The JCT is a trade association that represents a diverse variety of interests in the construction and building trade. Since its inception in 1931, the JCT has developed standard forms of paperwork for use in the construction industry, such as contracts and guide notes. Thus, when someone refers to a ‘JCT contract,’ they are often talking to a normal building contract.
JCT contracts are often entered into between an ’employer’ and a ‘contractor’ to assist the delivery of a construction project. They contain all pertinent terms and conditions, such as the parties’ obligations, the associated costs, and the project’s specification. This enables all parties to understand precisely what needs to be done, when it needs to be done, who will perform the task, and how much it will cost.
Crucially, a JCT contract clarifies the roles and obligations of each partner in order to facilitate the project’s delivery. In this article, JCT contracts meaning, we look at the subject in more detail.
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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.
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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.
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Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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