JCT contracts facilitate the process of constructing buildings. In simple terms, contracts set out the responsibilities of all parties within the construction process and their obligations, so it is clear as to what work needs to be done, who is doing it, when are they doing it by, and for how much.
JCT is the UK’s leading producer of standard forms of contract, which work on the principle of adapting established benchmark provisions to suit a wide range of projects. Generally, the law of England applies to the JCT contracts.
What is a standard form of building contract?
A standard form of building contract is a form of contract containing conditions which are applicable, or can be made applicable by the use of alternatives, to a wide range of building projects.
The JCT approach
Our approach is to produce standard forms that meet clearly defined needs and apportion risk in a way that is appropriate for the procurement methods they reflect.
The JCT suite of contracts is made up of ‘families’ of standard forms, guidance and other documents that are suitable for the majority of construction projects and procurement methods.
JCT contracts are produced to provide two key services:
- Minimise the transaction cost of entering into a contract
- Provide benchmark provisions in standard form contracts
Why a standard form?
There are many reasons why the industry and contract users benefit from the use of standard contracts:
- It saves time
- It minimises transaction cost
- It allocates risk in a fair and recognisable way
- Standard forms are designed in a way that is comprehensive, and cover most of the pitfalls which surround contractual relations in the building industry
- Standard forms reflect the benefits that are accrued through precedent – this is achieved by defining benchmark provisions which reflect a generally acceptable position in practice
- JCT contracts are developed via a cross-section of the building industry involved in the contract process. This means that clients (private and public sector), consultants, contractors, specialists, and sub-contractors are all involved in the development of JCT contracts.
Updated JCT Contracts Practice Note Highlights Risks of Amending Standard Forms
A key message within the JCT 2024 practice note ‘Deciding on the appropriate JCT contract’ concerns the risks of amending standard form contracts and encourages the avoidance of amendments as far as possible.
The practice note states:
“JCT Contracts are intended to be read as a whole, and amendments can produce unintended results when construed at law.
“Amendments should be avoided as far as practicable, particularly on points on substance. Where an amendment is considered necessary it should only be done with appropriate professional advice.”
The JCT Construct online service in the interest of transparency provides tracked change copies of contracts generated showing all changes from the published standard form text.
JCT Construct Terms & Conditions states:
“3. Permitted & Restricted Use
(10) A comparison document, showing all the changes from the original JCT text, is available and must be provided with the contract by the contract creator to all parties to the contract. A breach of this clause by Customer shall be deemed a material breach of this Agreement.”