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Design and Build Contract Guide
Design and Build Contract
Design and Build Contract Guide (DB/G) This Guide is intended to provide a general introduction to the contract and is not a substitute for professional advice.
Published by Thomson Reuters (Legal) Limited (Registered in England & Wales, Company No 1679046) trading as Sweet & Maxwell 100 Avenue Road, London, NW3 3PF First published September 2005 Revision 2009 published May 2009
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except in accordance with the provisions of the Copyright, Designs and Patents Act 1988, without the prior written permission of the publisher. Thomson Reuters and the Thomson Reuters Logo are trademarks of Thomson Reuters. Sweet & Maxwell ® is a registered trademark of Thomson Reuters (Legal) Limited. © The Joint Contracts Tribunal Limited 2009 www.jctcontracts.com
Terrorism Cover Update
Issued December 2009
JCT’s Works insurance provisions have been updated in relation to Terrorism Cover and the Contractor’s liability for loss or damage to the Works or Site Materials resulting from terrorism in cases where Insurance Option A applies. The amendments set out below have been agreed in relation to the Works insurance provisions of the Standard Building Contract in both its With Quantities (Q) and Without Quantities (XQ) versions. Amendments in substantially the same terms are required for the Approximate Quantities (AQ) version of that contract and for the Design and Build Contract, Management Building Contract, Prime Cost Building Contract and Intermediate Building Contract. In the case of the Measured Term Contract, similar amendments may also be appropriate.
Clause number and heading Contract Particulars, 6·10 and Schedule 3 ‘6·10 and Schedule 3
Insert new entry: Terrorism Cover – details of the required cover (State reference numbers and dates or other identifiers of documents setting out the requirements. Unless otherwise stated, Pool Re Cover is required.) Delete ‘6·11’ and insert ‘6·12’ (twice) Delete ‘6·13’ and insert ‘6·14’
Delete ‘6·16’ and insert ‘6·17’ Delete ‘6·11’ and insert ‘6·12’ __________________________________ __________________________________ __________________________________ __________________________________ ’
Contract Particulars, 6·11 Contract Particulars, 6·13
Contract Particulars, 6·16 Contract Particulars, Part 2 (E) (ii)
Clause 1·1 Clause 4·3·1·3 Clause 4·3·3·5 Clause 4·16·2·1
Funder Rights Particulars: delete ‘6·11’ and insert ‘6·12’ P&T Rights Particulars: delete ‘6·11’ and insert ‘6·12’ Delete ‘paragraph A·5·1 of Schedule 3’ and insert ‘clause 6·10·2’ After ‘clause 2·6·2’ insert ‘or 6·10·3’ After ‘3·17’ delete ‘or’ and insert comma; After ‘6·5’ insert ‘, 6·10·2 or 6·10·3’; After ‘paragraph’ delete ‘A·5·1,’ Delete ‘6·10·4·2’ and insert ‘6·11·5·2’ After ‘to the Employer’ insert ‘under clause 6·10·2 or’ Amend the existing definition by insertion of the words underlined: ‘Excepted Risks: the risks comprise: (a) ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel, radioactive toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof (other than such risk insofar, but only insofar, as it is included in the Terrorism Cover from time to time required to be taken out and maintained under this Contract);, pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds; and any act of terrorism that is not within the Terrorism Cover from time to time required to be taken out and maintained under this Contract.’
Clause 6·8, Excepted Risks
© The Joint Contracts Tribunal Limited
Terrorism Cover Update, December 2009
Clause number and heading Clause 6·8, Pool Re Cover
Insert as an additional defined term:
‘Pool Re Cover:
such insurance against loss or damage to work executed and Site Materials caused by or resulting from terrorism as is from time to time generally available from insurers who are members of the Pool Reinsurance Company Limited scheme or of any similar successor scheme.’
Clause 6·8, Terrorism Cover
Amend the existing definition by deletion of the words crossed through and insertion of the words underlined: ‘Terrorism Cover: Pool Re Cover or other insurance against provided by a Joint Names Policy under Insurance Option A, B, C for physical loss or damage to work executed and Site Materials (and/or, for the purposes of clause 6·11·1, to an existing structure and/or its contents) caused by or resulting from terrorism.’
New Clause 6·10
Insert as clause 6·10 the following new clause:
‘Terrorism Cover – policy extensions and premiums 6·10 ·1 To the extent that the Joint Names Policy for the Works and Site Materials excludes (or would otherwise exclude) loss or damage caused by terrorism, the Contractor, where Insurance Option A applies, or the Employer, where Insurance Option B or C applies, shall unless otherwise agreed take out and maintain, either as an extension to the Joint Names Policy or as a separate Joint Names Policy, in the same amount and for the required period of the Joint Names Policy, such Terrorism Cover as is specified in or by the Contract Particulars, subject to clauses 6·10·4 and 6·11. Where Insurance Option A applies and the Contractor is required to take out and maintain Pool Re Cover, the cost of that cover and its renewal shall be deemed to be included in the Contract Sum save that, if at any renewal of the cover there is a variation in the rate on which the premium is based, the Contract Sum shall be adjusted by the net amount of the difference between the premium paid by the Contractor and the premium that would have been paid but for the change in rate. Where Insurance Option A applies and Terrorism Cover other than Pool Re Cover is specified as required, the cost of such other cover and of its renewal shall be added to the Contract Sum. Where Insurance Option A applies and the Employer is a Local Authority, if at any renewal of the Terrorism Cover (of any type) there is an increase in the rate on which the premium is based, he may instruct the Contractor not to renew the Terrorism Cover. If he so instructs, the provisions of clauses 6·11·5·1 and 6·11·5·2 shall apply with effect from the renewal date.’
Renumber existing clause 6·10 as clause 6·11 and amend the re-numbered clause by deletion of the words crossed through and insertion of the words underlined: ‘Terrorism Cover – non-availability – Employer's options 6·1110 ·1 If the insurers named in the any Joint Names Policy, or (where Insurance Option C applies) the insurers named in either or both such policies, notify either Party that, with effect from a specified date (the 'cessation date'), Terrorism Cover will cease and will no longer be available or will only continue to be available with a reduction in the scope or level of such cover, the recipient shall immediately notify the other Party. The Employer, after receipt of such notification but before the cessation date, shall give notice to the Contractor either: ·1 that, notwithstanding the cessation or reduction in scope or level of Terrorism Cover, the Employer requires that the Works continue to be carried out; or that on the date stated in the Employer’s notice (which shall be a date after the date of the insurers' notification but no later than the cessation date) the Contractor’s employment under this Contract shall terminate.
© The Joint Contracts Tribunal Limited
Terrorism Cover Update, December 2009
paragraph C·4·2 Schedule 5. Delete ‘6·11’ and insert ‘6·12’ Renumber existing clause 6·13 as clause 6·14. paragraph B·3·2 Schedule 3. Delete ‘6·15·1·2’ and insert ‘6·16·1·2’ (four instances) Renumber existing clause 6·16 as clause 6·17 Delete ‘6·10·2·2’ and insert ‘6·11·2·2’ Delete ‘6·10·4·2’ and insert ‘6·11·5·2’ After ‘Joint Names Policy’ insert ‘or payable to him under clause 6·11·5·2. the restoration. and (where Insurance Option C applies) the requirement that the Works continue to be carried out shall not be affected by any loss or damage to the existing structures and/or their contents caused by terrorism but not so as thereby to impose any obligation on the Employer to reinstate the existing structures or affect the rights of either Party under paragraph C·4·4 of Schedule 3. then upon and from such termination the provisions of clauses 8·12·2 to 8·12·5 (excluding clause 8·12·3·5) shall apply and. then: ·1 if work executed and/or Site Materials suffer physical loss or damage caused by terrorism. December 2009 Page 3 . the net additional cost to the Contractor of any such cover and its renewal shall be added to the Contract Sum. he may instruct the Contractor to effect and maintain any alternative or additional form of Terrorism Cover then reasonably obtainable by the Contractor. Part 1. without deduction of Retention and with no reduction in any amount payable to the Contractor pursuant to this clause 6·11·5 6·10·4 by reason of any act or neglect of the Contractor or of any subcontractor which may have contributed to the physical loss or damage. where applicable’ Delete the whole of paragraph A·5 and its heading Delete ‘6·10·4·2’ and insert ‘6·11·5·2’ Delete ‘6·10·4·2’ and insert ‘6·11·5·2’ Delete ‘6·11’ and insert ‘6·12’ Delete ‘6·11’ and insert ‘6·12’ Schedule 3.’ ·43 ·54 ·2 ·3 Clause 6·11 Clause 6·12 Clause 6·13 Clause 6·14 Renumber existing clause 6·11 as clause 6·12 Renumber existing clause 6·12 as clause 6·13. replacement or repair of such loss or damage and (when required) the removal and disposal of debris shall be treated as a Variation. paragraph A·4·2 Schedule 3. the Contractor shall with due diligence restore the damaged work. no further sum shall become due to the Contractor other than the amounts referred to in clauses 8·12·3·1 to 8·12·3·4 which require any further payment or any release of Retention to the Contractor shall cease to apply. paragraph 5 Schedule 5. If the Employer gives notice of termination under clause 6·1110·2·2. Part 2. If the Employer does not give notice of termination under clause 6·1110·2·2. remove and dispose of any debris and proceed with the carrying out of the Works. Delete ‘6·14 to 6·16’ and insert ‘6·15 to 6·17’ Renumber existing clause 6·14 as clause 6·15 Clause 6·15 Clause 6·16 Clause 8·12 Schedule 3.Clause number and heading Action ·3 Where Insurance Option A applies and the Employer gives notice under clause 6·11·2·1 requiring continuation of the Works. replace or repair any lost or damaged Site Materials. notwithstanding any the other provisions of this Contract. paragraph A·4·6 Renumber existing clause 6·15 as clause 6·16. paragraph 9 © The Joint Contracts Tribunal Limited Terrorism Cover Update. paragraph A·5 Schedule 3.
