Berwin Leighton Paisner Christmas quiz 2011

Practical Law UK Articles 9-516-7170 (Approx. 12 pages)

Berwin Leighton Paisner Christmas quiz 2011

by PLC Construction

Construction Act 1996

Question 1

Which of the following statements is true (there may be more than one)?

(a) The statutory right to refer a dispute to adjudication under the Construction Act 1996 (as amended) only arises where the construction contract is in writing.
(b) The statutory right to refer a dispute to adjudication under the Construction Act 1996 (as amended) applies to all construction contracts whether wholly in writing, partly in writing or wholly oral.
(c) The statutory right to refer a dispute to adjudication under the Construction Act 1996 (as amended) applies to all construction contracts whether wholly in writing, partly in writing or wholly oral provided that the adjudication provisions are in writing.
(d) The statutory right to refer a dispute to adjudication under the Construction Act 1996 (as amended) applies to all construction contracts whether wholly in writing, partly in writing or wholly oral, however, where the contract is wholly oral, the adjudication provisions of the Scheme for Construction Contracts 1998 will apply.

Note: Answer to question 1

Close Drafting Note

Answer to question 1

The true statements are:

(b) The statutory right to refer a dispute to adjudication under the Construction Act 1996 (as amended) applies to all construction contracts whether wholly in writing, partly in writing or wholly oral.
(d) The statutory right to refer a dispute to adjudication under the Construction Act 1996 (as amended) applies to all construction contracts whether wholly in writing, partly in writing or wholly oral, however, where the contract is wholly oral, the adjudication provisions of the Scheme will apply.

For information on the changes to Part II of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996), introduced by Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (LDEDC Act 2009), see Construction Act 1996 changes toolkit.

Question 2

Which of the following statements is true (there may be more than one)?

(a) Third parties may give section 110A payment notices.
(b) The due date for payment can be fixed by reference to the payer's payment notice.
(c) The payer is not obliged to give a "pay less notice" if the payee goes insolvent before the date upon which the payer is required to give such pay less notice.

Note: Answer to question 2

Close Drafting Note

Answer to question 2

(a) Third parties may give section 110A payment notices.

For information on payment under the Construction Act 1996 (as amended), see Practice note, Payment in construction contracts: Construction Act 1996 and as amended.

Question 3

Which of the following statements is true? The Constructions Contracts (England) Exclusion Order 2011 provides that:

(a) All PFI sub-contracts (of any tier) are excluded from the operation of the Construction Act 1996 (as amended).
(b) Only first-tier PFI subcontracts are excluded from the operation of the Construction Act 1996 (as amended).
(c) All PFI sub-contracts (of any tier) are excluded from the operation of section 110(1A) of the Construction Act 1996 (as amended).
(d) Only first-tier PFI subcontracts are excluded from the operation of section 110(1A) of the Construction Act 1996 (as amended).

Note: Answer to question 3

Close Drafting Note

Answer to question 3

(d) Only first-tier PFI subcontracts are excluded from the operation of section 110(1A) of the Construction Act 1996 (as amended).

For more information on the Construction Contracts (England) Exclusion Order 2011 (SI 2011/2332), see Practice note, Do I have a "construction contract"?: Construction contracts in PFI arrangements.

Dispute resolution procedures

Question 4

Under which one of the following adjudication rules may an adjudicator determine his own jurisdiction?

(a) The Scheme.
(b) TeCSA.
(c) CEDR.
(d) ICE.

Note: Answer to question 4

Close Drafting Note

Answer to question 4

(b) TeCSA.

For information on the:

Scheme for Construction Contracts 1998, see Practice note, Adjudication using the Scheme for Construction Contracts 1998 and as amended.
TeCSA, CEDR and ICE rules, see Practice note, Adjudication: section 108 and adjudication procedures.

Question 5

Which of the following are usually considered to be grounds for challenge in the case of expert determination?

(a) Gross/manifest error.
(b) Procedural irregularity.
(c) Fraud.
(d) Failure to give reasons.

Note: Answer to question 5

Close Drafting Note

Answer to question 5

For information on expert determination, see Practice note, Expert determination.

Question 6

Which of the following provisions of the Arbitration Act 1996 can the parties agree shall not apply?

(a) Section 24 (power of court to remove arbitrator).
(b) Section 67 (challenging the award: substantive jurisdiction).
(c) Section 68 (challenging the award: serious irregularity).
(d) Section 69 (appeal on point of law).

Note: Answer to question 6

Close Drafting Note

Answer to question 6

(d) Section 69 (appeal on point of law).

For information on the Arbitration Act 1996, see:

Question 7

Your construction contract contains a tiered dispute resolution clause providing that when a dispute arises it must first be referred to the CEO of each party to try and reach an amicable resolution. Failing this the dispute may be referred to adjudication (the adjudication provision contains all of the mandatory requirements of the Construction Act 1996 (as amended)). A dispute has arisen - what is your advice to the client?

