Deciding on the right contract
Introduction
There can be no doubting the importance of making the right selection of main contract to be used in any given construction project. Few of you will have missed the recent publication of the highly awaited new JCT 2005 suite of contracts, replacing the earlier JCT 1998 versions. Following this comprehensive overhaul, the Joint Contracts Tribunal have now published a helpful practice note with the aim of providing assistance in deciding upon the contract to be used ("Deciding on the appropriate JCT contract").
The guidance note is divided into Parts 1 – 5 covering the following:
- Project Strategy: providing a description of the three main procurement options (traditional procurement / conventional procurement, design and build procurement and management procurement) and providing an overview of the main types of contract:
(i) traditional: lump sum, measurement and cost reimbursement contracts ;
(ii) design and build: package deal / turnkey, design & build and contractor's design for specific elements only;
(iii) management: management, construction management and design- manage-construct contracts.
A summary of the matters which might influence choice in contract selection is also listed in bullet form together with a list of consequences arising from the main contract chosen and "watchpoints".
- Range of JCT Main Contracts
The various contracts are then reviewed in relation to the type of projects to which they would be "appropriate" and the guide also gives examples as to when in the JCT's opinion they can be used. This categorises the contracts into the following areas:
(i) Traditional or conventional: Lump Sum, Measurement, Cost reimbursement or cost plus;
(ii) Design and build;
(iii) Management;
(iv) Partnering.
The guide also provides commentary on the range of JCT Sub-Contracts and concludes with a table comparing the various contract provisions and listing the current JCT Publications.
Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.
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