Comparison of UK Building Contracts

Comparison of UK Building ContractsAssessment Terms of Contract Critical Evaluation Question standard practiseSamuel PerkinsIntroductionThis assignment aims to equal and contrast the various aspects of both the SBC/Q 2011 Standard Building Contract over against the NEC 3 Engineering and Construction Contract priced with Bill of Quantities 2013. Throughout the assignment I impart abbreviate these to SBC/Q 2011 and NEC3. I aim to evaluate the documents involved in the making of the bowdlerizes (10%/350 crys), the roles of those involved in the performance of the engender (20% / 700 words) , the avowers business towards the design (20% / 700 words) and finally concentrating on the payment aspect of each sign up (50%/1750 words). The iron outs will be assessed regarding revisions made in September 2011 to the Housing Grants, Construction and Regeneration Act 1996. My word count will be including the above mentioned argonas not exceeding the 3500 words as required.Documents M aking up the ContractsIn the SBC/Q 2011 contract to a lower place aliment, the contract documents be defined in article 1.1. The issue with this is that the contract sum analysis and each(prenominal) schedule of rates are dependent on the respective ships company and can consequently not be deemed as contract documents under this condition. For the employer this would mean that the main, responsibility for the correct descriptions and quantities would be placed upon them mitigating risks for the contractor. Regarding any discrepancies within the contract documents it is the responsibility of the asseverator to inform the room decorator of any differences, nonetheless it should be noted that they are under no obligation to freely search for any discrepancies. Yet under condition 2.15 it states that if the contractor becomes aware of any such departure, error, omission or inadequacy as referred to in article 2.14 that he shall instantly give notice with appropriate detail s to the Architect/Contract executive director, who shall issue instructions in that regard. The discrepancies are alluded to items found in condition 2.15(1,2,3,4,5) which overfly the contract drawings, contract bills, instructions issued by the architect of contract administrator and finally the CDP documents. From the above we can see that SBC/Q 2011 shows a level-headed understanding to identifying contract documents.The main difference between the NEC3 and SBC/Q 2011 is that the NEC3 document doesnt define the condition Contract, and so there is no defining contract documents unlike SBC/Q 2011. It combats this within the guidance notes providing samples concerning a standard form of tender and form of agreement substituting themselves for actual contract documents. In the Core Clauses 12.4 it states that the contract is the entire agreement between the parties therefore combining the previously mentioned procedures involving the project management and contractual duties, liabilities and obligations. As discussed by Eggleston (2006) the term entire agreement has no legally definable definition until now the term entire contract which is also known as a sole agreement clause does. Therefore the contract can only be completed to the written legal injury and conditions, this excluding any implied terms of common constabulary remedies this relating to any legislation created by parliament as noted in (Galbraith, 2014). worry SC/Q 2011, NEC3 makes groomings regarding any discrepancies and contradictions between contract documents in Core Clause 17.1 however is much less distinct and clear cut in its definitions and clarity. The Clause states that The ascertain omnibus or the Contractor notifies the another(prenominal) as soon as either becomes aware of an ambiguity or inconsistency in or between the documents which are part of this contract. The foresee theatre director gives an instruction resolving the ambiguity or inconsistency. However this does conflict with Core Clauses namely 12.3 and 18.1 which would past suggest that the responsibility to report inconsistencies lies solely with the device Manager.Roles involved in the performance of the contractThe JCT contracts require the Architect to act as the Contract Administrator in regards to performance of the contract on behalf of the employer. below SBC/Q2011 the role of the architects expressed duties is covered in conditions 2.8 (1.2.3.4), 2.9, 2.11 and 2.12. These range from ensuring documents are supplied to the Contractor in accordance to the tucker schedule and initial contract documents to discharging the contract. As these are obligations of the architect they are therefore legally countable for the area of contract administration. Given the Architects professional built in bed and experience it is there province to ensure the contract is carried out under the implied terms of common law and to the terms and conditions of the contract, it is crucial that the Architect stays frank when making decisions.SBC/Q2011 states under condition 2.4 that it is the duty of the Contractor to continue with the take shape on a regular basis and attentively and comport the kit and caboodle perfect by the agreed completion date. The piss should progress steadily and in accordance to the contract in regards to time as noted in (Chappell 2012).If the Contractor is to make a breach of duty in respect of non-performance (not