Throughout this article, I will be explaining standard form contracts in more detail and exploring the types of contracts that are most commonly used.
In the process of a construction project, a formal agreement which sets out the terms and obligations of the relevant parties is always required. This contract reflects the aspirations of the parties and meets the demands of a project. This helps to ensure that the project runs smoothly and avoids any legal issues along the way.
In the construction industry, a construction contract is defined by section 104 of the Housing Grants, Construction and Regeneration Act 1996. This is an agreement with a person for any of the following:
- The carrying out of construction operations.
- Arranging for the carrying out of construction operations by others, whether under sub-contract to him or otherwise.
- Providing his own labour, or the labour of others, for the carrying out of construction operations.
Parties can enter into a fully particularised contract for each building project, but this is not always necessary. The use of standard form contracts in the construction industry is commonplace as it removes the need to create bespoke terms and conditions for every contract and every new project.
What type of standard form contracts are most commonly used?
Joint Contracts Tribunal (JCT):
One of the most widely used form of standard contract in the UK is that produced by the JCT. Often, this is used for complex development projects. The JCT standard form building contract is viewed as an industry benchmark and comes in six variants. This incorporates private and local authority versions, as well as those with quantities, without quantities and estimated quantities.
The Association of Consultant Architects (ACA):
ACA produces a standard form of contract which stands out for its precision and flexibility. Another significant feature of this form of contract is the availability of standard alternative clauses. These can be customised by the parties involved as and when necessary.
The ICE form of standard contract is well suited to both public and private scenarios, including where a significant civil engineering project is undertaken. Under this form of contract, the engineer is provided with significant powers of direction and control.
The International Federation of Consulting Engineers (FIDIC):
FIDIC produces a form of standard contract which is suitable for when an engineer is employed as the agent of the client. The contract sets out the provision of sub-contractors and extensions to any contract period, etc.
The NEC’s Engineering and Construction Contract comes with a set of standard clauses common to building projects, as well as extra clauses. This allows the contract to be easily adapted to the specific circumstances of the project. This form of contract is user-friendly, easy to understand and intended to be used by all partners on a building project.
Are you facing challenges when it comes to construction contracts?
Legal issues can arise at every stage in a project’s life cycle and contracts are no exception.
At Mercantile Barristers, we are regularly asked to review and draft contract documentation. We also provide advice concerning standard forms of contracts, including JCT ICE, NEC, GC/Works, IMech and IChem forms.
Our comprehensive and effective construction and engineering contract drafting and advisory service are applicable to all stages of a project’s life cycle, from initial feasibility through to completion, disposal or occupation.
So, whether you run into a contract dispute or simply require guidance, Mercantile Barristers can help.
Please contact me directly for more information.