ContractStore's Giles Dixon Launches User-Friendly Contract for the Construction Industry
1 March 2007
A unique plain speaking, one-size-fits-all contract, targeted specifically at the construction industry was launched March 1, 2007 at the House of Commons.
Published by the Joint Contracts Tribunal (JCT), the JCT-Constructing Excellence Contract is designed for use by all parties to a building project, consultants and contractors alike, thus minimising the risk of confusion and potential conflict. Speaking at the launch, Sir Michael Latham, chairman of Construction Skills and author of the seminal 1994 report on the UK construction industry, ‘Constructing the Team’ welcomed a “highly readable” document expressed in plain English. It was, he added, both brief and user-friendly and was “perfectly understandable and practical”. Sir Michael also highlighted the contract’s focus on trust and fairness, citing its emphasis on the importance of collaboration. “This is what best practice is about,” he said. Co-authored by solicitors Giles Dixon, founder of ContractStore, the online contracts website, and Martin Howe, the JCT-CE contract encapsulates their deeply-held belief in plainly drafted, succinct contracts that are readily understood by the layman. After all, observed Giles Dixon, “while the construction process is quite complex, at the end of the day a building contract is about three things – time, cost and quality. You don’t need a hundred pages to cover that.” And, he added, “why use the language of the 18th century in the internet age?” The JCT”s standard forms of building contract are used in the great majority of building projects in the UK and Giles Dixon is in no doubt that its adoption of this new contract is a very significant development for the construction industry. “10 years ago,” he said, “I would have laughed if anyone suggested I’d be writing a contract for the JCT. But Peter Hibberd, the current Secretary-General, has changed all that and is positioning the JCT for the 21st century with new, improved forms.” The JCT-CE contract carries a number of key innovations. Among these are: It’s ‘one size fits all’ configuration: Unique to the construction industry, the contract is drafted so that the same form may be used to appoint a main contractor, a subcontractor, architect or any other professional consultant. By identifying any of the parties as either ‘Purchaser’ or ‘Supplier’, every consultant and contractor on a project will be working on essentially the same terms, thus dispensing with the need for a multiplicity of forms. The contract emphasises consensus and a collaborative approach to problem solving. Good faith and co-operation are fundamental principles. The terms and conditions are clearly written in plain English and kept as brief as possible. Designed to resemble a purchase order, it is deliberately user-friendly. Risk management: provisions dealing with a risk register are included, as well as the incorporation of a Risk Allocation Schedule allowing for the identification of project risks and their allocation between the respective parties. Although the principal document is a two party contract, there is also an optional Project Team Agreement for the sharing of risk and reward among the project participants. Care has been taken to ensure that the contract meets the principles of the Achieving Excellence in Construction initiative established by the Office of Government Commerce (OGC). It is also intended to satisfy the requirement for public authorities to adopt a partnering approach in their procurement. Recalling that the Local government Association had originally called for it to be drafted, Sir Michael Latham said that another reason for welcoming the new contract was precisely because it was client-driven. “We have started on the best practice road,” he concluded, “but we are certainly not there yet.” But the JCT and Constructing Excellence were to be congratulated for helping the industry along that road More information on the new JCT contract is at: http://www.jctcontracts.com/JCT/contracts/view_family.jsp?familyId=180 | 