The JCT 05 Standard Building Contract Law and Administration This page intentionally left blank The JCT 05 Standard Building Contract Law and Administration Second edition Issaka Ndekugri Michael Rycroft AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEW YORK • OXFORD PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Butterworth-Heinemann is an imprint of Elsevier Butterworth-Heinemann is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA First published by Arnold as The JCT 98 Building Contract: Law and Administration, 2000 Reprinted 2006 Second edition, 2009 Copyright © 2000, 2009 Elsevier Ltd. 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British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data A catalogue record for this book is available from the Library of Congress ISBN: 978-1-8561-7629-3 For information on all Butterworth-Heinemann publications visit our web site at www.elsevierdirect.com Typeset by Macmillan Publishing Solutions (www.macmillansolutions.com) Printed and bound in United Kingdom 09 10 11 12 13 10 9 8 7 6 5 4 3 2 1 Contents Preface to Second Edition xxi Preface to First Edition xxiii Glossary of Latin terms xxv Abbreviations xxvii 1. Style of JCT 05 Standard Building Contract, contract execution and related problems 1 1.1 Standard form contracts generally 1 1.2 The Joint Contracts Tribunal Limited 2 1.3 JCT 05: Use, style and criticism 4 1.3.1 Use of JCT 05 4 1.3.2 Style of JCT 05 6 1.3.3 Criticism of JCT 05 7 1.3.4 Scope of this book – JCT 05 Standard Building Contract, With Quantities 9 1.4 Documents forming the Contract 10 1.4.1 JCT 05: the printed form 10 1.4.1.1 Contents 10 1.4.1.2 Articles of Agreement – Recitals, Articles, Contract Particulars, Attestation 10 1.4.1.3 Conditions 15 1.4.1.4 Schedules 15 1.4.2 Contract Drawings 17 1.4.3 Bills of Quantities 17 1.4.4 Documents related to Contractor’s Designed Portion (where applicable) 19 1.4.4.1 Employer’s Requirements 19 1.4.4.2 Contractor’s Proposals 20 1.4.4.3 CDP Analysis 20 1.4.5 Other documents: Standard Method of Measurement 20 1.4.6 Other documents: Adjudication Agreements 21 1.4.7 Other documents: Model Arbitration Rules 21 1.4.8 Other documents: Sundry descriptive documents 21 vi Contents 1.5 Preparing the Contract Documents 21 1.5.1 Generally 21 1.5.2 Agreement, Contract Particulars, Schedules 22 1.5.2.1 Articles of Agreement 22 1.5.2.2 Recitals 22 1.5.2.3 Articles 24 1.5.2.4 Contract Particulars – Part 1: General 25 1.5.2.5 Contract Particulars – Part 2: Third Party Rights and Collateral Warranties 34 1.5.2.6 Attestation 37 1.5.2.7 Conditions 39 1.5.3 Drawings and Bills of Quantities 39 1.5.3.1 Drawings 39 1.5.3.2 Bills of Quantities 39 1.5.4 Optional documents 40 1.5.5 Amending the Standard Contract Form 41 1.5.5.1 Generally 41 1.5.5.2 Amendment by introduction in the Bills and other documents 42 1.5.5.3 Amendments to the printed standard form 43 1.5.5.4 Amendments to the Conditions in breach of the ‘Construction Act’ 1996 44 1.5.5.5 Amendments and additions in breach of the Unfair Contract Terms Act 1977 48 1.5.5.6 Amendments to alter periods under the Limitation Act 1980 49 1.5.6 Custody of Contract Documents 50 1.6 When things go wrong 50 1.6.1 Two versions of a drawing revision, the wrong version of which is signed 50 1.6.2 Contract Drawings listed do not correspond with Drawings signed 50 1.6.3 Failure to complete the Contract Documents 51 1.6.4 Failure to complete the formalities 52 1.6.5 Discrepancies 53 1.7 Forming a contract and the ‘Battle of Forms’ 54 1.8 Letters of intent and the right to payment 58 1.8.1 Letters of intent: meaning and effect 58 1.8.1.1 Generally 58 1.8.1.2 Letters of intent and standard form contracts 61 1.8.2 Letters of intent: right to payment 64 1.8.2.1 Right to payment: introduction 64 1.8.2.2 Quasi-contract and restitution 65 1.8.2.3 What is quantum meruit? 