Long-awaited updates to construction sector contracts have been released, aimed at modernising and future-proofing the practice. Here’s what you need to know:
Modernising contracts
The flagship suite of standardised contracts produced by the Joint Contracts Tribunal (JCT), an organisation comprised of member bodies from across the construction industry, have become a well-used resource by businesses within the sector.
The latest update is a long-awaited revision to the previous 2016 edition, having been drafted in response to feedback provided by those who use the contracts most regularly.
Only the 2024 Design and Build Contract has been made available so far, having been released earlier this month. It is expected, however, that the changes will carry through the rest of the collection as and when they become available.
What is changing?
The new version factors in a range of new legislation and seeks to futureproof the contract by taking into account the need for sustainable and environmental development.
Among the changes the industry will need to take note of that feature in the 2024 Design and Build Contract are:
- the incorporation of some of the requirements introduced by the Building Safety Act 2022 (BSA) – for example, the identification, appointment and compliance of the principal designer and principal contractor (the dutyholders);
- that good faith negotiations between the parties are now mandatory;
- changes to the contractor’s design liability, including carrying out the design with ‘reasonable skill and care’, negating the previous requirement that the design also had to be fit for purpose; and
- the expansion of the extension of time provisions, which now incorporates things such as epidemics and delays caused by the discovery of contaminated materials.
However, some of the BSA’s requirements haven’t been factored in, with the new release not necessarily being directly applicable to the requirements of higher-risk buildings.
Hollie Ryan, Solicitor in the Thrings Construction and Engineering team, said: “It is great to see the JCT take a proactive approach in modernising the products it provides. This latest iteration of contracts addresses a range of areas from changing technology to gender neutral language and has incorporated learning from the Covid pandemic to support the delivery of projects in the sector with documentation that understands the parties’ concerns and needs.
“Careful consideration should be still given to the BSA as well as other legislation and statutory requirements when moving to the 2024 Contracts. Even though some of these requirements have been factored into the updates, some additional statutory requirements are not dealt with. As such, we would always recommend for those in the sector to seek legal advice on the suitability of their contracts before any agreement is completed.”
Thrings’ Construction and Engineering lawyers are well versed in advising those in the construction and real estate industry in navigating ever-changing regulation, with expertise in supporting clients with property portfolios, investment and transactions. For more information, get in contact today.
