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Why JCT Contracts provide security in Construction

jct-contractsJCT stands for the Joint Contract Tribunal. Established in 1931 it produces the standard forms for contractors working within the construction industry, including guidance notes and standard documentation. All of the publications it produces are approved by 8 professional bodies that represent the industry including the Association of Consulting Engineers, the British Property Federation, the Construction Confederation, the Local Government Association, the National Specialist Contractors Council, the Royal Institute of British Architects, the Royal Institution of Chartered Surveyors and the Scottish Building Contract Committee.

How JCT Contracts began

The original intention of the JCT was to establish a standardised form of building contract. The JCT Contracts come in various forms and degrees applying to different stages and individuals within the project development. This body of form is called the Suite of Standard Forms and includes those necessary for procurement, agreements, the main contract and subcontracts, design agreements, tender documents, bonds and rules as well as providing advice and guidance over the right document to use for a particular project or stage of a project.

Every ten years, JCT Contracts are revised and rewritten to ensure they are up to date with current legislation and procedure. The last principal amendments were in 2009. A breakdown of the main JCT Contracts include the main project form, the standard form of building contract, along with an intermediate form of building contract a minor works agreement, a management contract, design and build contract and construction management documentation. In 2007, a new JCT Contract was produced to deal with joint ventures or collaborative working. It was entitled “Contracting excellence”.

Criticisms and amendments

One criticism of JCT Contracts is that they are often detailed and difficult to understand. They are ideal for complex and large jobs where there are a number of different parties working on the project but were felt to be a little unwieldy for smaller jobs. JCT then launched a series of contracts designed specifically for smaller projects, largely those projects defined as domestic, that was targeted at a consumer market. Called “Building Contract for the Homeowner” they are designed for domestic jobs when dealing with builders, contractors or looking for a contract on home repairs and maintenance.

JCT Contracts have become a guide and ethos for the construction industry establishing standard practice. This includes payment, for example JCT Contracts tend to avoid payment upfront until the standard of completion has been certified by a third independent party, who is usually an architect or surveyor. The invoice can only be produced once this certificate has been provided. JCT Contracts also defined the protection of clients against risk, including liquidated and ascertained damages, for example of the contractor goes bankrupt before the project is completed. It sets down the risk to the client in the costs incurred if the project is not completed. Principally JCT Contracts state that if the obligation on the contract is not met then the client does not have to meet the obligation of payment.

jct contracts constructionJCT Contracts ensure the protection of the client and the contractor, regulating dispute and helping within the interpretation of different aspects of the contract. The JCT also provides support for the amendment of project contracts and provides specific advice on bringing a contract from draft to completion.

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