Construction contract

This article refers to the contract for the main contractor to construct the works (and on some contracts also to design, operate and finance the project).

For agreements for the appointment of consultants, independent client advisers, site inspectorate, project managers, client representatives, etc., see the article on Appointing consultants.

Contents 1 Introduction 2 Standard forms of contract in common use for construction in the UK 2.1 JCT (The Joint Contracts Tribunal) 2.2 ACA (Association of Consultant Architects) 2.3 Chartered Institute of Building 2.4 FIDIC (Fédération Internationale des Ingénieurs-Conseils) 2.5 NEC (The New Engineering Contract): Engineering and Construction Contract) 2.6 Other forms of contract 3 Contract conditions 4 Building information modelling (BIM) 5 Modified standard forms of contract 6 Bespoke contracts 7 Notes 8 Related articles on Designing Buildings 9 External references

[edit] Introduction

The classic 19th-century definition of a contract is 'a promise or set of promises which the law will enforce' (ref. Pollock, Principles of Contract 13th edition). That is, there is reciprocity of undertaking passing between the promisor and the promisee.

In a contract, the rights and obligations are created by the acts of agreement between the parties to the contractual arrangement.

In the procurement of construction, contracts can be:

• Standard forms.
• Modified standard forms.
• Bespoke.

[edit] Standard forms of contract in common use for construction in the UK

[edit] JCT (The Joint Contracts Tribunal)

• DB: Design and build contract.
• CE: Constructing Excellence contract.
• CM: Construction management contract.
• IFC: Intermediate form of building contract.
• MC: Management building contract.
• MTC: Measured term contract.
• MW: Agreement for minor work.
• PCC: Prime cost building contract.
• MP: Major project construction contract.
• RM: Repair and maintenance contract (commercial).
• SBC: Standard Building Contract.

NB: The JCT traditional forms of contract remain by far the most popular forms of contract in the UK (ref. NBS: National Construction Contracts and Law Survey 2012).

[edit] ACA (Association of Consultant Architects)

• Form of building agreement.
• PPC: Standard form of contract for project partnering.
• SPC: Standard form of specialist contract for project partnering.

[edit] Chartered Institute of Building

• CPC 2013: CIOB Contract for use with Complex Projects.

[edit] FIDIC (Fédération Internationale des Ingénieurs-Conseils)

FIDIC's core suite of contracts includes:

• Conditions of Contract for Construction. The Red Book.
• Conditions of Contract for Plant & Design-Build. The Yellow Book.
• Conditions of Contract for EPC Turnkey Projects. The Silver Book.
• The Short Form of Contract. The Green Book.

[edit] NEC (The New Engineering Contract): Engineering and Construction Contract)

• Option A: Priced contract with activity schedule.
• Option B: Priced contract with bill of quantities.
• Option C: Target contract with activity schedule.
• Option D: Target contract with bill of quantities.
• Option E: Cost reimbursable contract.
• Option F: Management contract.
• Option G: Term contract.

For more information, see NEC3.

[edit] Other forms of contract

Other less commonly used forms of contract include:

• The GC Works suite of standard government conditions of contract are no longer being updated by the government who are now moving to the New Engineering Contracts, now in their third edition NEC3. See GC Works for more information.
• IChemE (The Institution of Chemical Engineers) forms of contract.
• ICC Infrastructure Conditions of Contract. A relaunch of CoC (see below)
• The ICE Conditions of Contract (CoC) (previously maintained by the Institution of Civil Engineers) have been withdrawn in favour of NEC contracts. See ICE Conditions of Contract for more information.
• IMechE/IET (The Institution of Mechanical Engineers / The Institution of Engineering Technology) Model Forms of General Conditions of Contract for electrical works (MF/1-4).
• The Civil Engineering Contractors' Association (CECA) subcontracts for the ICC (above).

[edit] Contract conditions

Contract conditions set out the principal legal relationship between the parties to a construction project, determining the allocation of risk and consequently, price.

See: Contract conditions for more information.

[edit] Building information modelling (BIM)

The adoption of building information modelling (BIM) on a project requires the definition of specific obligations and liabilities, and limitations must be placed on the agreed use of the model. This is generally achieved by adopting a BIM protocol. BIM protocols can be incorporated into contract documents by the addition of a model enabling amendment such as that proposed in the CIC BIM protocol.

[edit] Modified standard forms of contract

See: Modifying clauses in standard forms of contract.

[edit] Bespoke contracts

24% of respondents to the National Construction Contracts and Law Survey 2012 indicated that they use purpose-written bespoke contracts. Not only is this considered inadvisable because of the risk that bespoke contracts may not adequately or fairly make provision for all circumstances, and that they are not supported by a history of case law, but it is also a poor reflection of how inflexible and ineffective the industry perceives many of the standard forms of contract to be.

For more information, see Bespoke construction contract.

[edit] Notes

NB: The first stage appointment of a two-stage procurement process might be made using a separate pre-construction services agreement (PCA or PCSA), sometimes called early works agreements, rather than under the provisions of the main, second-stage contract.

For a detailed description of the tender process for appointing the main contractor, see the free work plan stages:

• Traditional contract: tender.
• Design and build: tender.
• Public project: tender.
• Public project: PFI tender.
• Construction management: tender.
• Management contract: tender.

[edit] Related articles on Designing Buildings

• Addendum.
• Agreement.
• Automated vendor selection.
• Bespoke construction contract.
• CIOB Planning Protocol 2021.
• Clear contracts during uncertain times.
• Clustering.
• CMA and IRM publish 2020 competition law risk guide.
• Complex project.
• Concession Contracts Regulations.
• Consideration.
• Constructing Excellence contract.
• Construction contract conditions
• Construction contractor.
• Construction law.
• Contract documents for construction.
• Contractual chain.
• Contractual obligation.
• Contractual right.
• Core clause.
• Design and build.
• Early appointment / involvement.
• Equitable assignment..
• FIDIC.
• Hybrid construction contract.
• Intermediate building contract
• JCT
• Job order contracting.
• Lump sum contract.
• Maintenance contract.
• Management contractor.
• Maverick buying.
• Memorandum of understanding.
• Minor works.
• Model Services Contract MSC.
• Modifying clauses in standard forms of construction contract.
• NEC3
• NEC4.
• NEC4 Facilities Management Contract.
• Non-performance.
• Onerous contract.
• PPC 2000.
• Pre-contract management.
• Principal-agent theory.
• Procurement route.
• Reserved contract.
• Risk allocation.
• Standard form of contract.
• Tender documentation for construction projects.
• The Chancery Lane Project.
• Traditional contract for construction.
• Typical tender process for construction projects.
• Variations in construction contracts.
• What is an EPC contract?

[edit] External references

• The London Government Taskforce: A Guide to standard forms of construction contract, outlining key characteristics and components.
• The International Bar Association: Standard forms: contract conditions.
• PACE: Guide to the appointment of consultants and contractors P96.
• OGC: Partnering contract review.
• The Joint Contracts Tribunal.
• JCT: Deciding on the appropriate JCT contract. 2011
• nbs: National Construction Contracts and Law Survey 2012.
• Pollock, Principles of Contract (13th Edition).
• Winward Fearon on Collateral Warranties, David L Cornes and Richard Winward. 2002.
• Construction Contract Types Explained

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