APC Contract Practice Flashcards
What is a contract?
A legally binding agreement (between two parties) to provide goods and services within a specified timeframe.
What is necessary to form a contract?
Offer
Acceptance (or counter offer)
Consideration
Intention (to be legally bound)
Capacity (to make agreement) (e.g. power of attorney on behalf of a company)
How is a contract executed?
Under hand, signed by both parties, 6 year limitation period. Means that a party must bring about any claim for breach of contract within 6 years of the breach taking place. Any later and the claim will be time-barred.
Under Seal (as a deed), signed and witnessed, 12 year limitation period. Valuable consideration not required,
What are common contract documents?
- The Contract (with any amendments)
- Preliminaries
- Contract sum analysis/Pricing Schedule
- Drawings
- Works information
- Planning conditions/agreements
- Contractors Proposals
What are the main contract suites?
- JCT (Joint Contract Tribunal)
- NEC (New engineering contract)
- FIDIC (International federation of Consulting engineers)
- ICE (Institution of Civil Engineers)
Why use standard forms of contract?
- They are cheaper than getting a bespoke contract drawn up
- Offer a level of familiarity between the parties
- Tried and tested contracts in court, therefore you should be able to predict the outcome in the courts.
What should you consider when selecting the contract?
- The criteria of the client
- The procurement method you are going to use
- Nature of the works
- Timings, are the works required to start quickly or do you have time to produce robust set of docs
Can you name the NEC ECC standard contract forms?
- Option A, Priced contract w/ Activity Schedule
- Option B, Priced contract w/ BoQ
- Option C, Target contract w/ Activity Schedule
- Option D, Target contract w/ BoQ
- Option E, Cost reimbursable
- Option F, Management contract
Can you provide more information on the NEC Option A contract?
Priced Contract with an Activity Schedule
- For all types of clients, the balance of risk is mainly with the contractor
- It comes with/requires an activity schedule, containing a list of activities the contract expects is required to complete construction.
- Lump sum
Can you provide further information on the NEC Option B contract?
Priced Contract with a Bill of Quantities
- For all types of clients, the risk is mainly with the contractor
- Comes with a detailed BoQ, which can either be produced by the client or Contractor, which is a detailed statement of all the works that will be undertaken.
- Lump sum
Can you provide further information on NEC Option C contract?
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Can you provide further information on NEC Option D contract?
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Can you provide further information on NEC Option E contract?
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Can you provide further information on NEC Option F contract?
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What are the perceived problems with NEC3 Contracts?
- Very admin heavy
- Requires alot of expertise to operate effectively
- Focuses too much on Project Management
- Cost information in relation to compensation events can take a long time. PM regularly has to decide how to proceed based on a cost estimate from the QS, which then gets replaced by the actual costs.
