is quantum meruit?
A
This is where a reasonable sum is paid for the services rendered or work undertaken if the amount due is not stipulated in the contract.
6
Q
Can you give an example of an Implied term?
A
An implied term is assumed to be part of the contract for example employers duty to cooperate with the contractor
7
Q
What is Privity of contract?
A
A person who is not party to a contract cannot gain any benefit by suing on it, nor can they suffer any detriment by being sued on it.
8
Q
What is an example of privity of contract?
A
9
Q
What if the client tells you LADs are £100k a week?
A
LADs figure are based on a genuine pre estimate of loss and if they can’t prove the genuine financial loss it is likely to not be enforceable.
10
Q
What is an extension of time?
A
EOT adjust the completion date and relieves the contractor to pay LADs.
11
Q
What are LADs?
A
LADs are a genuine pre estimate of loss should the contractor not meet the completion date.
12
Q
What must be in place before Lads can be deducted?
A
Withholding notice
A non completion certificate
13
Q
What if the employer actually suffered no loss or damage?
A
The damages can still be deducted at the value stated in the contract
14
Q
What are the benefits of being able to grant EOT?
A
It relieves contractor liability for LADs for delay they have not caused
It enables another completion date to be set.
15
Q
What happens when time is at large?
A
There is no set completion date
LADS cannot be claimed and contractor has obligation to complete works in reasonable time
16
Q
What are the relevant events?
A
Variations
Deferment of possession of the site
Suspension by the contractor for non payment
Strike
Averse weather
Force Majeure
Terrorism or civil commotion
17
Q
What are the main elements found in a interim valuation?
A
Preliminaries
Measured Work
Mats on site and mats off site
Loss & Expense
Retention
18
Q
What needs to be in place to include payments for materials on site?
A
Materials should be for the works
Materials should be on programme
Should be protected
19
Q
What needs to be in place to include payments for materials off site?
A
Vesting certificate
Correct Insurances
Materials are clearly marked and stored together
MOS bond has been provided if required
20
Q
What is a vesting certificate and what would be included?
A
A vesting certificate is a legal document confirming that ownership of goods, materials, or equipment transfers from a supplier or contractor to a purchaser upon payment, even if the items are stored off-site and not yet delivered.
Materials off site should be listed within the contract.
Includes:
Reference - number/date of issue
Description - Details of product
Project info - Clearly named project
Proof of ownership
Insurance details
Storage location
reference to payment details
21
Q
What is a retention of title clause?
A
Where a sub contractor retains ownership of materials until they are paid for by the contractor.
Highlights the importance of a vesting
22
Q
How do you evaluate interim valuations?
A
Inspect site and attach percentages against the work, review against cashflow, value time related and fixed prelims, etc.
23
Q
How do stage payments work?
A
Stages and values are set out in the contract particulars
stages are usually set when certain elements of the works are complete for example the foundations.
24
Q
What is an interim certificate conclusive off?
A
Interim certificates do not carry any contractual significance apart from the final one.
25
What is retention?
Is a percentage deducted and retained by the employer on each interim certificate?
26
What is the purpose of the retention?
Provides an incentive for contractors to rectify any defects within the rectification period.
Provides financial security to the employer.
27
When is the retention released to the contractor?
Half retention is released in the interim certificate after PC.
The remaining retention is released in the final certificate after the certificate of making good defects is issued.
28
What is a typical retention %?
3 or 5%
29
What is a retention bond?
A retention bond is a type of surety bond used in the construction industry that replaces the need for cash retention, allowing contractors to receive full payment while guaranteeing that funds are available to fix defects. It acts as a substitute for the standard 3-5% cash retention held back by employers, thereby improving contractor cash flow.
Requirement for bond should be stated in contract particulars.
30
What happens if contractor does not maintain the retention bond?
The employer can then deduct retention from interim payments.
31
Why might a retention bond be used?
This could be used in difficult market conditions to aid the contractors cashflow.
32
What are the disadvantages of a retention bond?
Employer would have to pay premium for taking out the bond
Reduces employers cashflow
33
What is acceleration?
Is the completion of the works in a shorter time frame than anticipated at tender or programme, is the act of recovery by the contractor if they are in delay.
34
What options may be considered to achieve acceleration?
Re-sequencing of works
Increased working hours
Increases to resource and labour
change working methods e.g. dehumidifier to dry plaster
35
What is a fixed price contract?
Where adjustments of the contract sum are limited to changes to statutory contributions, taxes and levies
36
What is a fluctuating price contract?
A fluctuating price contract (or a contract containing "fluctuation provisions") is a construction contract mechanism that allows the final contract sum to be adjusted to reflect, upward or downward, changes in the cost of labour, materials, and other inputs during the contract period
37
What does a typical pack of contract documents contain?