” * Allocate the next available Article number.. whether by way of an extension to his CAR or specific Works Insurance policy or through a separate policy. that alternative cover does not extend to chemical or biological damage in commercial cases and also normally requires an extension for nuclear risks. The JCT would again stress that relevant details of this. The gap between exclusion and cover arose after the passing of the Terrorism Act 2000 (‘the 2000 Act’). Each amendment should be initialled by or on behalf of the parties. it also now extends the provision to cover any reduction in the scope or level of cover by insurers and contains an option for the Employer. the Contractor’s underlying obligation to restore. as defined in clause 6·8. in particular with respect to the Contractor’s liability for loss or damage to the Works and Site Materials in cases where Insurance Option A applies. December 2009 Page 4 . Clause 6·11 (the former clause 6·10) retains the provisions regarding non-availability at the renewal date and the Employer’s consequent option to terminate. Where Terrorism Cover other than Pool Re is required. where the Contractor is responsible for Works Insurance. the contractual obligation of the relevant Party to obtain Terrorism Cover should be limited to the risks insured by Pool Re or by such other insurance cover as is specified in the Contract Particulars for clause 6·10. However. require discussion and agreement between the Parties and their insurance advisers prior to entering into the Contract. Effecting Terrorism Cover may still be difficult in certain situations. not only where directed towards the overthrow or influencing of governments but also any intended to put any section of the public in fear. Pool Re continues to exclude nuclear. Originally the risk was substantially covered by the buy-back of cover under the Pool Re scheme established by the Reinsurance (Acts of Terrorism) Act 1993 (‘the 1993 Act’). the anticipated cost is intended to be included in the Contract Sum as tendered (clause 6·10·2). chemical and biological risks. Clauses 6·10·2 and 6·10·4 incorporate the provisions formerly in paragraph A·5 in Schedule 3. for each Insurance Option. In the absence of any relevant limitation or exclusion. The gap was illustrated by the ‘Unibomber’ Soho bombing and Huntingdon Life Sciences cases. Pool Re cover is the default position. to require him to switch to any alternative form of Terrorism Cover reasonably available at the renewal date. replace or repair any fire or other damage to the Works under that Insurance Option in effect meant that he bore the risk of any such loss or damage to the extent that it fell outside Pool Re or other terrorism cover that he ‘bought back’. houses and blocks of flats and other dwellings insured in the name of a private individual. subject to adjustment for changes in renewal costs. attach this Update to the Agreement. however. Lloyds market cover. In the 2000 Act. and insert in the Articles an additional Article which states: “Article *…. © The Joint Contracts Tribunal Limited Terrorism Cover Update. and of Works insurance generally.e. This Update is intended to rationalise the position. ideological or similar purposes. i. since insurers’ original exclusions of terrorism risk and Pool Re cover were both based on that Act’s definition of terrorism. which operates through the clause 6·6 exclusion of Contractor’s liability for those risks and also limits the required ambit of All Risks Insurance. The JCT has therefore agreed that both the Contractor’s liability (where Insurance Option A applies) and. It will be noted that in the case of residential property. Unlike Pool Re cover. In all cases Pool Re Cover requires annual renewal: Lloyds market cover may be available for the duration of the project. terrorism was defined as including not only acts connected to organisations with activities directed towards overthrowing or influencing any government by force or violence (the 1993 Act definition) but also acts of individuals (alone or on behalf of any organisation) committed for political. Where the Contractor is to obtain the Works Insurance and Pool Re Cover is required. A new clause 6·10 sets out the underlying obligation to effect Terrorism Cover.Guidance Notes to the Terrorism Cover Update JCT has previously highlighted through contract footnotes and guides certain possible issues regarding the extent of Terrorism Cover and compliance with the requirements of Insurance Options A.: Terrorism Cover Update – incorporation The Conditions shall have effect as modified by the amendments in the attached Terrorism Cover Update. This is coupled with an extension to the clause 6·8 definition of Excepted Risks. Use of Terrorism Cover Update Either or amend the contract in accordance with this Update and execute it as so amended. religious. the costs of effecting and renewing cover are treated as an addition to the Contract Sum. B and C. since at present the cost may not be as predictable as that of Pool Re (see clause 6·10·3). Adoption of the wider definition by insurers enlarged their standard terrorism exclusion beyond the 1993 Act risks covered by Pool Re but Pool Re cover was not extended in this respect. has been available to cover the wider 2000 Act risks. Not all insurers adopted the wider exclusion and an alternative to Pool Re.
Setting Out etc. (clauses 2·7 to 2·9 and Schedule 1 (Contractor’s Design Submission Procedure) Discrepancies and Divergences (clauses 2·10 to 2·16 and Supplemental Provision 3) Design Work (clause 2·17) Fees. Royalties and Patent Rights (clauses 2·18 to 2·20) Unfixed Materials and Goods (clauses 2·21 and 2·22) Adjustment of Completion Date (clauses 2·23 to 2·26) Practical Completion. Lateness and Liquidated Damages (clauses 2·27 to 2·29) Partial Possession by Employer (clauses 2·30 to 2·34) Defects (clauses 2·35 and 2·36) Contractor’s Design Documents (clauses 2·37 and 2·38) Section 3 – Control of the Works Access and Representatives (clauses 3·1 and 3·2 and Supplemental Provision 1) Sub-Contracting (clauses 3·3 and 3·4 and Supplemental Provision 2) Employer’s instructions (clause 3·5 to 3·15 and Schedule 4) CDM Regulations (clauses 3·16 and 3·17 and Supplemental Provision 8) Section 4 – Payment (and Schedule 6 – Forms of Bonds) Contract Sum and Adjustments (clauses 4·1 to 4·3) Payments (clauses 4·4 to 4·12) Gross Valuation (clauses 4·13 and 4·15) Retention (clauses 4·16 to 4·18) Fluctuations (clause 4·19 and Schedule 7) Loss and Expense (clauses 4·20 to 4·23) 9 13 14 © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page i .Contents Introduction General Revision 1 Revision 2 Format Risk allocation Content of the Guide Page 1 New Supplemental Provisions Articles of Agreement Recitals Articles Contract Particulars Attestation 3 6 6 6 6 7 9 9 Conditions Section 1 – Definitions and Interpretation Definitions (clause 1·1) Interpretation (clauses 1·2 to 1·10) Section 2 – Carrying out the Works Contractor’s obligations (clauses 2·1 and 2·2) Possession (clauses 2·3 to 2·6) Supply of Documents.
Section 5 – Variations General (clauses 5·1 to 5·3 and Schedule 2) The Valuation Rules (clauses 5·4 to 5·7) Section 6 – Injury. Damage and Insurance (and Schedule 3 – Insurance Options) Injury and property damage – indemnity and insurance (clauses 6·1 to 6·6) Works insurance (clauses 6·7 to 6·10 and Schedule 3) Professional Indemnity insurance (clauses 6·11 and 6·12) Joint Fire Code (clauses 6·13 to 6·16) Financial Services and Markets Act 2000 Section 7 – Assignment. Third Party Rights and Collateral Warranties (and Schedule 5 – Third Party Rights) Section 8 – Termination General (clauses 8·1 to 8·3) Termination by the Employer (clauses 8·4 to 8·8) Termination by the Contractor (clauses 8·9 and 8·10) Termination by either Party (clause 8·11) Consequences of Termination under clauses 8·9 to 8·11. (clause 8·12) Section 9 – Settlement of Disputes Mediation (clause 9·1) and ADR Adjudication (clause 9·2) Arbitration (clauses 9·3 to 9·8) and litigation (Article 9) 16 16 19 20 21 Appendix A – Amendment 1 (DB) Appendix B – Revision 2 changes Appendix C – DB User Checklist Appendix D – Related Publications 23 27 29 35 Page ii DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . etc.
