What You Need to Know about the JCT Standard Building Contract

Even for those who work in the UK construction industry, exactly what the JCT Standard Building Contract does can be somewhat murky.

However, it is necessary to understand this contract. Back in 2011, in the UK alone, there were over 65,000 complaints about builders. The Joint Contracts Tribunal (JCT) has attempted to optimize the building process in the UK by publishing consistent contracts and guidelines that contractors and builders should adhere to.

Today, we’ll be covering the basics of the JCT Standard Building Contract, so you can gain more clarity when conducting construction projects in the UK or collaborating with UK builders.

Introduction

The Joint Contracts Tribunal (JCT), founded in 1931, is an organization that represents many interests in the construction and building industries in the UK.

It has produced many standard forms of documentation, such as guidance notes and contracts, for the UK construction sector. Note that if you do come across a reference to a “JCT contract”, it will likely refer to a standard building contract.

These contracts are, like architectural construction documents, extremely helpful, if not crucial, in construction projects.

• Usually, JCT contracts are made between contractors and employers to facilitate the building project delivery process.

• The contracts state all relevant terms and conditions, including costs, specifications, and obligations of all parties. Hence, all parties can understand what needs to be done, the due dates, the costs, and who needs to do what.

• The Standard Building Contract can be used with traditional methods of procurement where the design is finished prior to the beginning of the tendering process. You can use it along with the JCT Standard Building Sub-Contract.

Note that the JCT rewrites and revises the forms each decade or so. The most recent one is the 2016 version. This includes some new features, including revisions of the Section 4 Payment provisions, revisions of the Collateral Warranties requirements, provisions for Parent Company guarantees and grant of performance bonds, and more.

The Various JCT Contract Forms

JCT contracts are, essentially, a suite of contracts that are available for use in forming clear, legally binding and formal contracts for construction projects.

Their popularity can be attributed to them suiting a wide range of procurement options and projects, as well as their goal of being fair to each party involved.

The range of contracts can be used for everything from simple home extensions to complex, multi-million pound construction projects.

The most commonly used contracts, as listed by JCT, are the JCT Standard Building Contract, Minor Works Building Contract, and Design and Build Contract.

Benefits of Using a JCT Contract

There are many benefits to using a JCT contract beyond responsibilities and roles.

• Resolution of Disputes: JCT contracts contain information on how to deal with disputes. Often, the provisions will nominate an adjudicator or arbitrator who can make decisions regarding the parties’ accountability. Hence, there is a lower chance of having expensive and long court proceedings.

• Risk Allocation: Thanks to the contracts’ standard formatting, all parties will usually be familiar with project risks and their distribution for each side. The goal is for the terms to not favor any party.

• Standardization: Since JCT has been around for so long, their contracts take into account most challenges that could be expected to arise during a project. This saves contractors and builders the trouble of drafting a new custom contract.

• Protection Against Poor Contractors: The contracts can be used as a way of protection against poor contractors. Most eventualities, such as penalties for overdue work, are covered in the contract.

Considerations When Using a JCT Contract

It is crucial that you understand what the contracts include, especially if you are unfamiliar with utilizing them. Here are some things to consider:

• Requirements Must Be Accurate: If there is a poor assemblage of requirements, it may lead to unsatisfactory results on behalf of the contractor.

• Time & Money Involved: The cost and time-frame of the project will increase if there are disagreements, which will result in negotiations over the terms and conditions of the JCT contract.

• Lack of Flexibility: Once a contract has been made, it will be difficult to make any changes to the requirements. Furthermore, any changes made could lead to project delays and higher costs.

• Beware of Lack of Review: If, prior to signing, the agreement has been improperly reviewed or drafted, or if it has been heavily amended, you may end up agreeing to unfavorable terms.

Format & Provisions

Most JCT forms follow the following format:

• Articles of agreement

• Particulars

• Conditions

• Schedules

Conditions are often further subdivided into:

• Definitions

• Carrying out work

• Control of work

• Payment

• Variations

• Damage, injury & insurance

• Collateral warranties, third party rights & assignment

• Termination

• Disputes settlement

Conclusion

As with all contracts, you might benefit from a solicitor who can ensure that the contract has been properly reviewed and drafted.

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