The JCT launched its of the on 15 June 2016. This will be followed by the other JCT contract suites, which will be rolled out family by family. We understand that the next contracts to be published will be the short form of sub-contract and sub-subcontract (date to be confirmed), followed by the (JCT DB) family in the autumn this year.
Minor Works Contracts. The New 2016 JCT Contracts. With part of the JCT 2016 Editions arriving last year and the remainder scheduled for 2017, below is a brief. The Contract: JCT Minor Works Building Contract with Contractor's Design Employer at base date is a 'contractor' for the purposes of the CIS. What Is The Difference Between Intel Vs Amd Jun 12, 2015.
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This post looks at some of the key changes in the minor works suite:. (MW 2016). (MWD 2016). (MWSub/D 2016). Many of these changes were, but others may take practitioners by surprise.
The JCT has also taken the opportunity to tighten up some of the drafting, clarify certain provisions and update the guidance notes within the contracts. Payment provisions The JCT indicated that the payment provisions would be amended but the extent of the changes may come as a surprise to some. While there are a large number of changes to clause 4 of MW and MWD 2016, these reflect a change in approach rather than any real change in substance:. Interim Valuation Dates (clause 4.3). Interim valuation dates (IVD) in respect of each interim payment are now defined.
While the parties may agree their own IVDs, the default position is that the first IVD is one month after the commencement date of the works and then at monthly intervals. The intention behind establishing IVDs is that they will operate down the supply chain and promote fair payment. MWSub/D 2016 provides that its IVD should be the same as the first IVD under the main contract and the intervals that apply under the main contract should also apply under the sub-contract. Dates for payment (clause 4.3). The due date for payment is now defined by reference to the IVD, rather than as 4-weekly intervals from the commencement date as under MW 2011.
This provides more certainty as to when the due date is. In MW/MWD 2016 it is the date seven days after the relevant IVD in relation to each interim payment. In MWSub/D 2016, it is 12 days after the relevant IVD. The final date for payment of each interim payment in all the contracts is now 14 days from the respective due date.
Simplified payment process (clause 4.3). MW/MWD 2016 provide for the monthly payment cycle to continue after practical completion up to the due date of the final payment. Under MW/MWD 2011, interim payments made before practical completion operated on a monthly payment cycle, whereas those made on or after practical completion operated on a two-monthly cycle. Contractor’s application for payment (clause 4.4). MW/MWD 2016 expressly allow the contractor to make an application for payment.
This reflects what often happens in practice whereas the 2011 contracts assumed that the architect/contract administrator would simply issue an interim certificate with five days of the relevant due date. It was only if this certificate was not issued that the contractor would issue a payment notice. Payment and payment notices (clauses 4.5 and 4.6). The provisions dealing with payment and pay less notices for both interim and final payments have been consolidated and are now dealt with by clause 4.5. The provisions setting out the consequences of failing to pay any amount due, whether an interim or final payment, have also been consolidated (clause 4.6).
Parties entering into a 2016 minor works contract should ensure that they understand the amended payment process set out in clause 4. It is compliant with the payment provisions of the and parties should not rush to amend it. Recent case law demonstrates that problems often arise when parties amend the payment provisions in standard form contracts, in particular when the court interprets them in a way that neither party intended. For example, in, the parties amended their contract ( ) to agree a specific schedule of interim applications and payments. The court held that once the agreed schedule expired, the contractor had no contractual right to apply for further payments until the contract’s final payment mechanism was triggered. Similarly, in, the parties amended the payment terms of their contract ( ) but did not amend the payment notice provisions with the result that the court interpreted them in a way for which neither party contended. Hi Stuart While we can’t give advice on any specific contract on this blog, we understand that the JCT’s intention with this drafting was to provide a flexible approach.
Looking further afield to engineering, infrastructure or publicly-funded projects, that would mean details of the type of coverage required would be added, rather than detail of a particular policy. That is, who is responsible for insuring what risks and on what basis. In those wider fields, that would form part of an insurance schedule, based on the advice of specialist brokers. Back to the current JCT forms and we’re sure that “good practice” will emerge, but until the JCT publishes the Standard Building Contract and Design and Build Contract, we await the JCT’s own guidance.
In the meantime, on a simple project, if the advice you receive from insurers or brokers is that a particular policy can meaningfully be referred to, that may be their position. In that scenario I wonder what the parties would have to do if the policy wording or insurers was likely to change during the course of the works?
The 2011 editions of the JCT contracts reflect amendments to the Housing Grants, Construction and Regeneration (HGCR) Act 1996 by Part 8 of the Local Democracy, Economic Development and Construction (LDEDC) Act 2009. This new Act has been introduced to encourage the resolution of disputes by adjudication and to enable better management of cash flow. Within the JCT 2011 contracts payment terms and conditions have been amended but, because the contracts refer to The Scheme for Construction Contracts (England and Wales) Regulations, adjudication has not required any changes. All contracts, except Minor Works (MW) and Minor Works with Contractor's Design (MWCD), now incorporate:.
