The Joint Contracts Tribunal, also known as the JCT, produces standard forms of contract for construction, guidance notes and other standard documentation for use in the construction industry. To put it simply, the JCT contracts are a set of standard forms that can be purchased by anyone who is looking to engage into a construction contract with another party. The Joint Contracts Tribunal (JCT) contract family is an archive of template contracts for use in documenting building projects between various parties.
The Joint Construction Board (JCT) represents a wide variety of construction and building industry stakeholders. JCT has been around since 1931, and in that time it has produced contract and guidance note formats that are used everywhere in the business world. Thus, a conventional construction contract is often referred to as a “JCT contract.”
‘Employers’ and ‘Contractors’ regularly use JCT contracts to aid in the performance of a construction project. The terms and conditions outline everything from the responsibilities of each party to the total cost of the project and every detail in between. By doing so, everyone is clear on the goals, timeline, resources, and monetary commitments involved.
Importantly, a JCT contract spells out the roles and duties of all parties involved in the project to facilitate its completion. In this article, What Does JCT Contract Stand For, we will delve deeper into the subject.
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Common forms of JCT contracts
Almost any construction job, from modest home extensions to the world’s tallest skyscrapers, can be completed under the umbrella of the JCT contracts. The two most common kinds of contracts are the design and build contract and the minor works contract.
Design and Build Contract
When working under a JCT Design and Build Contract, the contractor is held accountable for both the design and completion of the works. The developer provides detailed information about the program’s prerequisites. 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 contract type is widely used by large-scale developers because it consolidates all design responsibility into the hands of a single entity: the contractor. This means that if the works’ design is flawed, the developer need only go after the contractor to get his money back for any damages.
Minor Works Contract
For less substantial projects, JCT offers the Small Works Contract. Both versions of the JCT Minor Works Contract allow the developer to have some say in the design process, but one gives them full control and the other gives the contractor some say. There is no hard and fast rule limiting the employment of the JCT Minor Works Contract to a specific size or value of any project, despite its popularity for retail fit-outs and commercial property improvements.
What are the benefits of using a JCT contract?
Sometimes, responsibilities and duties aren’t the only things covered under JCT contracts. In fact, there are a number of benefits associated with adopting one, such as:
Standardisation of contracts
The development of JCT contracts throughout time has allowed them to address most of the issues that might be expected to arise during the course of a construction project. Most contractors and builders have dealt with these issues before, so rather than having to create a brand new contract from scratch, they are baked into the standard form. In this way, all parties can rest easy knowing that some basic precautions have been taken.
Recognisable and fair risk allocation
Since JCT contracts are so ubiquitous, everyone involved in a project understands their respective responsibilities and the risks involved. The JCT ensures that the parties are not unfairly favoured by the terms and that the risks are distributed fairly.
Resolving disputes
Let’s assume that a dispute did emerge during building. A JCT contract will have clauses that specify how to handle such disagreements. The regulations usually specify the appointment of an arbitrator or adjudicator to resolve any disputes between the parties. Hence, a JCT agreement allows the parties to avoid drawn-out and costly court actions. In the event of a disagreement, a JCT contract can serve as a useful point of reference, which is why they are often used in the construction sector.
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
What are the drawbacks 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
After a JCT contract has been established, it might be challenging for either side to make changes to the terms of the agreement. If the standard JCT contract is modified in any way, it could cause delays in the project due to the period of adjustment involved.
Inaccurate requirements
The terms of a JCT contract must be precise. The contractor’s performance may fall short of the employer’s expectations if the employer fails to adequately construct its demands. By giving the contractor “complete reign” over the design, the employer has effectively given the contractor decision-making authority under the JCT contract. Hence, the contract affords no protection to the employer if the contractor only meets the basic requirements.
Negotiations
It could be expensive and time-consuming to create a JCT contract. In the event of disagreements, the project’s schedule and budget will both grow. Negotiations break down if parties disagree on the contract’s terms and conditions.
Badly drafted contract
You run the danger of agreeing to terms and conditions that are not in your best interest if the contract has not been properly drafted, reviewed, and edited prior to signing.
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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Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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