JCT_Suite.pdf

7/28/2019 JCT_Suite.pdf

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Changes, Revisions and Amendments Arising from the

Update to the JCT Suite of Contracts published in the

JCT 05 Form

CPD Pack

Equivalent to 2 hours CPD

Published May 2006Prepared by D Doig


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Index

Introduction...............................................................................................................................................................................................3Summary of Main Changes.....................................................................................................................................................................3

General Trends....................................................................................................................................................................................3Changes to Layout, Terminology & Numbering..........................................................................................................................3Relevant Events....................................................................................................................................................................................4Third Party rights.................................................................................................................................................................................5Local Authority Contracts ................................................................................................................................................................5Payment notices & withholding payment ......................................................................................................................................5Retention...............................................................................................................................................................................................5 Dispute resolution...............................................................................................................................................................................5Adjustment of Completion Date.....................................................................................................................................................6Sectional Completion......................................................................................................................................................................... 6No Nomination provisions ...............................................................................................................................................................6Contractors Design Portion............................................................................................................................................................6Contractors Design Submission .....................................................................................................................................................6Professional Indemnity Insurance....................................................................................................................................................7Contractors Obligations...................................................................................................................................................................7

The New Schedule of Contracts and Subcontracts........................................................................................................................ 8JCT Standard Building Contract with Quantities 2005................................................................................................................11

General Changes ...............................................................................................................................................................................11Specific Changes.................................................................................................................................................................................11Important Changes and Implications ............................................................................................................................................13

JCT 2005 Design and Build Contract................................................................................................................................................14General Changes ...............................................................................................................................................................................14Specific Changes to the Design and Build form.........................................................................................................................14Important Changes and Implications ............................................................................................................................................14

JCT Intermediate Building Contract 2005.......................................................................................................................................15General Changes ...............................................................................................................................................................................15Specific Changes to the Intermediate Building form................................................................................................................15Significant Items that have not changed.......................................................................................................................................15Important Changes and Implications ............................................................................................................................................15

JCT Minor Works Building Contract 2005 .....................................................................................................................................16General Changes ...............................................................................................................................................................................16Specific Changes to the Minor Works Building form ..............................................................................................................16Important Changes and Implications ............................................................................................................................................17

CPD Questionnaire...............................................................................................................................................................................18


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Introduction

The Joint Contracts Tribunal (JCT) has recently revised and published their new standard forms of contract as a

new suite of JCT 05 contracts.

The style of the various forms of contract has been revised to make identifying the appropriate contract a morestraightforward process, using colour coding and single and double squares on the cover to denote main andsubcontracts respectively.

Attempt has been made to standardise the contracts and several new contracts have been introduced to reflectchanges in the industry since the previous edition, for example, the introduction of a new Framework Agreement.There is a greater procurement range and effort has been made to simplify terminology and reduce legalese toenable ease of understanding and administration.

This CPD pack provides a summary of the main changes to the contracts compared with the JCT 98 edition. Uponcompletion of this pack you should have a knowledge and understanding of:

The Main Changes between JCT98 and JCT05The implications of any changes on the role of the Contract Administrator and or Quantity SurveyorThe uses and applications of the different JCT forms

Summary of Main Changes

General Trends

The following general trends have become apparent in the new form:

Greater clarity and decisiveness is required of the Contract Administrator (CA) , for instance the CA is required toprovide a specific response in respect of every notice and for every Relevant Event.There is a reduced opportunity for delay and deliberation of both the CA and the Contractor. There is a

requirement to state decisions clearly and in writing with sufficient detail considered to clarify the rights of Partiesto seek adjudication of disputes.

The contracts are more complete in their standard form with supplements and appendices incorporated in themain document

A thorough set of Articles of Agreement, including a detailed set of Contract Particulars which resolve to defaultpositions rather than blank spaces to reduce uncertainty

A reduction in the time it takes to produce contract documents for tender and subsequent execution due to theholistic approach taken in the new forms reducing the risk of forgetting to include an appendix, etc.