Conditions of contract and amendments to standards forms e.g. SOA or Z-Clauses (depending on type of standard form).
Preliminaries.
Contract Sum Analysis/Pricing Schedule.
Drawings.
Specifications.
Planning conditions/Agreements.
Contractor’s Proposals.
38
What legislation are you aware of that govern construction contracts in the UK?
Housing Grant, Construction and Regeneration Act 1996 (HGCRA).
Local Democracy, Economic Development and Construction Act 2009 (LDEDC).
39
What laws does the construction industry operate under in the UK?
Tort law.
Contract law.
Criminal law.
40
Explain some of the sanctions the HGCRA 1996 imposes on construction contracts in the UK?
Contracts in excess of 45 days are entitled to interim or stage payments.
Right to suspend performance for non-payment.
Disallowing ‘pay when paid’ clauses.
Right to adjudication.
Right to be informed of the amount due and amount withheld.
41
Explain some of the sanctions the LDEDC 2009 imposes on construction contracts in the UK?
Bolstering a payee’s right to suspend for late payment.
Removing existing barriers to adjudication.
Making both written and oral contracts subject to the Act.
Right for adjudicator to correct typos and clerical errors.
42
Explain the understanding of the Unfair Contracts Act 1977 (UCTA)?
It regulates contracts by limiting the extent to which one party can avoid liability through the use of exclusion clauses.
For example: if one party was to raise prices without considering the rights of another would be considered unfair e.g. a utility provider increasing their prices without notifying the consumer or a landlord increasing rent without given sufficient notice to their tenants.
43
Name some families of contracts?
Joint Contract Tribunal (JCT).
New Engineering Contract (NEC).
International Federation of Consulting Engineers FIDIC.
44
What are the key changes of the new JCT suite of contracts 2024?
Gender neutral language.
Option of ‘collaborative working’ changed to core article for parties to work together in good faith and in a spirit of trust and respect.
Target cost contracts.
Updating relevant events to include for the following:
epidemics which occur after base date or before the base date but effects change after base date that affect the proper carrying out of works such as availability of labour, securing materials and etc.
delays upon the discovery of asbestos, contaminated materials and UXO’s.
change in law, guidance or exercise of statutory powers that affect the execution of the works.
Duty holder obligations introduced by the Building Safety Act 2022 to comply with their respective duties under Part 2A of Building Regulations. New roles of PD and PC also recognised.
Design liability - Contractor’s design liability has changed from ‘fit for purpose’ to ‘exercise reasonable skill and care.’
Termination - Updated in line with the Corporate Insolvency and Governance Act 2020. List of events entitling either party to terminate a contract has been updated to include for epidemics and changes in law that affect the execution of the works.
45
Name some of the standard forms of JCT contract?
Standard form with quantities (SBC/Q).
Standard form without quantities (SBC/XQ).
Standard form with approximate quantities (SBC/AQ).
46
Name some of the conditions of the SBC/Q?
Works have been designed.
There is a bill of quantities (BoQ).
Is a lump sum form.
Contractor’s risk is limited to price only.
Employer takes risk of errors in the bill.
Can include for CDP elements.
47
Name some of the conditions of the SBC/XQ?
Works have been designed.
There is no bill of quantities (BoQ).
Is a lump sum form.
Contractor takes risk for price and quantity.
Can include for CDP elements.
48
Name some of the conditions of the SBC/AQ?
Is a remeasurement form of contract.
There is no contract sum.
Design is incomplete at time of contract execution.
Approximate bill of quantities (BoQ) has been prepared.
Can include for CDP elements.
49
When is it most ideal to use the JCT SBC form of contracts?
Ideal for project with the following:
- Value in excess of £1m+.
- Programme duration of 12 months or more.
- For large complex projects.
- Administered by the contract administrator (CA), who can be either:
- Architect
- Project Manager
- Building Surveyor
- Engineer
- Quantity Surveyor
Also, under an SBC, the QS is appointed and named.
50
What is the JCT intermediate building contract, it’s conditions and when it’s most suitable for?
The IBC is a contract that is more detailed than the minor works building contract but not as extensive as the standard building contract. Is usually administered on projects that are procured via the traditional method and call also contain elements of CDP.
It is best suited for projects with the following conditions:
- Procured via the traditional route.
- Design is complete prior to tender.
- Can include elements of CDP, if so, then IBC with CDP must be issued.
- Is a lump sum contract.
Ideal for projects with the following:
- Value in between £250k - £1m.
- Programme duration of up to 12 months.
- For moderate sized projects although some complex areas can be included through CDP.
