APC Owen Rees > Contract practice (SOE) > Flashcards

Contract practice (SOE) Flashcards

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1
Q

Name some types of JCT contracts

A

Design & Build, Standard building contract with or without quants, Pre-construction service agreement (PCSA) new version is 2024

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2
Q

When would you use a D&B

A

When the contractor is responsible for Design and construction, its a single point of responsibility and the risk is transferred to the contractor

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3
Q

When would you use a SBC

A

Traditional procurement route, design is completed before construction, Client retains control of design, Risk held with client

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4
Q

What is a PCSA and when would you use

A

Pre-Construction Service Agreement - When a contractor is brought on early to engage with the design, ideal for two stage tendering, allows for construction and design to run simultaneously

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5
Q

Changes from JCT 2016 - 2024

A

Building Safety Act 2022 integration, Digital communication integration (Email now recondnised as a method for serving notices) and gender neutral language included

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6
Q

name some types of NEC contracts

A

Engineering and Construction Contract (ECC)
Facilities Management Contract (FMC)
Design Build and Operate Contract (DBO)
Professional Service Contract (PSC)

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7
Q

What are the main differences between NEC and JCT

A

JCT is more risk adverse with defined roles, NEC is more collaborative
JCT allocates risk to specific parties NEC shares risk more evenly
JCT deals with change time and cost separately vs NEC with deals with both simultaneously
JCT has an EA and QS defined whereas NEC has a PM
JCT has a fixed payment schedule NEC has more flexible payment terms
JCT has more traditional dispute resolution through litigation or arbitration. NEC has more collaborative EWN system

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8
Q

What is an employers agent

A

Acts on behalf of the employer, issues instructions and manages contract administration

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9
Q

What are some examples of standard forms of contracts outside of JCT / NEC?

A
  • FIDIC
  • JCT
  • NEC
  • ICC
  • ACA
  • IChemE
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10
Q

Who are the main parties involved in a contract?

A
  • Client
  • Contract Administrator/Employer’s Agent/Project Manager/Engineer
  • Contractor
  • Sub-contractors
  • Quantity Surveyor
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11
Q

What is assignment in contract law?

A

Transferring rights or obligations under a contract to another party.

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12
Q

What are third party rights in contract law?

A

Rights given to a third party to enforce terms of a contract.

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13
Q

What is a letter of intent?

A

A document indicating preliminary agreement before a formal contract is finalized.

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14
Q

What are interim valuations in contracts?

A

Assessments of the work completed to determine payments at intervals.

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15
Q

What does retention mean in contract law?

A

Holding back a portion of payment until project completion to ensure quality.

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16
Q

What are change procedures in contracts?

A

Processes for managing changes to the contract scope or terms.

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17
Q

What are extensions of time in contracts?

A

Allowances for delays in project completion due to unforeseen circumstances.

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18
Q

What is dispute avoidance and resolution?

A

Strategies to prevent disputes and processes for resolving them if they arise.

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19
Q

What are named/nominated subcontractors?

A

Subcontractors specified in the contract who must be engaged by the contractor.

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20
Q

What is sectional completion?

A

Completion of part of a project before the entire project is finished.

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21
Q

What does the defects liability/rectification period refer to?

A

Timeframe during which the contractor is responsible for fixing defects.

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22
Q

What is a Parent Company Guarantee (PCG)?

A

A promise from a contractor’s parent company to fulfill obligations if the contractor fails.

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23
Q

What is a performance bond?

A

A financial guarantee provided by a third party to cover contractor defaults.

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24
Q

What is a retention bond?

A

A bond that replaces cash retention held by the client until project completion.