In the case of Revision 2. and more detailed particulars with respect to Professional Indemnity insurance requirements. together with two new recitals (the Sixth and Seventh). and most other JCT contracts. that agent may be either an external consultant or an appropriate member of the Employer’s staff. it also reflected the publication of the JCT SubContractor Collateral Warranty for Employer (SCWa/E) and made certain other minor updates and corrections. The principal purpose of that Amendment was to reflect the coming into effect on 6 April 2007 of the Construction (Design and Management) Regulations 2007. DB 2005 is primarily appropriate for larger works where the Employer has defined his requirements and where the Contractor is not only to carry out the works. Revision 1 4 Revision 1 to DB 2005 was published in June 2007 and incorporated Amendment 1. and Notification and negotiation of disputes. The additional provisions reflecting AEC principles have been included as Part 2 of Schedule 2 (Supplemental Provisions). The standard form of Retention Bond has been included as Part 3 of Schedule 6. Format 8 9 The section-headed format adopted for DB 2005 was aimed at greater standardisation over the JCT range of contracts and greater adaptability to change. four existing clauses have been deleted or renumbered (clauses 1·8. at the same time including the standard JCT Retention Bond option and a minor modification of the provisions relating to payment applications after practical completion. (b) to simplify the provisions of section 4 (Payment). Revision 1 resulted in the deletion of only one clause (7F). 6 The additional provisions relating to AEC principles are: Acceleration Collaborative working Health and safety Cost savings and value improvements Sustainable development and environmental considerations Performance Indicators and monitoring. The format therefore remains substantially unchanged. which helps to simplify the text generally. issued in April that year. alongside the existing provisions (now Part 1). a consolidated notices and communications provision at clause 1·7. For the purpose of contract administration.Introduction General 1 2 This edition of the Guide to the 2005 edition of the Design and Build Contract (DB 2005) is being issued contemporaneously with the publication of Amendment and Revision 2 to DB 2005. 3·17 and 7·3) and a single new clause (4·17) added. 3·16. Revision 2 5 The principal purposes of Revision 2 are: (a) to introduce into DB 2005. 3 © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 1 . DB 2005 requires the appointment of an Employer’s Agent. 7 Revision 2 also makes certain textual refinements. and (c) to recognise the increasing importance of sustainability. additional provisions which build upon the traditional JCT approach and reflect principles adopted by the Office of Government Commerce in its Achieving Excellence in Construction (AEC) initiative. but also to complete the design for them in accordance with those requirements. A copy of the Amendment 1 documentation forms Appendix A to this Guide. It retains the provisions designed to meet the needs of both the Private and Local Authority sectors and allows for the works to be carried out in sections. These include wider usage of defined terms.
Of the deletions mentioned. clause 7·3 is now superfluous. In view of the minor alterations to Part 2 of the Contract Particulars referred to below. Appendix D lists the other JCT documents that comprise the DB 2005 suite of documents or that can readily be used in conjunction with the Contract. of the information and decisions on options that are required to complete the DB 2005 contract form. starting with the Articles of Agreement. 12 Appendix C is a straightforward listing.Risk allocation 10 In JCT’s view. clause 3·16 (Instructions on antiquities) is merely renumbered as clause 3·15·2 and clause 3·17 (Loss and expense arising) is included in the general loss and expense provision at clause 4·21·3. none of the Revision 2 changes has a material effect on the current allocation or balance of risk. none of the ancillary changes affects the status quo in terms of risk. The commentary is followed by: Appendix A – Amendment 1 Appendix B – Revision 2 changes Appendix C – DB User Checklist Appendix D – Related Publications. The commentary indicates the principal drafting and other ancillary Revision 2 amendments and deals with the Schedules (including existing Supplemental Provisions) in conjunction with the sections or sub-sections to which they most closely relate. Similarly. Revision 2 Supplemental Provisions and then deals sequentially with the other provisions of DB. Page 2 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . Content of the Guide 11 This Guide reviews the new. most of the related provisions are in substance a statement and reflection of good management practice that is already common in many sectors. The general thrust of the AEC principles and the new Supplemental Provisions is to reduce cost and avoidable risk. followed by the Conditions. by reference to relevant provisions of the Articles of Agreement. the substance of clause 1·8 (Electronic communications) is included in clause 1·7·2.
care should be taken about the possible assumption of design liabilities. however. if he is unwilling to make one. the provisions that give effect to those principles are now set out in Part 2 of Schedule 2. a provision for KPI monitoring and additional provisions for dispute resolution.) The new Supplemental Provisions comprise the seven principles listed at paragraph 6 above. Bills of Quantity. general sustainable development and environmental provisions. Cost savings and value improvements 23 Consultants generally are professionally bound to report potential value improvements of which they are aware. This by definition covers Health and Safety legislation. It is obviously right that contractors should be encouraged to do the same. It should be noted that the Contract Particulars contain different default positions for Parts 1 and 2 of Schedule 2. not during the construction phase covered by DB 2005. As indicated above. In terms of the new Supplemental Provisions. Collaborative working 20 21 This is a simple restatement of the principle that in effect underpins most of the other AEC principles. like all other JCT contracts and sub-contracts. they are generally intended to be disapplied only where there is a Framework Agreement or other contract documentation that covers the same ground. More detailed coverage of such issues is commonplace and is often quite properly contained in the Preliminaries rather than the contract conditions. but. for which there is an existing Supplemental Provision in Part 1 of Schedule 2 (paragraph 4). as a useful complement to the existing DB 2005 clauses. that the Employer. The Sixth Recital provides for any applicable Framework to be recorded in the Contract Particulars and the Seventh incorporates into the Contract those Supplemental Provisions identified in the Contract Particulars. Named Sub-Contractors. When making suggestions. it is not unreasonable that they should receive a fair share of the benefit for doing so. (It will be noted that in these cases the headings have now been abbreviated.e. Valuation of Changes – Contractor’s estimates. the Contractor is not bound to make such a quotation. and Loss and Expenses – Contractor’s estimates. This Supplemental Provision (at paragraph 8·2·1 in Part 2 of Schedule 2) adds an obligation to comply with non-statutory HSE and HSC approved codes. It is of course during the pre-construction period. goes on to highlight specific training and consultation aspects of the legislation. is able to derive the greatest benefit from value-engineering exercises. With a view to an earlier date of practical completion. and. alongside the existing Supplemental Provisions which now form Part 1 of that Schedule. The Contract also makes specific provision with respect to CDM Regulations (clauses 3·16 and 3·17). an outline procedure governing Contractor’s value engineering suggestions. the Employer may ask for an Acceleration Quotation at any time and may on or before receipt seek revised proposals. the following points merit mention: Acceleration 14 15 16 17 18 19 This consists of an acceleration quotation procedure based on those in several existing JCT contracts. i. but the new Supplemental Provisions apply unless stated not to apply. The intention of Revision 2 is to incorporate those principles into DB 2005 either where there is no applicable framework or framework provision. Health and safety 22 DB 2005. but they remain substantially in their original form.New Supplemental Provisions 13 AEC or similar principles are already incorporated in the JCT Framework Agreement. or where there is no other contractual coverage of the particular issue. additional illustrative Health and Safety requirements. assisted by the Contractor and relevant specialists as well as his consultant team. collaborative working. It is to cover that earlier period that the JCT has recently DB/G (2009) Page 3 24 © The Joint Contracts Tribunal Limited 2009 . acceleration. already contains an express undertaking to comply with the Statutory Requirements (clause 2·1). The existing Supplemental Provisions apply only where they are stated to apply. In this case it is not combined with the Variation Quotation procedure. The existing Supplemental Provisions comprise: Site Manager. which is clearly good practice. he is required to explain why acceleration is impracticable. Revision 2 is not intended to discourage more detailed coverage.
the importance of proper information on the environmental impact of materials and goods selected by the Contractor being available as part of the clause 2·2 and clause 2·8 approval processes. those indicators may also perform a valuable role in individual contracts. Decisions on these matters are principally matters for the client and his professional team which generally fall to be made during the pre-construction period. Performance Indicators and monitoring 30 Performance indicators are generally most relevant to Framework or other longer-term agreements between Employer and Contractor where there is benchmarking of performance against competitors as part of contractallocation or other incentive arrangements. it makes obvious sense that each Party should notify disputes promptly and nominate an employee of sufficient seniority and authority with a view to resolving them quickly. It should be recognised that provisions of this type are not straightforward. In the context of this provision. Adjustments also have to be made for the value/cost of the additional work involved and/or the saving to the Employer from any resultant omissions. the paragraph 9·2 reference to the Contractor’s quotation is intended to connote a considered. 27 28 31 33  The Housing Grants. However. are intended to give the Employer continuing control over further design work and selection of materials by the Contractor during the construction period. frequently coupled with express agreement that a specified period will be allowed to the Parties’ appointees to resolve the matter before steps are taken to initiate any external dispute resolution procedure. combined with clauses 2·2 and 2·8. bona fide estimate rather than a complete. sustainability is now becoming an increasingly important commercial factor. The legislative framework has historically been the principal driver for sustainable development and on environmental issues generally but. the Contractor will wish to be paid his share of the benefits before Final Statement. there is no entry in the Contract Particulars covering methodology or share of benefits. that performance should be regularly and properly monitored and that assessments should be made strictly in accordance with the indicators/targets. However.produced its two Pre-Construction Services Agreements. which has taken and continues to take an active role in establishing common ground on contractual provisions. It is important that the indicators and targets should be clearly stated or identified. for instance. As there is no standard approach. legally binding offer. In areas where the scope for further value engineering is clear and benefits can more readily be established. Notification and negotiation of disputes 32 In terms of avoidance or early resolution of actual or potential disputes. recognises both the need for positive continuing dialogue reflected in paragraph 10·1 and. Such provisions have for many years been commonplace in the field of general commercial agreements. In commercial terms. It is difficult to prescribe particular sharing arrangements covering such a wide field of possible benefits. often in the context of prospective variations. PCSA (between Employer and Main Contractor) and PCSA/SP (between Employer or Main Contractor and a Specialist contractor). However. section 108 of the HGCR Act 1996 requires that a construction contract should enable a party to give notice at any time of his intention to refer a dispute to adjudication. As indicated by the reference to Article 7 at the beginning of the provision. as indicated above and by the paragraph 9·3 reference to negotiations. the provision is therefore limited to giving the Contractor a measure of protection for proposals that he originates and puts forward under this Supplemental Provision by making any instruction to implement them conditional upon those terms being agreed. so that there cannot in construction contracts (within the meaning of the Act) be any prescribed period of delay in respect of any reference to adjudication. normally as part of the Preliminaries. in particular where it consists in lower operating or life-cycle costs. Construction and Regeneration Act 1996 © The Joint Contracts Tribunal Limited 2009 Page 4 DB/G (2009) . the Contractor’s obligations to comply with the Employer’s Requirements and instructions. 25 26 However further opportunities for value engineering do arise. (pre-)qualification purposes and the like. On the one hand. there is nothing to prevent agreement between the Parties on benefit shares at an earlier stage. the JCT. Sustainable development and environmental considerations 29 This Supplemental Provision may often be linked to the previous provision. there may then be several other interrelated matters to be agreed – not only in terms of price but also matters such as design liability (on which a Contractor may wish to reserve his position in making the proposal). for project-specific incentives. while on the other hand it may be difficult for several – perhaps many – years to establish the true benefit to the Employer. in terms of paragraph 10·2. for many clients.
