ARB Registration (Architects Registration Board) Construction Law and Contract Administration Flashcards

24 sample cards from the Construction Law and Contract Administration deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What is 'loss and expense' and how does it differ from an extension of time?

   Loss and expense is direct loss and/or expense the contractor incurs because the regular progress of the works has been materially affected by 'Relevant Matters' (employer-side causes), for which there is no other reimbursement (e.g. prolongation, disruption, head-office overheads). An EOT addresses time (relief from LDs); loss and expense addresses money. They are assessed separately, though often arise from the same event.

2. What are liquidated damages (LDs) and what makes a LD clause enforceable?

   LDs are a pre-agreed, fixed sum payable by the contractor for each period (e.g. per week) of culpable delay to completion, recovered without proving actual loss. To be enforceable the sum must be a genuine pre-estimate of likely loss / protect a legitimate interest and not be a 'penalty' (Cavendish v Makdessi / Dunlop). If unenforceable as a penalty, the employer is left to prove general damages.

3. What is the defects liability / rectification period?

   A fixed period after Practical Completion (commonly 6 or 12 months) during which the contractor is obliged to return and make good defects that appear, due to materials/workmanship not in accordance with the contract. The CA issues a schedule of defects, and on completion issues a Certificate of Making Good, triggering release of the remaining retention.

4. What is 'snagging' and how does it relate to practical completion and the defects period?

   Snagging is the process of identifying and listing minor outstanding/defective items (the 'snag list') as the works approach completion. Minor de minimis snags may remain at Practical Completion, but patent defects identified during the rectification period are formally scheduled by the CA for the contractor to make good.

5. Distinguish patent defects from latent defects.

   Patent defects are apparent/discoverable on reasonable inspection at completion (and are dealt with via the rectification period). Latent defects are hidden and only become apparent later (e.g. years after completion); they are pursued through breach of contract/negligence claims, subject to limitation periods, and are often covered by collateral warranties or latent defects insurance.

6. Compare negotiation, mediation and conciliation as forms of ADR.

   Negotiation: parties resolve the dispute directly, without a third party. Mediation: a neutral third party facilitates the parties reaching their own settlement but does not give a decision or opinion. Conciliation: similar to mediation but the conciliator takes a more active/evaluative role and may recommend a (non-binding) settlement or opinion. All three are consensual and non-binding unless a settlement agreement is signed.

7. What are the key advantages of Alternative Dispute Resolution (ADR) over litigation?

   Generally faster, cheaper, private/confidential, less adversarial (preserving commercial relationships), flexible, and capable of producing creative/commercial outcomes. Most ADR is consensual, so unlike adjudication or litigation it requires the parties' cooperation.

8. What is adjudication under the Housing Grants, Construction and Regeneration Act 1996 (the Construction Act)?

   A fast statutory dispute-resolution process available 'at any time' to any party to a construction contract. An adjudicator is appointed and must reach a decision within 28 days of referral (extendable to 42 days with the referring party's consent, or longer by agreement). The decision is binding on an interim basis and enforceable, until finally determined by litigation, arbitration or agreement ('pay now, argue later').

9. What is the typical timetable for an adjudication under the Construction Act?

   A notice of adjudication starts the process; the adjudicator is appointed (typically within 7 days) and the dispute is referred; the adjudicator must decide within 28 days of the referral, extendable by up to 14 days (to 42) with the referring party's consent, or further by agreement of both parties.

10. What does 'temporarily binding' mean for an adjudicator's decision?

    The decision must be complied with immediately and is enforceable (usually by summary judgment in the courts), but it is only binding until the dispute is 'finally determined' by litigation, arbitration or agreement. A dissatisfied party can re-litigate/re-arbitrate the same dispute afresh — hence 'pay now, argue later'.

11. Compare arbitration and litigation as final dispute-resolution routes.

    Arbitration is a private, consensual process (requires an arbitration agreement) under the Arbitration Act 1996, with a chosen arbitrator/expert, confidential, flexible procedure, and an award enforceable internationally (New York Convention) with limited appeal rights. Litigation is public, conducted in the courts (TCC for construction), binding, allows appeals, and does not require prior agreement, but is generally slower, more costly and not confidential.

12. Which court division typically hears construction disputes in England, and what governs arbitration?

    The Technology and Construction Court (TCC), a specialist part of the High Court (King's Bench Division), hears construction litigation and adjudication enforcement. Arbitration is governed by the Arbitration Act 1996 and requires a written arbitration agreement between the parties.

