The New Engineering Contract (NEC) is a series of contracts designed to manage any project from start to finish. The contracts are written in plain English with a straightforward structure and are designed to be easily understood. NEC contracts aim to prevent costly disputes.
JCT contracts are known for being highly prescriptive. Although the standardised format may provide clarity, it can also limit flexibility. Each JCT contract is structured around a specific set of terms and clauses, which may not suit every project's unique needs or challenges.
At a greater level of detail, JCT provides a number of subjective tests for determining if certain events give grounds for recompense to the contractor, whereas NEC generally relies on more objective tests.
Generally, NEC contracts are aimed at engineering projects but are easily adapted to building works. JCT contracts are aimed at building works rather than engineering projects but again can be adapted for both.
Usually a JCT contract is made between an 'employer' (the client) and the 'contractor' (the construction team) to make the process as seamless as possible. It's a document containing the obligations of everyone involved, the agreed costs and timelines, terms and conditions, and the specifications of the project.
Contracts 'with quantities' are priced on the basis of drawings and firm bills of quantities. 'Without quantities' means a contract priced on the basis of drawings and usually another document, such as a specification or work schedules.
The JCT Standard Building Contract is designed for large or complex construction projects where detailed contract provisions are needed. Standard Building Contracts are suitable for projects procured via the traditional or conventional method.
JCT contracts offer a comprehensive structure for construction projects, but they are not without their limitations. Recognising the disadvantages of JCT contracts—such as limited flexibility, complex language, and potentially high costs—can help clients and contractors approach these agreements with greater awareness.
Lesson Summary. A contract is a legal agreement between two or more parties in which they agree to each other's rights and responsibilities. Offer, acceptance, awareness, consideration, and capacity are the five elements of an enforceable contract.