Bal Manak on the latest edition of the JCT Design and Build Contract 2024

The new Design Build Contract 2024 has been published by the Joint Contracts Tribunal (JCT).

The JCT are announcing updates to all contracts and much of what is in the Building Contract are changes we had been expecting.

?There are now some key changes in the new contract, which I’m sure will be welcomed by parties used to utilising the 2016 version.

?The Design and Build Contract 2024 was released on 17 April, with others to follow such as a new Target Cost Contract.

?Below are some of the main headlines...

Modernisation

Adopting gender neutral language, the new contract outlines how email can now be used to send notices, except for notices relating to default or termination, which can be issued electronically only if selected in the Contract Particulars. There’s also new provision for electronic signatures.

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Building Safety Act

There is now a Building Regulations Principal Contractor and Principal Designer named in the contract, alongside the existing Principal Contractor and Principal Designer under the CDM Regulations.

The Contract also refers to the new duty holder requirements under the Building Regulations in clause 3.16, and there remains a right for either party to terminate the contract for breach of that clause.

No additional obligations are inserted for works on higher-risk buildings, so we’d expect to see additional amendments to cover this.

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Extensions of Time and Loss and Expense

Employers must notify contractors of extensions of time within eight weeks, reduced from the previous 12. Timeframes have also been condensed from 16 to 10 weeks in the Design and Build Subcontract.

A “Relevant Event” has been added to cover delays caused by an epidemic which limit the availability or use of labour or materials.

The exercise of Government statutory powers and changes in law Relevant Event has been updated to include publication of any guidance by the Government, local authority or Construction Leadership Council.

The Relevant Event relating to antiquities has been extended to include asbestos, contaminated material, and unexploded ordnance.

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Fitness for Purpose

There is an express fitness for purpose exclusion in relation to design. The Contractor has no greater liability for design than delivering the required level of skill and care that would be expected of a qualified and experienced architect or other appropriate professional designer.

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Professional Indemnity Insurance

Contract Particulars include new sections to insert specific exclusions included in the PI insurance policy rather than limiting them to pollution and contamination.

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Liquidated Damages and Termination

Following the Supreme Court’s decision in the case of Triple Point Technology Inc v PTT Public Company Ltd [2021], JCT now makes it clear that liquidated damages will be payable until works are completed or via the termination of the contract (whichever is the earlier).

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Termination

There is now a payment due date after termination, as well as provisions relating to the Termination Payment. The contractor’s right to claim losses and/or damages only applies if the termination is due to the employer’s default, insolvency or loss or damage to the works which is an Excepted Risk or is covered by the Works Insurance Policy.

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Conditions of Sub-Contacting

The provision for sub-contracts to require automatic termination should the main contract be terminated has been amended. It will only apply if a beneficiary is not permitted to step into those sub-contracts.

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Collaborative Working

Similar to NEC contracts, a requirement for parties to “work with each other and with the other project team members in a co-operative and collaborative manner, in good faith and in a spirit of trust and respect,” has been inserted.

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Insolvency

There are two new company insolvency grounds inserted to the definition of insolvency. These reflect changes to current insolvency legislation.

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Adjudication and Arbitration Nominating Body

The parties are able to now choose their own nominating body for adjudication and arbitration, which can be inserted into the Contract Particulars.

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Supplemental Provisions

The optional supplemental provisions dealing with collaborative working, sustainability and notification of disputes are now included in the Conditions.

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Fluctuations

The fluctuations options are no longer included in the contract. They are instead included in supplemental documentation that can be downloaded from the JCT website. The same applies to the Rights Particulars document.

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Bal Manak heads up the Square One's Construction service, working as a part of the broader Commercial Property team.