Sunteți pe pagina 1din 18

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 2006 Prepared by D Doig

Index
Introduction............................................................................................................................................................................................... 3 Summary of Main Changes..................................................................................................................................................................... 3 General Trends .................................................................................................................................................................................... 3 Changes to Layout, Terminology & Numbering.......................................................................................................................... 3 Relevant Events .................................................................................................................................................................................... 4 Third Party rights................................................................................................................................................................................. 5 Local Authority Contracts ................................................................................................................................................................ 5 Payment notices & withholding payment ...................................................................................................................................... 5 Retention ............................................................................................................................................................................................... 5 Dispute resolution............................................................................................................................................................................... 5 Adjustment of Completion Date..................................................................................................................................................... 6 Sectional Completion ......................................................................................................................................................................... 6 No Nomination provisions ............................................................................................................................................................... 6 Contractors Design Portion............................................................................................................................................................ 6 Contractors Design Submission ..................................................................................................................................................... 6 Professional Indemnity Insurance .................................................................................................................................................... 7 Contractors Obligations................................................................................................................................................................... 7 The New Schedule of Contracts and Subcontracts........................................................................................................................ 8 JCT Standard Building Contract with Quantities 2005 ................................................................................................................11 General Changes ...............................................................................................................................................................................11 Specific Changes.................................................................................................................................................................................11 Important Changes and Implications ............................................................................................................................................13 JCT 2005 Design and Build Contract................................................................................................................................................14 General Changes ...............................................................................................................................................................................14 Specific Changes to the Design and Build form.........................................................................................................................14 Important Changes and Implications ............................................................................................................................................14 JCT Intermediate Building Contract 2005 .......................................................................................................................................15 General Changes ...............................................................................................................................................................................15 Specific Changes to the Intermediate Building form ................................................................................................................15 Significant Items that have not changed.......................................................................................................................................15 Important Changes and Implications ............................................................................................................................................15 JCT Minor Works Building Contract 2005 .....................................................................................................................................16 General Changes ...............................................................................................................................................................................16 Specific Changes to the Minor Works Building form ..............................................................................................................16 Important Changes and Implications ............................................................................................................................................17 CPD Questionnaire ...............................................................................................................................................................................18

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 more straightforward process, using colour coding and single and double squares on the cover to denote main and subcontracts respectively. Attempt has been made to standardise the contracts and several new contracts have been introduced to reflect changes 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 to enable ease of understanding and administration. This CPD pack provides a summary of the main changes to the contracts compared with the JCT 98 edition. Upon completion of this pack you should have a knowledge and understanding of: The Main Changes between JCT98 and JCT05 The implications of any changes on the role of the Contract Administrator and or Quantity Surveyor The 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 to provide 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 Parties to seek adjudication of disputes. The contracts are more complete in their standard form with supplements and appendices incorporated in the main document A thorough set of Articles of Agreement, including a detailed set of Contract Particulars which resolve to default positions 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 the holistic 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 found at the beginning of each contract, with notes to assist with the execution. Insurance options and fluctuations are moved to the schedules and there are a greater number of definitions, such as: Purchaser and Tenant Rights Relevant Omission Insolvent Contractors Persons 3

In addition, certain terms have been changed, such as Defects Liability Period, which is now Rectification Period and Determination which has been amended to Termination. Also, the Certificate of Completion of Making Good 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 the control of the Contractor and also to take account of work being withdrawn from the Contractor, with the consequence that the period of time for completion of the works could either increase or be reduced. These situations are now covered under the heading Adjustment of Completion Date rather than Extension of Time. As a result of such changes, standard documentation such as certificates and tender documentation will have to be revised 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 interpretation Section 2 Carrying out the works Section 3 - Control of the works Section 4 Payment Section 5 Variations Section 6 Injury damage and insurance Section 7 Assignment third party rights and collateral warranties Section 8 Termination Section 9 Settlement of Disputes

Relevant Events
The Relevant Events which adjust the Completion Date have been reviewed, with a single catch-all term used to sweep 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 o o o o o o o o o Execution of work not forming part of the contract Supply of materials and good for the employer The contractor not receiving in due time instructions which it applied for in writing Failure by the Employer to give ingress or egress from the Site Non compliance by Employer with CDM Regulations Failure by Architect to comply with Information Release Schedule Inability, beyond the contractors control (and which he could not foresee) to secure labour and goods or materials Any change in Statutory Requirements which affects the works Delay by Nominated Subcontractors and Nominated Suppliers (25.4.7) Delay due to shortage of labour or materials (25.4.8)