(a) The dispute must be referred to the CEOs first as this is what the contract says.
(b) The dispute can be referred to adjudication immediately and the contractual adjudication procedure will apply as it is Act-compliant.
(c) The dispute can be referred to adjudication immediately and the Scheme for Construction Contracts 1998 will apply.
(d) Something else entirely.

Note: Answer to question 7

Close Drafting Note

Answer to question 7

For information on the relevant provisions of the Construction Act 1996 (as amended), see:

Liquidated damages

Question 8

The cost to an employer of mitigating the effects of a delay caused by a contractor breaching its obligations under the contract (for example, by negligently causing a fire) would not, in principle, fall within the scope of the liquidated damages clause. The employer retains a right to recover such losses under the first limb of Hadley v Baxendale. True or false?

Note: Answer to question 8

Close Drafting Note

Answer to question 8

False.

Liquidated damages (LDs) are an exclusive remedy for delay and unliquidated damages cannot be recovered for other breaches of obligation which lead to a delay. The costs of mitigating any delay incurred by an employer cannot be recovered in addition to LDs.

In Biffa Waste Services v MEH & Others [2008] EWHC 6, it was agreed that Biffa (the contractor) would pay LDs in the event of delayed completion. The clause stated that the LDs would be "the only monies due from the contractor for such default", but also that the payment of LDs would be "without prejudice to any other right or remedy" of MEH (the employer). Delay resulted from a fire, caused by one of Biffa's sub-contractors. MEH argued that the LDs clause only related to damages for the breach of Biffa's obligation to complete on time and that it could also recover unliquidated damages for other breaches of obligation which led to the delay. The court held that the LDs were the only remedy for delay. MEH could not recover costs of mitigation in addition to LDs. The judge said that it is not possible to draw a distinction between a "simple" failure to complete and the failure to complete caused by breach of another obligation. If there is a failure to complete, LDs are the only remedy, whether the failure is a pure failure to complete or arises out of another breach.

For more information on:

LDs, see Practice note, Liquidated damages in construction contracts.
Remoteness of damages, including Hadley v Baxendale (1854) 9 Exch 341, see Practice note, Remedies: damages and agreed remedies.

Design liability/professional negligence

Question 9

Which of the following statements about design liability is true?

(a) The common law imposes on a professional person and a design and build contractor the same standard, that is, a standard of reasonable skill and care.
(b) The Supply of Goods and Services Act 1982 (as amended by the Sale and Supply of Goods Act 1994) provides that in a contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill.
(c) Professional persons cannot delegate their design duty to third parties in any circumstances.
(d) A provision in a professional appointment which seeks to impose an absolute obligation on a professional person is unenforceable.

Note: Answer to question 9

Close Drafting Note

Answer to question 9

(b) The Supply of Goods and Services Act 1982 (as amended by the Sale and Supply of Goods Act 1994) provides that in a contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill.

For more information on:

The common law standard of care for a professional consultant, see Practice note, Professional appointments: standard of care.
The common law standard of care for a design and build contractor, see Blog post, Design liability in design and build contracts
The standard of care imposed by the Supply of Goods and Services Act 1982, see Practice note, Drafting standard terms and conditions for the supply of services: Standard of services.
Sub-letting a professional consultant's services, see Practice note, Professional appointments: sub-letting and specialist services.

Question 10

Which of the following statements is true about an unamended JCT Design and Build Contract, 2011 edition (there may be more than one)?

(a) The Contractor's design liability is absolute: he warrants that the Works, when complete, will achieve specific results set out in the contract.
(b) The Contractor's design liability is one of reasonable skill and care only.
(c) The Contractor has no responsibility for any design contained in the Employer's Requirements.
(d) The Contractor is responsible for any mistake or inaccuracy in the design of the Works and for any discrepancy or divergence between the Employer's Requirements and the Contractor's Proposals.

Note: Answer to question 10

Close Drafting Note

Answer to question 10

The true statements are:

(b) The Contractor's design liability is one of reasonable skill and care only.
(c) The Contractor has no responsibility for any design contained in the Employer's Requirements.

For more information on the JCT Design and Build Contract, 2011 edition, see:

Practical completion

Question 11

Which of the following statements is true (there may be more than one)? "Practical completion" should be certified:

(a) When the work to be done under the contract is complete in all respects and all patent and latent defects have been remedied.
(b) When the work to be done under the contract is complete in all respects, including any de minimis items, and all patent defects have been remedied.
(c) When the work to be done under the contract is complete in all respects apart from de minimis work and all patent defects have been remedied.
(d) In an unamended JCT 2011, when the Works are complete, the conditions precedent have been satisfied and there are no apparent defects.

Note: Answer to question 11

Close Drafting Note

Answer to question 11

The true statements are:

(c) When the work to be done under the contract is complete in all respects apart from de minimis work and all patent defects have been remedied.
(d) In an unamended JCT 2011 edition contract, when the Works are complete, the conditions precedent have been satisfied and there are no apparent defects.

For more information, see Practice note, Practical completion.

