CONTRACT PRACTICE - Level 3

Question 1

What is Insurance Option A:

Answer 1

Contractor takes out and maintains joint names all risks insurance of the works

Question 2

What is Insurance Option B:

Answer 2

Employer takes out and maintains the joint names all risks insurance of the works

Question 3

What is Insurance Option C :

Answer 3

the Employer to maintain a joint names policy for existing structure

Question 4

Letter of Intent main types

Answer 4

1) Comfort Letter - not legally binding
2) Agreement to spend - Legally binding
3) Recognition of entering contract - Legally binding

Question 5

Commerce Road - Client chose not to Levy LD’s how would this be recorded

Answer 5

In the Final Account Statement

Question 6

Give an example of when you have advised a Client on Contract Selection.

Answer 6

• Colville 2C – Proposed procurement route options (Traditional, D&B, Contract Management, Management Contracting, Partnership) – prepared in a report.
• Parkhouse Street – Demo (Int) or Demo + Works (D&B)

Question 7

You mentioned that the Contractor failed to complete works by the Contract Completion Date on Commerce Road. What did you do?

Answer 7

Issued Certificate of Non Completion, and notice that Employer may wish to levy LD’s

Question 8

You’ve mentioned JCT in your write up, but what other Suites of Contract are you aware of?

Answer 8

• NEC
• FIDIC
• ACA

Question 9

What are the differences between a JCT and NEC?

Answer 9

• PM Vs CA/EA
• JCT use England and Wales, NEC Internationally
• NEC programme key contract document and prescriptive what is included
• EOT Vs Compensation Events (How time and money are managed)

Question 10

Can you give me an example of some of the Bonds you are aware of? Have you experience any of them?

Answer 10

• Performance Bond (Yes)
• Advance Payment Bond
• Retention Bond
• Off site materials bond

Question 11

On Colville Phase 2C, what was the procurement route recommended in your report, and what were the principle reasons?

Answer 11

• Use of a framework – able to select tenders with relevant experience and would reduce timescales.
• And use Design and Build procurement using JCT contract – two stage tender
• Design and Build as client wanted Contract Sum before starting works
• wanted to transfer design risk to contractor
• Familiar with form of contract

Question 12

On Varcoe Road, did you have to issue a payment notice even though it was a nil cost.

Answer 12

Yes as the contractor had submitted an application for Payment, no this was required in line with the Construction Act.

Question 13

On Varcoe Road, what works were complete (approx. value) before the performance bond was in place?

Answer 13

Demo had commenced and piling, I advised my client of there available options and risks associated with doing so.

Question 14

Varcoe Road: Also, what contractual terms were your advice based on, was it an amendment to the standard contract?

Answer 14

I was not party to agreeing the contract terms, however yes there was an amendment.

Question 15

On Varcoe Road, was there any other alternatives, rather than issuing a nil valuation?

Answer 15

• I advised my client they may wish, by agreement with the contractor to hold a total of 10% retention until the Bond was in place.
• Or terminal as contractor was in breach of contract

Question 16

On Commerce Road, how were LD’s deducted?

Answer 16

Client chose not to levy LD’s. However I understand if they were to the process would be;
• Issue Certificate of Non Completion
• Notice Employer may levy LD’s
• Employer issue notice that they will levy LD’s
• Pay Less Notice levying the LD’s no later than 5 days before final payment date

Question 17

Can you tell me some pre-contract advice you would give to a Client about LDs?

Answer 17

That there calculation should be based on actual forecasted loss.

Question 18

Can you give me an example of how you have assessed an Extension of Time?

Question 19

Can you explain how a Collateral Warranty works and why you would advise a Client to obtain one?

Question 20

Can you explain the difference between Sectional Completion, Partial Possession and Early Use?

Answer 20

• Sectional – in contract
• Partial - Not in Contract to be agreed with contract (treated same as SC) notices, retention release etc, insurance
• Early Use – at gift of contractor, still remains in contractors ownership until completion

Question 21

What are the disadvantages of design and build

Answer 21

• Changes may be difficult to agree
• Contractor may propose easiest to build as appose to quality
• Client may need to retain resource to review proposals

Question 22

What is a relevant event?

Answer 22

A relevant event is an event that causes a delay to the completion date, which is caused by the client, or a neutral event not caused by either party.

Question 23

Name some relevant events?

Answer 23

Exceptionally adverse weather.
Failure to provide information.
Statutory undertaker’s work.
Force majeure (such as a war or an epidemic).
Loss from a specified peril such as flood.
The supply of materials and goods by the client.
National strikes.
Changes in statutory requirements.

Question 24

What is a relevant matter

Answer 24

A relevant matter is a matter for which the client is responsible that materially effects the progress of the works. This enables the contractor to claim direct loss and / or expense that has been incurred.

Question 25

Name some relevant matters

Answer 25

Failure to give the contractor possession of the site. Failure to give the contractor access to and from the site. Delays in receiving instructions. Opening up works or testing works that then prove to have been carried out in accordance with the contract. Discrepancies in the contract documents. Failure by the client to supply goods or materials.