Terrorism cover provisions included in JCT's 2009 update. The appointment of a principal contractor to comply with the Site Waste Management Plans Regulations 2008. Payment provision in JCT 2011 contracts Minor Works (MW) and Minor Works with Contractor's Design (MWD) The Contract Administrator is responsible for both valuations and issuing certificates. The due dates are:. Up to practical completion, at intervals of 4 weeks calculated from the date for commencement of the Works.
7 days after the date of practical completion. Every two months after practical completion until the expiry of the rectification period. Interim certificates (payment notice) must be issued by the CA within 5 days of the due date. If an interim certificate is not issued or is issued late, the Contractor may give a payment notice (default payment notice) to the CA stating the sum due on the due date and the basis on which that sum has been calculated. Payment is to be made by the Employer to the Contractor following the strict timetable in the contract:. The final date for payment of the certificated sum is 14 days from the due date. If a default payment notice is served the date for payment is delayed by the same number of days after expiry of the 5 day period.
Should the Employer wish to pay less than the sum stated in the certificate, a notice (pay less notice) must be issued to the Contractor not later than five days before the final date for payment stating the basis on which the sum has been calculated. Intermediate Contract (IC) and Intermediate Contract with Contractor's Design (ICD) The Contract Administrator (CA) is responsible for issuing certificates. Valuations are done by the CA unless undertaken by the QS upon request of the CA. The Contractor has the right to submit an interim application to the Quantity Surveyor at least 7 days before the due date stating the sum due on the due date and the basis on which that sum has been calculated.
The due dates are:. Up to practical completion, the monthly dates stated in the Contract Particulars. Within 14 days after the date of practical completion. On the specified dates every two months after practical completion until the expiry of the rectification period or issue of the certificate of making good. Interim certificates (payment notice) must be issued by the CA within 5 days of the due date. If an interim certificate is not issued or is issued late, the Contractor's interim application if made becomes an interim payment notice (default payment notice) or any time after the 5 day period the Contractor may give an interim payment notice (default payment notice) to the QS stating the sum due on the due date and the basis on which that sum has been calculated. Payment is to be made by the Employer to the Contractor following the strict timetable in the contract:.
The final date for payment of the certificated sum is 14 days from the due date. If a default payment notice is served the date for payment is delayed by the same number of days after expiry of the 5 day period. Should the Employer wish to pay less than the sum stated in the certificate, a notice (pay less notice) must be issued to the Contractor not later than 5 days before the final date for payment stating the basis on which the sum has been calculated. Standard Contract with quantities (SBC/Q) without quantities (SBC/XQ) and with approximate quantities (SBC/AQ) The Contract Administrator is responsible for issuing certificates. Valuations are made by the Quantity Surveyor when the Contract Administrator requires them for ascertaining the amount due in an interim certificate; except when Fluctuations Option C applies, where it is required before the issue of each certificate.
The Contractor has the right to submit an interim application to the Quantity Surveyor at least 7 days before the due date stating the sum due on the due date and the basis on which that sum has been calculated. The due dates are:.
Up to practical completion, the monthly dates stated in the Contract Particulars. Within one month after the date of practical completion. On the specified dates every two months after practical completion until the expiry of the rectification period or issue of the certificate of making good. Interim certificates (payment notice) must be issued by the CA within 5 days of the due date. If an interim certificate is not issued or is issued late, the Contractor's interim application, if made, becomes an interim payment notice (default payment notice) or any time after the 5 day period the Contractor may give an interim payment notice (default payment notice) to the QS stating the sum due on the due date and the basis on which that sum has been calculated. Payment is to be made by the Employer to the Contractor following the strict timetable in the contract:. The final date for payment of the certificated sum is 14 days from the due date.
If a default payment notice is served the date for payment is delayed by the same number of days after expiry of the 5 day period. Should the Employer wish to pay less than the sum stated in the certificate, a notice (pay less notice) must be issued to the Contractor not later than 5 days before the final date for payment stating the basis on which the sum has been calculated. Design and Build Contract (DB) As there is no independent certifier, the Contractor is required to make applications for interim payments, either at the completion of stages (Alternative A) or at regular intervals (Alternative B). The selected method is stated in the contract particulars. The due dates are:. Alternative A - at the completion of stages specified in the Contract Particulars up to application for the last stage and thereafter the same date at intervals of 2 months or, if later in each case, the date of receipt of the Contractor's interim application. Alternative B - up to practical completion, the monthly dates stated in the Contract Particulars and thereafter the same date at intervals of 2 months or, if later in each case, the date of receipt of the Contractor's interim application.
Following the Contractor's application for payment the Employer must follow the strict timetable for the notice and payment procedure:. The final date for payment of an interim payment is 14 days from the due. Not more than 5 days after the due date the Employer must give notice (payment notice) to the Contractor stating the sum due on the due date and the basis on which that sum has been calculated. If the payment notice is not issued the amount due, subject to any payless notice, is the sum stated as due. Should the Employer intend to pay less than the sum stated in the interim application or payment notice, a notice (pay less notice) must be issued to the Contractor not later than 5 days before the final date for payment, stating the sum due on the due date and the basis on which that sum has been calculated. Related reading on theNBS.com To keep up-to-date with future articles in this topic area - why not sign up to the NBS eWeekly newsletter?
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