The JCT Major Projects Form

The Joint Contracts Tribunal are publishing a completely new standard form of contract for large clients on major construction projects. The main purpose of the form is to meet the particular needs of large commercial clients who do not themselves intend to occupy the premises, as well as property owners and developers (such as hoteliers and supermarkets) who regularly build. The Major Project Form is the first JCT form specifically to provide for third party rights. It caters for various levels of design input on the part of client and contractor and incorporates a design submission procedure. Other key provisions are those dealing with: no retention, acceleration of project, bonus for early completion, cost savings and value improvements, the client's pre-appointed consultants, and mediation. This new book will look at the contract clause by clause, with full text of the contract itself, and will examine the background law, highlighting practical issues. The JCT Major Project Form......Page 1 Background......Page 9 Preface......Page 17 Abbreviations......Page 18 Introduction and background to the Major Project Form......Page 19 Who is this contract for?......Page 20 Some significant features......Page 21 The contract documents......Page 22 The requirements......Page 23 The proposals......Page 24 Execution and completion - clause 1.1......Page 26 Contractor as planning supervisor and principal contractor -clauses 1.2 and 1.3......Page 31 The Construction (Design and Management) Regulations 1994......Page 32 Compliance with instructions - clause 2.1......Page 33 Contractor failing to comply with instruction - clause 2.3......Page 36 Compliance with statutory requirements - clause 3.1......Page 38 Fees and charges - clause 3.2......Page 39 Civil liability for breach of 'Statutory Requirements'......Page 40 Introduction......Page 41 Discrepancies within the requirements - clause 4.2......Page 42 Discrepancies between the requirements, proposals and statutory requirements - clause 4.4......Page 44 Standards of design, materials and workmanship - clause 5......Page 45 Background law - design - workmanship and materials......Page 46 Materials and workmanship......Page 51 The contractor's responsibility for the requirements - clause 5.1......Page 52 Contractor's design warranties - clause 5.2......Page 54 Contractor to use skill and care - clause 5.3......Page 55 Kinds and standards of materials and goods - clause 5.4......Page 60 Standards of workmanship - clause 5.5......Page 66 Contractor to prepare the design documents - clause 6.1......Page 67 Content and timing of submission of design documents - clause 6.2......Page 69 Employer's response - clause 6.3......Page 70 Employer's explanation of why it considers that the design document is non-compliant - clause 6.5......Page 72 Action required from the contractor - clause 6.6......Page 73 Contractor's challenge - clause 6.8......Page 76 Significance of contractor not employing the challenge procedure - clause 6.9......Page 78 Brief background......Page 79 Some points to note......Page 81 Background......Page 83 Ground conditions at contractor's risk - clause 8.1......Page 87 Contractor's proposal treated as giving rise to a change - clause 8.2......Page 88 Extensions of time - clause 12......Page 10 Force majeure - clause 12.1.1......Page 114 Specified perils - clause 12.1.2......Page 117 Exercise of Government powers - clause 12.1.3......Page 119 Terrorism - clause 12.1.4......Page 120 Changes - clause 12.1.5......Page 121 Other persons on site authorised by the employer - clause 12.1.6......Page 122 Contractor validly suspending - clause 12.1.7......Page 123 Other breaches or acts of prevention of the employer - clause 12.1.8......Page 124 Clause 12.1 proviso......Page 125 Procedures and timetable for adjustments to completion date......Page 126 Notification - clause 12.2......Page 127 Employer's response - clause 12.4......Page 129 Post practical completion review - clause 12.6......Page 132 Some specific points to which the employer must have regard in adjusting the completion date - clause 12.7......Page 134 No earlier completion date - clause 12.8......Page 138 Introduction......Page 139 Employer's reaction - clause 13.2......Page 140 Bonus - clause 14......Page 141 The bonus provision - clause 14.1......Page 142 Employer's representative - clause 15.1......Page 143 Employer may appoint others - clause 15.2......Page 146 Summary......Page 147 Instructions following failure to carry out work in a good and workmanlike manner not covered......Page 148 Instructions to open up or test - clause 16.1......Page 149 Instructions