Changes to Layout, Terminology & Numbering

The suite of contracts has been revised to incorporate the Contract Particulars and Articles which are now foundat the beginning of each contract, with notes to assist with the execution. Insurance options and fluctuations aremoved to the schedules and there are a greater number of definitions, such as:

Purchaser and Tenant Rights

Relevant Omission

Insolvent

Contractors Persons


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In addition, certain terms have been changed, such as Defects Liability Period, which is now Rectification Periodand Determination which has been amended to Termination. Also, the Certificate of Completion of MakingGood Defects is now simply the Certificate of Making Good.

The 1998 and the 2005 forms permit a change to the completion date to take account of matters beyond thecontrol of the Contractor and also to take account of work being withdrawn from the Contractor, with theconsequence that the period of time for completion of the works could either increase or be reduced. Thesesituations are now covered under the heading Adjustment of Completion Date rather than Extension of Time. Asa result of such changes, standard documentation such as certificates and tender documentation will have to berevised to incorporate the new terminology.

The conditions have been grouped into more logical sections and the order of the clauses has been changed.

Order of Clauses are changed and grouped as:

Section 1 Definitions and interpretationSection 2 Carrying out the worksSection 3 - Control of the worksSection 4 PaymentSection 5 VariationsSection 6 Injury damage and insuranceSection 7 Assignment third party rights and collateral warrantiesSection 8 TerminationSection 9 Settlement of Disputes

Relevant Events

The Relevant Events which adjust the Completion Date have been reviewed, with a single catch-all term used tosweep up several Relevant Events that were previously stated individually. The phrase used within the contract is:

Any impediment, prevention or defaultby the Employer

The following Relevant Events have been deleted from the contract:

o Execution of work not forming part of the contracto Supply of materials and good for the employero The contractor not receiving in due time instructions which it applied for in writingo Failure by the Employer to give ingress or egress from the Siteo Non compliance by Employer with CDM Regulationso Failure by Architect to comply with Information Release Scheduleo Inability, beyond the contractors control (and which he could not foresee) to secure labour and

goods or materialso Any change in Statutory Requirements which affects the workso Delay by Nominated Subcontractors and Nominated Suppliers (25.4.7)o Delay due to shortage of labour or materials (25.4.8)

The following Relevant Events remain unaffected, delays caused by:

o Architects variationso Architects Instructions re discrepancies, postponement, provisional sums (except defined work),

antiquities, opening up workso Deferred possessiono Approximate quantities where quantities are inaccurateo Suspension for non payment


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o Delay by Statutory Authoritieso Exceptionally adverse weathero Specified perilso Civil commotion, terrorismo Strikes, lock outso Exercise of Statutory powers

Third Party rights

The Contract Particulars allow for the recording of the names of those purchasers, tenants and funders and subcontractors to whom third party rights may be conferred. The default position is that there are to be no rights forthird parties. If third party rights are required then Part 2 of the Contract Particulars must be completed to enablewhichever of the two mechanisms is required.

The first method is the traditional method of providing collateral warranties in favour of the third party and theJCTs standard form collateral warranties are now included in Design and Build 2005 and Standard BuildingContract 2005, rather than being separate supplements.

The second method is a new approach and obviates the need for a collateral warranty. JCT 2005 provides underSchedule 5 that Parties may make use of the Contracts (Rights of Third Parties) Act 1999, by giving notice of the nameand nature of each interest.

Local Authority Contracts

The JCT 98 contract required separate forms of contract for employers in the private sector and the public sector.The 2005 Standard Building Contract provides for both public and private sector employers and no separateprivate or local authority versions are included within JCT 05

Payment notices & withholding payment

Whilst there has been no change to the payment mechanism itself, in the previous edition, where the employerfailed to serve a withholding notice a minimum of five days before the final date for payment it was bound to paythe contractors application as submitted. Under the JCT 05 version the contractor is now paid only what is dueunder the valuation provisions of the contract.

