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- JCT Design and Build Contract, 2011 Edition
- A Game of Risk: JCT Design and Build Contracts
This Practice Note explains who the Joint Contracts Tribunal JCT are and also provides an overview of the most commonly used contracts within the JCT suite in relation to traditional procurement, design and build procurement and management routes of procurement. The JCT publishes a suite of standard form building contracts and associated documents, including collateral warranties that are widely used for construction projects in the UK. This Practice Note considers which parties are responsible for design, the standard of care to be exercised, and other key provisions relating to design including how discrepancies are dealt with, the design submission procedure and copyright.
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The simple concept that makes Design and Build Contracts different to traditional is that the Employer seeks to transfer more design responsibility to the Contractor.
The Contractor has greater design input on a Design and Build Contract than with the traditional procurement route. Design and Build is a modern Procurement Route in construction , unlike in other industries where it has been in use for a long period of time. Construction has lagged behind due to the emergence of architecture as a profession that has led the industry for the majority of the past century.
The table below extracts the page number and Clause reference for the important day-to-day Clauses. The JCT Design and Build Contract is a detailed and lengthy contract with over pages, but it is designed to be simple to navigate if you know where to look.
The Contract is split into three sections; the Articles of Agreement; the Conditions and the Schedules. These sections are further broken down into subsections. This section of the Contract is where you will find details of the date of the Contract and who the parties to the contract are — their registered company name, registered address and company registration number. There are nine different Articles included in this section of the contract and in effect the Articles provide headline details on the major agreements within the Contract.
A description of each is provided in the table below:. This section includes:. The Attestation pages are the area of the Contract where the signatures and details of the individuals who signed the contract can be found. You will also find whether the Contract is signed under hand or as a Deed.
There are key differences between contracts signed as a Deed or Under Hand. Executing a contract as a Deed means that the limitation period for starting legal proceedings for a breach of contract is significantly longer — 12 years rather than six if signed underhand. This section deals with how the Contract is to be interpreted by the parties and potentially by any third party in the event of a dispute. The Definitions explain the formatting of the Contract. For example, when a word or phrase in the Contract starts with a Capital Letter this is a defined term in the Contract.
This means the term can be defined by the list of definitions on Page 25 of the Contract, which explain exactly what that word means in the context of the Contract. Knowledge of this fact makes understanding and using the Contract much easier.
Here are some examples:. With regards to Interpretation , pages 29 to 31 detail how the Contract and the terms and conditions within it are to be interpreted. This is useful to understand in the event there is a disagreement regarding any matters during the project. An example of its application could be used in the event there is a disagreement about the Scope of Works:.
In this case, Clause 1. Nothing contained in any other Contract Document or any Framework Agreement, irrespective of their terms, shall override the Agreement or these Conditions. This means that the Contract Document is the entire agreement between the two parties and only documents included within it are relevant. An understanding of the Interpretation clauses is important as it allows the parties to understand what the agreement is with clarity.
Clause 2 includes many Clauses and Sub-Clauses which define the criteria under which the Works will be completed. The Clauses are summarised below:. The Contractor under Clause 2.
For example. Possession — Clauses 2. This wording obligates the Contractor to work every day moving forward until the works complete. Clause 2. Contract Documents — Clauses 2. Discrepancies and Divergences — Clauses 2. Given large volume of documents included in the contract, there will be a discrepancy between contract documents.
These Clauses explain how to manage discrepancies and confirm who is responsible and whether the matter constitutes a Change that often leads to an impact in terms of time and money. If the Employer chooses the more expensive option, this is treated as a Variation to the contract sum. Design Work, Liabilities and Limitation — Clause 2. This is confirmed by the following wording:.
Unfixed Materials and Goods — property, risk etc. Where payment for materials on site has been made, the materials become the property of the Employer and ownership of the materials is transferred.
In terms of which party is responsible for loss or damage to them once ownership is transferred, check which Insurance Option, B or C, has been selected in Schedule 3 Insurance Options. These are some of the most important and commonly used Clauses in the Contract as they explain the grounds upon which a Contractor must submit a Notice of Delay and how a Contractor is able to adjust the completion date apply for an extension of time. Often, the Commercial success of a project hinges on the Contractor making regular Notices of Delay.
Read our article on Giving Notice for more information on this. Relevant Events — A Relevant Event is an event during the progress of the works that causes a delay to the completion date and potentially gives the Contractor rights to request an Extension of Time. A key matter which often drives disputes is covered under Clause 2. For the Contractor, it can lead to the early release of retention and a reduction in their insurance obligations and the value of Liquidated Damages.