to remove non-complying work, materials or goods from the site - clause 16.2.1......Page 152 Instructions for non-complying work, materials or goods to be used - clause 16.2.2......Page 153 Consequential instructions - clause 16.2.3......Page 155 Opening up, testing or inspection - clause 16.2.4......Page 156 Background......Page 158 Summary of clause 17......Page 159 Instructions to remedy defects - clause 17.1......Page 160 Defects not remedied by contractor - employer's options - clause 17.3......Page 162 Introduction and background......Page 165 Summary of clause 18......Page 174 Execution of Model Form of Novation Agreement - clause 18.2......Page 175 Appointment of named specialist - clause 18.3......Page 176 Contractor solely responsible for pre-appointed consultants and named specialists - clause 18.4......Page 178 Consequences if contractor fails to enter into a contract - clause 18.5......Page 179 Contractor not to prejudice employer under form of novation or specialist sub-contract - clause 18.6......Page 181 No termination without consent - clause 18.7......Page 183 Appointment of replacement - clause 18.8......Page 184 Contractor to supply copy of contract - clause 18.9......Page 185 Contractor's responsibilities unaffected by appointment of replacement - clause 18.10......Page 186 Introduction......Page 187 Scope of savings and improvements - clause 19.1......Page 188 Negotiation of the financial benefit - clause 19.3......Page 191 Restrictions on employer's use of contractor's suggested amendments - clause 19.5......Page 192 Background......Page 195 Summary of clause 20......Page 197 The definition of a 'Change'......Page 198 Instructions giving rise to change - clause 20.1.1......Page 203 Value agreed or a fair valuation - clause 20.2......Page 205 Employer's request for a quotation - clause 20.3......Page 206 Contents of the quotation and period of validity - clause 20.4......Page 208 Contractor to provide sufficient detail to enable the employer to assess amounts and periods Acceptance of quotation - clause 20.5......Page 209 Fair valuation - clause 20.6......Page 210 Employer's notification of valuation - clause 20.8......Page 216 Post practical completion review - clause 20.9......Page 217 Background......Page 218 Summary of clause 21......Page 227 Changes excluded - clause 21.1......Page 228 Matters for which employer liable to the contractor in respect of loss and expense - clause 21.2......Page 229 Notification issues - clause 21.3......Page 230 Contractor to provide assessment and supporting information -clause 21.4......Page 234 Employer's obligation to ascertain - clause 21.5......Page 235 Review mechanism - clause 21.6......Page 237 Background......Page 238 Summary of clause 22......Page 247 The contractor's application - clause 22.1......Page 248 Employer's interim payment advice - clause 22.2......Page 249 The requirement to give notice of the proposed payment -clause 22.3......Page 251 The due date and the final date for payment - clause 22.4......Page 254 Contents of the interim payment advice - clause 22.5......Page 255 The final payment advice - clause 22.6......Page 261 The effect of the issue of the final payment advice - clause 22.7......Page 262 Withholding - requirements - clause 23......Page 266 Grounds upon which a withholding can be made......Page 267 Position if there is no valid notice......Page 269 Interest on late payments......Page 270 Treatment of VAT - clauses 25.1 and 25.2......Page 273 Content......Page 274 Rule A - Interim valuations: clause P3.1......Page 275 Rule B - Stage payments: clauses P4.1 and P4.2......Page 276 Rule C - Progress payments: clauses P5.1, P5.2, P5.3, P5.4 and P5.5......Page 277 Rule D - Some other method: clause P6.1......Page 278 Form of contract sum analysis......Page 279 Other points for consideration......Page 280 Third party claims and indemnities......Page 284 Contractor to indemnify employer - clause 26.1......Page 287 Employer to indemnify contractor - clause 26.2......Page 290 Types and extent of cover......Page 291 Insurances required by clause 27......Page 292 Relationship between insurance against loss or damage to the project or existing structures and legal liability under the contract......Page 293 Obligation to insure and comply with Fire Code - clause 27.1......Page 297 Documentary evidence of insurance and failure to insure - clauses 27.2 and 27.3......Page 298 The occurrence of an event - clauses 27.4 and 27.5......Page 300 Excesses - clause 27.6......Page 302 Terrorism cover - clauses 27.7 and 27.8......Page 303 Background......Page 305 Requirements for professional indemnity cover - clauses 28.1, 28.2 