Identifying the best standard form of building contract to use for a project
Problem: It is not so much of a problem, but a question that I have, which is posed every time my company is awarded a project – what is the best standard form of building contract to use?
Response: It is impossible to answer such a generic question.
There are many organisations (NEC, JCT, RIBA, CIOB, to name just a few), that produce different standard forms of contracts, and each contract that is produced is designed for different methods of procurement, project value, complexity and the relationship between the parties.
As an example, take the JCT (Joint Contracts Tribunal – which brings together seven professional organisations, such as the RICS, RIBA and the BPF), which produce about 50 different forms of contracts, the selection of which will depend upon so many variances including the type of project (i.e. infrastructure work, office building, housing, shops or industrial), complexity (i.e. sports arena versus a home extension), the speed of delivery (i.e. traditional procurement or cost plus), value, how the project will be managed (i.e. independent contract administrator or in-house), and risk (i.e. design and build versus construction management).
So, for an extension to a domestic residence with a build value of £100,000 and an architect being engaged as the contract administrator, the JCT Minor Works 2016 edition will probably be the most suitable. If however it is a new build house with a build value of £800,000, and the employer/owner wants an element of control on specialist sub-contractors, then the JCT Intermediate Form of Contract 2016 could be the most suitable (this contract allows for named sub-contractors).
Therefore, to select the most suitable form of contract, it is crucial to know and consider certain details about the project in order to identify the most appropriate form of contract.
© Michael Gerard 2020
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.
Author background
Michael is a Solicitor, Chartered Builder & Registered Construction Adjudicator, and is a director at Michael Gerard Law Limited, a solicitors practice regulated by the SRA.