CONSTRUCTION LAW

Construction Law

Construction Law

Case Background

Henry is having a commercial office project built for him, which is a 163; 35M project, which is let under a JCT 05 Standard Form of Building Contract with Quantities. David who is the contractor is falling behind, due to the number of changes being made by Henry. Henry requests that David furnish him with a Lump sum quotation to accelerate the works, to avoid the project not being completed on time. David wonders whether this is the best way forward, especially as Henry has threatened to withhold an interim certificate which is due, if David doesn't provide such a lump sum quotation.

Analysis

The standard UK building contracts are drafted by the Joint Contracts Tribunal. It consists of members of the professional association of architects, consulting engineers, the construction confederation, specialist contractors council and the institute of chartered surveyors. The standard form building contract JCT 2005 is regarded as the industry standard for "general" or traditional style contracting. It is based on a common origin with the Irish RIAI form of contract and embodies broadly similar principles. However, it is much more detailed. There are six versions of the JCT contract, with quantities, with approximate quantities and without quantities with a private and Local Authority edition (equivalent to the Irish GLDA) in each case. Certain further supplements are available. These include a contractor designed portion supplement (CDPS).

There are sub-contracting forms for use with the JCT 2005. These include a standard form of sub-contract tender and agreement, a standard form of agreement between the sub-contractor and nominated contractor, employer nominated sub-contractor agreement. The intermediate form of building contract IFC 98 is shorter than JCT 2005 but is still fairly complex. It is designed for work that uses basic trade skills of the industry and does not require complex building services, engineering packages. CD 98 is the standard design and build form of contract. There is no architect administering the contract. It is set on the basis of the document called the employer's requirements which specifies what the contractor is being asked to do.

Payment requirements of the Construction Act

Subject to the statutory provisions referred to below, the parties are free to chose how much will be paid and when payment will be made. The building contract will define the scope of works included within the contract sum and will generally only allow the contract sum to be altered in accordance with the terms of the building contract. The payment provisions of the Construction Act apply to contracts for “construction operations”, which is broadly defined. In addition to the standard forms of building contract (and bespoke amendments), it includes the engagement of consultants such as architects, engineers and quantity surveyors. If these contracts do not contain the necessary provisions, the relevant provisions required by the Construction Act and set out in the Government Scheme (the “Scheme”) will be implied to replace the noncompliant contract provisions.

It should be noted that, at present, the Construction Act applies only to contracts in writing ...