The Joint Contracts Tribunal (JCT) publishes standard forms of building contracts that are used for construction projects in England and Wales. Whilst these standard form contracts do contain a number of important provisions and are generally considered to be drafted in a reasonably balanced way, there are a number of areas which can be and often are updated to provide enhanced protections or improve your position. In addition, the contracts are drafted generally and therefore will most likely not address the quirks and nuances of a unique project sufficiently. Therefore, while the standard form contracts can be a good starting point for most projects, some form of amendment to them is often required.
For the purposes of this article, we will focus on an unamended JCT Design and Build Contract 2016 (“JCT DB 2016”), which is designed for projects where the contractor carries out both the design and the construction work. However, many of the other JCTs may also require similar amendments to the ones we discuss below.
- Updating insurance clauses
On many projects, the default insurance provisions will not be sufficient or reflective of the way the project will be insured. Particularly on projects such as fit outs, it is important that careful consideration is given to the way the project will be insured and that the contract reflects this. For further information on this, please click here.
- Single point design responsibility
Clients will often amend the standard form contract so that the contractor takes the responsibility for all the design, including any design in the Employer’s Requirements, as this is not the case in the unamended JCT DB 2016. This is usually an expectation of funders, tenants and other interested parties, and most design and build contractors within the industry generally expect and accept the amendment. Where, for example, the parties contract on the unamended form of the JCT DB 2016, contractors will, in certain circumstances, still be responsible for the Employer’s Requirements meeting statutory requirements.
- Copyright not being subject to charges
Under the unamended JCT DB 2016, the copyright licence is conditional upon there being no monies owed to the contractor. Employers often amend this to mitigate the potential withdrawal of the copyright license in the event of a payment dispute.
- Building Safety Act (“BSA”) amends
As discussed in our previous article here, the most recent changes came into force on 1 October 2023, which implemented several new sets of regulations. Whilst we are expecting the new suite of JCTs coming out later this year to deal with these points, in the meantime it is important that the contract deals effectively and properly with the practical side of the new duties imposed on the various individuals involved, in particular where the building in question is a high-risk building (i.e. at least 18 metres tall or has at least 7 storeys; and contains at least 2 residential units).
The schedule of amendments should also include and or make reference to the general and, if applicable, additional duties for dutyholders, as well as the new competency requirements.
Limitation period
Prior to the BSA, the limitation period was six years (or 12 years if the contract was executed as a deed), and such amendments may startle contractors and designers alike, who previously would have been able to rely on such time barred defence in the case of any historic work.
However, the limitation period in relation to certain claims is now 15 years instead of the previous six. This change applies prospectively, meaning that it will apply in respect of buildings completed after 28 June 2022.
Further, the limitation period for any retrospective claims, being those involving developments that were completed before 28 June 2022, has been extended to allow up to 30 years after the completion of the dwelling to bring an action save for the exception that where that 30-year period would expire within the first year of the commencement of the Act in which case the claim must be brought within that year. It is best to then reflect these new limitation periods within the contract.
Where applicable, the parties should agree and prescribe who will be responsible for the passing of the gateway and the golden thread of information and who bears the risk of any delays in respect of these areas.
- Third party provisions
Third party agreements are agreements which either of the parties have entered into with other parties and are relevant to the project, such as funding agreements, agreements with planning authorities / other planning obligations. It is essential that the JCT is amended to ensure that the relevant party complies with all of its obligations under this third-party agreement and any breach does not affect the other party to the building contract.
This article only discusses a few suggested amendments, however, there are a number of additional amendments which we would recommend making to ensure that your contract is as tailored to your project as possible. If you need further advice on any points from this article or more generally on construction law, please contact our construction team.