The statement of the requirement for a notice concerning what sums are to be paid and the issue of a withholdingnotice have been sharpened. Whilst both should be issued, one notice or either notice sufficiently detailed andwith all the requisite information will be deemed sufficient, if served correctly.

RetentionWhilst retention remains 5% for the Minor & Intermediate forms, the standard level of retention has been reducedfrom 5% to 3% for Standard Building Contract and the Design and Build form.

Dispute resolution

The JCT 05 forms recognise the increasing utilisation of mediation, and the new forms contain a clause that allowsfor consideration of mediation of disputes as an impartial method of settling disputes, where both parties agree.

The Adjudication provisions have been simplified from previous editions and are now carried out under the Schemefor Construction Contracts, with provision for selection of a specific Adjudicators Nominating Body in theContract Particulars.


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There has been a change to the default dispute resolution model from arbitration to litigation. Although the formsprovide an option for disputes to be arbitrated should the parties require.

Adjustment of Completion Date

The Architect / Contract Administrator (ACA) still has a 12-week period in which to respond to a request to theAdjustment of Completion Dare, however the date for completion no longer undercuts that period as the duty isnow to endeavour to complete the assessment before the date for completion.

The role of the ACA has become more detailed and the response expected of the ACA to a notice of a RelevantEvent is now more comprehensive. He/she must now state what award of time is given against each of the RelevantEvents notified.

Sectional Completion

The Contract Particulars refer to Sectional Completion dates and, if these are inserted within the Particulars, the

Contract will operate to give effect to the Parties intentions.

No Nomination provisions

The Design and Build and Standard Building forms no longer make provisions for nominated sub-contractors or suppliers.

Contractors Design Portion

There is no separate Contractors Design Portion Supplement; design clauses have been amalgamated into theContract Particulars. The separate Contractors Design Portion Supplement is no longer applicable and is includedin the Main Contract. If required, details provided in the recitals:

o Employers Requirementso Contractors Proposals

o Limit of Contractors Design Liabilityo Professional Indemnity Insurance details (NEW)

Contractors Design Submission

A Contractors Design submission procedure is provided, as follows:

o The Contractor prepares and submits two copies of each of the Contractors Design Documentso Within 14 days from the date of receipt, the Architect/Contract Administrator returns one copy to the

Contractor marked A, B or Co Where a Contractors Design Document is returned marked A, the Contractor shall carry out

the Work.o Where marked B, the Contractor may carry out the Work provided comments are

incorporatedo Where marked C, the Contractor takes account comments on it and resubmits ito The Contractor must not carry out any work in accordance with a Contractors Design

Document marked C.o If the response is not within the time stated, the design is regarded as marked Ao Where the Architect/Contract Administrator marks a Document B or C, he/she indicates why he/she

considers that it is not in accordance with the contract.


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Professional Indemnity Insurance

There is a new provision for professional indemnity insurance. The required amount of cover is inserted in the

Contract Particulars. If no alternative type of cover is selected then the cover is for the aggregate amount for anyperiod of insurance rather than claims arising out of any one event. Where no period of expiry is stated, this is sixyears from the date of practical completion. Insurance must be taken out immediately following execution of thecontract. There is also provision to insert a level of cover for pollution and contamination claims.

