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TitleContract Practice for Surveyors
TagsContractual Term Negligence Construction Management Architect Duty Of Care
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Total Pages427
Table of Contents
                            Front cover
Title page
Copyright page
Table of contents
List of figures and tables
1 Contracts and the surveyor
	The nature and form of contracts
	The surveyor’s role
2 Building procurement
	Traditional methods
	The composite nature of contracts
	Circumstances in which the various types of contract may be used
	The risk factor
	Relationships between the parties
	Alternative methods
3 Contract selection
	Standard forms of construction contract
	An approach to effective contract selection
4 Tendering methods and procedures
	Methods of contractor selection
	Tender documents
	Tendering procedure
	Electronic tendering
5 Examining and reporting on tenders
	Examination of selected tender
	Reporting on tenders
	Dealing with errors, etc.
6 The contract
	The contract documents
	Preparations for executing the contract
	Copies of contract documents
	The contract sum
7 Variations and instructions
	Definition and origin of variations
	Measuring variations
	Variation accounts
	Valuing variations
	Additional expense arising from variations
	Use of erroneous rates when pricing variations
	Adjustment of Preliminaries on account of variations
	Variations on contractor’s designed portion work
	Examples of variations
8 Fluctuations
	Traditional method
	Additions to net sums recoverable
	Recording and checking fluctuations claims
	Fluctuations after expiry of the contract period
	Other non-recoverable fluctuations
	Formula method
	Preparatory work necessary before using the formulae
	Calculation of adjustment amounts
	Application of the formula rules to work executed after the Completion Date (or extended Completion Date)
	Adjustment of value of work included in interim valuations issued after the issue of the Certificate of Practical Completion
	Specialist engineering formulae
9 Claims
	Common law claims
	Contractual claims
	Global claims
10 Interim valuations
	Payment requirements under the Act
	The Scheme
	Frequency of valuations and ‘valuation date’
	General procedure
	Notifying the architect
	Payments and notices
	Advance payments
	Liquidated and ascertained damages
	Examples of interim valuations
11 Final accounts
	Constituents of final accounts
	Final certificate
	Example of final account
12 Cost control
	The surveyor’s role
	Monitoring and reporting on the financial position
	Forecasting client’s capital expenditure flow
	Forecasting contractor’s earnings and expenditure
13 Capital allowances
	Capital allowances
	Rates of allowances
14 Indemnity and insurance
	Some general principles of insurance
	Insurance against injury to persons and property
	Insurance of the works
	Professional indemnity insurance
	Joint fire code
15 Health and safety: The Construction (Design and Management) Regulations 1994
	The Regulations
16 Collateral warranties
	General principles
	Interested parties
	Terms of warranty
	Contracts (Rights of Third Parties) Act 1999
	Conferring benefits under the JCT form
	Liability to third parties
	An alternative to collateral warranties
17 Guarantees and bonds
	The purpose of guarantees and bonds
	Sources and formats of bonds
	The arguments for and against bonds and guarantees
	The use of bonds
	JCT bonds
18 Value management
	A brief history of value management
	The value process
	The application of value management
	The benefits of value management
	Some value management case studies
	The benefits in summary
19 Insolvency
	The law
	Client’s creditor status
	Provisions in the JCT Standard Building Contract
	Avoidance, precautions and indications
	Action in the event of contractor insolvency
	Domestic sub-contractors
20 Dispute resolution
	Alternative dispute resolution
Appendix A: Particulars of contract referred to in the examples given in the text
Appendix B: Articles of Agreement
Index to references to clauses in JCT Standard Building Contract with Quantities
Document Text Contents
Page 2

Contract Practice
for Surveyors

Page 213

fails to fill in this section of the Contract Particulars then by
default interim certificates must be issued at regular periods, not
exceeding one month, up until the date of practical completion.
After the date of practical completion interim certificates are to be
issued as and when monies become due to the contractor, although
the architect cannot be required to issue an interim certificate
within one month of a previous interim certificate. Specific atten-
tion is drawn to the fact that an interim certificate must be issued
after the later of the two following events: the end of the rectifica-
tion period or the issue of the certificate of making good (see clause
4.9.2). The main purpose of this interim certificate is to release the
final portion of retention to the contractor.