The following Relevant Events remain unaffected, delays caused by: o o o o o Architects variations Architects Instructions re discrepancies, postponement, provisional sums (except defined work), antiquities, opening up works Deferred possession Approximate quantities where quantities are inaccurate Suspension for non payment 4

o o o o o o

Delay by Statutory Authorities Exceptionally adverse weather Specified perils Civil commotion, terrorism Strikes, lock outs Exercise of Statutory powers

Third Party rights


The Contract Particulars allow for the recording of the names of those purchasers, tenants and funders and sub contractors to whom third party rights may be conferred. The default position is that there are to be no rights for third parties. If third party rights are required then Part 2 of the Contract Particulars must be completed to enable whichever of the two mechanisms is required. The first method is the traditional method of providing collateral warranties in favour of the third party and the JCTs standard form collateral warranties are now included in Design and Build 2005 and Standard Building Contract 2005, rather than being separate supplements. The second method is a new approach and obviates the need for a collateral warranty. JCT 2005 provides under Schedule 5 that Parties may make use of the Contracts (Rights of Third Parties) Act 1999, by giving notice of the name and 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 separate private 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 employer failed to serve a withholding notice a minimum of five days before the final date for payment it was bound to pay the contractors application as submitted. Under the JCT 05 version the contractor is now paid only what is due under 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 withholding notice have been sharpened. Whilst both should be issued, one notice or either notice sufficiently detailed and with all the requisite information will be deemed sufficient, if served correctly.

Retention
Whilst retention remains 5% for the Minor & Intermediate forms, the standard level of retention has been reduced from 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 allows for 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 Scheme for Construction Contracts, with provision for selection of a specific Adjudicators Nominating Body in the Contract Particulars. 5

There has been a change to the default dispute resolution model from arbitration to litigation. Although the forms provide 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 the Adjustment of Completion Dare, however the date for completion no longer undercuts that period as the duty is now 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 Relevant Event is now more comprehensive. He/she must now state what award of time is given against each of the Relevant Events 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 the Contract Particulars. The separate Contractors Design Portion Supplement is no longer applicable and is included in the Main Contract. If required, details provided in the recitals: o Employers Requirements o Contractors Proposals o Limit of Contractors Design Liability o Professional Indemnity Insurance details (NEW)

Contractors Design Submission


A Contractors Design submission procedure is provided, as follows: o o The Contractor prepares and submits two copies of each of the Contractors Design Documents Within 14 days from the date of receipt, the Architect/Contract Administrator returns one copy to the Contractor marked A, B or C o 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 incorporated o Where marked C, the Contractor takes account comments on it and resubmits it o The Contractor must not carry out any work in accordance with a Contractors Design Document marked C. If the response is not within the time stated, the design is regarded as marked A 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.

o o

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 any period of insurance rather than claims arising out of any one event. Where no period of expiry is stated, this is six years from the date of practical completion. Insurance must be taken out immediately following execution of the contract. 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 Architect Must comply with Architects Instructions for integration of Contractors design work with design works as a whole

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 under the 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 by The Articles of Agreement found at the beginning of the Contract, reducing the possibility of inconsistency or incomplete contract information all relevant information is now contained within the contract itself 3. Watch out for changes in terminology, such as, Rectification Period and Termination 4. Standard documents such as certificates and tender documents will need to be revised to incorporate the new terminology 5. Provision within the Contract Particulars for rights of third parties 6. There are no separate Local Authority Contracts the Standard Forms have been adapted for use on both public and private sector projects 7. Changes to retention provisions within the Standard and Design and Build forms 8. Option for mediation as the first method of resolving a dispute has been introduced 9. The default provisions of dispute resolution have been changed from arbitration to litigation 10. The adjudication provisions have been simplified to comply with the Scheme for Construction Contracts 11. Specific responses must be given to all Relevant Events whether or not it requires an Adjustment to Completion Date 12. Any dates for Sectional Completion should be included within the Contract Particulars

The New Schedule of Contracts and Subcontracts


The New Schedule of Contracts and Subcontracts is detailed below, using JCT colour coding to denote contract type:
Standard Building Contracts used for larger projects where detailed contract provisions are necessary and where 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/C Intermediate Contracts used for proposed works are of simple content involving the normal recognised trades and skills of the industry and where a Contract Administrator or Quantity Surveyor will administer the conditions 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 where a 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 Contracts used where detailed contract provisions are necessary where the Contractor carries out and completes the work as well as the design and where the Employer employs and agent to administer the 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 large scale 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 8

