When it comes to building projects, having a solid construction contract in place is crucial. It sets out the terms and conditions of the project, including the scope of work, payment terms, and dispute resolution processes. Two of the most commonly used construction contracts in the UK are the Joint Contracts Tribunal (JCT) and the New Engineering Contract (NEC). Our expert construction lawyers will compare these two contracts and help you determine which one is best suited for your construction project.
Are you unsure which contract to choose for your construction project? Let our expert lawyers help you to make an informed decision. Explore our comprehensive comparison of JCT and NEC contracts and if you have any questions please call us for a Free Consultation on 0207 459 4037 today.
What is the JCT Contract?
The JCT contract is a standard form of contract that has been used in the UK construction industry for over 80 years. It is designed for traditional building projects and is widely used for both small and large-scale projects. The JCT contract is updated regularly to reflect changes in the industry and to address any issues that may arise.
Key Features of the JCT Contract
- Suitable for traditional building projects
- Provides a clear and detailed scope of work
- Allows for variations to the contract
- Includes provisions for extensions of time and liquidated damages
- Provides a payment schedule and retention payments
- Includes dispute resolution processes
Illustrative Examples of JCT Contracts
Renovation of a Historic Building
The JCT contract was selected for the renovation of a historic building due to its suitability for traditional building projects. The JCT contract provides a clear and detailed scope of work, which is crucial when dealing with historical structures that require specific restoration techniques. Additionally, the JCT contract allows for variations to accommodate unforeseen circumstances that may arise during the renovation process.
Construction of a Residential Housing Development
In the case of constructing a residential housing development, the JCT contract was preferred for its established provisions for extensions of time and liquidated damages. This is important in a project of this scale to ensure timelines are adhered to and any delays are adequately addressed. The JCT contract’s payment schedule and retention payments also provide a structured approach to financial management throughout the project.
What is the NEC Contract?
The NEC contract is a relatively new form of contract that was first published in 1993. It was created by the Institution of Civil Engineers and is now owned by NEC Contracts Ltd. The NEC contract is designed to be more collaborative and flexible than traditional contracts, with a focus on risk management and project management.
Key Features of the NEC Contract
- Suitable for a wide range of projects, including civil engineering, building, and infrastructure projects
- Encourages collaboration and communication between parties
- Includes a risk management process
- Allows for early warning of potential issues
- Provides a payment schedule and retention payments
- Includes dispute resolution processes
Illustrative Examples of NEC Contracts
Infrastructure Development Project
Opting for the NEC contract for an infrastructure development project provides a structured approach to project management and risk mitigation. The NEC contract’s focus on risk management, with a risk register and early warning system, enhances the project’s ability to identify and address potential issues early on. This proactive approach to risk management makes the NEC contract a suitable choice for large-scale infrastructure projects.
Building a Sustainable Energy Facility
Choosing the NEC contract for the construction of a sustainable energy facility allows for effective project governance and streamlined communication processes. The NEC contract’s emphasis on collaboration and clear communication mechanisms ensures that all parties involved in the project are aligned on objectives and risk management strategies. This collaborative approach enhances the delivery of sustainable energy projects with a focus on efficient project execution and risk mitigation.
JCT vs NEC: Which One is Right for Your Construction Project?
Both the JCT and NEC contracts have their own unique features and benefits. The best contract for your project will depend on a variety of factors, including the type of project, the level of risk involved, and your preferred approach to project management.
Type of Project
The type of project you are undertaking will play a significant role in determining which contract is best suited for your needs. The JCT contract is best suited for traditional building projects, while the NEC contract is more suitable for a wider range of projects, including civil engineering and infrastructure projects.
Risk Management
The NEC contract has a strong focus on risk management, with a risk register and early warning system built into the contract. This can be beneficial for projects with a high level of risk, as it allows for potential issues to be identified and addressed early on. The JCT contract, on the other hand, does not have a specific risk management process, but it does allow for variations to the contract, which can help mitigate risk.