34 The costs of adjudication are generally less than those of litigation or arbitration. If a dispute arises. © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 5 . but they are not inconsiderable and are often not recoverable. whether or not this Supplemental Provision applies. the Parties should consider whether to allow a reasonable period for negotiation before recourse to adjudication or other external means of resolving the dispute.
Part 1 44 In Part 1. Entries are provided against the references to them in Part 1 of the Contract Particulars. subject only to the Revision 1 change in Article 5 (CDM Co-ordinator) to reflect the 2007 CDM Regulations and the Revision 2 abbreviation of Article 8 (Arbitration). as his or her residence). The only insertion required by the Recitals is a brief description of the Works. Recitals 36 The sole alteration to the DB 2005 Recitals has been the Revision 2 insertion of the new Sixth and Seventh Recitals (Framework Agreement and Supplemental Provisions). In terms of Article 7 (Adjudication) and clause 9·2 of the Conditions. so that any Employer who is a residential occupier should take advice on the point. in particular with respect to adjudication and the question of whether or not to delete that Article and clause. a contract which principally relates to operations on a dwelling which one or more of the parties to the contract occupies. the JCT would stress the need for proper identification of the documents that are to comprise the Employer’s Requirements and Contractor’s Proposals respectively and the need for consistency between them. Privalov  UKHL 40  Page 6 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . Articles and the Attestation clause. Part 2 of that Act does not apply to contracts with residential occupiers. If they do not apply (and subject to either Party’s right to refer any dispute to adjudication or subsequently to agree to arbitration) final resolution of disputes is a matter for the courts. previously it was envisaged that all or only the first of those provisions (Site Manager) Fiona Trust v.Articles of Agreement 35 DB 2005 retains the traditional form of Articles of Agreement. those include five new or extended entries or groups of entries and the deletion of one existing entry. Article 8 (Arbitration) applies only if the Contract Particulars specifically state that it and clauses 9·3 to 9·8 apply. 37 38 Articles 39 The Articles remain substantially the same as they were in the 2005 edition. in the case of Part 2. the General particulars that are required and.e. as Part 1. The entries for the existing Supplemental Provisions (those in Part 1 of Schedule 2) have been expanded to allow for the selection of each of those provisions separately. which can now safely be made following a 2007 decision of the House of Lords. Articles 3 to 6 deal with relevant contractual and CDM appointments and Articles 7 to 9 with dispute resolution. division of the Works into Sections is dealt with by the Contract Particulars for the Fifth Recital and the identifiers of the documents comprising the Employer’s Requirements. they consist of a few minor deletions only. Last minute changes are often inevitable but the constituent documents need to be checked before execution. comprising. In the case of Part 1. an entry has been included for the Sixth Recital (Framework Agreement) and the Supplemental Provisions entries are now by reference to the Seventh Recital. care needs to be taken when DB 2005 is used for a contract to be let by a residential occupier within the meaning of section 106 of the HGCR Act 1996 (i. As indicated by the footnote to the Third Recital. as Part 2. 40 41 42 Contract Particulars 43 Both Part 1 (General) and Part 2 (Third Party Rights and Collateral Warranties) remain substantially in their original DB 2005 form. or intends to occupy. Articles 1 and 2 summarise the primary obligations under the Contract. the fact that identifiers are not always changed to reflect a change in the relevant drawing or document reinforces the desirability of initialling or signing the constituent documents. the entries for Third Party Rights and Collateral Warranties. with only minor adjustments. but also includes within them the Contract Particulars. comprising the Recitals. the Contractor’s Proposals and the Contract Sum Analysis are for insertion against the Contract Particulars entries for Article 4.
foreign companies. to avoid later disputes and delays. Those have now been omitted. no entry need be made. and cover levels are intended to be sub-limits of the general level of cover. This retains separate forms for execution under hand and execution as a deed. If there is an overlap either through an applicable Framework Agreement or other intended contractual provision (whether in the Preliminaries or elsewhere) the Parties should consider removing that overlap by disapplication of the Supplemental Provision. where the Contract is executed as a deed. to reduce the number of tender documents involved. 47 48 49 Attestation General 50 The attestation provisions are in the revised standard JCT layout introduced as from 1 April 2008. not as separate insurances in their own right. is intended to be within the overall policy. it will be noted that certain sub-contractor details required for (E) are linked to details given at (B) and (C) and that the Table (E) now requires an entry indicating the types of warranty required from each specified sub-contractor. Where there is no Framework Agreement or contractual provision that overlaps with any of the Supplemental Provisions. it is important that full details of the requirements be given to prospective contractors and sub-contractors in the tender process and properly incorporated in the Contract. That is considered desirable not least because the Design and Build Sub-Contract is predicated upon these (Main) Contract Particulars being made available in substantially completed form for sub-contract tendering purposes and it is clearly good practice. Part 2 46 Prior to Revision 2. For execution as a deed by a company. separate entries for asbestos and fungal mould cover. If Employers nevertheless consider it easier to retain separate. 45 In relation to clause 6·11 (Professional Indemnity insurance) and in line with market realities. with a cover limit for the asbestos claims. or 12 years. Coverage of these specific categories of risk. other attestation clauses may also be needed in the case of certain housing associations. as in the case of execution under hand. (In that connection. Execution under hand or as a deed 51 The primary factor governing the decision to execute the Contract under hand or as a deed is whether the limitation period for instituting proceedings is to be 6 years. There are also new. The mode of execution of the Contract will also determine the mode of execution of collateral warranties (clause 7·4) and (for both third party rights and collateral warranties) the limitation period that applies to them. which may not be required in certain cases. Further comments on the requirements are made below in the context of section 7. the default position with respect to pollution and contamination cover is no longer that the required limit of indemnity is the amount of the general cover under the policy. (Where there is fungal mould cover. © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 7 . it is understood that there is normally no separate cover limit. the limit for pollution and contamination claims must be expressly specified if such cover is required. Companies Act 2006 method of execution as a deed through signature by a single director signing in the presence of an attesting witness. In the case of Supplemental Provision 12 (Notification and negotiation of disputes). an appropriate entry can still be made in the Tables at (A) and (E) stating that the required particulars are set out in the separate. Different attestation provisions are still required under the law of Scotland (for which the Scottish Building Contract Committee Limited issues Scottish contract forms). However. as did an entry at the beginning of (E) (Collateral Warranties from Sub-Contractors).) The required cover levels should in each case be reasonable. these now include entries for the additional. In contrast to those entries. partnerships and possibly. Foreign companies 52 Many foreign companies involved in development and construction now themselves carry on business in the UK. Part 2 commenced with a preliminary entry which expressly envisaged that the required details of Third Party Rights or Collateral Warranties might for convenience be set out in a separate identified document (or Annex). The JCT considers that wherever possible the required details be included in the Contract Particulars themselves. There are new entries for the Retention Bond (clause 4·17) and Daywork (clause 5·5).) Where warranties are required from consultants who are sub-contracted to the Contractor a form of warranty other than the specified JCT warranties may be necessary. identified document. rather than operating here through UK subsidiaries. the default position for each of the new Supplemental Provisions is that it applies unless otherwise stated. or if in hard copy cases inclusion of those details is physically difficult. so far as is reasonably practicable.would apply. there is a further entry for nominated employees. standard documentation which they use for the purpose of third party rights or warranty requirements. as discussed below.
54 55 Many foreign companies do not have a seal and the authority of relevant signatories needs to be checked but if there is any doubt. a foreign company can execute deeds either: • • by affixing its common seal or any manner of execution permitted under the laws of its place of incorporation. consideration should also be given to inserting an obligation on the foreign company for the duration of the Contract to maintain an agent for service within England and Wales or within Scotland or Northern Ireland. where appropriate. To avoid complications in the service of claims or notices outside the jurisdiction. or by expressing the document to be executed by the company under the signature of persons authorised to sign on its behalf in accordance with its domestic law. as applied by the Foreign Companies (Execution of Documents) Regulations 1994 and the 1995 amendments to those regulations. Page 8 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 .53 Under the Companies Act 1989. professional advice should be obtained.
