Questions on construction contracts (and JCT contracts)

tallac

I'm trying to understand details about construction contracts and JCT contracts. I did some Google searching and I've still not found any website that clearly gives a layperson explanation of this.

As a home owner, if I want to get construction work done (especially a large project) then I understand that it's wise to get a contract drawn up. What I don't understand is, is it entirely reasonable to draw up a custom contract between the builder and the home owner. I'm sure a builder might have their own template and so it would have all the necessary clauses to protect the builder but this might not protect the home owner in the same way. As a home owner, I might be able to request certain changes and details in the contract that the builder might incorporate but this may still not protect the home owner to the same level as the builder.

This is where I think JCT contracts come into play. As far as I understand, these are defined standard templates for contracts so having a JCT contract would give some reassurance to the home owner (and the builder) that it is protecting both parties in an impartial way.

Q1: Does this mean that a JCT contract cannot be substantially amended by the builder?

Of course the builder can insert details specific to the project in the contract such as the completion date and cost details but:
Q2: surely they can't remove an entire clause which is there to protect the home owner?

Thus, I'm guessing a JCT contract can only be amended with details that are strictly controlled by JCT.
Q3: Is that understanding correct?

Q4: I'm also guessing that there's some cost involved to using a JCT contract?

Q5: Is JCT the Rolls Royce of contract standards?

Q6: Are there any other contract standards that are worth considering that provide a similar standard?

Thanks in advance for the help to explain :-:smiley:

Doozergirl

Honestly speaking, contracts don't mean an awful lot in domestic setting.   Paperwork does mean a definite something but all the clauses for lawyers to argue over cost, as I was quoted this week, £220 + VAT per hour.   

The FMB produce a plain language contract and I think that it is the most helpful for both parties, who aren't qualified construction professionals.  

JCT produce contracts.   You put your own terms into both but when you talk about a 'large project', JCT classes it as minor works.  Big firms use JCT.   I have worked under a JCT contract with an architect as project manager and our clients walked away owing us £16,000.  We paid our solicitor for a consultation and she told us that we'd probably win, but the fees would be a minimum of £10k.  The fact that our clients were both solicitors meant that they would very quickly run us out of anything we were entitled to.  They knew that. 

The FMB contract is simple stuff.  It sets out clear expectations that both parties can understand and just signing it shows good willing on both sides. 

Ultimately, all you are going to get through on is trust and good feeling.  It starts with gut feeling.  If you don't get it, really get it, don't employ the person.  It goes both ways.  We work with people we click with - that's the rule.   Contracts only ever suit the cunning, not the honest.  

Our good friend uses all sorts of contracts and he gets caught out on them all the time.   Nicest guy you'd ever want to deal with - he'd be better off not using the contracts and just continuing to be too nice and save the solicitors fees.  

He has money to stick up for friends if they'll win something and he put himself £200k deep for £400k of someone else's money.  Who can afford to do that? Same sort of litigation fee.  

Simple contract, as few terms as possible because no side of an average domestic project one can afford to uphold anything complicated.  

Doozergirl

In summary, if a JCT contract is a Rolls Royce, you need to be able to afford to service it.  

Section62

Doozergirl said:

In summary, if a JCT contract is a Rolls Royce, you need to be able to afford to service it.  

^A perfect summary IMV.

There's a place for complex contract types, but if you don't understand the workings of the contract and don't have the deep pockets needed to draft it and subsequently defend your position, then the contract can be as much a noose as a lifeline.


For domestic work keep it simple and understandable.

It's far more important to concentrate on what the important outcomes are - fixed cost, fixed completion date, scope to change the design part-way etc etc.

The big financial claims in construction contracts usually relate to design changes or delays. Or delays due to design changes.

homersimpson246

Doozergirl said:

In summary, if a JCT contract is a Rolls Royce, you need to be able to afford to service it.  

Indeed this, when we have JCT (or NEC) contracts for millions of pounds of construction work its still almost never worth using the contract to force anything via legal routes as the costs are huge and the outcome is never certain even in cases that seem black and white.

If your using a small builder for works at your house then a simple contract (no more than JCT minor works) is a good idea as it sets out what everyone is meant to do and when (defects periods, retentions, damages, completion dates etc.) but using it to enforce them if the other party won't agree is an entirely different matter.

tallac

Understood, thanks for the advice. Sounds like just getting a simple written down agreement for the main aspects is enough. Thanks for the advice.