Essentially, the JCT contracts are a collection of off-the-shelf contracts that anyone interested in entering into a building contract with another party can acquire. The JCT contract family is a collection of standard construction contracts that parties can use to document their construction projects.
The JCT is a trade group that covers a broad range of construction and building trade interests. Since its foundation in 1931, the JCT has established industry-standard forms of paperwork, such as contracts and guide notes. Thus, when someone speaks of a ‘JCT contract,’ they are frequently referring to a standard construction contract.
JCT contracts are frequently used to facilitate the delivery of a construction project by an ’employer’ and a ‘contractor.’ They include all the important terms and conditions, such as the parties’ responsibilities, associated costs, and the project’s specification. This lets all parties understand precisely what must be accomplished, when it must be accomplished, who will complete the task, and how much it will cost.
Crucially, a JCT contract defines each partner’s tasks and responsibilities in order to assist the project’s delivery. In this article, JCT contracts explained, we will delve deeper into the subject.
Free Initial Telephone Discussion
For a free initial discussion on how we can help you draft a suitable JCT contract, get in touch with us today. We will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help you avoid making mistakes, saving you money and also avoiding the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will get back to you.
Common forms of JCT contracts
The JCT contracts cover a broad range of projects, from small residential extensions to the world’s tallest skyscrapers. The Design and Build Contract and the Minor Works Contract are the two most often utilised types.
JCT Design and Build Contract
The JCT Design and Build Contract is written in such a way that the contractor is responsible for both the design and execution of the works. The developer offers specific details on its requirements. The JCT Design and Build Contract is a lump sum contract (i.e. the contract specifies the total cost of constructing the works) in which the contractor is paid on a recurring basis. This type of contract is extremely popular with major developers since it assigns design obligation to a single party — the contractor. This means that if the design of the works is deficient, the developer need merely pursue the contractor to recoup all damages incurred as a result of the deficient design.
JCT Minor Works Contract
The JCT Minor Works Contract has been designed for smaller projects. One version of the JCT Minor Works Contract contains clauses allowing the contractor to design a portion of the work, whereas the other version vests the developer with complete design authority. Although the JCT Minor Works Contract is frequently used for retail fit-outs and commercial property additions, there is no hard and fast rule limiting its application to a specific size or value of construction project.
What are the advantages of using a JCT contract?
JCT contracts might cover more than just roles and obligations. Indeed, there are various advantages to using one, including the following:
Standardisation of contracts
JCT contracts have evolved over time and, as such, account for the majority of concerns that can fairly be anticipated during a construction project. Due to the fact that the majority of builders and contractors are familiar with these concerns, rather than crafting a fresh and bespoke contract, these issues are included in the contract template. This provides both parties with assurance of a minimum level of risk control.
Risk allocation that is recognisable and equitable.
Due to the common nature of JCT contracts, all parties are typically familiar with the project’s risks and how they are allocated between them. The JCT guarantees that these risks are shared evenly between the parties, ensuring that the terms are not favoured by one party over the other.
Dispute Resolution
Assume for argument’s sake that a conflict did arise during construction. In that case, a JCT contract will include clauses outlining the procedure for resolving such conflicts. Frequently, these rules will appoint an arbitrator or adjudicator to determine the parties’ responsibility. As a result, a JCT agreement permits the parties to avoid more expensive and time-consuming judicial proceedings. JCT contracts are mostly utilised in the construction industry to offer a reference document in the event of a dispute.
Typical causes of dispute
These can include:
- A contractor claiming against the employer for delay or a change to the scope of works
- A professional consultant claiming against the employer for non-payment of fees
- The employer claiming against a professional consultant for shortcomings in the design or a failure to properly supervise the works
- The employer claiming against the contractor for delay or defective works
Alternative Dispute Resolution
Alternative dispute resolution, which is often shortened to ADR, is the umbrella term given to the various methods used to settle disputes that do not require court proceedings. Many businesses and individuals are eager to solve their disputes in a quick, cost-effective and confidential way, and ADR brings the opportunity to do so.
There are, however, both advantages and disadvantages to all ADR. ADR comes in many forms, and among the more commonly used methods are:
- Mediation
- Negotiation
- Neutral evaluation
- Use of ombudsmen and other regulatory bodies
- Arbitration
- Adjudication
The perceived risks common when dealing with contractors
JCT contracts are frequently used to protect employers from incompetent contractors. Employers can rest assured that the contract will cover the majority of scenarios, such as penalties for late completion of work or working under adverse conditions. Additionally, a JCT contract is structured in such a way that the agreement’s terms are exhaustive and cover the majority of the risks associated with the construction sector.
What are the disadvantages of using a JCT contract?
Despite the fact that JCT contracts follow a standard format, it is critical to comprehend what the document contains, particularly if you are unfamiliar with its use. Among the risks connected with this are the following:
Inflexibility
When a JCT contract is created, it can be difficult for either party to modify their needs. Given the usual format of JCT contracts, any alterations could result in project delays due to the introduction of unfamiliarity.
Requirements that are not accurate
A JCT contract’s requirements must be accurate. If an employer fails to properly construct its needs, the contractor’s work may fall short of the employer’s standards. For example, if the employer grants the contractor ‘full reign’ over the design, the employer has granted the contractor decision-making authority under the JCT contract. As a result, if the contractor performs to the bare minimum criteria, the employer is not protected by the contract.
Negotiations
A JCT contract might take a significant amount of time and money to develop. When there are conflicts, the project’s timeline and cost will increase. Disagreements emerge in negotiations about the contract’s terms and conditions.
Poorly drafted contract
If the contract has not been properly created, reviewed, or extensively revised before you sign it, you risk committing to unfavourable terms and circumstances.
How we can help
We have a proven track-record of helping clients deal with JCT contracts. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner and support and advise you with all the negotiations. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
Please click here to find out more about our construction legal services.
How to Contact our Construction Solicitors
It is important for you to be well informed about the issues and obstacles you are facing. However, expert legal support is crucial in terms of saving you money and ensuring you achieve a positive outcome.
To speak to our Construction solicitors today, simply call us on 0345 901 0445, or allow a member of the team to get back to you by filling in our online contact form. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Comments are closed.
