JCT Contract Variations: A Guide For Contractors

In construction projects that use Joint Contracts Tribunal (JCT) contracts, variations are common and often necessary. JCT contracts provide a standardised framework for managing construction projects across England and Wales and include specific provisions for handling variations, which can affect the project scope, costs, or timeline. Understanding how to manage variations effectively can make a significant difference in maintaining good client relationships and ensuring that you are fairly compensated for any additional work.

This guide from Blackstone Solicitors explains how variations work under JCT contracts and outlines the process and options available to contractors when variations arise.

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1. What is a Variation under a JCT Contract?

Under a JCT contract, a variation is a change to the original scope of work as outlined in the contract documents. Variations can include alterations to the design, quality of materials, working methods, or project timeline. They may arise for a variety of reasons, such as client requests, unforeseen site conditions, or changes needed to comply with regulatory requirements.

The JCT contract specifically defines variations and provides a procedure for managing them to ensure transparency and fairness between all parties involved.

2. Common Types of Variations in JCT Contracts

Variations in JCT contracts may include:

• Changes in the Scope of Work: This could involve adding, omitting, or modifying aspects of the project that were initially specified in the contract.
• Alterations in Specifications or Quality of Materials: Changes in the type, quality, or specifications of materials to be used, either due to client preferences or availability issues.
• Adjustments to Design: These include any modifications to the architectural, structural, or mechanical designs.
• Time Extensions: Any change that impacts the schedule, such as delays or adjustments due to the above variations.

Each type of variation must be properly managed and documented to avoid disputes and ensure that you, as the contractor, receive adequate compensation and time adjustments.

3. The Role of the Contract Administrator in Managing Variations

In JCT contracts, the contract administrator—often the architect, project manager, or engineer—has an important role in managing and authorising variations. The contract administrator is responsible for issuing instructions for variations and ensuring that both parties understand the changes. They will typically oversee the entire process, from issuing the variation instruction to ensuring that the contractor is paid for the additional work.

If the client requests a variation, it should be communicated through the contract administrator, who can then issue a formal instruction to you as the contractor. In practice, no variation should be executed without formal approval to avoid future payment disputes.

4. The Process for Requesting and Handling Variations

Managing variations under a JCT contract follows a structured process, typically involving the following steps:

Step 1: Document the Need for Variation

If you identify a necessary variation, whether due to unforeseen conditions or client requests, the first step is to document the change clearly. This documentation should include:

• A description of the proposed change.
• Reasons for the variation.
• Any anticipated impact on time, costs, or scope of work.

Thorough documentation is crucial as it helps you demonstrate the need for the variation and justifies any additional compensation or time extensions.

Step 2: Submit a Variation Request

Once the change has been identified and documented, it is generally the contract administrator’s role to issue a variation instruction to formalise the change. If you’re proposing the variation, you may need to submit a variation request, outlining the work involved, estimated costs, and any expected impact on the project schedule.

Step 3: Obtain Approval Before Proceeding

One of the most critical steps is to ensure you have formal approval from the contract administrator before starting any additional work related to the variation. Working on a variation without written authorisation can put you at risk of non-payment and disputes.

Step 4: Value the Variation

Once the variation is approved, it must be valued. This can be done in several ways under a JCT contract, depending on the nature of the change. Common methods include:

• Using Contract Rates: If the contract already specifies rates for certain types of work, these rates can often be applied to calculate the cost of the variation.
• Daywork Rates: For labour-intensive work that is hard to estimate, daywork rates (which account for hourly labour costs) can be applied.
• New Rates or Agreed Sum: For unique or complex changes, the parties may need to negotiate and agree on a new rate or lump sum.

The method for valuing variations will depend on the specifics of your contract, and it’s essential to clarify the pricing approach with the contract administrator.

Step 5: Adjust the Timeline

Many variations will impact the project’s timeline. If the variation requires more time than originally planned, you should formally request an extension of time. Under a JCT contract, extensions can often be granted for variations, provided that the impact on the timeline is justified and documented.

A written request for a time extension should include details of the variation, its impact on the project schedule, and any steps you are taking to minimise delays. Approved extensions should be documented to protect you from potential penalties for late completion.

5. Common Challenges in JCT Contract Variations

Variations are often a source of disputes in construction projects. Common issues contractors face include:

• Ambiguity in Scope: Disagreements over whether a particular task qualifies as a variation or falls within the original scope of work can arise if the initial contract terms are not clearly defined.
• Delay in Approval: Delays by the contract administrator in approving variations can lead to costly project hold-ups.
• Underestimation of Costs: Variations can sometimes be underestimated, leading to cost overruns and disputes over payment.

Being proactive in documenting and managing variations can help you avoid these issues. Additionally, consulting with solicitors can provide guidance on managing variations and protecting your rights.

6. Disputes Over Variations and How to Resolve Them

If disagreements over variations do arise, several dispute resolution options are available under JCT contracts:

• Negotiation: Direct discussions between you, the client, and the contract administrator can sometimes resolve issues without formal proceedings.
• Adjudication: A faster and cost-effective option, adjudication allows for a binding decision to be made within a short period, often within 28 days. Adjudication is widely used in construction disputes in England and Wales.
• Mediation: A less formal approach, mediation involves a neutral third party to help both sides reach a mutually agreeable solution.
• Arbitration or Litigation: As a last resort, disputes can be taken to arbitration or court, though these methods are more costly and time-consuming.

At Blackstone Solicitors, we offer support and guidance through each stage of the dispute resolution process, helping contractors navigate disputes effectively while minimising disruption to their work.

7. How to Protect Yourself with Future Contracts

Although variations are often unavoidable, you can take steps to manage them more effectively on future projects:

• Clarify the Scope of Work: At the contract drafting stage, make sure the scope of work is well-defined to avoid ambiguities later on.
• Set Out Clear Procedures for Variations: Ensure the contract includes a straightforward variation clause that specifies procedures for authorisation, valuation, and payment.
• Keep Detailed Records: Documentation is crucial. From day one, keep detailed records of work completed, materials used, and any communications with the client or contract administrator.
• Communicate Early and Often: Regular communication with clients and contract administrators can help identify potential variations early and allow for more manageable adjustments.

Being proactive in managing variations from the outset can help you avoid disputes, keep projects on track, and ensure fair compensation for any extra work required.

Conclusion

JCT contract variations are a common aspect of construction projects, and managing them effectively is essential for any contractor. Following the proper procedure—documenting variations, obtaining approval, valuing additional work, and adjusting timelines where needed—can help you complete projects smoothly and protect your business interests.

If you’re facing issues related to JCT contract variations or need legal guidance, Blackstone Solicitors is here to support contractors across England and Wales. With our expertise in construction law, we can help you handle variations, resolve disputes, and set up contracts that protect your rights and help you avoid future challenges.

How we can help

We have a proven track record of helping clients deal with construction law. We will guide you diligently and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting. You can read more about the range of construction law services we offer by clicking here: https://blackstonesolicitorsltd.co.uk/construction-solicitors/

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It is important for you to be well informed about the issues and possible implications of a construction law case. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.

To speak to our Construction solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.

Authored by Ben Posted in Blog, News Tagged as

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