The JCT 2011 Building Sub-contracts
Written to help the busy subcontractor deal effectively with the range of subcontracts they will encounter, The JCT 2011 Building Subcontracts looks at the key contract conditions, considers the rights and obligations of the parties and how risk is allocated, and discusses the main practical problems that arise when using these subcontracts. The authors have written the book to be as accessible as possible to ensure the material is easy for the busy subcontractor to assimilate and use.
The JCT 2011 Building Sub-contracts
Background and Introduction
1.1 The Joint Contracts Tribunal (JCT)
The Joint Contracts Tribunal (JCT) was established in 1931 and for over 80 years has produced standard forms of contracts, guidance notes and other standard documentation for use in the construction industry. In 1998, the JCT became incorporated as a company limited by guarantee and commenced operation as such in May 1998.
Currently, JCT forms require the agreement of seven constituent bodies before they are issued by the JCT. Those bodies are:
The British Property Federation
The Contractors Legal Group
The Local Government Association
The National Specialist Contractors Council
The Royal Institute of British Architects
The Royal Institution of Chartered Surveyors
The Scottish Building Contract Committee
The above listed bodies are intended to be reasonably representative of the interests across the construction industry, namely, the employers, the consultants, the contractors and the sub-contractors, and the JCT sub-contract forms are naturally a reflection of these competing interests.
The regular position is that an employer contracts with a contractor, and the contractor contracts separately and independently with each of his sub-contractors.
The key point in respect of the above relationships is that, although the term 'sub-contract' is used in respect of the contract between the contractor and the sub-contractor, in all of the above cases, a contract is formed between two parties only (i.e. a contract is formed between an employer and a main contractor; a contract is formed between a sub-contractor and a main contractor).
With that in mind, it would be useful, therefore, to understand some basic principles of contract law.
Most aspects of the law of contract are set down in case law; however, there are some notable exceptions where provision is made in statute (e.g. the Sale of Goods Act 1979, the Unfair Contract Terms Act 1977 and the Supply of Goods and Services Act 1982).
Because of the nature of this book, the basic principles of contract law, as provided at section 1.3 can naturally be dealt with in outline only.
1.3 The formation of contracts and sub-contracts
There are many definitions of a contract, but in simple terms, it can be considered as being: 'an agreement which gives rise to obligations which are enforced or recognised by law'. Under English law, only the actual parties to a contract can acquire rights and liabilities under the contract. This is known as 'privity of contract'.
In respect of a main contract situation, the practical consequences of the doctrine of privity of contract are twofold:
the main contractor carries responsibility for a sub-contractor's work, etc., so far as the employer is concerned; and
the employer cannot take direct action in contract against the sub-contractor, unless there is a separate contract between the employer and the sub-contractor.
The effect that the Contracts (Rights of Third Parties) Act 1999 has upon this position in respect of the JCT sub-contracts considered in this book is dealt with later within this book.
The essence of any contract is agreement . In deciding whether there has been an agreement, and what its terms are, the court looks for an offer to do or to forbear from doing something by one party and an unconditional acceptance of that offer by the other party, turning the offer into a promise.
In addition, the law requires that a party suing on a promise must show that he or she has given consideration for the promise, unless the promise was given by deed .
Further, it must be the intention of both parties to be legally bound by the agreemen