JCT Contract Types Explained – Complete Guide

JCT is one of the UK’s most popular standard-form contract suites and is used on around 70% of all construction projects. The JCT contract aims to save time, minimise contract costs and allocate risk between parties.

 

What is a JCT contract?

The JCT offers standard-form contracts to cover the vast majority of construction work. Contracts range from large-scale construction projects to home improvement work. They’re generally made between an employer and a contractor working on delivering a building project. This means that larger projects can involve many individual contracts.

These contracts lay out the responsibilities and obligations of everyone involved so it’s clear what work needs to be done, who should be doing it, by when, and at what cost. The contracts work by adapting existing benchmarks to suit most projects.

They’re substantially rewritten once a decade, with the most recent suite being either the 2016 or 2024 version depending on the contract family chosen. On long-term projects, older contracts are still in use today but they should be avoided for new projects as they don’t comply with current legislation.

 

What is the JCT?

The JCT is a body set up to represent and promote the interests of the building and construction industries. It comprises several contributing organisations including RIBA, the Contractors Legal Group, the British Property Federation and the RICS. Its contracts are well-known and regarded in the UK.

The first Joint Contracts Tribunal (JCT) standard form building contract was published in 1931 – although it wasn’t referred to as a JCT until much later, in 1977. A local authority version was introduced in 1937.

 

Why choose a JCT contract?

There are a lot of good reasons to choose JCT for your next project.

They’re efficient

Because they’re standard-form, you can pick a JCT contract off the shelf for most projects and you’re good to go. This is much cheaper and faster than the extensive drafting required to create a new contract. You can also use the same contracts across projects and contractors, making them far easier to manage.

The industry knows them

JCT contracts are some of the best-known and trusted in the UK. This means that most contractors already have some knowledge of them, minimising potential confusion.

They allocate risk

Because JCT contracts are drafted impartially by construction experts, risks and responsibilities are appropriately distributed between all parties. Because they’re well-known and regarded, most contractors will already be aware of the distribution.

They set out payment terms clearly

Payment under a JCT contract is staggered, with percentages being paid once the project has been completed and certified by an administrator. They allow for retention of a final percentage until any snagging or minor defects have been rectified. They can also set ‘milestone’ payments throughout the project.

They’re tried and tested

JCT contracts are written and maintained by experts in construction law. They’re legally watertight and they’re regularly updated to keep up with changes in the law.

They minimise disputes and help resolve them

JCT contracts clearly outline the responsibilities of each party involved in a project, along with the remedial actions required if those responsibilities are not met. If there is a dispute, using a JCT contract can avoid complex court proceedings.

They protect everyone

JCT contracts are written so that everyone involved in a project is protected, including the employer. They are protected against poor contractors as much as the contractors are protected from unreasonable employers.  And because they’re so popular and well-trusted, everyone knows what to expect.

 

What are the downsides of a JCT contract?

Although they’re very well regarded, there are some downsides to using JCT contracts. It’s well worth exploring these so you can make an informed decision to what is best for you.

They’re not designed to be amended

While it’s possible to amend a JCT contract to suit a specific project it’s not recommended and it can be hard to do so. Due to their standard-form nature, introducing amendments to a JCT contract can cause unforeseen problems.

They require accuracy

If an employer’s requirements are not accurately communicated in a JCT contract it can result in unsatisfying work from the contractor with no comeback. For example, allowing a contractor control over the design in a contract grants them the right to make decisions around the work done. If the employer is not happy, they have no comeback under the contract.

They can take time to negotiate

Because accuracy is so important, it can take time to produce a JCT contract despite it being standard-form. Disagreements can lead to protracted negotiation, potentially delaying the project’s start.

 

What are the different types of JCT contracts?

The JCT contract family is designed to cover most levels of construction, from homeowner renovations to major projects. Each contract type offers different versions depending on the work to be done.

 JCT standard building contract

The standard building contract is for large projects requiring detailed contact provision. It’s designed for projects procured using traditional/conventional methods.

JCT intermediate building contract

The intermediate building contract is for projects not requiring complex building service installations or other specialist work. It’s designed for projects procured using traditional/conventional methods.

JCT minor works contract

The minor works contract is for smaller projects involving simple work. It’s designed for projects procured using traditional/conventional methods.

JCT major project construction contract

The major project contract is designed specifically for large projects involving major works. It’s intended for use with contractors with the experience and ability to bear greater risk than other JCT contracts. It’s suitable for projects procured via the design and build method.

JCT design and build contract

The design and build contract is for projects where the contractor does both the design and construction work. It’s suitable for projects of varying sizes including those where detailed provision is needed.

JCT management building contract

The management building contract is for projects where a management contractor is used to manage the works. The actual construction is completed under separate contracts, overseen by the manager. It’s suitable for projects procured by the construction management method.

JCT construction management contract

The construction management contract is for projects where separate firms are contracted to complete the works, overseen by a construction manager. It’s suitable for projects procured by the management method.

JCT-CE contract

The JCT-CE contract is a collaboration with Constructing Excellence. It’s for procuring a range of construction services and is designed to be used with collaborative and integrated working practices.

JCT measured term contract

The measured term contract is for employers who want to use a single contractor for maintenance and minor works over a set time period. It can be used with projects procured by the traditional/conventional method.

JCT prime cost building contract

The prime cost building contract is for projects that require a quick start, such as for alterations or urgent repair work and the full scope of work is not known until the project has started. It’s suitable for projects procured using the traditional/conventional method.

JCT repair and maintenance contract

The repair and maintenance contract is for projects which have a set programme of repair and maintenance. It’s usually used by local authorities and anyone else who regularly use small to medium size contracts for ongoing work.

JCT homeowner contracts

Home owner contracts are for people who want the protection of a contract when using contractors to work on their own property.

JCT tracked change contract

The tracked change contract is a version of a JCT  contract which highlights the changes between the current and previous versions. It’s for anyone who needs a simple, easy-to-reference guide to the differences.

 

Can JCT contracts be amended?

It is possible to amend any JCT contract to suit a specific project, but it’s not recommended. One of the biggest advantages of a JCT – or any other standard-form contract – is that it is tried and tested. Amending the contract can increase the likelihood of disputes, and make any that do happen harder to resolve.

 

What procurement types do JCT contracts cover?

JCT contracts cover the four procurement methods used by the construction industry. These are:

 

Which is best for my project – JCT or NEC?

There are several differences between JCT and NEC contracts. JCT is seen as the more traditional option focused primarily on construction projects. NEC is considered to be more progressive. Both can be adjusted to work with either construction or engineering.

JCT places the majority of risk with the contractor. This makes it more adversarial than the NEC, which takes a more collaborative approach with a more even split of risk.

Which is best for you depends on the project and the parties involved. In the UK JCT is well known, which can make things simpler. NEC is written for the international market but is less common in the UK.

 

Contract management

Whether you’re using JCT contracts, another standard-form contract or something bespoke, using a tool to manage your contracts can help you keep on top of your projects. Sypro’s Contract Manager keeps all your contracts together and lets you keep track of everything quickly and easily.

Everyone has access to what they need so they can work collaboratively and keep on top of risks and changes all the time.

NEC Contracts & Options Explained – Complete Guide
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NEC Contracts & Options Explained – Complete Guide