Contractors Obligations

No change except for reference to Contractors Design Portion.No obligation to check Employers design (clause 47 guide)Contractors design responsibility same as that of ArchitectMust comply with Architects Instructions for integration of Contractors design work with design works as awhole

Important Changes and Implications:

1. If you are familiar with clause reference in JCT 98 you will need to take care to verify the reference underthe new form, as much of the running order has changed

2. The Appendix and Schedule of contract specific information found in the 98 form has been replaced byThe Articles of Agreement found at the beginning of the Contract, reducing the possibility ofinconsistency or incomplete contract information all relevant information is now contained within thecontract itself

3. Watch out for changes in terminology, such as, Rectification Period and Termination4. Standard documents such as certificates and tender documents will need to be revised to incorporate the

new terminology5. Provision within the Contract Particulars for rights of third parties6. There are no separate Local Authority Contracts the Standard Forms have been adapted for use on

both public and private sector projects7. Changes to retention provisions within the Standard and Design and Build forms8. Option for mediation as the first method of resolving a dispute has been introduced9. The default provisions of dispute resolution have been changed from arbitration to litigation10. The adjudication provisions have been simplified to comply with the Scheme for Construction Contracts11. Specific responses must be given to all Relevant Events whether or not it requires an Adjustment to

Completion Date12. Any dates for Sectional Completion should be included within the Contract Particulars


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The New Schedule of Contracts and Subcontracts

The New Schedule of Contracts and Subcontracts is detailed below, using JCT colour coding to denotecontract type:

Standard Building Contracts used for larger projects where detailed contract provisions are necessary andwhere a Contract Administrator or Quantity Surveyor will administer the conditions

Standard Building Contract With Quantities SBC/Q

Standard Building Contract With Approximate Quantities SBC/AQ

Standard Building Contract Without Quantities SBC/XQ

Subcontracts

Standard Building Subcontract With Subcontractors Design Agreement SBCSub/DA Standard Building Subcontract With Subcontractors Design Conditions SBCSub/DC

Standard Building Subcontract Agreement SBCSub/A Standard Building Subcontract Conditions SBCSub/CIntermediate Contracts used for proposed works are of simple content involving the normal recognisedtrades and skills of the industry and where a Contract Administrator or Quantity Surveyor will administer theconditions

Intermediate Contract IC

(NEW) Intermediate Contract With Contractors Design ICD

Subcontracts

Intermediate Subcontract Agreement ICSub/A Intermediate Subcontract Conditions ICSub/C (NEW) Intermediate Subcontract With Subcontractors Design Agreement ICSub/DA (NEW) Intermediate Subcontract With Subcontractors Design Conditions ICSub/DC

Intermediate Named Subcontract Tender and Agreement ICSub/NAM Intermediate Named Subcontract Conditions ICSub/NAM/C Intermediate Named Subcontractor/Employer Agreement (ICSub/NAM/E)

Minor Works Building Contracts used for simple works designed by or on behalf of the Employer and wherea Contract Administrator or Quantity Surveyor will administer the conditions

Minor Works Building Contract (MW)

(NEW) Minor Works Building Contract With Contractors Design (MWD)

Design and Build Contractsused where detailed contract provisions are necessary where the Contractorcarries out and completes the work as well as the design and where the Employer employs and agent to administerthe conditions

Design and Build Contract (DB)

Subcontracts

Design & Build Subcontract Agreement (DBSub/A) Design & Build Subcontract Conditions (DBSub/C )

Major Project Construction Contracts used for major works where the Employer regularly procures largescale works and where the Contractor is experienced and able to take greater risks than those arising under other

JCT forms, and where the Contractor will also complete the design. The parties will have their own established


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procedures and only limited procedures are required under the contract and the Employer will have provided hisrequirements to the Contractor. designed by or on behalf of the Employer and where the Employer appoints arepresentative to exercise the powers and functions of the Employer under the Contract. Can also be used wherethe works are to be carried out in sections

Major Project Construction Contract (MP)

Subcontracts

Major Project Subcontract (MPSub)

Construction Management Contracts used where the client is to enter into separate trade contracts andwhere a Construction Manager is appointed to administer the conditions on behalf of the Client.