procedures and only limited procedures are required under the contract and the Employer will have provided his requirements to the Contractor. designed by or on behalf of the Employer and where the Employer appoints a representative to exercise the powers and functions of the Employer under the Contract. Can also be used where the 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 and where 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 works are designed by or on behalf of the Employer but full design information is not available before the works commence and where the design is of a sophisticated or innovative nature requiring specialists. The Employer will provide the Contractor with Drawings and Specification and where a management contractor is to administer the conditions. 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 are designed by or on behalf of the Employer but where it is not possible to prepare full design information before works commence and where detailed provisions are necessary and the Employer is to provide a specification showing items of work and where Quantity Surveyor and Contract Administrator is to administer the conditions on behalf of the Employer Prime Cost Building Contract PCC Measured Term Contract used where the Employer has regular maintenance and minor work to be carried out by a single contractor for a defined period of time. Works are instructed from time to time and measured and valued on the basis of a Schedule of Rates and where a Contract Administrator and Quantity Surveyor administer the 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 are simple with design being undertaken on behalf of the Employer and where a grant is paid by a Local Authority in respect of the work. The Employer provides drawings and specification and a Contract Administrator is appointed to administer the conditions Housing Grant Works Building Contract (HG) 9

Adjudication Agreement appropriate for the appointment of an adjudicator in respect of any construction dispute 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 a period of time and for use alongside most standard forms of contract. The non binding forms is used where the parties do not wish to enter into a legally binding framework but wish to create a collaborative working environment (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 work with straight forward content and low risk. Subcontracts Short Form of Sub Contract (ShortSub) Sub-sub contract (SubSub)

10

JCT Standard Building Contract with Quantities 2005


General Changes
JCT Standard Building Contract with Quantities 2005 replaces both JCT Standard Form of Building Contract 1998 private 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 than issue new revisions to accommodate new terms. Further, the JCT 98 form tended to incorporate new terms rather than remove old terms that were perhaps no longer appropriate for the industry. An example of the removal of terms which are not deemed appropriate or are seldom used is the removal of all nomination of sub-contractors in the new JCT 05 form. The JCT 05 form has been redrafted and reorganised into plain English, and is more thoroughly subdivided into sections which described by short titles. The titles are for convenience only and not for interpretation. The running order 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 an Architect/Contract Administrator rather than by an Architect. Also, there is now an Adjustment to the Completion Date rather than an Extension of Time. A number of the previous communication and notices have been given names including Non-Completion Certificate, and some of the old terms have been changed eg. Practical Completion Certificate replaces Certificate of Practical Completion, and Certificate of Making Good replaces Certificate of Completion of Making 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 which required 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 choose to deviate if they require other options to be incorporated. By using a standard default position, it is less likely that the 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 the ACA after the Interim Certificate has been issued by the ACA a payment notice and a withholding notice. If care is taken to ensure that reasons for withholding are given, then the payment notice may also serve as the withholding notice and one the initial notice is required. The Employer is responsible for issue of these notices, not the 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 includes all project specific information and is frequently completed by hand. JCT 98 placed most of this information at the end 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 position from arbitration to litigation. Obviously, the parties can amend the default position if they prefer to resolve disputes via arbitration. The adjudication process has been changed and is now carried out under the rules of the Scheme for Construction Contracts Regulations 1998 rather than JCTs own rules. The contract also includes a new clause which suggests that the parties consider the mediation of disputes. 11

It has been common practice over recent years to accommodate the needs of third parties where subcontractors designers and the like entered into collateral warranties with funders and purchasers. The need for such warranties has been slightly tempered due to the introduction of the recent Contract (Rights of Third Parties) Act 1999, which provide certain rights to third parties such as funders and purchasers. In JCT 98, if you required a collateral warranty 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 by adoption of the Contract (Rights of Third Parties) Act 1999. The provision of rights to third parties is not mandatory 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 has changed 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 Contract Particulars 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. These are the Sectional Completion Supplement, the Contractors Designed Portion Supplement and also the Collateral Warranties and Fluctuations. Like JCT 98 the new JCT 05 Standard Building Contract is a contract for which the Employer is expected to employ its own design team. However, unlike JCT 98, the new form includes facility for an element of design work to be carried out by the Contractor the Contractors Design Portion. A key distinction for the new Standard Building Contract is that the Contractor is now obliged to obtain PI insurance, which was not a previous requirement of the 1998 Contractors Design Portion. The new JCT 05 Standard Building Contract includes provision to allow the adjustment of the time for completion to preserve the Employers right to the deduction of liquidated damages. The Relevant Events giving rise to the need to adjust the Completion Date have been revised and updated. For instance the Contractor is now more thoroughly responsible for his supply chain including labour and materials as the clauses relating to labour relations and strike difficulties have been deleted. In addition, The ACA must now state reasons when adjusting the Completion Date.