- Administered by the the contract administrator (CA), who can be either:
- Architect
- Project Manager
- Building Surveyor
- Engineer
- Quantity Surveyor
Also, under an IBC, the QS is appointed and named.
51
What is the JCT minor works building contract, it’s conditions and when it’s most suitable for?
The MW is a contract that refers to small, relatively straight forward construction projects that are less than £250k in value. Is usually administered on projects that are procured via the traditional method.
It is best suited for projects with the following conditions:
- Procured via the traditional route.
- Design is complete prior to tender.
- Can include elements of CDP, if so, then MWBC with CD must be issued.
- Is a lump sum contract with periodic payments.
Ideal for projects with the following:
- Value up to £250k.
- Programme duration of up to 12 months.
- Administered by the the contract administrator (CA), who can be either:
- Architect
- Project Manager
- Building Surveyor
- Engineer
- Quantity Surveyor
Also, under an MW, the QS is not appointed and named.
52
What is the JCT Design and Build (D&B) contract, it’s conditions and when it’s most suitable for?
The D&B is a contract where there is a need for a single point of responsibility for delivering the entire project. Is usually administered on projects that are procured via the design and building method.
It is best suited for projects with the following conditions:
- Procured via the D&B route.
- Design can overlap during the tender/construction and thus a programme saving can be offered.
- Is a lump sum contract with periodic payments.
Ideal for projects with the following:
- Value in excess of £500k+.
- Programme duration of 12 months or more.
- Contractor’s proposals form the basis of the contract.
- Enhances collaborative working, sustainability, 3rd party rights, bonds, collateral warranties and etc.
- Administered by the Employer’s Agent (EA), who can be either:
- Architect
- Project Manager
- Building Surveyor
- Engineer
- Quantity Surveyor
Also, under an D&B, the QS is not appointed and named.
53
Name some of the elements of a JCT contract?
Recitals - describes the purpose of the contract and contextualises the agreement such as:
describes the works required by the employer.
confirmation of a priced schedule has been provided.
identifies the contract design information and etc.
Articles - set out what is required between the parties of the contract such as:
contractor to deliver the works.
client to pay the sum under the contract and etc.
Contract Particulars - sets out the details specific to the contract such as:
the contract sum.
retention percentage
Interim payment method.
Completion dates and sectional completion dates and etc.
54
What are some of the differences between the JCT and NEC forms of contract?
JCT:
Forms of Contract.
Legal language.
QS referenced in SBC, not in D&B.
Programme is not a contractual document.
Variations.
Loss and expense (L&E), extensions of time (EOT).
Provisional sums.
Administered by either CA or EA.
NEC:
Six main options including ‘mix and match’.
Layman terms.
No QS reference.
Programme is part of the contract.
Compensation events (CE).
Time and cost claims covered within CE.
No provisional sums.
Administered by PM.
55
What are the differences of an EA and CA?
Form of contract
Loyalty - EA is an agent for the employer, CA must act failry between both parties.
Repsonsibility - EA more PM scope whereas CA more of focus on contract compliance.
EA role tends to begin a lot earlier.
56
How do you go about calculating LAD’s on a project?
Determine Genuine pre estimate of loss - for example a hotel would consider room charge rates, income from facilities, etc.
It would also consider utility consumption, LADs cannot be purley on lost revenue.
57
What are LAD’s and what needs to be in place for this to be deducted?
Non completion certifcate must be issued (not required in minor works) and the employer has given the appropriate notice before the final certifcate.
Decuction maybe request for payment or deduct from sums due to the contractor.
58
What is a relevant matter?
Relevant matter is a matter for which the client is responsible that materially affects the progress of the works. This may enable the contractor to claim direct loss and / or expense that has been incurred.
E.g. delay in instructions, failure to give possession/access, disruption caused by client.
59
What happens if the contractor does not maintain the retention bond?
If a contractor does not maintain a required retention bond, the employer can typically make a claim against the bond to recover the outstanding retention amount, treating it as a breach of contract.
60
What are the disadvantages of using a retention bond?
Clients cashflow
Insurance backed product so includes fees
Obtaining a bomd requires strong finanical standings
61
What is practical completion (PC)?
The RIBA Plan of Work 2020, defines practical completion as: 'The point in the process when the construction work is certified as practically complete under the Building Contract
62
What is the difference between sectional completion and partial possession?
Sectional completion is pre determined in the contract.
Insurance of site is different.
Sectional completion has LADs
Partial possession is received mid project and requires contractor consent to take over.
63
What are unliquidated damages?
Unliquidated damages are damages that are payable for a breach of contract, the exact amount of which has not been pre-agreed in the contract.
This is in contrast with liquidated damages which are a pre-agreed when the contract is entered into.
After the breach, the court determines the actual damages.
64
What is quantum merit?
