Following the release of the first JCT 2024 contracts, which include a number of changes in response to our recommendation on contract terms, Build UK has updated its guidance on implementing the recommendation when using JCT contracts. The changes, which will help to support a fairer allocation of risk through the supply chain, include:
- Fitness for Purpose ‐ A new clause containing an express exclusion for fitness for purpose, making it clear that in undertaking the design, the contractor will have no duty beyond reasonable skill and care, and will not be subject to any fitness for purpose obligation in respect of its design
- Unquantifiable Risks ‐ The range of events giving rise to an extension of time and/or loss and expense has been extended to include asbestos, contaminated material and unexploded ordnance, in addition to antiquities, allowing the parties to agree a share of the risk in the event of such conditions
- Uncapped Liabilities ‐ A new footnote highlighting that the parties may wish to agree a cap on liability, with model clauses now included in the Guide.
The business environment remains challenging, and our recommendation identifies six contract terms that should be avoided in order to promote collaboration and realise better project outcomes. The updated guidance is designed to help implement the recommendation by explaining why each term should be avoided and setting out ways to manage the underlying issues in a more collaborative way, with specific guidance for both JCT and NEC contracts.
BuildUK represent large contractors in the UK and they state that the recommendation is non‐binding and Build UK members are free to negotiate their own contractual terms.
Whilst this is the case FIS CEO Iain McIlwee stressed the importance of “not putting up with rubbish contracts” and encouraged members to report unreasonable contract terms to the FIS so that we can take them up with BuildUK and, if necessary the contractor in question on a collective level.
FIS Members can (and are encouraged) to report unreasonable and irresponsible contract clauses via our website here.
Further help on legal and contractual matters is available by calling the dedicated FIS Legal Helplines (supported by expert lawyers and quantity surveyors). This helpline is available during office hours Monday – Friday via 0121 707 0077.
A raft of legal advice, support and training is available via the FIS Contractual and Legal Toolkit. Here you will also find details of our subsidised contract review service and details of recommended training on legal and contractual matters.
Find out more about FIS campaign to support better contracting: The Responsible No here
FIS is supporting the Conflict Avoidance Coalition: Find out more about the coalition and signing the Pledge here