MODULE 20 - CONTRACT ADMIN

Question 1

What does ‘time’ in a contract refer to?

Answer 1

The time by which a party’s obligations under the contract must be performed and the consequences if they fail.

Question 2

What is the general consequence of failing to perform obligations on time?

Answer 2

Breach of contract, which may give the other party the right to terminate and/or sue for damages, subject to contractual mechanisms.

Question 3

Why is ‘contract is king’ important in time management?

Answer 3

Because all rights, obligations, and remedies (including delays and termination) are governed by the contract’s terms.

Question 4

Define practical completion.

Answer 4

The point at which a building is fit for its intended use.

Question 5

What are the usual requirements for practical completion?

Answer 5

• Works substantially complete
• Contractor has tested and commissioned works
• Necessary approvals for occupation (e.g., OC)

Question 6

What happens once practical completion is reached?

Answer 6

Start of defects liability, final account reconciliation, release of security, end of contractor’s possession and risk.

Question 7

Who initiates the practical completion process?

Answer 7

The contractor, by giving written notice with a schedule of defects/incomplete works.

Question 8

What is the architect’s role in practical completion?

Answer 8

Inspect works, issue notice of practical completion or defects, act independently and impartially, meet deadlines.

Question 9

How long does the architect have to inspect after the contractor’s practical completion notice?

Answer 9

Within 10 days or an agreed period.

Question 10

What happens if practical completion is not reached by the required date?

Answer 10

Architect must notify contractor and owner in writing of owner’s entitlement to liquidated damages.

Question 11

When does the owner release security after practical completion?

Answer 11

Typically 50% at practical completion, remainder after defects liability period and final certificate.

Question 12

What is the defects liability period?

Answer 12

The period during which the contractor must correct defects and incomplete works, usually 12 months, sometimes 24 months if specified.

Question 13

What if the contractor fails to fix defects in time?

Answer 13

Owner can have a third party complete the works at contractor’s expense.

Question 14

How long are statutory warranties for residential buildings?

Answer 14

2 years for minor defects, 6 years for major defects.

Question 15

When is the final certificate issued?

Answer 15

After defects liability obligations are complete and remaining security is released.

Question 16

What are liquidated damages?

Answer 16

Pre-agreed damages payable for delay or breach of contract.

Question 17

Why are liquidated damages used?

Answer 17

Provides certainty of losses, avoids proving actual loss, allows contractor to calculate cost of acceleration.

Question 18

Can liquidated damages be enforced if the principal contributes to delay?

Answer 18

No; principal-caused delays may invalidate enforcement, mitigated by Extension of Time clauses.

Question 19

When must the architect notify of owner’s entitlement to liquidated damages?

Answer 19

Promptly, once the date for practical completion is reached but works are incomplete.

Question 20

What is required for liquidated damages to be valid?

Answer 20

Must be a genuine pre-estimate, not a penalty or extravagant.

Question 21

What is an Extension of Time (EOT)?

Answer 21

A contractual mechanism to adjust the practical completion date due to qualifying delays.

Question 22

What are the main elements of an EOT claim?

Answer 22

• Qualifying cause of delay
• Effect of the delay
• Notice requirements

Question 23

What are the notice requirements in ABIC for delay events?

Answer 23

Contractor must notify the principal within 2 working days of awareness of start and end of delay event, in writing, including cause, start date, and estimated impact.

Question 24

How long does the contractor have to submit a claim for adjustment?

Answer 24

Within 20 days of the delay event.

Question 25

How long does the architect have to assess and respond to an EOT claim?

Answer 25

Within 20 days of receiving the claim.

Question 26

Can an architect grant EOT even if the contractor doesn’t apply?

Answer 26

Under ABIC H6, yes, typically in any progress certificate.

Question 27

What is the architect’s general role in time, practical completion, liquidated damages, and extension of time?

Answer 27

Act honestly, fairly, independently, assess practical completion, defects, liquidated damages, and extension of time claims, issue notices, and meet contract deadlines.