Quantum meruit is a Latin term meaning ‘the amount deserved’ or ‘what the job is worth’.
It is used to refer to a claim for a reasonable sum, such as when a contractor seeks payment for work which has not been determined by a contract.
65
What is consideration in a contract?
Consideration in a contract is the bargained-for exchange of value between parties, essential for making an agreement legally binding
66
What is the purpose of the base date?
Acts as a fixed reference point - used to allocate risk between the employer and contractor for changes in legislation, material costs, or site conditions. It serves as the baseline for calculating fluctuations and identifying when contractor knowledge of conditions is assumed.
67
What is tort?
A tort is a civil wrong—other than a breach of contract—that causes harm or loss to another person, resulting in legal liability for the person who commits the act.
68
What is a JCT Remeasurable contract?
Used when scope of work is defined but quantities cannot be accurately determined beforehand.
SBC with approx. quantities
Final contract sum is based on actual work measured in completion.
69
What is the Contracts (Right to Third Partys) Act 1999
Allows a 3rd party who is not entered into the contract the legal right to enforce a contractual term that confers a benefit.
3rd party must be identified in the contract.
70
What is the Defective Premises Act 1972?
Individual working on a dwelling owes a duty to perform in a professional manner and use proper materials so the dwelling is fit for habitation.
71
What is the unfair contract Terms Act 1977?
Impose statutory limits on extent to which contract terms can avoid liability. e.g. client will not be held liable for claims against negligence.
72
What is the Late Payment Commercial Debts Interest Act 1998?
Interest to be paid by purchasers on late payment of debt in a commercial contract for goods and services.
73
What options are there if the client is late on making interim payments?
Charge Interest
Right to suspend works (written notice, suspension begins 7 days after notice)
Adjudication
Termination - if non payment is persistent
74
What is included in an LOI?
Parties involved
Scope of Works
Max Expenditure
Expiry date
Basic terms of agreement
Obligations of parties
75
What Payment methods are the?
Periodic
Stage
76
What is included within Loss and Expense?
prolongation costs - Prelims
Head office overheads - rent, admin
Loss of profit - profit that would have been made on another project
Finance charges - interest costs for potential borrowed money.
77
What is the difference between a named and nominated subcontractor?
Named - employer provides preferred list, contractor is responsible for performance, contractor can reject list.
Nominated - employer selects subcontractor, employer is responsible for performance.
78
What is set off?
Monies withheld in respect to payment from the employer to the contractor.
79
What is NEC4?
NEC4 is the fourth edition of the New Engineering Contract suite, published by the Institution of Civil Engineers (ICE) in 2017 to manage construction, infrastructure, and service contracts collaboratively. It promotes risk sharing, proactive project management, and reduced disputes through clear, standardized language. NEC4 updates NEC3 to reflect modern practices, offering increased flexibility for various procurement strategies
80
What are the benefits of NEC?
Flexibility - choice of pricing options
Clarity & Simplicity - written in plain English, simple clause structure
stimulus to good project management
81
What are the NEC different pricing options?
Main Option A - Priced Contract with activity schedule
Main Option B - Priced contract with BOQ
Main Option C - Target contract with activity schedule
Main Option D - target contract with BoQ
Main Option E - cost reimbursable
Main Option F - Management Contracting
82
What are the 9 sections in a JCT?
1 - Definition and interpretation
2 - Carrying out works
3 - Control of Works
4 - Payment
5 - Changes
6 - Injury, damages and insurances
7 - Assignment, Third party Rights and collateral warranties
8 - termination
9 - Settlement of disputes
83
What is management Contracting?
Construction works described in a contract are constructed by a number of different works contractors who are contracted to a management contractor appointed by the client.
Contractual link with client and contracting manager.
84
What is construction management?
Works are constructed by a number of different trade contractors. These trade contractors are contracted to the client but managed by a construction manager.
Contractual link between client and trade packages.
85
What is the impact of PC?
Possession of site becomes employer
Release retention
Ending contractors liability of LDs
Rectification period commences
86
What is Time at Large?
when there is no date for completion or date has become invalid.
Contractor is bound to no date, client is not able to claim LDs
87
What should an employer do before claiming LDs?
issue notice no later than 5 days before final date for payment stating:
period between completion date and PC
Contractor to pay LDs at the rate stated in contract
88
What are the signs of a contractor going into insolvency?
89
What is Termination?
Termination of a contract by one party to the contract can occur where the other party has breached the terms of contract.
90
What is corporate recovery?
Term used to describe process and actions taken to bring an
ailing company back to full health; this can involve the provision of financial, restructuring, accounts and legal advice by those qualified to give such advice and the possible appointment of an insolvency practitioner.
91
QS - APC Technical 2026
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