Construction Management Trade Contract (CM/TC)

Construction Management Agreement (CM/A)

Construction Management Tender (CM)

Contraction Management Trade Contractor Collateral Warranty for a Funder (CMWa/F)

Contraction Management Trade Contractor Collateral Warranty for a Purchaser or Tenant (CMWa/P&T)

Management Building Contracts used for large scale projects requiring and early start on site where worksare designed by or on behalf of the Employer but full design information is not available before the workscommence and where the design is of a sophisticated or innovative nature requiring specialists. The Employer willprovide the Contractor with Drawings and Specification and where a management contractor is to administer theconditions.

Management Building Contract (MC)

Subcontracts

Management Works Contract Tender and Agreement (MCWK) Management Works Contract Conditions (MCWK/C) Management Works Contractor/Employer Agreement (MCWK/E)

Prime Cost Building Contracts used for projects requiring an early start on site where the works aredesigned by or on behalf of the Employer but where it is not possible to prepare full design information beforeworks commence and where detailed provisions are necessary and the Employer is to provide a specificationshowing items of work and where Quantity Surveyor and Contract Administrator is to administer the conditionson behalf of the Employer

Prime Cost Building Contract PCC

Measured Term Contract used where the Employer has regular maintenance and minor work to be carriedout by a single contractor for a defined period of time. Works are instructed from time to time and measured andvalued on the basis of a Schedule of Rates and where a Contract Administrator and Quantity Surveyor administerthe conditions on behalf of the Client

Measured Term Contract MTC

Housing Grant Works Building Contract used for works to a domestic building and where works aresimple with design being undertaken on behalf of the Employer and where a grant is paid by a Local Authority inrespect of the work. The Employer provides drawings and specification and a Contract Administrator is appointedto administer the conditions

Housing Grant Works Building Contract (HG)


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Adjudication Agreement appropriate for the appointment of an adjudicator in respect of any constructiondispute arising under any JCT Contract, Subcontract or Agreement

Adjudication Agreement (Adj) Adjudication Agreement Named Adjudicator (Adj/N)

Framework Agreement appropriate for the procurement of construction or engineering related works over aperiod of time and for use alongside most standard forms of contract. The non binding forms is used where theparties do not wish to enter into a legally binding framework but wish to create a collaborative workingenvironment

(NEW) Framework Agreement FA

(NEW) Framework Agreement (non binding) FA/N

Generic Contracts appropriate where the main contract is a JCT form and used for a small package of workwith straight forward content and low risk.

Subcontracts Short Form of Sub Contract (ShortSub)

Sub-sub contract (SubSub)


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JCT Standard Building Contract with Quantities 2005

General Changes

JCT Standard Building Contract with Quantities 2005 replaces both JCT Standard Form of Building Contract 1998private with Quantities, and the Local Authority with Quantities version.

The JCT 98 form was weighty, and was difficult to read as it included many amendments and addenda rather thanissue new revisions to accommodate new terms. Further, the JCT 98 form tended to incorporate new terms ratherthan remove old terms that were perhaps no longer appropriate for the industry. An example of the removal ofterms which are not deemed appropriate or are seldom used is the removal of all nomination of sub-contractors inthe new JCT 05 form.

The JCT 05 form has been redrafted and reorganised into plain English, and is more thoroughly subdivided intosections which described by short titles. The titles are for convenience only and not for interpretation. The runningorder of the clauses has substantially changed, although the essential features of the clauses remain unchanged.

A number of familiar terms have been revised. For instance the contract is now administered by anArchitect/Contract Administrator rather than by an Architect. Also, there is now an Adjustment to theCompletion Date rather than an Extension of Time.

A number of the previous communication and notices have been given names including Non-CompletionCertificate, and some of the old terms have been changed eg. Practical Completion Certificate replacesCertificate of Practical Completion, and Certificate of Making Good replaces Certificate of Completion ofMaking Good Defects. The contract can now be terminated rather than the previous determination.