12

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 and Adjustment to the Completion Date JCT 05 includes a default position on many clauses which means that there is less likelihood of errors when formulating the contract After issue of the Interim Certificate by the ACA, the Employer is required to issue a Payment Notice and subsequent 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 in separate 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 is served Email can now be deemed a contractual method of serving notice which can ensure correspondence can be 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 be undertaken by the Contractor The Contractor will no longer be entitled to a Relevant Event for difficulties in obtaining labour due to strike action The ACA must state reasons when adjusting the Completion Date. Care must be taken to update procedures and proforma used by the ACA under JCT 98 forms

13

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 and principles are found across the whole suite of 2005 contracts. These general changes are not repeated below. The reader should refer to the general changes detailed above relating to the JCT Standard Building Contract with Quantities 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 contained within his application for payment, if the Employer failed to comply with the payment provisions and not issue a payment notice or withholding notice. This caused many arguments as to the correctness of the various notices issued 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 rather than 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 not require the Contractor to take out design liability insurance. The 2005 version provides an option for the Contractor to take out such insurance through an inclusion in the Contract Particulars which include a requirement for specifying the minimum level of the insurance to be maintained. If the Contract Particulars are not completed then the Contractor is not obliged to take out the insurance. Further, the obligation is not absolute in that if the insurance is not available at reasonably commercial rates then the Contractor does not need to take out the insurance. The new Design and Build form includes provision to enable the savings or additional cost associated with design work arising out of a variation to be included in the valuation of any variation. As a result of this amendment, the cost 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 in the 1998 Contractors Design Portion Supplement. The Contractors Design Submission Procedure is found in Schedule 1 of the contract. The procedure is mandatory and requires that the Contractor issues all drawings to the Employer before they are used. The Employer then has 14 days to review the drawings. If he fails to pass comment then the Contractor may proceed and use the drawings. It should be noted that this does not in any way relieve the 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 provisions which 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, the roles are ordinarily undertaken by employees of the Contractor, or as a subcontractor to him

Important Changes and Implications


The Contractor is now only ever entitled to sums properly due, even if the Employer fails to issue the requisite payment and withholding notices. The Contractor is required to take out design liability insurance but only if the ACA has specifically included 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. 14

JCT Intermediate Building Contract 2005


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

General Changes
There are a limited number of substantive changes in the new form, and the changes generally are generic and follow the general changes to the 2005 suite as a whole. JCT have introduced a number of key concepts and changes from the previous 1998 edition. These changes and principles are found across the whole suite of 2005 contracts. These general changes are not repeated below. The reader should refer to the general changes detailed above relating to the JCT Standard Building Contract with Quantities 2005 above. 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 is appropriate for charging, and requires that in such instances daywork sheets be provided as evidence of the time spent. The new form also provides that an advanced payment bond be issued by the Contractor in instances where the Employer 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 new Standard Building Contract and Design and Build forms. The new contract retains a method for appointing a Named Subcontractor, similar to the process in the previous 1998 form. Other new JCT forms have dispensed with the naming provisions.

Important Changes and Implications


The new form clarifies the instances when daywork can be used for valuing works Retention remains at 5% in the new form

15

JCT Minor Works Building Contract 2005


The JCT Minor Works Building Contract 2005 replaces the JCT Agreement for Minor Building Works 1998. This form is probably the most popular form within the JCT suite of documents. Indeed, as the JCT have now issued a new 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, and the changes generally are generic and follow the general changes to the 2005 suite as a whole. JCT have introduced a number of key concepts and changes from the previous 1998 edition. These changes and principles are found across the whole suite of 2005 contracts. These general changes are not repeated below. The reader should refer to the general changes detailed above relating to the JCT Standard Building Contract with Quantities 2005 above. 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 two columns of text. There have been great economies in the text wording. For instance, the Defects Liability Period has become Rectification Period. The payment process has been stated with greater clarity, which now makes clear that either, both, or only one certificate 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 rather than 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 Regulations unless this default position is specifically altered. The adjudication provisions have changed substantially from those contained in the 1998 form. The new form provides that the parties may include an Adjudicator Nominating Body or a specific named Adjudicator in the Contract Particulars. If the Contract Particulars are left blank then either party wishing to have a dispute adjudicated may select any of the nominating bodies stated in the contract to make a nomination. The JCT Adjudication Rules have been changed in favour of the Scheme for Construction Contracts. The default position for all disputes has also been changed from arbitration to litigation. Again, the contract includes provision to suggest that 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 an account 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 to provide 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 seek guidance from professional advisors when executing the contract, there are better and clearer guidance notes contained within the contract which should assist.

16

Important Changes and Implications


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 is included There is a default position stating that the ACA automatically becomes planning supervisor for CDM Regulations

17

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 documents previously 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 the new form?

5.

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

18