Too much reliance could be placed on the industry-accepted standard form of the contract that the parties may be led into a false sense of security that even minor changes made to the JCT contract will not lead to disputes in the future. Parties may quickly amend the standard form because they are using the JCT contract to save time and do not want to waste time on the amendments. Despite the ordinary meaning of the word, it was still judiciable as to the meaning of “sign-off” agreed between the parties.Īdditionally, the essence of the JCT contract being a standard form invites an element of casualness or informality. The parties could not rely on any definition of the term “sign-off” because one was not given in the contractual documents. The dispute was whether “sign-off” meant actual signing-off of the items in question or simply the delivery of the items in accordance with the contractual agreement. The term “sign-off” was applied inconsistently across the contractual documents, resulting in a dispute as to what this term meant. This can be seen in Bennett, where the parties used a JCT contract but changed the provision involving interim payments. However, despite these benefits, there are many significant problems with relying on JCT contracts without legal advice.įirst, whilst parties are entitled to adapt any part of the JCT contract, they do so with words, terms or provisions which are nebulous, ill-defined or inconsistent. Therefore, JCT contracts act as a platform for the construction industry to assist in reaching timely and cost-effective contracts that meet the desired standard of provisions for construction contracts. Thirdly, they provide benchmark provisions in standard form contracts, thereby assisting clients who wish to create their own contract but are not sure what mandatory provisions to put in place. If necessary, the clients are still able to change provisions of the contract to the parties’ specific needs or requirements. Secondly, and similarly, this also reduces the time spent on creating a contract, ensuring that projects can proceed in a timely manner with reassurance that the contracts are commonly used by other construction professionals. This is especially useful if the budget is tight and costs need to be minimised. These contracts assist the construction industry in three main ways: first, they minimise the transaction costs of entering into a contract because it is provided for the clients in a standard form. JCT contracts are a standard form of contract with the purpose of facilitating the process of constructing buildings. In light of Bennett (Construction) Ltd v CIMC MBS Ltd (formerly Verbus Systems Ltd) EWCA Civ 1515 (“ Bennett”), it is useful to consider the wider implications of construction contracts, in particular in assessing the purpose of JCT contracts and the potential pitfalls that can befall clients who use them. Generally, construction contracts can be similar in scope and structure, but there are dangers lurking for those who do not pay enough attention to the precise terms of the contract, relying on standard terms or structures of the contract, irrespective of the actual arrangement between the parties.
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