partial performance) of the contract would result in complete disregard to the contract terms and conditions which would understanding total non-performance. Provisions are made to non-performance regarding the employers in conditions 8.4, 8.5 and 8.7 which guarantees the Contractors continual advancement of deeds in the event of unpredictable circumstances delaying spend a pennys and the rectification of defect works.Unlike SBC/Q 2011, NEC3 does not mention the Architect under any of its clauses which removes any context o f the Architects involvement. Under Core clause 10.1 it stipulates that the legal transitions and agreements and between the Employer and Contractor and after(prenominal) the Project Manager and Supervisor. The provision of NEC3 states that the association of the Employer is to be related regarding their participation within the roles of the contract administration and are therefore a legal entity.The Project Manager exclusively has authority to change the work information, including issues and discharging any works instruction all of which is stated under Core clauses 14.3 and 27.3. Therefore the Project Manager is acting as the Employers Agent , allowing them to have a greater influence in decisions, which contrasts SBCQ/2011 whereby the Architect of Contract Administrator is more independent and acts in sovereignty.It is zippy that the appointed Project Manager under NEC3 be it a single person or firm is competent and professional in order to chance upon successful completion of the works and the contract due to the wide-ranging duties and obligations they are assigned. The Project manager and Supervisor can delegate works to other round members in order to carry out their duties. This is noted under Core clause 14.2 however, before this can be done the Contractor must be notified of what actions each member of staff has been assigned.NEC3 also differs variably from SBC/Q2011 in its lack of expressed terms stating the Contractors obligation to continue with the works regularly. Consequently it relies on the feed of Core clause 20.1 which state the Contractor is to Provide the works as defined in clause 11.2(3) along with disciplinary procedure that corner any delays to key dates, damages and or the payments scheme.It is important to note that NEC3 has no provisions in any of its Clauses that concerns any expressed terms that state the Project Manager should be neutral and equal, as mentioned above they are effectively acting as the Employers Agent. The refore any concerns regarding the issues of impartial and unbiased contract administration is an implied duty and should therefore be overseen by the implied terms of common law remedies as displayed in Constain Ltd and Others Corber v Bechtel Ltd Anor 2005.The Contractors Responsibility for DesignRegarding the responsibility of the design aspect the Contractor should have no involvement, except if it has clearly been requested and defined within the contract documents under the parameter of the Contractors design responsibility Chappell (2012). It is also worth mentioning that the term design should be used broadly and should also encompass not just drawings but also any written documents relating to the Contractors design proportion for typesetters case specifications and schedules of work.Lupton and Cornes (2013) The SBC/Q 2011 has previously required an additional supplement which is provided through the Contractors designed proportion part of the contract. With the Contracto rs design proportion the employer will then prepare their requirements known as the Employers Requirements, which is created from the performance specification that consequently then allows the Contractor to formulate and submit their proposals known as the Contractors Proposals. These are required when creating the contract documents and subsequently the contract sum. Under clause 2.13.2 it states that the Contractor shall not be responsible for the contents of the Employers requirements or for verifying the adequacy of any design contained within them. Furthermore under clause 2.2 titled Contractors Design similarity, it states what the Contractor should do where the works contain a Contractors Design Proportion. From these clauses it should be made clear the difference between the Contractors Design Proportion and the remainder of the job is to reduce any conflicts or confusion throughout the project. The Contractors liability is noted in clauses 2.1 and 2.19.1 and ensures that they do not exceed the level of works required, due to the Contractors liability being near equal to the Architects the liability is restricted to the Contractors skill and attention to details in their works.The NEC3 differs from SBC/Q 2011 and does not give the Contractor as much flexibility of which the Contractors design can operate. Clause 60.3 of NEC3 states that any inconsistencies with site information are the responsibility of the Employer. It is noted in Eggleston (2006) that due to the fact the Employer should have engagen into account the best site conditions as per 60(12) yet logically the Contractor should have allowances and precautionary measures in place, which is contradictive.The Contractors basic obligation is covered in core clauses 20.1 and the obligation for Contractors designed work in clause 21.1 which states what work and designs are required from the Contractor and that the Employer should state the works information, the criteria to which he requires des igns to conform. NEC3 is written to take account of common law remedies unlike SBC/Q2011 which uses expressed terms of provisions when discussing the Contractors liability regarding the works being fit for purpose.NEC3 optional clause X15.