The first. now takes the Base Date as its starting point. the Contractor is to DB/G (2009) Page 9 © The Joint Contracts Tribunal Limited 2009 . e. merely reflects the simplification of Final Statement terminology. apart from the Minor Works Building Contracts and the other. It requires that the Works be carried out in a proper and workmanlike manner and in compliance not only with the Contract Documents but also with the Construction Phase Plan and other Statutory Requirements. The changes introduced by Revision 2 primarily comprise the insertion of the Acceleration Quotation and Confirmed Acceptance definitions. the abbreviation of what is now clause 1·8. Once the protocol is in place. local bye-laws and health and safety legislation generally. coupled with the deletion of the existing clause 1·8 (Electronic communications). In addition. is now used throughout.Conditions Section 1 – Definitions and Interpretation Definitions (clause 1·1) 56 Clause 1·1 contains few changes from the DB 2005 original. a matter now dealt with in clause 1·7·2.g. originally used only in the context of insurance. For consistency and brevity. starting with the Contractor’s basic obligations with respect to the carrying out and completion of the Works. This simplifies the text of the Conditions and now applies across the range of JCT contracts and subcontracts. and as indicated by the footnote to clause 1·7·2. The Joint Fire Code definition. i. At clause 1·7·1 there is a requirement that all notices and other communications between the Employer (or Employer’s Agent) and the Contractor that are referred to in the Articles of Agreement or Conditions are to be in writing. particularly if any wider direct distribution of hard copy documents is required. so that a protocol may be useful in this area also.e. reflects the overriding nature of the building contract. (Reference to hand delivery is now used in place of the traditional ‘actual delivery’. the Parties are encouraged to agree a communications protocol as early as possible.g. dealing sequentially with various aspects of the construction process. it should be noted that Revision 2 has eliminated several traditional references to numbers of copies to be supplied. unintended construction that may be given to the traditional expression. the primary change is that previously referred to. There are two other minor changes in the Interpretation sub-section. this reflects recent case law indicating a wider. at clause 1·3. preferably on or before execution of the Contract. the deletion of references to Final Account in relation to the Final Statement and consequential changes in certain crossreferences. development control requirements. there needs to be regular updating of relevant contact points. The second. which is recognised in the JCT Framework Agreement and also by many other such agreements. with adjustment for particular aspects at a later stage. so that it can from the outset be applied to the supply chain generally. There is nothing to prevent the basic document being included in the Preliminaries or in other tender documents. e. it has also been abbreviated. as a corollary of the point reinforced in clause 6·14. e-mail addresses and so forth. including specifications and standards for materials. those relating to defaults/termination and third party rights/collateral warranties. It is clearly important that appropriate arrangements are in place before the flow of Contractor’s detailed design work commences. Where design or other contractual information flows are still in whole or in part to be in hard copy form. Contractor’s obligations (clauses 2·1 and 2·2) 64 Clause 2·1·1 develops the Contractor’s principal obligation under Article 1. including CDM Regulations. It also requires completion of the design. Interpretation (clauses 1·2 to 1·10) 57 In the Interpretation sub-section. 58 59 60 61 62 Section 2 – Carrying out the Works 63 Section 2 remains substantially in its original DB 2005 form. Clause 1·7·4 retains a formal hand delivery/Recorded Signed for or Special Delivery post requirement for key notices. goods and workmanship that have not already been established by the Employer’s Requirements or Contractor’s Proposals. the term ‘Site Materials’.) In relation to electronic and other communications. the revised and extended clause 1·7 (Notices and other communications). shorter contracts and sub-contracts that contain few express notification procedures.
If there are inadequacies in the Employer’s Requirements (or in designs contained in them) which are not dealt with in the Contractor’s Proposals or a divergence between those requirements and the definition of site boundaries. The Employer is required to give instructions. If there is any part of the Employer’s land adjacent to the Works which the Contractor may require to use on a purely temporary basis and not for the full duration of the Works or a Section. the Contractor may also be required to allow for amendment to the Contractor’s Proposals necessitated by Development Control decisions. they are to be established through the Contractor’s Design Submission Procedure under clause 2·8 and Schedule 1. goods and workmanship. the general principle on cost is simple. Setting Out etc. discrepancies and divergences in the Contractor’s Proposals. where the relevant kinds or standards are not established by the Employer’s Requirements or Contractor’s Proposals. If he fails to do so. the Employer is responsible for the cost of the necessary Change. if the Works insurers consent. control of the site. and not unreasonably to withhold or delay his consent to such work being carried out even where sufficient information has not been given to him in advance. he risks not being paid for the work in question (see paragraph 6 of Schedule 1). those under building regulations. but does not of course affect his position and duty under general law. it is borne by the Party responsible for the document in question. deferral where the option does not apply or for longer than the permitted period is a breach. Supplemental Provision 3 (Bills of Quantities). • • (Employer’s use or occupation for storage or other purposes under clause 2·5 should be distinguished from partial possession being retaken by the Employer under clause 2·30. This covers the period up to practical completion. those to the local authority in relation to the operation of the site and any required in relation to health and safety matters. in effect. its use (and any necessary insurance arrangements) should be the subject of a separate arrangement. that should generally be excluded from the site for these purposes. to the effect that. in his Contract Sum Analysis and in the Contractor’s Design Documents. 65 Clause 2·2 makes further provision with regard to materials. Clause 2·9 makes the Employer responsible for defining site boundaries: the consequences of a divergence in that definition are set out in the following sub-section. Possession (clauses 2·3 to 2·6) 66 The next sub-section covers the transfer to the Contractor of possession and. subject to: • the Employer’s possible option to defer giving possession for a specified period not exceeding 6 weeks (The Contractor is entitled to recover any loss and/or expense arising from a permitted deferral. access to them and confidentiality. if it applies. including incident reports. which are to be provided as and when necessary and in accordance with the Contractor’s Design Submission Procedure set out in Schedule 1 or as otherwise stated in the Contract Documents. the latter is treated as practical completion of the part repossessed. also makes provision for errors in any bills contained in the Employer’s Requirements.) Clause 2·1·4 then sets out the Contractor’s duty of compliance with the Employer’s instructions and decisions.) Supply of Documents. Subject to certain exceptions. Samples are to be provided where the Employer’s Requirements or Contractor’s Proposals reserve that right. (clauses 2·7 to 2·9 and Schedule 1 (Contractor’s Design Submission Procedure)) 67 68 This sub-section at clause 2·7 covers the Contract Documents. and the cost of remedial action. 69 71 Page 10 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . (Clause 2·1·2 may in certain circumstances modify the Contractor’s contractual liability to the Employer in relation to the Statutory Requirements. The procedure can be tailored to the particular project but it is extremely important that the Contractor should not undertake work to which particular designs relate until he has complied fully with the procedure. and the Employer also has a right to reasonable proof of conformity. the Contractor’s obligation not unreasonably to refuse the Employer the right to use or occupy the site or part of it for storage or other purposes prior to practical completion.). Under clause 2·15·2·2.give all necessary notices under the Statutory Requirements. and the Contractor’s obligations to allow the Employer or other contractors on the latter’s behalf to carry out other work on site where the requirement has been sufficiently described in the Contract Documents. Discrepancies and Divergences (clauses 2·10 to 2·16 and Supplemental Provision 3) 70 The sub-section deals in detail with the requirements for notification of errors. e. Contractor’s Design Documents and instructions. Clause 2·8 then provides for the supply of the Contractor’s Design Documents. either in or between themselves or in relation to the Statutory Requirements.g. discrepancies and divergences discovered in Contract Documents. the Contractor is responsible for errors.
