JCT And NEC – Construction Contracts Explained

By Kenzie Consulting
www.kenzieconsulting.com

This month´s question was posed by a contractor in Newcastle-upon-Tyne.

What are JCT and NEC contracts?

Answer:

There has been for many years several attempts to create the perfect contract. JCT and NEC are both examples of attempts to create a family of construction contracts to cater to specific needs.

A JCT Contract is a wide range of construction contracts produced by The Joint Contracts Tribunal. JCT Contracts are a range of construction contracts and guidance notes used to assist in any construction agreement. JCT have developed a range of standard forms for a variety of procurement processes.

The JCT has an established history in providing an adequate contraction contract, a proven track record and the fact that its drafting is based on the consensus of many industry parties.

The amendments to the new JCT contract are more comprehensive and focused. They go beyond what is required under statute to cover any other eventualities, which may arise in specific situations.

Another of these many contract forms is the New Engineering Contract or NEC. The latest update to these contracts is NEC3.

The most popular form of contact in the NEC collection is the engineering and construction form. The NEC contract has been labelled as easy to understand and easy to use.

The language used in these contracts has been thought to be advantageous as it is written in plain English rather than with legal jargon or ‘ye olde english’.

In these contracts the risks are identified as part of the contract and so are dealt with at an early stage rather than arguing about any risk after performance of the contract. The NEC contract is a lot more vauge than the JCT contract.

The NEC contract needs to be administered property so as not to be a detriment to the parties.

The JCT highlights the payment changes as part of its contract clauses drawing attention to Payment Notices and Pay Less Notices.

However, having drawn attention to suspension as a compensation event the NEC contract delves no further into this issue.

There are risks and problems that arise out of both contracts and it would seem that, if not administered properly, the contract you choose to use may be detrimental.

It is essential that the correct contract is entered into which will adequately protect the parties and the performance of the contract.

Do you have a contractual, technical or legal problem?

Or would you simply like to understand a particular issue better?

Would you like independent objective advice?

Therefore, if you have a question regarding any construction law, dispute resolution or quantity surveying matter then email info@modernbuilder.co.uk or joseph.bond@kenzieconsulting .com and we will publish a response in Modern Builder detailing our advice.

All correspondence will be treated with the utmost confidence.

The content of this article is provided for informational purposes only and does not constitute legal advice. This article is offered only for general informational and educational purposes. It is not offered as and do not constitute legal advice or legal opinions. You should not act or rely on any information contained in this article without first seeking the advice of a solicitor.