What Is a JCT Contract?
JCT stands for the Joint Contracts Tribunal, an independent body that has been producing standard forms of construction contract since 1931. JCT contracts are the most widely used building contracts in England and Wales, providing a fair and balanced framework for managing construction projects of all sizes.
The purpose of a JCT contract is to set out the rights and obligations of everyone involved in a building project, primarily the employer (the person commissioning the work) and the contractor (the person carrying it out). A well-chosen contract protects both parties by clearly defining the scope of works, the price, payment terms, the programme, insurance requirements and the procedures for handling changes, delays and disputes.
Without a formal contract, disagreements about what was agreed can quickly escalate into costly disputes. A JCT contract provides a tried-and-tested framework that has been refined over decades of use and is supported by extensive case law, giving both parties confidence that the document will stand up to scrutiny if things go wrong.
Understanding which JCT contract is right for your project is an important decision. Choose the wrong one and you may find that it either does not cover the complexity of your project or introduces unnecessary administrative burden for a straightforward job. In this guide, we explain the main JCT contract types in plain English and help you decide which one you need.
JCT Minor Works Building Contract (MW)
The Minor Works contract is the simplest and most commonly used JCT contract for small-scale building projects. It is designed for straightforward work where the employer has appointed a contract administrator, typically an architect or quantity surveyor, and the project does not involve complex building techniques or specialist subcontractor management.
The MW contract is typically used for projects valued up to around £500,000, although there is no formal upper limit. Common examples include house extensions, loft conversions, garage conversions, kitchen and bathroom refurbishments, small commercial fit-outs and repair and maintenance work.
Key features of the Minor Works contract include a simple payment mechanism based on the contract administrator’s valuation, provisions for variations (changes to the work), a straightforward extension of time procedure for delays caused by relevant events such as weather or late information, and a practical completion and defects liability period framework.
Key Point: The MW contract comes in several variants, including one with contractor design provisions (MWD) that allows the contractor to take responsibility for designing part of the works. This is useful when the contractor is providing a specialist element such as a structural steel frame or a bespoke kitchen installation.
JCT Intermediate Building Contract (IC)
The Intermediate contract sits between the Minor Works and the Standard Building Contract in terms of complexity. It is designed for projects that are more complex than a simple domestic extension but do not require the full administrative machinery of the Standard contract.
The IC contract is suitable for projects that may involve more detailed design, multiple work packages or named subcontractors. It is commonly used for medium-sized projects such as larger residential schemes, small commercial developments, school extensions, community buildings and mixed-use refurbishments.
Key differences from the Minor Works contract include more detailed provisions for interim valuations and payments, a formal mechanism for naming subcontractors, more comprehensive insurance provisions and detailed procedures for variations, loss and expense claims and extensions of time. The IC contract also includes provisions for sectional completion, allowing different parts of the project to be completed and handed over at different times.
Tip: If your project involves several specialist subcontractors or the works are being carried out in phases, the Intermediate contract is likely a better fit than Minor Works, even if the project value is relatively modest. The additional structure helps manage the complexity without the overhead of the full Standard contract.
JCT Standard Building Contract (SBC)
The Standard Building Contract is the most comprehensive JCT contract and is designed for large or complex construction projects. It is the contract of choice for substantial building works where detailed contract provisions are needed to manage risk, programme, quality and cost across a significant project duration.
The SBC is typically used for major new builds, large-scale refurbishments, commercial developments, multi-storey residential schemes and projects procured through competitive tendering with a full set of contract documents including drawings, specifications and bills of quantities.
The Standard contract includes comprehensive provisions for interim valuations, retention, fluctuations (changes in the cost of labour and materials), detailed loss and expense claims, performance bonds, parent company guarantees, collateral warranties and advanced dispute resolution procedures including adjudication, arbitration and litigation.
The SBC comes in three variants: with quantities (using a bill of quantities for pricing), without quantities (using a specification or schedule of works) and with approximate quantities (where the quantities are re-measured during the project). A bill of quantities is an essential document for the quantities variant, providing a detailed, measured breakdown of every element of the works that the contractor prices against.
JCT Design and Build Contract (DB)
The Design and Build contract is used when the contractor is responsible for both the design and construction of the project. Unlike the traditional contracts above, where the employer’s design team prepares the full design and the contractor simply builds it, the DB contract transfers design responsibility to the contractor based on the employer’s requirements.