clause 2·24·1 sets out the Contractor’s obligation to notify: it will be seen that the obligation arises not merely when progress is being delayed but when it becomes reasonably apparent that it is likely to be delayed.e. building regulation notification and inspection fees. where appropriate. However. Under JCT contracts. The Contractor must also use best endeavours both to prevent delay (or further delay) and. those listed in clause 2·26) that entitle the Contractor to an extension nor. the pre-conditions of payment are set out in clause 4·15. as the case may be. Royalties and Patent Rights (clauses 2·18 to 2·20) 74 Statutory fees. This in practice is a matter which in a majority of cases involves sub-contractors. In the case of the Works as originally designed or specified. the matter should be raised with the Employer before entry into the Contract or implementation of the instruction. However DB/G (2009) Page 11 75 78 79 80 © The Joint Contracts Tribunal Limited 2009 . is it limited to events that have already occurred. as well as supplying any further information reasonably required (clause 2·24·3). Where there has been a Relevant Omission. is that the Contractor is responsible for checking that the Employer’s Requirements and any instructions conform to the Statutory Requirements in the same way as Contractor’s Design Documents. loss of profits and other consequential loss arising from any inadequacy in the Contractor’s design work: this does not limit or affect liability for direct loss. agreement on an extension of time under Supplemental Provision 4 or for acceleration under Supplemental Provision 6. Adjustment of Completion Date (clauses 2·23 to 2·26) 77 The sub-section sets out the provisions governing extensions of time in all cases other than those where there is a Pre-agreed Adjustment within clause 2·23·2. In other words. On being duly notified. where the consequences of that inadequacy are irremediable. this is intended to be the same as that of any independent architect or other professional designer employed by the Employer. it is only where supply or use of patented items is required by a subsequent instruction that the Contractor has right to reimbursement. are under clause 2·18 to be paid by the Contractor and are his liability unless they are stated by way of a Provisional Sum in the Employer’s Requirements. Unfixed Materials and Goods (clauses 2·21 and 2·22) 76 The sub-section concerns the transfer to the Employer of property in Site Materials and Listed Items on payment to the Contractor and the concomitant restriction on removal from site. the resultant diminution in value of the Works. including the cost of remedial work or. i. by further exceptions. a duty to grant extensions under clause 2·25·1. the first five Relevant Events listed and that in clause 2·26·12 are matters for which loss and/or expense may generally be claimed under clause 4·20: the remainder are not. the Employer has power and. The obligation is not restricted merely to Relevant Events (i. so that the flow-down of these conditions required by clause 3·4·2 is generally essential in cases of sub-contracts for work and materials. an optional provision for an overall cap on liability for loss of use. he also has power under clause 2·25·4 to fix an earlier Completion Date. and also that it arises in relation to any cause of delay or likely delay. under clause 2·15. Such cases are rare. if that occurs. in which case the Contract Sum is adjusted for any difference. Fees. any patent or design-related royalties or other payments to third parties are deemed to be included in the Contract Sum. or if there is any necessary change to any part of the Employer’s Requirements which is expressly stated to comply with the Statutory Requirements. For Listed Items.g. The Employer should reach a decision as soon as reasonably practicable (clause 2·25·2). do everything reasonably required to proceed (clauses 2·25·6·1 and 2·25·6·2). if there is any question as to whether a requirement may involve use or infringement of third party patent or other intellectual property rights. including the expected effects (clause 2·24·2) and thereafter to update the information given. where that likelihood exists.72 The exceptions arise in relation to divergences from the Statutory Requirements. Design Work (clause 2·17) 73 The clause follows on from clause 2·2 and deals with the Contractor’s liability in respect of his design work. The obligation is to notify all the material circumstances. as defined in clause 2·24·3. The first. if: • • • the divergence arises from a change in Statutory Requirements after the Base Date and that change necessitates an alteration to the Works. e. though it is only to grant such extension as he considers fair and reasonable. There is. under clause 2·17·3. he may take account of concurrent or overlapping causes of delay that are not Relevant Events. Following the clause 2·23 definitions. or if an amendment to the Contractor’s Proposals is necessitated by the terms of any Development Control permission or approval issued after the Base Date. As will be seen from clause 2·26. the Employer assumes the risk of any divergences between the Statutory Requirements and the Employer’s Requirements (including any Change) or the Contractor’s Proposals.e.
and cannot do so in such a way as to affect the length of any Pre-agreed Adjustment unless the omission is from the work that formed the subject of the Pre-agreed Adjustment (clause 2·25·6·4). Partial Possession by Employer (clauses 2·30 to 2·34) 86 As indicated above. there is no reason why these should not form a single document. deemed practical completion of the relevant parts. Clause 2·5 contains a pre-condition as to insurance. decisions made in the course of the Works. inevitably risk giving rise to precisely the expensive and wasteful disputes that AEC principles seek to avoid. good practice dictates issue of the Practical Completion Statement for the Works at the same time as the last Section Completion Statement. (The same restrictions apply with respect to any earlier date. sometimes in a short space of time and without a full knowledge of the facts and effects of the various possible causes of delay. Clause 2·30 is a provision which can be of benefit to Employers in relation to discrete areas of the site. responsibility for insurance of the part(s) in question immediately passing to the Employer and a reduction (pro rata to value) in the rate of liquidated damages. It should be noted that. which has the consequences set out in clauses 2·31 to 2·34. This power is exercisable both through an overall schedule of defects (clause 2·35·1) and by instructions in respect of individual defects (clause 2·35·2). i. 81 Under clause 2·25·5. Without it. Lateness and Liquidated Damages (clauses 2·27 to 2·29) 83 The sub-section requires issue by the Employer of a Practical Completion Statement or Section Completion Statement when the Works or a Section achieves practical completion and the Contractor has fulfilled his obligations with respect both to as-built drawings and to health and safety file matters (clause 2·27). commencement of the Rectification Period in respect of them. Practical Completion. It provides an opportunity for proper reflection and assessment and is. hanging paragraph). The sub-section also requires the issue of a Non-Completion Notice if the Contractor fails to achieve practical completion by the relevant Completion Date (clause 2·28).he can exercise the latter power only where there has already been an extension of the original Completion Date. the clause 2·35·2 power in respect of individual defects ceases when that schedule is served. followed by a separate Notice of Completion of Making Good. they should also note the requirement for compliance with section 111 of the HGCR Act 1996 (Withholding Notices) reflected in clauses 4·10·4 and 4·12·6. either through an earlier decision or by a Pre-agreed Adjustment. Grant of an extension of time requires cancellation of a Non-Completion Notice and the appropriate repayment within a reasonable time of liquidated damages relating to the period of extension that have by then been paid or withheld. but it should not be invoked without proper liaison and due consideration of its possible effects.e. to review the overall position with respect to extensions of time. In no circumstances may the date fixed by such a decision be earlier than the Date for Completion given in the Contract Particulars. liquidated damages will become payable or deductible on notice from the Employer in accordance with clause 2·29·2 provided both that a subsisting Non-Completion Notice has been issued and that the Employer himself has notified the Contractor in advance that he may require payment or make a withholding or deduction of such damages (clause 2·29·1). Clause 2·30. on the other hand. The notice or schedule in each case must be given or delivered not later than 14 days after the expiry of the Rectification Period. but the clauses otherwise have no effect on the operation of other terms of the Contract. Where there are Sections.) The provision for overall review appears frequently to be overlooked. essential. In the event of such failure. including Relevant Events that may not have been specifically notified under clause 2·24·1 and has power to do what he considers fair and reasonable. immediately following practical completion. in the JCT’s view. In that review he may look at all the circumstances. Users should note the time limits for service both of the warning notification (clause 2·29·1·2) and the notice of withholding and/or deduction (clause 2·29·1. either by fixing a later or (for Relevant Omissions) an earlier Completion Date or by confirming the date previously fixed. the schedule of defects should be comprehensive: in the interests of a properly managed rectification programme. Defects (clauses 2·35 and 2·36) 89 Clauses 3·12 to 3·14 set out the Architect/Contract Administrator’s powers with regard to actual and suspected defects and faults arising during the progress of the Works: this sub-section gives him power to specify and require remedial action in respect of defects and faults arising in the Rectification Period. is concerned with outright repossession of part(s) of the site in advance of practical completion. the Employer in addition has not merely the power (as from the Completion Date) but also the duty. 82 84 85 87 88 Page 12 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . there is provision at clauses 2·5 and 2·6 whereby the Contractor may during the progress of the Works be obliged to accommodate use and occupation of parts of the site by the Employer for storage or other purposes and work by others that falls outside the Contract. it also requires the issue of a further notice in respect of any residual period of default. when given. where use and occupation will not impede the Contractor in managing the site and his completion of the Works as a whole.
and CDM Regulations. by the time that the sub-contract is due to be entered into. is a pre-condition to issuance of the Practical Completion Statement or a Section Completion Statement and the subsection then sets out the terms and conditions relating to the Employer’s licence to use Contractor’s Design Documents generally. it takes the place of clause 3·2. This. Tenants and a Funder under section 7. Under clause 4·9. Supplemental Provision 2 (Named Sub-Contractors) is an optional provision which allows the Employer to require that work be carried only by a sub-contractor named in the Employer’s Requirements but does not give him power to nominate a replacement in any Change necessitated by termination of the resultant sub-contract. Employer’s instructions (clause 3·5 to 3·15 and Schedule 4) 100 The sub-section commences with the general requirement (clause 3·5) that the Contractor should forthwith comply with all instructions. but that is not to be unreasonably delayed or withheld. in the case of performance. interest on late payments and execution of sub-contractors’ collateral warranties. either as third party rights or by collateral warranty. CDM Regulations. The Site Manager is intended to have a similar but wider representative function on behalf of the Contractor. namely automatic termination of the sub-contractor’s employment upon termination of the Contractor’s employment and sub-contract provisions that are compatible with the main contract with respect to vesting and control of Site Materials. His removal or replacement requires the Employer’s consent and there are express provisions for his attendance at Site meetings and for record keeping. There is always the possibility (particularly in the case of work later in the programme) that. similar access to sub-contractors’ premises (a point reflected in clause 3·4·2). Section 3 – Control of the Works 92 This section deals with most of the principal control issues other than performance and payment-related matters. access to workshops. clause 3·1 requires reasonable access to the Works and the Contractor’s premises for the Employer’s Agent and his nominees and. though it is not to be unreasonably delayed or withheld (clause 3·3). the Contractor is obliged to maintain a competent person-in-charge on site. and in section 4 as respects payment. as noted in the context of clause 2·27. Sub-Contracting. That can only be done by an instruction excluding the relevant work from the Contract. Under clause 3·2. the Contractor’s choice of sub-contractor is subject to his approval.) Clause 3·4 sets out the minimum conditions that are required of any sub-contract. who is also required to act as his agent there for receiving instructions and directions. it is conditional upon the Contractor having been paid in full. so far as practicable. Unlike SBC 2005. Employer’s instructions. Contractor’s Design Documents (clauses 2·37 and 2·38) 91 The sub-section deals first with the supply of as-built drawings. unless the Parties are in the happy position of there having been no defects requiring the issue of instructions or a schedule of defects. It then sets out in clauses 3·7 and 3·8 the procedures to be followed if the DB/G (2009) Page 13 94 95 97 98 99 © The Joint Contracts Tribunal Limited 2009 . Access and Representatives (clauses 3·1 and 3·2 and Supplemental Provision 1) 93 For the purpose of inspecting work and the conditions under which it is being undertaken. Where Supplemental Provision 1 (Site Manager) applies. it is desirable that there should also be the measure of agreement between the Parties as to possible alternatives of the type that the SBC 2005 list of three procedure inherently involves.90 Clause 2·36 then sets out the Employer’s obligation to issue the Notice of Completion of Making Good. Sub-Contracting (clauses 3·3 and 3·4 and Supplemental Provision 2) 96 Sub-contracting by the Contractor requires Employer’s consent whether it concerns the whole or part of the Works or their design. The giving of consent by the Employer does not in any way affect the Contractor’s responsibilities under the Contract. In clause 3·6 it outlines the consequences of failure to do so in terms of liability for the Employer’s additional costs. If he wishes the Contractor to be responsible for completing that work. there is in DB 2005 no provision for a list of sub-contractors from whom the Contractor may select his sub-contractor but even where the Employer’s pre-named specialist is acceptable to the Contractor. (The JCT continues to keep the question of pre-selection under review. may have undergone an unwelcome change of control. The licence is in substantially the same terms as the licence granted to Purchasers. which are dealt with in section 2. may have lost key personnel or capabilities and/or be materially less secure in financial terms. namely Access and Representatives. the pre-named specialist may have other priorities. it is the issue of this notice that permits the final Application for Interim Payment and final release of Retention (see clause 4·18·3). It consists of four sub-sections.