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25
What is a collateral warranty?
Legal agreements creating a contractural link between a party under the contract (subbies, cotnractors) and a third party wich is not a party to the main contract
26
What is the role of the Quantity Surveyor (QS) in a contract?
To manage costs and ensure the project remains within budget.
27
When is a Parent Company Guarantee often used?
When the contractor is a subsidiary with limited assets.
28
What does a Performance Bond pay out for?
If the contractor defaults, helping fund completion or cover losses.
29
What are the two types of Performance Bonds?
* Conditional (requires proof of default) * On-demand (payable upon request)
30
What is a Retention Bond?
Replaces cash retention held by the client.
31
When is a Retention Bond released?
Upon satisfactory completion of works or defects liability period.
32
What is the purpose of an Advance Payment Bond?
Protects the client when making upfront payments for materials or mobilisation.
33
What does an Advance Payment Bond ensure?
Repayment if the contractor fails to deliver.
34
What are Collateral Warranties?
Legal agreements giving third parties (e.g. funders, tenants) rights to claim against the contractor or consultant for defects.
35
What is loss and expense
The provision in a contract via a clause to allow a party to be reimbursed for unforeseen circumstances that may occur where a party has incurred a loss or an additional expense
36
What is a relevant matter
Referred to in a construction contract as a matter for which the client is responsible that materially affects the progress of the works, allowing a contractor to claim direct loss and or expense that has occurred
37
Name some relevant matters
Delays in issuing instructions, instructions, Failure to supply materials or goods, Discrepancies in contract docs, Disruption from the employer, late access to site
38
What is a relevant event
A relevant event is an event that causes a delay to the completion date. Entitle a contractor to an Extension of Time
39
name some relevant events
13 in total in clause 2.29 - Variations - Instructions -Failure to give possession -Delay in access - Acts of prevention -Force majeur -Weather conditions
40
Name a time you have dealt with an EOT
Contractor claimed that a delay in receiving sign off to design drawings lead to a 2 week delay to the programme. Under the sign off process (JCT SBC) the design sign off in schedule 1 indicated the drawings had been marked as status 'B' and therefore the contractor could have proceeded with the ordering of steels if the comments had been incorporated promptly
41
How would you validate an EOT
Check the contract that the relevant event was covered under the contract (If NEC applicable). Check the contractor prelim rates and remove fixed price items (such as mobilization costs, or hoarding) and then times it by the agreed delay period
42
NEC compensation event claim timelines
Contractor must notify within 8 weeks of becoming aware PM has 1 week to consider validity Contractor has 3 weeks to provide quotation PM has 2 weeks to respond to quotation
43
Typical JCT payment terms
Valuation date set in contract Due date 7 days after valuation date Payment notice 5 days after due date Final date for payment 14 days after due date
44
Typical NEC payment terms
Assessment date set in contract Payment date usually 14 days after assessment date
45
Under the NEC ECC form, can you name some options
A - Priced contract with activity schedule B - Priced contract with BoQ C- Target contract with Activity schedule D - Target contract with bill of contract E - Cost reimbursable contract F - Management contract
46
In your opinion which NEC ECC option holds the MOST risk for the Client?
Option E - Cost reimbursable contract. Due to lower cost certainty as the client will pay the actual cost and can fluctuate. Also required high administrative burden to monitor actual costs
47
In your opinion which NEC ECC option hold the LEAST risk for the client
Option A - Fixed price with activity schedule. Due to early cost certainty and the price is fixed. Also, activity schedule only releases payment for completed activities
48
In your opinion which JCT contract form hold the MOST risk for the Client?
JCT Construction Management Contract. Lower cost certainty as it is a reimbursable contract and needs high admin to monitor actual costs
49
In your opinion which JCToption hold the LEAST risk for the client
JCT D&B contract. Design responsibility is with the contractor and the priced is fixed so higher cost certainty for the client
50
Name some key updates from NEC 3 to NEC 4
Expanded the suite of contracts (Alliance contracts) Added options for dispute resolution (W3 for Dispute Avoidance Board) Additional secondary X clauses (X29 climate change, X22 Early contractor involvement) Risk management enhancements by use of EWN registers
51
At oxleas you talk about SBC being the chosen contract. Was anything else considered?
JCT D&B was considered. But the Client had completed several similar projects that were relatively simple and so they were happy a traditional form of contract would suit. They would realize savings with respect to prelims
52
You talk about CDP at oxleas. How is CDP executed under a JCT
-CDP elements are defined in the contract particulars in the contract - Design submission procedure is defined in schedule 1 of the contract - Schedule 1 defines how a CDP element is submitted the the archatect / CA and is accepted / rejected
53
Under the JCT design submission procedure, can you name the different markings (A-C) and what do they mean?
Marked A - Contractor to carry out the CDP works in accordance with the documents submitted Marked B - Contractor may carry out the CDP works in accordance with the document, provided the comments are incorporated into the document and returned Marked C - The contractor is to resubmit the documents with comments incorporated into it prior to carrying out the CPD works
54
Name some popular elements of CDP a Client may wish to transfer
- Structural elements - Roofing works - Temporary works - Specialist joinery
55
How is CPD defined under JCT vs NEC
JCT it is defined in the contractors particulars, CPD elements named and ER's defined NEC design responsibility is set out in the scope and contract data
56
Can you name some amendments you had in the oxlease CDC SBC
Clause 5.2 with reference to valuation of variations. There was an addition to the clause that read to the effect that there will be no variations or extensions of times granted from the effects or negligence, omissions or defaults from the contractor It was to strengthen the clause and mitigate risk
57
Can you name some amendments you had at Pirbright (NEC 4)
There was some amendments and bespoke clauses added in the Z clauses Clause 21 regarding contractor design - Wording added to strengthen the contractors design responsibility with reference to any design information provided Clause 60.3 regarding ambiguity in the design was replaced and a new clause added to the effect of the contractor will take reasonable steps to mitigate the effects of any compensation event
58
Under the JCT, what are come of the key sections in the conditions portion
Section 4 - payment Section 5 variations Section 9 dispute resolution
59
Under the JCT what are some key schedules
Schedule 1 - Design submittal procedure (improtant for CDP) Schedule 3 - insurance options Schedule 5 - Third party rights
60
Where is CDP assigned under the JCT
it would be in the recitals section, also included in the main body section 2*CHeck this*
61
Under the NEC ECC contract, where is design responsibility notes?
In the core clauses; contactors main responsibilities
62
Where is dispute resolution laid out in JCT vs NEC?
JCT In clause 9.2 NEC W clauses W1 Adjudication when the construction act 1996 does not apply W2 Adjudication when it the Construction act does apply W3 When a dispute avoidance board is the method of dispute resolution (Construction act does not apply) three independent members acts impartially and issue non binding agreements if not happy they can relate the dispute to a tribunal (arbitration)
63
Under the NEC can you name some secondary clauses you used
X clauses X7 Delay damages X13 Performance bond X16 retention X18 Limitations on liability - Limits the amount a contractor can be financially responsible for under a contract Y2(UK) Contruction act applies. Adjudication is the method of dispute Y3 Right of the third parties W2
64
What is clause X15 under NEC
X15 The contractors design - Limits the contractors liability for design to a reasonable skill and care rather than fitness for purpose obligation
65
What is reasonable skill and care vs fitness for purpose
Reasonable skill and care means the contractor is required to complete the job to a standard that any competent professional would Fitness for purpose means the finishes produce must work exactly as its intended (not covered by PII)
66
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