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Don’t get caught out: Changes to the JCT Minor Works Building Contract

Despite the revised JCT 2011 suite of contracts being in circulation for almost a year, legal disputes resulting from misunderstanding the contract appearing in the industry press is still commonplace.

A period of uncertainty often follows a change to standard form construction contracts, but this does not win any leniency in a Court of Law. It is essential for surveyors, employers, contractors and sub-contractors to fully understand the requirements and their obligations under the up-to-date contracts to avoid what are potentially extremely costly disputes.

The potential costs to the employer are demonstrated by the case of Rupert Morgan Building Services (LLC) Ltd v David Jervis and Harriet Jervis [2003]. A summary of the salient points from the case are provided below and will serve as a timely reminder to follow the statutory requirements within the revised standard form contracts diligently:

  • A couple engaged a builder to carry out work on their cottage, by means of a standard form contract.
  • The interim certificate was for a sum of around £44,000 plus VAT.
  • The employers accepted that part of that amount was payable but disputed the balance, amounting to some £27,000 but did not give ‘a notice of intention to withhold payment’ before ‘the prescribed period before the final date for payment’.
  • The builder argued that the employers ‘may not withhold payment’.
  • The employers maintained that it was open to them by way of defence to prove that the items of work which go to make up the unpaid balance were not completed, were charged as extras within the original contract, or represented ‘snagging’ works.
  • The Court of Appeal determined that in the absence of an effective withholding notice the employer has no right to set off against a contract administrator’s certificate

More information with regards to the JCT 2011 suite of contacts can be found in the JCT website at: www.jctltd.co.uk

Finnegan Associates are independent property consultants who provide advice to public and private sector clients. We work regularly with the JCT 2011 standard form contracts and understand the implications on your individual projects. To discuss this further please contact info@finneganpropertyservices.com or call 020 3137 8078.

 

Posted on 2 October, 2015

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