JCT contracts—price and payment
JCT contracts—price and payment

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • JCT contracts—price and payment
  • Contract price—lump sum contracts
  • Contract price—remeasurement contracts
  • Contract price—prime cost contracts
  • Interim payments
  • Final payment
  • Payment following termination

This Practice Note provides an overview as to how the contract price is calculated in JCT contracts and how it may be adjusted. It also provides guidance on the process for determining interim payments and the final payment. It focuses on the payment provisions found in section four of the Standard Building Contract With Quantities 2011/2016 and the Design and Build Contract 2011/2016.

As JCT contracts are largely intended for domestic use, their payment provisions comply with the requirements of Part II of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996). The payment provisions of the 2011 and 2016 editions take account of the changes made to the HGCRA 1996 by the Local Democracy, Economic Development and Construction Act 2009 (for example, the introduction of pay less notices). For more information, see Practice Note: Payment in construction contracts under the HGCRA 1996.

For information in relation to the NEC contracts, see Practice Note: NEC contracts—price and payment.

Contract price—lump sum contracts

Lump sum contracts, under which the contract sum is agreed before the work commences, tend to be the most common form of pricing structure for construction projects. The most commonly-used JCT contracts are lump sum contracts, eg:

  1. Standard Building Contract With Quantities (SBC/Q)

  2. Standard Building Contract Without Quantities (SBC/XQ)

  3. Design and Build Contract (DB)

  4. Intermediate Building Contract (IC)

  5. Minor