66 2. Participants in the project and their roles under the Contract 72 2.1 The Employer 72 2.1.1 Express contractual duties 72 2.1.2 Implied contractual duties 74 Contents vii 2.1.3 Duty not to interfere with the discretion of the Architect or Quantity Surveyor 75 2.1.4 Rights of third parties 75 2.1.5 The Employer as client under the Site Waste Management Plans Regulations 76 2.2 The Employer’s Representative 77 2.3 The Contractor 78 2.3.1 Materials and workmanship 78 2.3.1.1 The common law position 78 2.3.1.2 The contractual position 80 2.3.1.3 Substitution of materials required under the Contract 83 2.3.2 The Contractor’s duty to give notices 83 2.3.3 The Contractor’s design responsibility 85 2.3.4 The Contractor’s CDP obligations 86 2.3.5 The Contractor’s duty to warn 86 2.3.6 Duty to comply with Architect’s Instructions (AIs) 88 2.3.7 Duties relating to the Contractor’s master programme 88 2.3.7.1 The Society of Construction Law’s Protocol 89 2.3.7.2 The contractual status of the Contractor’s programmes 90 2.3.8 Statutory Requirements 92 2.3.8.1 Divergence in contractual requirements 93 2.3.8.2 Unauthorized variations to comply with Statutory Requirements 94 2.3.9 Duty to indemnify the Employer 94 2.3.10 Insurance obligations 95 2.3.11 Duties with respect to assignment and sub-contracting 95 2.3.12 Obligations in respect of other contractors of the employer 95 2.3.13 The principal contractor under the Site Waste Management Plan Regulations 96 2.4 The Architect 96 2.4.1 Duty to provide drawings, instructions and other information 99 2.4.1.1 Items in the Information Release Schedule 99 2.4.1.2 Information not listed in the Information Release Schedule 99 2.4.1.3 Information from other designers 101 2.4.1.4 Claims for delayed drawings and other information 102 2.4.2 Quality control duties 102 2.4.2.1 Evidence of Architect’s satisfaction and appropriate materials and goods 102 2.4.2.2 Inspection and testing 103 2.4.2.3 Removal of non-conforming work and materials 103 2.4.2.4 Acceptance of non-conforming work 104 2.4.2.5 Variations and other instructions 105 2.4.2.6 Defective work and Interim Certifi cates 106 2.4.2.7 Exclusion of persons 107 2.4.2.8 Withholding the Practical Completion Certifi cate 107 2.4.2.9 Construction Skills Certifi cation Scheme 107 viii Contents 2.4.3 The extent of the Architect’s duty to supervise/inspect 107 2.4.4 Certifi cation duties 109 2.4.5 Duty to report on failings of other members of the design team 110 2.4.6 Standard of skill and care expected of the Architect 110 2.4.7 Liability of the Architect to the employer 111 2.4.8 Liability of the Architect to the Contractor and other third parties 112 2.5 The Quantity Surveyor 113 2.6 Designers 113 2.7 The Person-in-Charge (PIC) 114 2.8 The Clerk of Works (COW) 115 2.9 Suppliers and sub-contractors 117 2.10 Joint liability 117 3. JCT 05 timetable 118 3.1 Possession of site 120 3.1.1 General principles 120 3.1.2 Possession of site under the JCT 05 121 3.2 Completion Date 122 3.3 Practical Completion Certifi cate 123 3.3.1 Meaning of ‘practical completion’ 123 3.3.2 Effect of the Practical Completion Certifi cate 124 3.4 Non-Completion Certifi cate 125 3.5 Rectifi cation Period 126 3.5.1 Liability for defects that appear during the Rectifi cation Period 127 3.5.2 Defects after the Rectifi cation Period 127 3.5.3 Consequential loss from defects 128 3.5.4 Variations after practical completion? 129 3.6 Certifi cate of Making Good 129 3.7 Final adjustment of the Contract Sum 130 3.8 Final Certifi cate 130 3.8.1 Conditions precedent to a valid Final Certifi cate 131 3.8.2 Timetable for issue of the Final Certifi cate 133 3.8.3 Payment on the Certifi cate 133 3.9 Effect of Final Certifi cate 134 3.9.1 Role of the Architect 134 3.9.2 Adjustment of the Contract Sum and claims 135 3.9.3 Quality 135 3.9.4 Adjudication, arbitration or other proceedings 137 3.9.5 Dormant Proceedings 138 3.10 Partial possession 138 3.11 Early use/occupation by the Employer 139 4.