Question 12

Which of the following statements is true (there may be more than one)? Under a JCT 2011 edition contract:

(a) If the Employer makes early use of the works practical completion is deemed to have occurred.
(b) If the Employer uses all of the Works for the purpose for which they were intended prior to the issue of the Practical Completion Certificate, practical completion is deemed to have occurred.
(c) If the Employer takes possession of part of the Works prior to the issue of the Practical Completion Certificate, practical completion is deemed to have occurred for that relevant part.
(d) If the Employer takes possession of the whole of the works prior to the issue of the Practical Completion Certificate, practical completion is deemed to have occurred for the whole of the Works.
(e) Exclusive possession is not a determining factor in deciding whether practical completion is deemed to have occurred.

Note: Answer to question 12

Close Drafting Note

Answer to question 12

The true statements are:

(c) If the Employer takes possession of part of the Works prior to the issue of the Practical Completion Certificate, practical completion is deemed to have occurred for that relevant part.
(d) If the Employer takes possession of the whole of the works prior to the issue of the Practical Completion Certificate, practical completion is deemed to have occurred for the whole of the Works.

For more information, see Practice note, Practical completion.

Termination

Question 13

True or false? It is possible for silence to constitute acceptance of a repudiatory breach.

Note: Answer to question 13

Close Drafting Note

Answer to question 13

True.

For information on repudiatory breach, see Practice note, Contracts: discharge of contracts.

Question 14

True or false? A party which terminates a contract for breach under a contractual provision thereby waives any right that he might have to accept a repudiatory breach.

Note: Answer to question 14

Close Drafting Note

Answer to question 14

False.

For information on repudiatory breach, see Practice note, Contracts: discharge of contracts.

Question 15

True or false? A party which serves a contractual notice to terminate too early because it has mistakenly calculated the notice period is treated as having repudiated the contract.

Note: Answer to question 15

Close Drafting Note

Answer to question 15

False.

For information on repudiatory breach, see Practice note, Contracts: discharge of contracts.

Standard form contracts: IChemE

Question 16

Like FIDIC, IChemE has a rainbow suite of contracts. Which is the odd one out?

(a) Green.
(b) Brown.
(c) Orange.
(d) Red.
(e) Blue.
(f) Burgundy.
(g) Yellow.
(h) Pink.

Note: Answer to question 16

Close Drafting Note

Answer to question 16

(e) Blue.

For information on the IChemE suite of contracts, which does not include a "blue book", see Practice note, IChemE contracts.

Question 17

Which of the following statements about defects/final certificate are true (there may be more than one)?

(a) The defects liability period is 18 months from Takeover.
(b) The final certificate is conclusive evidence that the Plant is free from defects.
(c) The contractor's liability for the cost of making good defects is capped.
(d) The contractor is not obliged to make good defects notified pre-Takeover as a condition precedent to the issue of the Final Certificate.

Note: Answer to question 17

Close Drafting Note

Answer to question 17

(b) The final certificate is conclusive evidence that the Plant is free from defects.

For information on the IChemE suite of contracts, see:

Question 18

Completion milestones: which of the following statements are false (there may be more than one)?

(a) Completion of construction certifies that the Plant is substantially complete and can be operated safely.
(b) Performance tests are carried out prior to Takeover.
(c) Performance liquidated damages are payable if the performance guarantees are not achieved.
(d) The Acceptance Certificate is issued at the expiry of the Defects Liability Period.

Note: Answer to question 18

Close Drafting Note

Answer to question 18

The false statements are:

(b) Performance tests are carried out prior to Takeover.
(d) The Acceptance Certificate is issued at the expiry of the Defects Liability Period.

For information on the IChemE suite of contracts, see:

Sustainability

Question 19

When does the government anticipate that all new non-domestic buildings will be zero carbon?

(a) 2012.
(b) 2015.
(c) 2019.
(d) 2022.

Note: Answer to question 19

Close Drafting Note

Answer to question 19

For more information, see Practice note, Zero carbon buildings.

Question 20

What type of buildings currently need to have Display Energy Certificates?

(a) Any buildings occupied by public authorities.
(b) Any larger buildings occupied by public authorities and frequently visited by the public.
(c) Any buildings frequently visited by the public.
(d) Any larger buildings frequently visited by the public.

Note: Answer to question 20

Close Drafting Note

Answer to question 20

(b) Any larger buildings occupied by public authorities and frequently visited by the public.

For more information, see Practice note, Energy performance certificates.

Question 21

When will the Energy Performance of Buildings Directive 2010 take effect in the UK?

(a) 2012.
(b) 2015.
(c) 2019.
(d) 2022.

Note: Answer to question 21

Close Drafting Note

Answer to question 21

(a) 2012.

For more information, see Practice note, EU Energy Performance of Buildings Directives 2002 and 2010.

Question 22

When is it anticipated that the Code for Sustainable Buildings will be introduced?

(a) 2012.
(b) 2015.
(c) 2019.
(d) No date fixed.

Note: Answer to question 22

Close Drafting Note

Answer to question 22

(d) No date fixed.

For more information, see Practice note, Zero carbon buildings: Draft Code for Sustainable Buildings.

End of Document

Resource ID 9-516-7170

Published on 20-Dec-2011

Resource Type Articles