What are the changes in the JCT Design and Build Contract 2016?

David Savage, partner and head of construction and infrastructure at Charles Russell Speechlys, and Kate Knox, senior associate, consider the changes to the JCT Design and Build Contract 2016. Key changes include amendments to the provisions concerning payment, insurance and performance security.

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Original news

On 22 September 2016, the JCT published the 2016 edition of its Design and Build Contract and Design and Build Sub-contract, along with associated guides. See News Analysis: JCT Design and Build Contract 2016 published.

Lexis®PSL Construction customers are able to access reference copies of the new contracts and guides in subtopic: JCT contracts 2016 (under the Forms tab).

What are the key changes from the 2011 edition?

Performance bonds and parent company guarantees (PCGs)

Similar to the drafting already found in the JCT Construction Management Trade Contract (2011 edition), there is now a standard clause (clause 7.3) requiring the contractor to provide a performance bond and/or a PCG on the execution of the building contract (where these requirements are stipulated to apply in the contract particulars). The bond and/or PCG are to be ‘substantially’ in the forms identified within the contract particulars (though employers’ lawyers may not welcome the term ‘substantially’). The contract particulars allow for optional expiry dates of the bond, being:

• the date of practical completion
• two weeks after the expiry of the rectification period, or
• the date for issue of the notice of completion of making good

These optional expiry dates will be welcomed by most, though perhaps not by insurers preferring a calendar date. Understandably, the JCT have chosen not to prescribe the form