This procurement route is popular because it provides the employer with a single point of responsibility for both design and construction. If something goes wrong, the employer does not need to establish whether the fault lies with the designer or the contractor, as the contractor is responsible for both.
The DB contract is commonly used for developer-led residential schemes, commercial office fit-outs, warehouse and industrial buildings, retail developments and projects where the employer wants cost certainty through a lump sum price. The contractor typically engages their own architects, structural engineers and building services designers to develop the detailed design from the employer’s initial requirements.
Understanding the role of construction contracts in managing design liability is important when considering the D&B route, as the allocation of risk between the employer’s requirements and the contractor’s proposals is a critical area that requires careful drafting.
How to Choose the Right JCT Contract
Choosing the right JCT contract depends on several factors, and getting this decision right at the outset can save considerable time and cost during the project. Consider the following when making your choice:
Project value and complexity. For simple, small-value projects, the Minor Works contract provides adequate protection without unnecessary complexity. For medium-sized projects with multiple work packages or phases, the Intermediate contract offers a good balance. For large, complex projects, the Standard Building Contract provides the comprehensive framework needed to manage risk effectively.
Design responsibility. If the employer’s design team is producing the full design and the contractor is simply building it, a traditional contract (MW, IC or SBC) is appropriate. If the contractor is taking on design responsibility, the Design and Build contract should be used.
Procurement method. The contract choice is closely linked to the procurement route. Traditional procurement with a full design uses MW, IC or SBC. Design and build procurement uses the DB contract. Two-stage tendering, where the contractor is appointed early and helps develop the design, can work with either approach depending on how design responsibility is allocated.
Subcontractor management. If the project involves named or nominated subcontractors, the Intermediate or Standard contracts provide the mechanisms to manage these appointments. The Minor Works contract has limited provisions for managing subcontractors.
Key Clauses to Understand
Regardless of which JCT contract you choose, there are several key clauses that everyone involved in a building project should understand:
Variations. Variations are changes to the scope of works after the contract is signed. Every JCT contract includes provisions for instructing, valuing and paying for variations. Understanding how variations are priced and administered is crucial for managing project costs. An accurate original estimate provides the baseline against which variations are measured.
Extensions of time. When delays occur that are not the contractor’s fault, such as exceptionally adverse weather, late information or changes instructed by the employer, the contractor can apply for an extension of time. This protects the contractor from liability for liquidated damages during the extended period.
Practical completion. Practical completion is the point at which the works are sufficiently complete for the employer to take possession and use the building. It triggers the start of the defects liability period, during which the contractor must return to fix any defects that appear. It also triggers the release of half the retention money held by the employer.
Liquidated damages. These are a pre-agreed sum that the employer can deduct from payments if the contractor fails to complete the works by the agreed completion date. The amount should be a genuine pre-estimate of the loss the employer would suffer from late completion, not a penalty.
Dispute resolution. JCT contracts include provisions for resolving disputes through adjudication, which provides a rapid interim decision, and either arbitration or litigation for final resolution. Understanding these procedures before a dispute arises is far better than trying to navigate them under pressure.
How Contracts Relate to Estimates
The relationship between your construction contract and your estimate is closer than many people realise. The estimate forms the pricing basis for the contract, and the contract governs how that pricing is managed throughout the project.
A detailed, accurate estimate is essential for preparing the contract sum, whether it is a lump sum price in a Minor Works contract or a fully measured bill of quantities in a Standard Building Contract. If the estimate is inaccurate, the contract sum will be wrong, leading to disputes about variations, loss and expense claims and ultimately an adversarial relationship between the parties.
Having a professional estimate prepared by a qualified quantity surveyor ensures that the contract sum is based on a thorough measurement of the works, current market rates for labour and materials, realistic allowances for preliminaries and overheads, and a clear understanding of the project specification. This gives both parties confidence that the contract sum is fair and achievable.
If you are a contractor pricing a project for a JCT contract, our tender pricing service can help you prepare a competitive and accurate price. If you are an employer or contract administrator, our post-contract services include contract administration support, interim valuations and final account preparation to help you manage the contract effectively from start to finish.
Ready to get a detailed estimate for your next project? Get in touch to discuss how we can support you through the estimating and tendering process.