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If you haven’t heard of the JCT, you’re not alone, but it’s probably because you don’t work in the construction or building industries. Even for those involved in construction, precisely what the JCT does can still sometimes prove a mystery.
A study in 2011 highlighted that in the UK alone, there were 65,000 complaints regarding builders. As if that wasn’t bad enough, the National Federation of Builders (NFB) recently stated that the perception of builders as ‘cowboys’ in the UK is still thriving to this day.
It’s this image that the Joint Contracts Tribunal, or JCT in short, has attempted to correct through publishing consistent guidelines and contracts that builders and contractors alike should be adhering to.
What is a JCT contract?
The JCT is a body that represents a wide range of interests in the building and construction industries. Since its founding in 1931, the JCT has produced standard forms of documentation, such as contracts and guidance notes, for use in the construction industry. So, if you ever come across someone referring to a ‘JCT contract’, it is typically in reference to a standard building contract.
JCT contracts are usually made between an ’employer’ and a ‘contractor’ to facilitate the process of delivering a building project. They set out all of the relevant terms and conditions, including the obligations of the parties, the costs involved and specification of the project. This allows all parties to see exactly what needs to be done, when it needs to be done, who needs to do the work and what the cost will be.
Crucially, a JCT contract provides clarity on the roles and responsibilities of each party to try to ensure a smooth delivery of the project.
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Benefits of producing a JCT contract.
The scope of JCT contracts can go further than simply roles and responsibilities. In fact, there are several benefits of employing one, including:
- Standardisation and protection over common issues. JCT contracts have come about over years, and as such, take into account most issues that can reasonably be expected to occur during a construction project. Most builders and contractors will be familiar with these issues so, rather than drafting a new and bespoke contract, these issues come built into the contract template. This offers assurance to both sides of a baseline of risk management.
- Recognisable and equitable allocation of risk. Due to the standard formatting of JCT contracts, both parties will typically be familiar with the risks of a project and how they are distributed across each side. The JCT ensures these risks are split equally across both parties, so the terms are not more favourable to one side than the other.
- Dispute resolution. Suppose in the unfortunate scenario a dispute does arise in the course of building works. In that case, a JCT contract also contains provisions on how to deal with such disputes. These provisions will often nominate an arbitrator or adjudicator who can make decisions as to the accountability of the parties. A JCT contrac therefore allows the parties to avoid more costly and drawn-out court proceedings. People within the construction industry use JCT contracts primarily to have a standard document to rely upon when a dispute arises.
- Dangers surrounding the industry are addressed. JCT contracts are also used as a means of protecting employers against poor contractors. The employer can be comfortable in the knowledge that most eventualities are covered by the contract, e.g. penalties for late completion of work or conditions. Furthermore, a JCT contract is designed in a way that the provisions of the agreement are comprehensive and cover most of the dangers which surround the construction industry.
Things to consider.
Despite JCT contracts following a standard format, it’s still important to understand what the document includes, especially if you are unfamiliar with using them. Some of the associated risks include:
- Lack of flexibility. When a JCT contract has been produced, it can be tough for either party to make a change to their requirements. Given the standard formatting of JCT contracts, any changes could lead to project delays as unfamiliarity is inserted.
- Inaccurate requirements. Any requirements stated in a JCT contract must be accurate. If an employer poorly assembles their requirements, it may result in the contractors work not satisfying the employer. For instance, if the employer gives the contractor ‘freehand’ over the design, the employer has given the contractor the ability to make decisions under the JCT contract. As a result, the employer won’t be protected by the contract, if the contractor works to the lowest possible specifications.
- Negotiations. A JCT contract can take a lot of time and money to produce. The time-frame and cost of the project will rise when there are disagreements. Disagreements result in negotiations over the terms and conditions of the contract.
- Improperly produced. If the agreement hasn’t been properly drafted, reviewed or it has been extensively amended and you sign the contract, you could be agreeing to unfavourable terms and conditions.
How can Britton and Time Solicitors help?
As with all contracts, a solicitor will ensure your contract has been properly drafted and reviewed. A misunderstanding or error can cause costly consequences, especially with large building contracts.
A JCT contract review with a solicitor will highlight any clauses hidden within legal jargon, and identify whether the contract is fair. Even if you’re happy with the contract, you will gain the peace of mind that you’re not going to have any future problems.
Regarding drafting a contract, our solicitors will ensure that your contract is properly written and legally binding. As a result, there will be no errors in the contract and the chance of contestation will be minimised. Furthermore, a solicitor will negotiate your JCT contract to ensure it’s in line with your desires.
To find out more about JCT contracts please don’t hesitate to visit our independent legal advice page or call our solicitors directly on 020 3007 5500.
Great post on JCT contracts from Construction solicitors
Thank you for the comment! I’m happy you found our blog on JCT contracts useful.
Hi – a couple of questions with the JCT contract which I am sure you will know off the top of your head:
1. Does it stipulate that all works should be done to British Building Regs?
2. If the builder “forgets” to invoice for something. What is a reasonable period to include this?
Sorry – these seem rather important points and can’t find them in the JCT.