Tread carefully - JCT 2016 contracts

The JCT has started publishing its 2016 updates. So far the Minor Works Building Contracts (both with and without design) and the Design and Build Contract have been updated, in each case with related sub-contract documentation. Updates to the rest of the suite are anticipated over the next few months.

Care needs to be taken with the new suite, particularly with the revised loss and expense provisions in the Design and Build Contract 2016.

The main thrust of the changes, particularly in the Design and Build form, is to bring the contracts closer to market practice. In terms of the Design and Build Contract, market practice updates include:

  • The addition of an option for a bond and / or parent company guarantee - the parties will need to agree the form of bond / PCG as the JCT has not published its own forms.
  • The addition of sub-contractor third party rights – this is particularly welcomed as the accompanying changes to the JCT forms of sub-contract should reduce the risk of third party rights not being properly incorporated into sub-contracts. Care will still however need to be taken to ensure that sub-contracts do meet the requirements of the employer in terms of classes of beneficiary, the form of sub-contractor third party rights and the mechanism for these to be granted.
  • Recognition that the contractor may be obliged to comply with a BIM Protocol – the BIM protocol itself will need to be prepared by the project team and included in the contract documents.