JCT Intermediate Contract
The JCT Intermediate Building Contract suite 2024 (which includes sub-contracts for differing design responsibilities and sub-contractor options) is for medium-sized construction projects. It’s part of the JCT suite of contracts, which provides options for all levels of project.
Let’s look at what kind of projects it’s designed for, and when you should us
What is the JCT Intermediate Building Contract?
JCT Intermediate Building contracts are specifically designed for projects with a total value of up to £1 million. They’re suitable for projects that need moderately detailed contract provisions and involve all recognised skills and trades, but don’t need complex building service installations or specialist works. The JCT Intermediate contract is suitable for private and public sector projects.
It’s impossible to say exactly what projects are suitable. But, things like the below would fall under its remit:
- Medium-sized commercial projects.
- Residential developments too large for a Minor Works contract.
- Projects where detailed requirements are needed (but are not large or complex enough to justify using the Standard Building Contract.
Both NEC and FIDIC provide contracts that cover projects of a similar scale. Each contract suite works differently, so it’s worth exploring each option.
Features of the JCT Intermediate Contract
The Intermediate Building Contract is for projects beyond the scope of the Minor Works contract, but with additional complexity kept to a minimum.
There are a few key points to consider when deciding whether an Intermediate Building contract is right for your project.
Who is responsible for the design?
By default, the employer is responsible for the design. This usually means employing an architect or design team to work on the employer’s behalf, separately from the construction contractor. Otherwise, the JCT Intermediate Contract with contractor’s design (ICD) version should be used.
What is the JCT Intermediate Contract with contractor’s design?
The JCT Intermediate Contract with contractor’s design is a sub-version of the standard Intermediate contract. It switches responsibility for the design to the contractor, with some other minor changes to ensure everything runs smoothly.
Who administers the project?
Usually, an Intermediate Building contract is administered by the architect, a quantity surveyor or an appointed contract administrator. It requires more oversight than the Minor Works contract.
How does it deal with variations to the work?
Variations are managed through specific contractual mechanisms focused on formal instructions, valuation and compliance with written requirements. They must be issued in writing by the contract administrator.
They can be valued by mutual agreement from the employer and contractor. If no agreement is reached, a quantity surveyor determines the value based on contract rates or market prices. Variations cannot alter the fundamental nature of the works and cannot redirect them to other contractors.
How are disputes handled?
The Intermediate contract uses a tiered resolution framework, which combines informal and formal methods. It’s designed to resolve issues efficiently, while maintaining project continuity. These are some of the key mechanisms:
- Negotiation. The first step is for parties to discuss directly and attempt to reach an agreement without third-party involvement. The aim is to preserve relationships and avoid escalation.
- Mediation. If negotiation fails, a neutral mediator can be involved to facilitate a non-binding agreement. This step is voluntary and prioritises collaborative problem solving.
- Adjudication. This provides a binding interim decision within 28 days. The adjudicator is selected either via contract terms or a nominated body. The decision is enforceable unless it’s overturned by arbitration or litigation.
- Arbitration. Offers a private, legally binding decision. An arbitrator (either agreed upon by the parties or appointed by a nominating body) reviews the evidence and issues a final decision. This is usually faster and less expensive than court proceedings.
- Litigation. This should always be a last resort. Unresolved disputes can proceed to the Technology and Construction Court (TCC).
How flexible is it?
The Intermediate Building contract is more flexible than the Minor Works contract.
It can be used for projects where the work is carried out in sections, and it includes provisions for flexible options, including collaborative working, advance payments, bonds and collateral warranties.
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Intermediate Contract 2024 Update
Along with the rest of the JCT suite, the Intermediate Building contract had a major update in 2024. These are some of the key changes.
Building regulations compliance
The principal designer and contractor must be confirmed to comply with the amended Building Regulations.
Collaborative working
Collaborative working provisions were previously optional. They’re now mandatory. Parties must act in ‘good faith’ with a ‘spirit of trust and respect’.
Contractor’s design liability
In the ICD version of the contract, design liability is limited to ‘reasonable skill and care’. Fitness for purpose obligations are specifically excluded, except where there are statutory requirements that state otherwise.
Disputes
The dispute process (as discussed above) introduces new clauses to formalise early notification, encouraging proactive resolution.
Ground conditions
In the 2024 version of the Design and Build contract, risks for ground hazards like unforeseen asbestos, contamination or unexploded bombs are transferred to the employer. This is not the case in the ICD version of the Intermediate Building contract, which maintains the 2016 approach for less complex projects.
Termination payments
A new, structured ‘Termination Payment’ framework simplifies final account calculations when the project is terminated. This is in response to ambiguities in previous versions of the contract.
Insurance
There are now particulars in the contract to allow the customisation of sub-limits and exclusions to professional indemnity insurance.
Language
In line with other contracts in the suite, gender-neutral language is used throughout.
Modernisation
Digital communication and electronic signatures are now formally recognised in the contract.
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