The default position of the contract form has changed. JCT 98 provided a series of options to the user whichrequired a selection to be made or the consideration of including one of the further supplements. In many instances

JCT 05 has moved away from this, and provides a default position from which the parties must specifically chooseto deviate if they require other options to be incorporated. By using a standard default position, it is less likely thatthe contract will be incorrectly formulated as a result.

Specific Changes

The payment system remains unchanged but is clearer with regard to payment notices and withholding notices.This follows the Housing Grants, Construction and Regeneration Act and requires two notices to be issued by theACA after the Interim Certificate has been issued by the ACA a payment notice and a withholding notice. If careis taken to ensure that reasons for withholding are given, then the payment notice may also serve as thewithholding notice and one the initial notice is required. The Employer is responsible for issue of these notices, notthe ACA.

The standard sum for retention has been decreased from 5% to 3%.

The JCT 05 form includes a new section called Contract Particulars at the front of the document which includesall project specific information and is frequently completed by hand. JCT 98 placed most of this information at theend of the contract and spread throughout the Recitals, Articles and main text of the contract.

Whilst JCT 98 provided for arbitration in all disputes under the contract, JCT 05 has changed the default positionfrom arbitration to litigation. Obviously, the parties can amend the default position if they prefer to resolvedisputes via arbitration. The adjudication process has been changed and is now carried out under the rules of theScheme for Construction Contracts Regulations 1998 rather than JCTs own rules. The contract also includes anew clause which suggests that the parties consider the mediation of disputes.


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It has been common practice over recent years to accommodate the needs of third parties where subcontractorsdesigners and the like entered into collateral warranties with funders and purchasers. The need for such warrantieshas been slightly tempered due to the introduction of the recent Contract (Rights of Third Parties) Act 1999, whichprovide certain rights to third parties such as funders and purchasers. In JCT 98, if you required a collateralwarranty it was necessary to purchase the standalone supplement and incorporate the terms on a job by job basis.Now JCT 05 in section 7 includes a standard set of rights for each kind of third party that typically requires them.The rights themselves are set out in Schedule 5 and may take the form of collateral warranties or alternatively byadoption of the Contract (Rights of Third Parties) Act 1999. The provision of rights to third parties is notmandatory but must be specifically selected in Part 2 of the Contract Particulars.

Under JCT 98 a contract would automatically terminate in the event that a party became insolvent. This haschanged in JCT 05 under which a contract will not automatically terminate unless a notice of termination is served.

Importantly, the parties can now agree the methods of electronic communications by completing the ContractParticulars section. This could mean that email can now be deemed a contractual method of serving notice.

The JCT 05 includes provisions that were previously addenda or separate supplements to the main contract. Theseare the Sectional Completion Supplement, the Contractors Designed Portion Supplement and also the CollateralWarranties and Fluctuations.

Like JCT 98 the new JCT 05 Standard Building Contract is a contract for which the Employer is expected toemploy its own design team. However, unlike JCT 98, the new form includes facility for an element of design workto be carried out by the Contractor the Contractors Design Portion. A key distinction for the new StandardBuilding Contract is that the Contractor is now obliged to obtain PI insurance, which was not a previousrequirement of the 1998 Contractors Design Portion.

The new JCT 05 Standard Building Contract includes provision to allow the adjustment of the time for completionto preserve the Employers right to the deduction of liquidated damages. The Relevant Events giving rise to the needto adjust the Completion Date have been revised and updated. For instance the Contractor is now morethoroughly responsible for his supply chain including labour and materials as the clauses relating to labour relationsand strike difficulties have been deleted. In addition, The ACA must now state reasons when adjusting theCompletion Date.


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Important Changes and Implications

Removal of all terms relating to nomination of sub-contractors

More easily understood and drafted in plain English

A number of familiar terms have been amended including Architect/Contract Administrator andAdjustment to the Completion Date

JCT 05 includes a default position on many clauses which means that there is less likelihood of errorswhen formulating the contract

After issue of the Interim Certificate by the ACA, the Employer is required to issue a Payment Notice andsubsequent Withholding Notice if appropriate

The standard sum for retention has been decreased from 5% to 3%.