This kind of arrangement is not uncommon and an example of when this could happen is in the Construction of a Residential Tower. It may be that that the Tower is 10 storeys high and when levels 1 to 5 are finished, the Employer can move tenants in on these floors while Fit-Out works on the upper levels finishes.
Defects — Clauses 2. This Period is usually 12, 18 or 24 months long. The length of the Rectification Period is confirmed on page 9 of the contract in the Contract Particulars. These are required as during the construction process elements of the design are often changed on site due to physical constraints not foreseen during design. As Built Drawings are important and tied to the release of the Practical Completion certificate by the Employer. The Contractor needs to have a procedure in place for managing and issuing As Built Drawings to ensure this does not impact the release of the Practical Completion Certificate.
The Clause also confirms that by signing the Contract, the Contractor grants the Employer unreserved rights to use its drawings and that this will not infringe any Copyright legislation. Access and Representatives — Clauses 3.
Sub-Contracting — these conditions describe the basis upon which the Contractor can subcontract elements of the work. It is rare for consent to be withheld as the Employer must always act reasonably. However, the terms do require the Contractor to notify and receive consent. The Contractor does have a right to reasonable objection of instructions under Clause 3.
Contract Sum and Adjustments — This section of the Contract is all about money and on what grounds the Contract Sum can be adjusted. Clause 4. Taxes — Clauses 4. Payments and Notices — Clause 4. This payment mechanism is compliant with the most recent UK legislation from , the Local Democracy, Economic Development and Construction Act and the Clauses are summarised as below:.
Interim Payments — calculations of sums due — Clause 4. Listed Items — Clause 4. Listed Items will include the value of such materials and once paid, ownership passes to the Employer. Retention — Clause 4. Within 28 days, the Employer must then reasonably confirm their acceptance or otherwise to these costs.
Final Statement and Payment — Clause 4. Clause 5. The Valuation Rules — these Clauses deal with how each party must Value the price of any variation and assessment falls under two main headers:. Personal Injury and Property Damage — Clauses 6. This insurance protection must be held and maintained throughout the lifecycle of the project. Insurance of the Works and Existing Structures — Clauses 6.
Professional Indemnity Insurance — Professional Indemnity Insurance, often referred to as PI cover, must be held by the Contractor to cover its professional expertise in the field of design. The Contractor holds the same level of liability as an Architect under the JCT Design and Build Contract and must hold Professional Indemnity insurance confirming this level of expertise.
Joint Fire Code — compliance — Clauses 6. If it does apply refer to these Clauses for its application. Assignment — Assignment is a legal term used in contract and property Law. It is the process whereby a person, the assignor, transfers rights or benefits to another, the assignee. Performance Bonds and Guarantees — Clause 7. An example of a 3 rd party is a future Tenant or a Funder who may have rights to the Contract at a later stage. These 3 rd parties may need to enforce specific terms of the contract and these Clauses give them the rights to do so.
For example, if the project was supposed to use certain, long-lasting, materials which it does not, these Clauses allow the 3 rd party to enforce a contract term or to highlight a breach. Collateral warranties are more express agreements associated with specific 3 rd parties such as a known tenant and provide for the duty of care in the Contract to be extended by one of the contracting parties to the 3 rd party not in the contract.
A simple example of the relevance of this is the Design and Build Contractor owes a duty of care to the future occupier of the development in so far as any subsequent defects which may arise are concerned. General — This Clause deals with Contract Termination. If these obligations are not met, the parties involved can enforce contract termination Clauses to void and close the contract.
One of the most common reasons for Termination is when one of the parties becomes insolvent and can no longer administer their obligations. Clause 8. Termination by the Employer — Clause 8.
JCT Design and Build Contract, 2011 Edition
The following Construction practice note provides comprehensive and up to date legal information covering:. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial. To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
The design-builder is usually the general contractor, but in many cases it is also the design professional architect or engineer. Design and build is a term describing a procurement route in which a single contractor is appointed to design or complete the design and then to construct the works. The JCT ranges in publications from standard contracts, to major construction projects or a Design and Build Contract which is designed for construction projects where the contractor carries out both the design and the construction work. The focus will be on how to manage the form, looking at how to advise a client, be it employer side or contractor and supply chain teams. The Design and Build Contract is a construction project delivery system where the design and construction aspects are contracted for with a single entity known as the design-builder or design-build contractor.
outside the United Kingdom, see the Design and Build Contract Guide. Page © The Joint Contracts Tribunal Limited DB Page 9.
A Game of Risk: JCT Design and Build Contracts
The simple concept that makes Design and Build Contracts different to traditional is that the Employer seeks to transfer more design responsibility to the Contractor. The Contractor has greater design input on a Design and Build Contract than with the traditional procurement route. Design and Build is a modern Procurement Route in construction , unlike in other industries where it has been in use for a long period of time.
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