(1.2) limits the Contractors liability to reasonable skill and care much like SBC/Q2011 clause 2.1. This clause could be interpreted differently regarding fitness for purpose as the Contractor could complete the works with reasonable skill and care however could not be meeting their contractual obligations.Clause 21.2 states that the Contractor is responsible for the design standards, materials and products unless it is stated otherwise in the works information. As common law remedies implied on any warranties unless they are excluded.PaymentSBC/Q 2011s provisions states that the parties involved should agree to suitable staged payments or Milestones as they are more commonly known, however if staged payments cannot be agreed upon the contract prov isions will default to interim payments as per condition 4.9 (1.2) where a monthly valuation is submitted. It is therefore crucial that all valuations submitted for interim certificates are reasonably accurate and do not need to be perfectly correct, this will allow for any errors from miscalculations created from the difficulty of the matter as revealed in Secretary of say for Transport v Birse-Farr Joint Venture 1993 62 BLR 36.Interim bars account for the completed work at Bill of Quantity rates along with a percentage of lump sums, the final amount is due when the whole work has been re-measured in accordance with the Bill of Quantities. Eggleston (2006)Interim valuations should be calculated via gross valuation, which include for the deduction of retention and any previously arranged payments certified as due. Provisions regarding this are found under 4.16 (1.2.3) discussing work executed, site materials and listed items. Yet staged payments should be agreed before the work is commenced and should correlate to relevant milestones and work sections. However this procedure should require periodic re-evaluations due to the administrative nature. Regarding in the event of insolvency as previously mentioned, the site materials in particular any stored off-site can be a difficult to identify whom they belong to, however noted in the provisions of SBC/Q 2011 under Terms of Conditions 4.17 (1-5) these materials become property of the Employer provided they are accounted for in an interim certificate. The Contractor must also provide proof to ensure all offsite materials are insured. Therefore any implied terms of common law remedies regarding SGA 1979 are in excluded of their respective powers. To act upon the above the retention of title clause must be completed in order to identify the alley the transfer of title takes, this is usually done methodically working through the supply chain from the Contractor, Subcontractor and Manufacturer, again checked against interim payments of that Contractor.The principles of payments should be governed by terms of the contract provisions and also by any implied terms of common law remedies like SGA 1979 and SOGSA 1982 as noted in Hughes, Mills, and OBrien (2008). In SOGSA 1982 it establishes that a payment should be made to any provider of work including the provision of any good or services supplied. However if it is expressed in the terms of the contracts provision a right to set off can be put in place to exclude any implied terms of common law remedies as seen in the case of Acsim (Southern) Ltd v Danish Contracting and Development Co Ltd 1992 47 BLR 59 and Gilbert-Ash Northern v Modern Engineering Bristol) Ltd 1974 AC 689. any interim certificates under the provisions of the SBC/Q 2011 are to adhere to the dates specified under the contract particulars throughout the contract and its conditions. Condition 4.10 (1.2) under contract provisions the contractor should receive a written notice statin g the amount to be paid and the methodology used to calculate the sum, this should be received no less than 5 old age after the submission of the interim certificate from the Contractor. It is therefore common physical exercise for a reference to the interim certificate and copy of the valuation to be prepared by the Contract Administer or Quantity Surveyor. It should be noted that in comparison to either the Contract Administrator or Architect they would be held accountable to the parties involved due to the concern of skill and care.Regarding the final payment a few conditions must be mentioned firstly condition 4.12 (1-7) which covers details interim payments final date and amount most importantly that the final date for interim payment shall be no later than 14 days from the original issuing of the interim certificate. It also provides instructions on how to proceed with any pay less notices. Secondly the under the provisions of condition 4.15 (1-9) under title Final certificat e and final payment instructs that the final payment will match the final certificate. The final payment should amount to the total of the contract price while taking into account all additional works and omissions, less the staged payments that have been paid throughout the projects work.As discussed by Ramsey (2000)the case of Lubenham V South Pembrokeshire DC 1986 33 BLR 39 