JCT contract - suitable for your construction project?

JCT (Joint Contracts Tribunal) contracts are among the most widely used standard forms of contract in the UK construction industry. They are highly respected and provide a well-established legal framework that helps manage risk, responsibilities, and payment structures in construction projects. Their structured approach helps reduce disputes and promotes clarity for all parties involved.

We deal with a lot of development projects with an overall budget of between £1-10 million. Clients often want to know whether they can save money and potentially time by asking us to use a JCT contract. In simple terms, JCT contracts are a good starting point, as they are designed to be user-friendly. However, they contain complex legal clauses that can have significant implications if misunderstood.

Instructing a construction lawyer or contract specialist to review and tailor the contract to your project’s specific needs is highly advisable, particularly for larger or more complex works.

There are 3 main forms of JCT contract likely to be useful starting points for a small to medium size construction/property development project.

JCT Minor Works Building Contract

Key points to note with this form of JCT include :-

• Simple and easy to use, making it accessible for smaller contractors and employers without extensive legal knowledge.

• Suitable where minimal design input from the contractor is needed, ensuring clarity on design responsibility.

• Cost-effective with minimal legal complexity, reducing legal fees and administrative burden.

• Well-recognised in the industry, which speeds up contract negotiations and simplifies procurement.

• Clearly defined payment provisions, including interim payments and final payment terms (Clause 4.2), ensuring smooth cash flow.

• Limited flexibility – Does not cater for complex phasing or significant design changes post-contract.

• Minimal contractor design responsibility – May not be appropriate for projects requiring innovative construction solutions.

• Weak risk allocation – Fewer provisions for latent defects, unforeseen ground conditions, and employer-contractor risk sharing.

• Basic dispute resolution mechanisms – Limited provisions for adjudication and arbitration, potentially leading to difficulties in resolving disputes efficiently.

• Lacks detailed variations mechanism – Modifications to the scope of work can be cumbersome and prone to disagreements.

JCT Intermediate Building Contract

Generally a good option as a starting template for a mid-size projects with moderate complexity. Common contract adaptions for this form of JCT can include adding bespoke terms related to risk allocation, design responsibility, and time extension provisions to reduce exposure to delays and cost overruns. Other factors to consider include :-

• Includes robust provisions for contract administration and risk allocation, enhancing project management.

• Includes clauses relating to nominated subcontractors and suppliers – Allows employers to retain some control over key trades while still engaging a main contractor.

• Clearly defines liabilities for defects (Clause 2.18) and completion obligations.

• Supports projects with moderate design complexity – Allows for employer-led design with some contractor input, offering a balance between control and flexibility.

• Detailed provisions for interim payments, retention (Clause 4.16), and final accounts, ensuring fair financial structuring.

• Clear contractual clauses on variations – Formal instructions (Clause 3.10) allow modifications to work while managing cost and timeline implications.

• Limited flexibility in employer design changes – Although variation clauses exist, significant design changes can be administratively complex and costly.

• Requires structured contract management - including issuing formal instructions and valuations, increasing workload for project managers.

• Potential for subcontractor disputes – The contract’s nominated subcontractor provisions (Clause 3.8) may cause conflicts over responsibilities and liabilities.

• Not ideal for phased or multi-stage projects – Lacks the flexibility and staging mechanisms of SBC, making it less suitable for complex delivery schedules.

Fluctuation provisions may not be suitable for all projects – While the contract includes provisions for adjusting costs due to market changes (Clause 4.20), these can sometimes create budget uncertainty if not well managed.

JCT Standard Building Contract

Generally best suited for larger/higher value projects with significant complexity. Adaptation by an experienced construction lawyer will often focus initially on phased work scheduling, liquidated damages, and specific performance obligations. This form of JCT includes :-

• Traditional procurement methods – Employer has full control over design before tendering, ensuring greater cost and quality certainty.

• Comprehensive phased work provisions – Allows for sectional completion (Clause 2.4), enabling staged handovers and reducing site coordination risks.

• Detailed risk allocation mechanisms – Clearly defines responsibilities for defects, variations, and project delays.

• Comprehensive payment mechanisms – Includes detailed provisions for interim valuations (Clause 4.8), liquidated damages (Clause 2.29), and final accounts.

• Strong dispute resolution options – Incorporates adjudication (Clause 9.2), arbitration (Clause 9.3), and mediation, reducing risks of prolonged legal disputes.

• Extensive provisions for quality control and performance obligations – Includes detailed warranties, indemnities, and defect rectification periods, ensuring high-quality outcomes.

• Requires more extensive contract management, increasing overheads for both contractors and employers.

• Slower procurement process – Requires finalised design before tendering, delaying early contractor involvement. Limited flexibility for design changes post-contract – Any modifications to the design can be administratively complex and financially significant.

• Payment mechanisms require careful oversight to avoid delays in cash flow.

Is it worth starting with a JCT contract and adapting it?

In many cases yes. However, while JCT contracts provide a robust framework, certain projects may require a more bespoke approach. You should expect any form of construction contract that has lawyers involved for the parties to be heavily amended and negotiated. The specification will invariably be very important and detailed and this will be separate generally from the main terms of the contract.

In summary, don't expect to be able to just use an unamended JCT contract and fill in the names and other basic details. This will generally mean significant risk. Always focus on :-

• Risk Allocation - including liability and indemnity.

• Performance Standards - ley contract clauses needed in the form of warranties, indemnities, and quality assurance requirements.

• Payment Terms - milestone payments, retention, and fluctuation provisions.

• Dispute Resolution- adjudication and arbitration clauses

• Specifications - to avoid ambiguity in scope and quality expectations.

For tailored advice on JCT contracts and necessary adaptations, contact our construction law team.