The sub-section then lists the Employer’s powers and duties in relation to specific types of instruction. Where work. Clause 4·9 provides for the Contractor’s Applications for Interim Payment. (This is also reflected in the DB Sub-Contract. The form of the Retention Bond is set out in Schedule 6. They highlight certain of those duties. to be reflected in the next Interim Payment. e. Clause 4·1 limits adjustments to those expressly provided for by the Conditions. the second relates to instructions that alter or modify the design of the Works (instructions which under this Contract require the Contractor’s consent. they also provide for the supply of necessary information to the CDM Co-ordinator and Principal Contractor at no cost to the Employer. The first of those applies where the instructions relate to a Variation within clause 5·1·2 (i. and Loss and Expense.g. clause 4·7 provides for Interim Payments to be calculated in accordance with whichever method of Gross Valuation applies – Alternative A. set out in clause 4·13. As respects antiquities. imposes any limitation on working space or hours or affects the order of working) and operates if the Contractor makes reasonable written objection to compliance. Retention. the duty to give instructions on Provisional Sums. which relates to stage payments or Alternative B (clause 4·14) which relates to monthly payments and clause 4·8 sets out the deductions to arrive at the net amount in each case. Revision 2 provides for loss and expense arising from necessary steps or instructions now to be covered as a Relevant Matter under clause 4·21·3. Payments (clauses 4·4 to 4·12) 110 Following the standard JCT provisions with regard to VAT and the CIS and the optional provisions for an advance payment and bond. Revision 2 simplifies the text in certain areas. 3·9·1 and 3·9·4. Gross Valuation. along with those relating to Advance Payment and Listed Items.e. if it applies. the Employer. if he wishes to issue instructions under clause 3·12 for opening up and testing to establish whether there is more extensive non-compliance.) Page 14 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . clause 4·2 continues for convenience to list the various adjustments that are provided for and clause 4·3 provides for the amount of each adjustment. CDM Regulations (clauses 3·16 and 3·17 and Supplemental Provision 8) 105 The sub-section provides contractual cross-undertakings by the Parties to comply with their respective duties under the regulations. Those contained in section 3 relate to the other key instructions. the power to instruct Changes and postponement. As previously mentioned. 102 103 104 106 Section 4 – Payment (and Schedule 6 – Forms of Bonds) 107 108 The section remains divided into six sub-sections – Contract Sum and Adjustments.e. Payments. This is intended to apply both to monthly payments and to stage payments. Revision 2 now provides for post-practical completion applications to be made at intervals of 2 months (or other agreed intervals) rather than simply as and when further amounts are ascertained. Fluctuations. 101 The only express exceptions to the requirement for immediate compliance are clauses 3·5. general Health and Safety considerations are now further amplified by Supplemental Provision 8. is required by clause 3·13·4 to have regard to the Code of Practice set out in Schedule 4. when ascertained. Further details of the 2007 Regulations and consequent Revision 1 amendments are contained in Appendix A to this Guide. the optional provision for a Retention Bond has been added as clause 4·17 and loss and expense relating to Antiquities added as a Relevant Matter at clause 4·21·3. materials or goods are not in accordance with the Contract. the Principal Contractor’s obligations with regard to welfare facilities and the obligation to inform him of sub-contracting arrangements. Employer’s approval of the proposed surety for each bond required should wherever practicable be obtained before the Contract is executed. Provision for instructions to resolve discrepancies and divergences and those relating to defects have already been made in section 2 (see clause 2·13). one that relates to site access. Contract Sum and Adjustments (clauses 4·1 to 4·3) 109 This sub-section deals with the basic principles of adjustments to the Contract Sum. i. non-compliant work or workmanship. the powers in relation to opening up and testing. The third relates to CDM aspects of instructions for Changes and for Provisional Sum expenditure where notice of objection is given.Employer gives oral instructions or if there is in the Contractor’s view doubt as to the Employer’s power to issue the instruction in question. notably in clauses 4·12 to 4·15. albeit not to be unreasonably delayed or withheld). and also in relation to finds of antiquities.
from the end of the Rectification Period or Notice of Completion of Making Good). prevention or default on the part of the Employer or those for whom he is contractually responsible. work materials and goods (excluding insurance repair items).111 Clause 4·10 provides that the final date for an Interim Payment is 14 days from receipt of the application and then makes express provision for the issue of payment notices and withholding notices that mirrors sections 110 and 111 of the HGCR Act 1996. or in relation to discrepancies or divergences. etc. They also include instructions for postponement. Either way. Clause 4·18 sets out the default percentage rates of retention and the periods applicable to them. If he fails to do so either within that period or within 2 months of a reminder notice from the Employer. other than those where the value is agreed under Supplemental Provision 4 (since loss and expense is to be included in the value). clause 4·12 provides that the Contractor should submit the Final Statement to the Employer within 3 months of practical completion of the Works. opening up or testing (except where required to be provided for or in cases of non-compliant work. Retention (clauses 4·16 to 4·18) 114 115 116 117 Clause 4·16 sets out the fiduciary basis of retentions. expenditure of provisional sums. except to the extent that the final balance shown is disputed by notice from the other Party within one month of receipt of the statement (or if later. coupled with the accounting requirements and the Contractor’s option (other than in Local Authority cases) of requiring a separate bank account for any retention. i. and those additional amounts that are not subject to Retention. Fluctuations (clause 4·19 and Schedule 7) 118 119 All three Fluctuations Options have been retained. dependent upon whether stage or periodical payments apply. Each makes a simple division for the purposes of clauses 4·8 and 4·16 as between items that are subject to Retention. unavoidable Development Contract delays. Loss and expense ascertained under clause 4·20 is added to the Contract Sum. Loss and Expense (clauses 4·20 to 4·23) 120 Clause 4·20 expressly entitles the Contractor by written application to claim loss and expense that he incurs either as a result of any deferment of possession under clause 2·5 or (subject to express exclusions in the Conditions) because the regular progress of the Works or any part of them has been or is likely to be materially affected by any of the Relevant Matters.e. and impediment. provides a straightforward basis for calculating amounts that have fallen due under the Contract. exercisable after a warning notice. the Statement then becomes conclusive as to the final balance. to make his application as soon as the likelihood of an effect on progress has become (or should have become) apparent and on request to supply such further information as is reasonably required. 121 122 © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 15 . Gross Valuation (clauses 4·13 to 4·15) 112 113 Clause 4·13 or 4·14. In terms of final accounting. suspension under clause 4·11. it also then has the further conclusive effects mentioned in the latter clause. The provisions do not affect any other rights or remedies of the Contractor but in relation to claims under clause 4·20 he is obliged. for which there is an appropriate entry in the Contract Particulars. Subject to the provisions of clause 1·8. excluding any that arise under clause 6·15. without material amendment. each then nets off any applicable deductions provided for in the Conditions that have been ascertained or fixed.). Under Revision 2 there is a minor addition to the Contract Particular for alternative rates that allows also for those cases where it is agreed there should be no retention. in similar fashion to extension of time claims. Clause 4·17 then sets out the terms governing the alternative option of a Retention Bond. They include Changes. the Employer may issue the statement. Clause 4·11 sets out the Contractor’s right of suspension under section 112 of the Act. Application of the rules in clauses 4·18·2 and 4·18·3 in conjunction with clauses 4·8 and 4·13 or 4·14 should result in the release of one half of the Retention in the interim payment made on or immediately following practical completion and of the remaining half in the payment made upon issue of the Notice of Completion of Making Good. The Relevant Matters are listed in clause 4·21. actions and instructions relating to antiquities. Clause 4·15 sets out the pre-conditions for the inclusion of Listed Items in the valuation.