13. What is Professional Indemnity Insurance (PII) and why must architects carry it?

    PII covers an architect's legal liability to third parties for claims arising from professional negligence (errors, omissions, breach of duty) in the provision of professional services, including defence costs. The ARB Code and RIBA require adequate PII cover; it protects clients' ability to recover and protects the practice's solvency.

14. On what basis is PII written, and what is the practical implication of that basis?

    PII is written on a 'claims made' basis: the policy in force when the claim is made (notified) responds, not the policy in force when the work was done or the negligent act occurred. The practical implication is that cover must be maintained continuously, including 'run-off' cover after a practice ceases, to remain protected against latent-defect claims arising years later.

15. How can an architect/consultant lawfully limit their liability in an appointment?

    Through express contract provisions: a financial cap on liability (e.g. linked to PII cover or fee level), a net contribution clause (limiting liability to the architect's fair share where others are also responsible), time limits, and exclusion of certain heads of loss. Limitations must be reasonable under the Unfair Contract Terms Act 1977 and cannot exclude liability for death/personal injury caused by negligence.

16. What is a 'net contribution clause' and why do consultants seek one?

    A net contribution clause limits a consultant's liability to the amount that would be 'just and equitable' for that consultant to pay, assuming all other responsible parties have paid their fair share — i.e. it apportions liability rather than leaving the consultant jointly and severally liable for the whole loss. Consultants seek it to avoid bearing 100% of a loss where an insolvent or absent co-defendant was also at fault.

17. What is a collateral warranty and why is it used?

    A collateral warranty is a contract that creates a direct contractual link between a consultant/contractor and a third party (e.g. a funder, purchaser or tenant) who was not party to the original building/appointment contract. It is used because, under privity of contract, those third parties otherwise have no direct contractual claim; the warranty gives them a route to recover for defects/negligence (overcoming the restriction on recovering pure economic loss in tort).

18. How does the Contracts (Rights of Third Parties) Act 1999 provide an alternative to collateral warranties?

    The Act allows a contract to expressly confer enforceable benefits on identified third parties, so a named beneficiary (e.g. a future tenant or purchaser) can enforce the relevant terms directly without a separate collateral warranty. Construction contracts can use a schedule of third-party rights instead of, or alongside, collateral warranties; many standard forms allow either mechanism to be selected.

19. What is the doctrine of privity of contract and why does it matter in construction projects?

    Privity of contract means that only the parties to a contract can sue or be sued under it; a third party generally acquires no rights or obligations. It matters because funders, purchasers and tenants are not parties to the building contract or consultants' appointments, so they need collateral warranties or third-party rights (under the 1999 Act) to obtain a direct claim for defects.

20. What is the difference between a Relevant Event and a Relevant Matter under JCT?

    A Relevant Event is a cause of delay that entitles the contractor to an extension of time (relief from liquidated damages) — e.g. variations, exceptionally adverse weather, force majeure. A Relevant Matter is a cause that entitles the contractor to loss and expense (money) — e.g. employer-side disruption, late information. Some events (e.g. variations) are both.

21. What is the difference between liquidated damages and unliquidated (general) damages for delay?

    Liquidated damages are pre-agreed in the contract at a fixed rate per period of delay and recovered without proving actual loss. Unliquidated (general) damages are not pre-agreed; the employer must prove the actual loss suffered. If the LD clause is void as a penalty or 'time becomes at large', the employer falls back on unliquidated damages, which require proof of loss.

22. What does the term 'consideration' require, and what is the rule about past consideration?

    Consideration is the price of a promise — something of value moving from the promisee (a benefit to one party or a detriment to the other). It must be sufficient but need not be adequate (no need for market value), and past consideration (something already done before the promise) is generally not good consideration.

23. What is the difference between an offer and an 'invitation to treat' in contract formation?

    An offer is a definite statement of terms which, once accepted, forms a binding contract. An invitation to treat is merely an invitation to others to make offers or to negotiate (e.g. an advertisement, a tender invitation, goods on display). In construction, a tender invitation is usually an invitation to treat and the contractor's tender is the offer.

24. In professional negligence, what must a claimant additionally show beyond a breach of the Bolam standard?

    Causation and loss: that the architect's breach actually caused (factual 'but for' causation) recoverable, reasonably foreseeable damage, and that the loss is not too remote. A breach of duty without resulting loss caused by that breach does not give rise to a successful negligence claim.

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