As the contract specific information is now included in one section Contract Particulars rather than inseparate sections, Recitals, Articles, etc., contract preparation should be eased.

The default dispute provision has been amended from arbitration to litigation

The new form includes a standard set of rights to third parties

Contracts will not automatically terminate in the event of insolvency, unless a notice of termination isserved

Email can now be deemed a contractual method of serving notice which can ensure correspondence canbe issued efficiently and allow smooth progress of the contract

The new form includes the Contractors Design Portion to allow an element of the design to beundertaken by the Contractor

The Contractor will no longer be entitled to a Relevant Event for difficulties in obtaining labour due tostrike action

The ACA must state reasons when adjusting the Completion Date. Care must be taken to updateprocedures and proforma used by the ACA under JCT 98 forms


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JCT 2005 Design and Build Contract

General Changes

JCT have introduced a number of key concepts and changes from the previous 1998 edition. These changes andprinciples are found across the whole suite of 2005 contracts. These general changes are not repeated below. Thereader should refer to the general changes detailed above relating to the JCT Standard Building Contract withQuantities 2005 above.

Specific Changes to the Design and Build form

Under the 1998 form, the payment provisions provided that the Contractor was entitled to the sums containedwithin his application for payment, if the Employer failed to comply with the payment provisions and not issue apayment notice or withholding notice. This caused many arguments as to the correctness of the various noticesissued by the Employer. The new Design and Build form provides that if the notices are not issued correctly and

yet sums are withheld, then in any event the Contractor is only ever entitled to be paid the amount due ratherthan the sums he states in an application for payment.

The Design and Build form clearly places an obligation on the Contractor to do the design. The 1998 form did notrequire the Contractor to take out design liability insurance. The 2005 version provides an option for theContractor to take out such insurance through an inclusion in the Contract Particulars which include arequirement for specifying the minimum level of the insurance to be maintained. If the Contract Particulars are notcompleted then the Contractor is not obliged to take out the insurance. Further, the obligation is not absolute inthat if the insurance is not available at reasonably commercial rates then the Contractor does not need to take outthe insurance.

The new Design and Build form includes provision to enable the savings or additional cost associated with designwork arising out of a variation to be included in the valuation of any variation. As a result of this amendment, thecost consequences of varying the works will be to the Employers account.

The new Design and Build form adopts a Contractors Design Submission Procedure that was previously stated inthe 1998 Contractors Design Portion Supplement. The Contractors Design Submission Procedure is found inSchedule 1 of the contract. The procedure is mandatory and requires that the Contractor issues all drawings to theEmployer before they are used. The Employer then has 14 days to review the drawings. If he fails to pass commentthen the Contractor may proceed and use the drawings. It should be noted that this does not in any way relievethe Contractor from ensuring his design is in full compliance with the contract.

It should be noted that the JCT 05 Design and Build contract, like its predecessor, still does not include provisionswhich allow the Employers design team to be effectively novated into the design and build contractors team.

Further, the design and build forms do not create roles or responsibilities for an Architect, Contract Administrator,Quantity Surveyor or Project Manager. As these roles are essential to any project being delivered successfully, theroles are ordinarily undertaken by employees of the Contractor, or as a subcontractor to him


The Contractor is now only ever entitled to sums properly due, even if the Employer fails to issue therequisite payment and withholding notices.

The Contractor is required to take out design liability insurance but only if the ACA has specificallyincluded the requirement in the Contract Particulars

The new contract requires the Contractor to issue design to the Employer who has 14 days to comment.This should aid procedure.


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JCT Intermediate Building Contract 2005

The Intermediate Building Contract 2005 replaces the JCT Intermediate Form of Building Contract 1998. This formhas been extensively used over recent years and bridges the gap between the JCT Standard Building Contract andthe simple minor works forms.