From the contractor’s point of view, the exact position of the
day in the month when an interim certificate is to be issued may
well affect his cash flow as, for example, his invoices for materials
become payable at the end of the month.Also, if the formula method
of recovery of fluctuations applies (see p. 169), the fluctuations
amount included in a valuation will be affected by the relation-
ship between the ‘valuation date’ and the date of publication of
the monthly indices.

From the Employer’s point of view the ‘interim certificate date’
will affect his cash flow situation also. If the Employer is a public
authority and it is necessary for payments to be approved by a
finance committee, then the date of the committee meeting in
each month may have a direct bearing upon the most appropriate
date for the issue of interim certificates, if payment is not to be
delayed unduly.

The architect usually relies on the quantity surveyor to advise
the sum which should be stated as due in an interim certificate.
In order to do this, the surveyor prepares a valuation in accord-
ance with the provisions of clause 4.16 of the JCT Form. As an
alternative to clause 4.16 the JCT recognizes that some Employers
may wish to make interim payments based upon the principle of
‘stage payments’.2 Interim certificates will be issued at the nor-
mal monthly period and payments will be calculated on the basis
of stages in the construction work that have been completed.
Thus, the first interim certificate may contain the value for the
completed substructure and ground slabs, the second certificate
the value of the superstructure walls and upper floors, the third
certificate the value of the roof, and so on. Stage payments are more
appropriate to housing contracts than to more complex projects

202 Contract Practice for Surveyors

Page 214

where the stages are often not so readily or satisfactorily defin-
able. Table 10.1 shows how a housing contract, consisting of four
house types may be broken down into stages, in preparation for
interim valuations.

Where the interim valuation is to be prepared on the basis of
clause 4.16 it will be necessary for the surveyor personally to visit
the site to see for himself both the completed work and the unfixed
materials and goods and then to ascertain their total value. The
surveyor is required to carry out this task in the seven-day period
leading up to the date of issue of the interim certificate (see clause
4.16). This should help to maximize the value of the interim valu-
ation and aid the contractor’s cash flow.

For administrative purposes, it will be advantageous to decide
from the start a fixed date in each month on which to do valu-
ations. Although the surveyor has no obligation under the terms
of the JCT Form to notify the contractor when he proposes to visit
the site for valuation purposes, nevertheless it is desirable as well
as courteous to do so and even better if the surveyor and the con-
tractor’s surveyor agree on a ‘valuation date’ in each month.

Interim valuations 203

Table 10.1 Typical breakdown of house type contract sums for use
in ‘stage payments’ method of interim valuations

Proportion of contract value for house types

A (£) B (£) C (£) D (£)

Sub-structure 9,200 9,920 9,568 11,408 40,096
External walls, upper 27,120 31,472 28,656 35,424 122,672
floors, windows
and external doors
Roof, internal walls 23,496 26,880 25,024 31,816 107,216
and partitions,
first fixings
Plumbing, internal 29,944 33,328 31,616 33,728 128,616
finishings, second
External works 9,920 11,648 11,080 17,440 50,088
Preliminaries 14,800 15,856 15,352 18,816 64,824

Totals 114,480 129,104 121,296 148,632 513,512

Page 426

Quantity surveyor, 9, 10, 18, 33, 35, 40,
45, 60, 62, 69, 70, 81, 107, 115, 116,
119, 121, 122, 130, 133, 134, 160,
190, 202, 220, 223, 224, 233

R G Carter Ltd v Edmund Nuttall Ltd,
(2000), 378

Rate of spend forecasting, 250
Reasonable skill and care, 297
Rectification period, 202
Rees and Kirby Ltd v Swansea BC

(1985), 194
Release of retention, 215
Relevant Events, 188
Reporting of Injuries, Diseases and

Dangerous Occurrences
Regulations 1995, 313–14

Reporting on tenders, 93
Retention, 202, 214, 364
Retention bond, 216
Retention of title, 362
Return envelope, 78
Revised Completion Date, 120
RICS contracts in use survey, 20, 37,

42, 56
Risk evaluation, 315
Role of the Arbitrator, 376
Romalpa clause, 362
Royal Institution of Chartered

