Introduction and structure
In June 2005 the JCT published its suite of revised contracts. The aim was to make the contracts more accessible. Consequently, the revised suite adopted a uniform layout across all the contracts and commentators agree that the result of the changes is a more user-friendly suite of contracts.
Recitals and Articles
The JCT contracts are drafted to favour the contractor. The employer, therefore, will inevitably want to include its own amendments. In relation to the Design and Build Contract, the tussle between the employer and the contractor usually takes place as early as page two: the Recitals!
The effect of the Recitals and the Articles is that the contractor does not accept liability for the employer’s requirements, including any of the employer’s design. This could have disastrous implications for the employer, who may not be able to recover its losses if there is a defect in the completed works. Consequently, it is usual to amend the recitals and the articles so that it is clear that the contractor adopts the employer’s design and is responsible for that design. It is also usual to amend the recitals to confirm that the contractor’s proposals will meet the employer’s requirements. These amendments reflect the intent of most design and build contracts and as the employer’s consultants generally novate to the contractor, the contractor is best placed to manage these risks.
It is important to complete the particulars and to do so accurately because if certain particulars are not completed, default provisions will apply. For example if the insurance details are not added the default position is that insurance cover for pollution and contamination claims is not required. Also, if the particulars for clause 2.17.3 are not completed, the contractor will not have the benefit of a liability cap for consequential loss.
Priority of documents
There is likely to be a conflict between the schedule of amendments and the main body of the JCT contract. The general rule is that a bespoke amendment will take precedence over a standard term, but it is good practice to make this clear by including a hierarchy clause in the articles. Also, all amendments should be set out in one document, preferably the schedule of amendments. If some amendments appear elsewhere, for example in the employer’s requirements, the general rule may not apply and the standard terms may take precedence. So be warned if you try and sneak additional amendments in the employer’s requirements!
In the next edition, we will analyse the design obligations in the JCT Design and Build Contract 2005.