Project Management Approach
The NEC contract encourages collaboration and communication between parties, with a project manager appointed to oversee the project. This can be beneficial for projects that require a high level of coordination and communication between parties. The JCT contract, on the other hand, does not have a specific project management approach, but it does provide a detailed scope of work and allows for variations to the contract.
Payment Schedule and Retention Payments
Both the JCT and NEC contracts include a payment schedule and retention payments. However, the NEC contract allows for more flexibility in the payment schedule, with the option for stage payments or a lump sum payment. The JCT contract, on the other hand, typically follows a traditional payment schedule with interim payments and a final payment upon completion.
Dispute Resolution Processes
In the event of a dispute, both the JCT and NEC contracts have provisions for dispute resolution. The JCT contract allows for disputes to be resolved through mediation, adjudication, or arbitration. The NEC contract, on the other hand, has a more collaborative approach to dispute resolution, with a dispute resolution board appointed to help parties resolve issues.
Our expert lawyers set out a comparison table below to allow you to understand the difference between JCT and NEC contracts:
| Feature | JCT Contract | NEC Contract |
| Suitable Project Types | Traditional building projects | Wide range of projects, including civil engineering |
| Scope of Work | Clear and detailed | Emphasis on project management and risk mitigation |
| Variations to the Contract | Allowed | Encouraged through early warning system |
| Payment Terms | Traditional payment schedule with retention | Flexible payment schedule, including stage payments |
| Dispute Resolution | Mediation, adjudication, arbitration | Collaborative approach with dispute resolution board |
| Risk Management | Limited focus | Risk register and early warning system |
| Project Management Approach | Detailed scope of work, variations allowed | Emphasis on collaboration and clear communication |
Winning Approach to Construction Dispute Resolution
Ready to streamline your construction project with the right contract? Whether you opt for the JCT or NEC contract, our team of experts is here to assist you. Contact us for a Free Consultation today to discuss your project requirements and ensure a smooth and efficient construction process.
Our lawyers’ extensive industry-specific knowledge and our commitment to justice make us the preferred choice for many businesses in the construction industry.
Our construction dispute lawyers are recognised among the best lawyers in England & Wales, and have regularly been asked and featured to write authoritative articles in the Financial Times, the Law Society and LexisNexis and have been quoted in City AM, the New Law Journal, Law Society Gazette and Litigation Futures.
Our unique approach to construction disputes means that we will:
- Arrange a Free Consultation with you & a qualified lawyer to discuss your construction dispute
- Free Asset Tracer & Due Diligence Report
- Arrange a WhatsApp group with you & your legal team in case you have any questions
- Investigate the merits of your issue & create a strategy for success
- Send us your case documents easily through our secure client portal, Go Transfer
- Advise on any judgments & tactics that have proved successful in construction disputes
- Consult with independent surveyors & experts to strengthen your position
- Free sign-up to our Insolvency Tracker & Claims Protection service (worth £1k pa)
- Fixed fees & “no win no fee” arrangements are available
- Work hard to achieve the best outcome in your construction dispute
Our construction dispute lawyers offer regulated, independent & confidential legal advice and are also dedicated members of the Professional Negligence Lawyers Association, the London Solicitors’ Litigation Association, the Association of Cost Lawyers, the Insolvency Lawyers Association and the Commercial Litigation Association.
Mediation in Construction Disputes
Alternative dispute resolution, where suitable, provides many advantages for parties involved in construction disputes. Our construction disputes lawyers are strong advocates for mediation which can often lead to favourable and early settlements.
Several of our lawyers are trained mediators and expert negotiators who are registered members of the Chartered Institute of Arbitrators (CIArb) and the International Mediation Institute. Our expertise in mediation gives our construction lawyers a significant and unique advantage when navigating settlement discussions on your behalf.
Fixed Fee & Flexible Funding Options
We provide flexible funding options including fixed fees. To book a Free Consultation with our expert construction dispute lawyers, you can call us on 0207 459 4037 or you can use our booking form below.