showing how the Contract Administrator should abide to the provisions of expressed terms of the contract while performing their contractual procedure, in which the contractor will have no motive or reason to challenge the certificates issued.NEC3 differs from SBC/Q 2011 in the methods used relating to payment schemes. Firstly it is the Project Managers responsibility to assess the amount of the payments due at the assessment date and consequently they are accountable to ensure the submission of application to confirm payment. The Project Manager is also responsible for determining the first assessment date. Th is is found under Core Clause 50.1 under title assessing the amount due. Clause 51.1 stating that the in vogue(p) dates that the Project Manager can certify the payment are fixed throughout the contract relating to each assessment date, this is usually a period of 1 week from the date.NECs secondary option Clause X16 (1.2) is similar to condition 4.20 (1.2.3) of SBCQ/2011 in its replication which defaults the retention percentage to either 3% unless otherwise stipulated under the contract particulars. Regarding the Core clauses that relate to retention there are no expressed terms found in the contract provisions. Core Clause 50.3 is designed to be a powerful motivation to the Contractor and can incur a 25% deduction until the Project Manager confirms a programme submitted by the Contractor, however no provisions are made that make any reference to the final certificate, which consequently means that certificates have no order of precedence and polemically no contractual status.As we are aware it is the Project Managers responsibility under Core Clause 50.1 to access and certify each payment amount at the given assessment dates, along with this under Clause 50.4, it states that the Project Manager should take into account any submissions by the Contractor that however the responsibility remains on the Project Manager the amount due regardless if he has not received a submission from the Contractor.Any assessment that is issued after the defect certificate will be considered as is common practise as the final assessment which will lead to the final certificate, therefore from clause 50.4 it is tacit that without the Contractors submission of a final account before the last assessment they will lose any influence they have regarding payment. However this clause may cause disputes between the Contractor and Project Manager regarding the information supplied from the contractors original submitted programme, as this considered to meet the requirements of the cont racts agreement. Clause 50.3 is biased in its favouring to the Project Manager, therefore the Contractor may wish to seek adjudication if they believe they have any conflicts throughout the project as the clause provides the opportunity to invoke a penalization clause.NEC Core clause 50.5 is designed to provide motivation to the Contractor to submit a programme which contains information required for the contract, within this clause it is understood that if the amount has been inaccurately assessed is difficult to comprehend. It is implied that the Contractor will not be entitled to any correction of the next payment certificate. Usually it is common practice for inaccurate assessments to be corrected on the later payment certificates without the Project Managers admission. However, if the Project Manager does not correct the assessment in question again the Contractor can seek adjudication by an Adjudicator. If the Project Manager does admit to a mistake following a tribunal or ad judication, under the provisions of core clause 51.3 it is liable to attract interest calculated from the date when the increased amount would have been certified if there had been no dispute.Core Clauses 11.2(21), 11.2(22) and 11.2.(28) relate to Payment in Main Option B Priced Contract with BOQ. The Term bill of quantities is defined in clause 11.2(21) which define its meaning and therefore the how the BOQ relates to other clauses. Clause 11.2(21) is very similar to Core Clause 11.2(20) of the main Option A priced contract with activity schedule. Finally Core Clauses 11.2(28) and 11.2(31) define the completed work ensuring it cannot be misinterpreted regarding payment terms.ReferencesChappell, D. (2012) Understanding JCT standard building contracts. 9th edn. London, United Kingdom Taylor Francis.Eggleston, B.Ce. (2006) The NEC 3 engineering and building contract A commentary. 2nd edn. Oxford, UK Wiley, throne Sons.Galbraith, A., Stockdale, M., Wilson, S., Mitchell, R., Hewitso n, R., Spurgeon, S. and Woodley, M. (2014) Galbraiths building and land management law for students. 6th edn. Oxon Routledge.Hughes, S., Mills, R. and OBrien, P. (2008) Payment in construction A practical guide. Coventry RICS Books.Lupton, S. and Cornes, D.L. (2013) Cornes and Luptons design liability in the construction industry. 5th edn. London, United Kingdom Wiley-Blackwell (an imprint of John Wiley Sons Ltd).Ramsey, Vivian. Construction Law Handbook. 1st ed. London Thomas Telford, 2000. Print.CasesAcsim (Southern) Ltd v Danish Contracting and Development Co Ltd 1992 47 BLR 59 and Gilbert-Ash Northern v Modern Engineering Bristol) Ltd 1974 AC 689.Constain Ltd and Others Corber v Bechtel Ltd Anor 2005.Lubenham V South Pembrokeshire DC 1986 33 BLR 39Secretary of State for Transport v Birse-Farr Joint Venture 1993 62 BLR 36.