JCT Design & Build Contract 2016 – what are the main changes?

Niamh Batterton, an associate solicitor at Lupton Fawcetts York office,
Niamh Batterton, an associate solicitor at Lupton Fawcetts York office,

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Recently the JCT have issued their revised suite of standard building contracts, the most recent being the Design & Build Contract together its Subcontract.

Such contracts are used where the Contractor not only takes responsibility for the build, but also the design.

There have been many changes within the contracts, however the key changes are:

Performance Bonds and Parent Company Guarantees:

A new Clause 7.3 permits the Employer to require a Bond and/or Guarantee by completing the relevant section of the Contract Particulars. However, the parties must agree to their own form of Bond and/or Guarantee.

Collateral Warranties and Third Party Rights (‘TPRs’):

New Clause 7E allows the Contractor to procure Warranties or TPRs from Subcontractors.

Contract Particulars Part 2 has been removed. The Employer now sets out its requirements for Collateral Warranties and TPRs in a ‘Rights Particulars’ to be appended to the Contract. The Contractor is required to produce a similar document to append to any subcontracts.

Clause 7.4.2 allows the Contractor to choose whether it provides Collateral Warranties or TPRs, if the Employer fails to do so in the Rights Particulars.

Interim Valuations Dates (‘IVD’)

This features in all new JCT editions. The intention is that by including IVD in the main contract and any subcontracts, it will promote fairer payment throughout the supply chain.

However, whilst this appears beneficial to subcontractors, it will not be so if the Contractor does not adhere to the JCT payment periods and chooses to extend such periods. IVD must be specified in the Contract Particulars.

Payment Process

JCT have simplified the payment process by restructuring and shortening these clauses with the Final Statement being dealt with last.

Loss & Expense

There is a new procedure at Clause 4.20 for notifying and ascertaining loss and expense claims. This procedure imposes stricter requirements on both parties (mainly, the Employer).

Net Contribution

Schedule 5 now includes a Net Contribution clause in respect of TPRs. However, if the Contract is amended to give the Contractor total design responsibility, then such a clause must be deleted, as it is inappropriate.

Insurance of Existing Structures

A new C.1 Replacement Schedule which can be incorporated into the Contract allowing the parties to set out their own bespoke insurance arrangements in the event that existing Option C is unsuitable. The Replacement Schedule must fully detail the alternative insurance arrangements, avoiding any gaps within the insurances.

Other areas that have been amended include Public Contracts Regulations, Copyright, Consent & Approvals, Fluctuations, and additional Supplemental Provisions etc. If you require a more detailed article or wish to discuss the above further, please contact Niamh Batterton an Associate solicitor at Lupton Fawcett on 01904 561473 or Niamh.batterton@luptonfawcett.law.

Niamh Batterton, an associate solicitor at Lupton Fawcett’s York office, receives high praise from Chambers and Partners, who names her as an “associate to watch”.

It also says she is “very proficient and commercially aware” in the advice she gives clients on non-contentious construction matters.

One commentator reports: “Niamh was excellent and really helpful with all aspects of the work”.