JCT Standard Building Contract 2024: what’s new?
Following the eagerly anticipated release of the new JCT Design & Build Contract 2024, JCT Minor Works Building Contract 2024 and JCT Intermediate Building Contract 2024, JCT has now released the JCT Standard Building Contract 2024 suite.
Ross Galbraith, partner in our construction team, summarises the changes.
An introduction to JCT Standard Building contracts
These comprise the following:
- Standard Building Contract (with Quantities).
- Standard Building Contract (without Quantities).
- Standard Building Contract (with Approximate Quantities).
- Standard Building Contract Sub-Contract Agreement and Conditions (with/without Sub-Contractor’s Design).
In addition to the main contracts, sub-contracts and guides from the JCT Standard Building Contract 2024 suite, JCT has also released the Standard Building Contract 2024 Admin – Contract Administration Model Forms, which are available digitally only.
JCT Standard building contracts are generally used when works are relatively complex in nature however, the client does not want to go down the full design and build route whereby the contractor takes full responsibility for design and would rather retain some control over the design.
It is worth noting that the JCT Standard building contracts must be administered by an architect/contract administrator and quantity surveyor.
The updates to the JCT Standard Building Contract 2024 suite largely resemble the updates to the JCT Design & Build Contract 2024; however, we have summarised the key changes below:
Building Regulations
A new Article 7 requires the parties to confirm who the principal designer and principal contractor will be for the purposes of the amended Building Regulations.
Updates have also been made to ensure that the contractor complies with the relevant sections of the amended Building Regulations.
Collaborative working, sustainable development and notification of disputes
New provisions relating to collaborative working, sustainability and notification of disputes (which were previously optional supplemental provisions) have now been introduced into the main body of the JCT terms.
A new Article 3 states that the parties must work together and with the project team in a cooperative and collaborative manner, in good faith and in a spirit of trust and respect.
In addition, the contractor is encouraged to suggest economically viable amendments to the works to improve environmental performance and sustainability, and a reduction in environmental impact.
Contractor's design liability
To the extent the contractor is undertaking any design in relation to the works, the JCT Standard Building Contract 2024 includes some key changes to the contractor's design liability in respect of the contractor's designed portion.
A new clause makes it clear that, to the extent permitted by the statutory requirements, the contractor will have no greater duty than to exercise reasonable skill and care in respect of its design and "under no circumstances" shall it be subject to a fit-for-purpose obligation.
Timescales for responding to an extension of time
The existing 12-week timescale for the Employer to respond to the Contractor’s extension of time claim has been reduced to 8 weeks.
In addition, the Employer has 14 days to notify the Contractor contractor of such further information as is reasonably necessary to reach a decision on the proposed extensions of time.
Epidemics and Statutory Powers
In light of the COVID-19 pandemic, a new relevant event has been added, allowing the contractor to claim an extension of time if there is an “epidemic”.
The relevant event relating to the UK Government exercising its statutory powers has been widened to include “the publication of any guidance” by the UK Government, local authorities, etc., and specifically the Construction Leadership Council.
No doubt this addition has been influenced as a result of the COVID-19 pandemic when the government published numerous guidance notes throughout this period.
The above relevant events are also relevant matters that may entitle the contractor to additional money, albeit they are now dealt with as optional entries within the contract particulars.
Insolvency
The definition of ‘Insolvent’ has been expanded to cover developments in insolvency law.
Ground conditions
Like the JCT Design and Build Contract 2024, provisions have been introduced so that, as well as antiquities, the Employer takes the risk for asbestos, contaminated material and unexploded ordnance found in the ground.
Termination payment
The new JCT Standard Building Contract 2024 introduces a new defined term, “Termination Payment”. Together with some new clauses in the termination section, this provides a more structured approach to the final payment when a contract is terminated.
Liquidated damages
New provisions make it clear that liquidated damages will be paid until all works have been completed or, if earlier when the contract is terminated.
Professional Indemnity Insurance
The contract particulars now include a space that allows users to set out specific sub-limits and exclusions for a PI insurance policy.
Previously, any sub-limits related to pollution and contamination only and users were not able to set out any specific exclusions.
This change reflects the evolving nature of the PI insurance market and how common exclusions, such as those relating to fire safety and cladding, are becoming.
Modernisation
The JCT Standard Building Contract 2024 suite adopts gender-neutral language and has moved away from references to “he” and “workmen”.
The suite also allows for the delivery of notices by email and accommodates electronic signatures.
What next?
The main 2024 suites of JCT contracts have now all been released. However, the new Target Cost Contract (TCC) family is still to be released, as well as the other remaining suites (including the construction management and major project suites).
For more information on the above changes, or if you have any questions on construction law in general, please contact Ross Galbraith using [email protected] or 0191 211 7999.