Surveyors, 3, 116, 213, 217

Schedule 2 Quotation, 114, 119, 189,
194, 195–96, 237

Schedule of rates, 21, 29, 57, 62, 106
Schedule of Works, 105, 109
Scoping of trade packages, 15
S-curve, 254, 258
Sectional Completion, 58, 189
Selective tendering, 71
Serial tendering, 73
Shanklin Pier v Detel Products Ltd

(1951), 321
Single point responsibility, 35, 44
Single stage selective tendering, 71
Site costing, 259
Smith v Bush (1990), 12
Sources and formats of bonds,

Specialist Engineering Formulae, 164,

Specification, 76, 105, 109
Specified Perils, 286–87, 192
Stage payments, 202

Standard collateral warranties, 325
construction management trade

contractor collateral warranty
for a funder (CMWa/F), 326

contractor collateral warranty for a
funder (CWa/F), 325

contractor collateral warranty for a
purchaser or tenant (CWa/P&T),

management works contractor/
employer agreement (MCWK/C),

sub-contractor collateral warranty
for a funder (SCWa/F), 326

sub-contractor collateral warranty
for a purchaser or tenant
(SCWa/P&T), 326

Standard costing, 259
Standard forms of contract, 3, 51
Standard Method of Measurement of

Building Works, 116
Standard Method of Measurement of

Building Works, Seventh Edition,
235, 236

Standard schedule, 21
Statutory authority, 236
Statutory contribution, 156
Statutory fees and charges, 214
Sub-contractor warranties, 329

sub-contractor/employer warranty
SCWa/E, 33

Subrogation, 285, 292, 332
Supply chain, 44, 46
Surety companies, 336
Surveyor’s authority, 5
Surveyor’s legal obligations, 9
Surveyor’s post-contract duties, 6
Surveyor’s role, 4, 245
Suspension, 199
Sutcliffe v Thackrah (1974), 10

Target cost, 26
Tate & Lyle Food Distribution Co Ltd v

Greater London Council (1982),

Tax planning, 263
Taxation, 263
Tender documents, 75
Tendering and the EU, 83
Tendering methods and procedures,

Tenders based on ad hoc schedule of

rates, 93

Index 415

Page 427

Tenders based on bills of approximate
quantities, 92

Tenders based on drawings and
specification only, 92

Term contracts, 29
Termination of contractor’s

employment, 361
The contract, 104–10
The Scheme for Construction Contracts

(England and Wales) Regulations
1998, 197, 199–200, 380

dates for payment, 200
interim payments, 200
payment notices, 201
valuation dates, 201

Third party benefits under JCT 05, 327
assignment, 327
collateral warranties, 328
liability to third parties, 329
third party rights, 328

Time-related charges, 133
Tort of negligence, 298
Trade contractors, 15, 40
Trade discount, 126
Trade packages, 40
Traditional procurement methods, 17
Two stage selective tendering, 74
Tyrer v District Auditor of

Monmouthshire (1974), 10

Unabsorbed overheads, 192, 194
Undefined work, 236
Underpriced bill rate, 9
Under-valuation, 204
Unfixed materials and goods, 212, 362
Unit rates, 122
Use of bonds, 337
Use of erroneous rates, 130

Valuation date, 201, 202, 203, 204, 248
Valuation period, 166, 169, 174

Valuation Rules, 119
Value management, 44, 343–53

application, 348
case studies, 350–53

value, 344
value analysis, 346
value engineering, 346
value management, 345
value planning, 346

history, 343
the benefits, 349, 353
value process, 346

Valuing variations, 118
Variation accounts, 117, 237
Variations and Instructions, 112–53,

Variations on contractor’s designed

portion work, 134
VAT, 158
Voluntary arrangements, 359
Voluntary liquidation, 356

Warranty Agreements, 33
Wates Construction Ltd v Franthom

Property Ltd,( 1991), 3
Weighted categories, 164
Wharf Properties Ltd and Another v

Eric Cumine Associates and Others
(1991), 195

Wimpy International Ltd v Warland
(1988), 269, 271

Withholding notice, 200, 218
Withholding payment, 200
Working Rule Agreement for the

Construction Industry, 157
Works contractors, 37
Works Contracts, 61
Wraight Ltd v PHT (Holdings) Ltd

(1968), 192–93

416 Index

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