and 28.3......Page 306 Prohibition of contractor assignment......Page 315 Employer can assign the benefit at any time without the consent of the contractor......Page 316 Employer's right to assign both benefit and burden of a contract to the funder at any time......Page 317 Background......Page 318 Contracts (Rights of Third Parties) Act 1999......Page 319 The Act in the context of construction projects......Page 322 The JCT approach to the Contracts (Rights of Third Parties) Act 1999......Page 323 Limited exclusion of the Act - clause 30.1......Page 324 Position of the funder - clauses 30.2 and 30.3......Page 325 Position of the purchaser - clauses 30.4, 30.5 and 30.6......Page 327 Contractor to comply with the contract - clause Fl......Page 331 Equivalent rights in defence of liability - clause F2......Page 333 The funder's step-in provisions - clauses F4 to Fll......Page 340 Copyright and design documents - clause F12......Page 345 Assignment - clause F14......Page 346 Notices - clause F15......Page 347 Contractor not liable to funder for delays - clause F17......Page 348 Third party rights from the contractor in favour of the purchaser or tenant (Part PT of the schedule)......Page 349 Contractor to comply with the contract: limits to any claim - clauses PT1, PT2 and PT3......Page 350 Equivalent rights in defence of liability - clause PT4......Page 351 Contractor's professional indemnity cover - clause PT8......Page 352 Applicable law - clause PT13......Page 353 Practical implications......Page 354 Background......Page 357 Summary of termination provisions......Page 369 Material breach and warning notice - clause 32.1......Page 370 The termination notice - clauses 32.2 and 32.3......Page 378 Consequences of a termination of the contractor's employment by the employer - clause 32.4......Page 381 Financial accounting following termination - clauses 32.5, 32.6 and 32.7......Page 384 Material breach, warning notice and termination notice - clauses 33.1, 33.2 and 33.3......Page 389 Consequences of a termination of the contractor's employment by the contractor - clause 33.4......Page 392 Prolonged suspension or removal of insurance cover for terrorism - grounds and notice of possible terminatiocclause 34.1......Page 394 Determination by the employer where terrorism cover is no longer available - clause 34.3......Page 396 Due date and final date for payment - clause 34.5......Page 397 Background......Page 398 Choice of dispute resolution method - clause 35.1......Page 405 Mediation - clauses 36.1 and 36.2......Page 406 Adjudication - clauses 37.1 and 37.2......Page 407 Methods of communication and special situations - clauses 38.1 and 38.2......Page 410 Communications in writing......Page 411 Electronic communications......Page 412 Address for communications......Page 413 Measurement of time where contract specifies a number of days within which an act is to be done......Page 414 Definitions and meanings - clause 39.2......Page 415 Commentary......Page 420 10 The appendix to the Major Project Form......Page 422 Table of cases......Page 427 Table of statutes......Page 436 MPF clause number index to text......Page 440 MPF and WCD 98 clause comparisons......Page 446 Index......Page 448 The Joint Contracts Tribunal published a completely new form of contract in 2003, the JCT Major Project Form, to meet the needs of parties in major construction projects, including funders, purchasers and tenants. It seems set to revolutionise the world of major projects.Although much shorter and more straightforward than, for example, the JCT design and build form, the new contract raises a number of important issues to which careful attention must be paid. These include: design liability provisions, express provisions dealing with ground conditions, detailed design documents procedures, minimal provisions for insurances, provision of a third party rights schedule to replace collateral warranties, the absence of detailed procedures for valuation and payment.This new book, written by a well known construction lawyer, examines the form clause by clause, with full text of the contract itself. It also looks at the background general law and at statutory requirements, highlights common practical issues, and considers potential problems which need to be addressed when using this contract. "This new book, written by a well known construction lawyer, examines the form clause by clause, with full text of the contrast itself. It also looks at the background general law and at statutory requirements, highlights common practical issues, and considers potential problems which need to be addressed when using this contract."--BOOK JACKET