General Changes

There are a limited number of substantive changes in the new form, and the changes generally are generic andfollow the general changes to the 2005 suite as a whole.


Changes specific to the Intermediate Building Contract are considered below.

Specific Changes to the Intermediate Building form

Clause 5.4 of the new Intermediate form has clarified the limited number of instances where daywork isappropriate for charging, and requires that in such instances daywork sheets be provided as evidence of the timespent.

The new form also provides that an advanced payment bond be issued by the Contractor in instances where theEmployer provides an advance payment.

Significant Items that have not changed

Retention under the new form remains at 5% despite the fact that it has been reduced to 3% in both the newStandard Building Contract and Design and Build forms.

The new contract retains a method for appointing a Named Subcontractor, similar to the process in the previous1998 form. Other new JCT forms have dispensed with the naming provisions.


The new form clarifies the instances when daywork can be used for valuing works

Retention remains at 5% in the new form


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JCT Minor Works Building Contract 2005

The JCT Minor Works Building Contract 2005 replaces the JCT Agreement for Minor Building Works 1998. Thisform is probably the most popular form within the JCT suite of documents. Indeed, as the JCT have now issued anew separate Minor Works contract with provisions for Contractors design, this popularity is likely to snowball.

General Changes

As with the Intermediate Building Contract, there are a limited number of substantive changes in the new form, andthe changes generally are generic and follow the general changes to the 2005 suite as a whole.


Changes specific to the Minor Works Building Contract are considered below.

Specific Changes to the Minor Works Building form

The contract layout has been improved and is now set out in one column of text rather than the previous twocolumns of text. There have been great economies in the text wording. For instance, the Defects Liability Periodhas become Rectification Period.

The payment process has been stated with greater clarity, which now makes clear that either, both, or only onecertificate can act as a withholding notice so long as it has sufficient detail and it served at the correct point in time.

The contract specific information is embodied into the Contract Particulars at the beginning of the contract ratherthan scattered throughout the previous form. The new form also includes default provisions for many of the issues.

For instance the ACA automatically becomes the planning supervisor for the purpose of the CDM Regulationsunless this default position is specifically altered.

The adjudication provisions have changed substantially from those contained in the 1998 form. The new formprovides that the parties may include an Adjudicator Nominating Body or a specific named Adjudicator in theContract Particulars. If the Contract Particulars are left blank then either party wishing to have a disputeadjudicated may select any of the nominating bodies stated in the contract to make a nomination. The JCTAdjudication Rules have been changed in favour of the Scheme for Construction Contracts. The default position forall disputes has also been changed from arbitration to litigation. Again, the contract includes provision to suggestthat the parties should consider mediation in the first instance.

If the Employer terminates the contract, under the new JCT 05 form the Employer is now obliged to prepare anaccount to determine the sums due rather than wait for the Contractor to take action.

The new form requires the completed contract to include the company registration number in the contract toprovide an absolute way of identifying the contracting entity.

Importantly, as the Minor Works Building form is used for minor works where the parties are reluctant to seekguidance from professional advisors when executing the contract, there are better and clearer guidance notescontained within the contract which should assist.


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Contract now drafted in a single column of text easing reading

Notice of withholding can be provided using one or both of the normal certificates if sufficient detail isincluded

There is a default position stating that the ACA automatically becomes planning supervisor for CDMRegulations


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CPD Questionnaire

1. In which 2 key areas have the JCT contracts been amended to simplify use?

2. Give three examples of changes in terminology which will necessitate amendments to standard documentspreviously issued under the 98 form:

3. What is the default dispute position within the new contracts?

4. How have the requirements of the Contracts (Rights of Third Parties) Act 1999 been incorporated in thenew form?

5. What key changes within the contracts will influence the way the Contract Administrator/QuantitySurveyor deals with an Adjustment to Completion Date?

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