of the reference to Statutory Undertakers. reflecting the Employer’s strict liability in respect of damage to other properties. the second.e. the imposition or alteration of obligations or restrictions affecting either access or time. and Joint Fire Code – compliance. unless they agree on some other method of valuing the work. a valuation by or on behalf of the Employer in accordance with the Valuation Rules. This applies equally if the Contractor makes reasonable objection to producing estimates under Supplemental Provision 4 or if those estimates are not accepted. Damage and Insurance (and Schedule 3 – Insurance Options) 129 The section takes the form of five sub-sections: Injury to Persons and Property. the cost of such insurance. covers work which is to be treated as a Change and work under instructions as to the expenditure of Provisional Sums. (The Contractor’s clause 3·5 right of reasonable objection.) Clause 5·2. method or order of working. with a ‘safety-net’ provision at clause 5·7·1. If they do not agree the value. 125 127 128 Section 6 – Injury. quality or quantity of the work. Under this Contract. outside the direct scope of the instruction. The sole Revision 2 amendment in these sub-sections is the insertion at the end of clause 6·1. If the Employer’s Requirements state that insurance under clause 6·5·1 is required. subject to the clause 6·2 and clause 6·3 exclusions. This type of insurance is sometimes referred to as “nonnegligent loss insurance”. Clause 5·6 makes consequential provision for any resultant changes in conditions under which other work. and the second comprising the Valuation Rules. Clause 5·5 makes provision for valuing Daywork: the document setting out the Percentage Additions and any AllInclusive Rates applicable should be identified in the new Contract Particular provided for that purpose.Section 5 – Variations 123 The section is divided into two sub-sections. Insurance against Personal Injury and Property Damage. but the instruction stands. for the sake of consistency. in addition to Changes. arises only in relation to the second category. with appropriate allowance for adjustments in the amount of design work and site costs involved. 130 132 133 Page 16 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . then. (There are minor modifications to the rules where Supplemental Provision 3 (Bills of Quantities) applies. liability for damage by any of the Specified Perils to the Employer’s existing structures/contents prior to practical completion. for which purpose they may use the estimates procedure under Supplemental Provision 4. (It will be noted that clause 6·3·2 deals with Sectional completion. In each case the value may be pre-agreed by the Employer and the Contractor. B and C) are set out in Schedule 3. excusing immediate compliance with instructions. The Valuation Rules (clauses 5·4 to 5·7) 126 Clause 5·4 (Measurable Work) requires the valuation of additional or substituted work to be on a basis consistent with the Contract Sum Analysis (and of any omissions to be in accordance with that analysis). executed work and Site Materials and. In terms of the Works insurance. weakening or removal of support. i. is taken to be included in the Contract Sum. General (clauses 5·1 to 5·3 and Schedule 2) 124 The clause 5·1 definition of Changes divides into two parts: the first. Public Liability cover) with the level of cover (other than in respect of employer’s liability insurance) specified in the Contract Particulars. where Option C applies. Injury and property damage – indemnity and insurance (clauses 6·1 to 6·6) 131 Clauses 6·1 and 6·2 set out the Contractor’s liability for personal injury and for injury or damage to property. Cover is to be the amount stated in the Contract Particulars and is subject to the list of exclusions set out in that clause. Insurance of the Works. it is a matter for a Valuation. the Contractor is obliged to take out insurance in the joint names of the Employer and the Contractor in respect of claims against the Employer as a result of damage to property due to subsidence. coupled with his indemnity to the Employer.e. consists in alteration or modification of the design. the three Insurance Options (A. irrespective of whether or not there has been negligence or breach of duty on the part of either the Employer or the Contractor. if stated as required.) Those exclusions are followed in the next sub-section by the Contractor’s clause 6·4 obligation to effect insurance against liability under clauses 6·1 and 6·2 (i. As part of the overall insurance scheme. Professional Indemnity Insurance. clauses 6·2 and 6·3 exclude liability for loss or damage to the Works. vibration or the like arising out of the carrying out of the Works. the first a General sub-section which includes at clause 5·1 the definition of Changes. in clause 5·1·1. is executed.
In each case. assumes that the Party effecting the policy will “buy back” that terrorism cover. The policy (or policies) are required to include the Employer and the Contractor as composite insured and to provide that the insurer has no right of recourse against either of them. ‘All Risks Insurance’ as a defined term has a meaning somewhat narrower than the phrase “all risks” might otherwise imply. as appropriate. however. (In the case of existing structures and contents. In such cases. with the Employer continuing separately to cover his own particular risk in respect of loss or damage to the existing structures and contents and with the Contractor covering his risk in respect of such loss and damage under his Public Liability policy. Relevant Definitions 136 The term ‘Joint Names Policy’. referred to above in the context of clause 6·4. or if insurers propose a limitation on the cover to be bought back that reflects the Pool Re limitation referred to in the previous paragraph. it is not entirely straightforward and requires the “buy back” of Terrorism Cover. are defined in clause 6·8. in line with JCT contracts generally. paragraph A·5 in Schedule 3 provides Local Authority Employers with the option of themselves assuming the terrorism risk if during the progress of the Works there is a premium increase for the Contractor’s terrorism cover. Briefly. a choice effected by the relevant entry in the Contract Particulars for clause 6·7: • Insurance Option A applies to new buildings and requires the Contractor to take out a Joint Names Policy for All Risks Insurance for the full reinstatement value of the Works. Insurance Option C applies where existing structures are involved and requires the Employer to take out a Joint Names Policy for the full reinstatement cost in respect of damage to the existing structures and their contents by Specified Perils. By clause 6·9. However. not least because of the consequential amendments that may be needed in clause 6·2 and elsewhere. the policy is to cover physical loss or damage to work executed or Site Materials (but not the Contractor’s plant and equipment). and will himself wish to retain. In the event of non-availability of cover under the Works policy during that DB/G (2009) Page 17 140 141 © The Joint Contracts Tribunal Limited 2009 .) • • 135 To ensure that suitable arrangements are made. risks reinsured by Pool Re. and other relevant insurance terms. the Employer himself will in fact normally have. However. Where Insurance Option A applies. B or C. the Joint Names Policy for the Works is also required either to recognise each sub-contractor as an insured or to include a waiver of rights of subrogation against him in respect of loss or damage caused by the Specified Perils.Works insurance (clauses 6·7 to 6·10 and Schedule 3) 134 For the purposes of Works insurance. as mentioned in the first footnote to the clause 6·8 definition (which has been expanded in Revision 2). war or Excepted Risks and also inventory losses that are not traceable to an identified event. the Parties and their advisers are strongly advised to consult each other and to seek professional insurance market advice prior to entering into the contract. and appropriate professional advice should be sought. where relevant.e. and it will usually exclude loss or damage caused by wear and tear/deterioration. the Employer must inform his existing structure and contents insurers of the intention to carry out the work. If there is any likely difficulty in buying back terrorism cover. “any act of any person acting on behalf of or in connection with any organisation with activities directed towards the overthrowing or influencing of any government de jure or de facto by force or violence”. it is envisaged that the Parties will effect a Joint Names Policy in the terms of Insurance Option A. including Site Materials. the Government-linked reinsurer of terrorism risks. the practical solution may be to use Option A (or possibly Option B) in respect of the Works and Site Materials. irrespective of which Party claims under the policy or may otherwise have been liable for the loss or damage. plus professional fees. Terrorism and Terrorism Cover 137 138 139 A point of concern for both the Employer and the Contractor is the general exclusion from All Risks policies for the Works (and. i. Insurance Option B applies to new buildings and requires the Employer to take out a Joint Names Policy for All Risks Insurance for the full reinstatement value of the Works. plus professional fees. All Risks cover. prior to entering into the contract. and. including Site Materials. the Parties and their insurance advisers should prior to entry into the contract consult and agree what they wish to do in that regard. a Joint Names Policy for All Risks Insurance on the same basis as under Option B. from Existing Structures policies) of cover for damage by terrorism. In either case. which is discussed in greater detail below. Difficulty can also arise in relation to joint names insurance of existing structures in cases that involve residential owner-occupiers or leaseholders whose insurance is effected by their landlord. defects in design or workmanship. in respect of the Works. remain limited to acts of terrorism within the Reinsurance (Acts of Terrorism) Act 1993. DB 2005. not the wider definition under the Terrorism Act 2000 which insurers generally use for the purposes of their exclusion from the policy.
Other costs that are not generally covered automatically by the Works insurance and may require an extension of cover or separate cover include increases in costs of working as a result of the damage or reinstatement work. if he fails to do so. The provisions are in substantially the same terms as those in the JCT Collateral Warranties. Financial Services and Markets Act 2000 152 The regulatory requirements imposed by the Insurance Mediation Directive were implemented through the Financial Services and Markets Act 2000. The JCT understands that each of its member bodies has issued guidance to their members. but also the amount of the VAT chargeable on the work of reinstatement. A realistic approach needs to be taken both to the type(s) of cover required and to the cover level(s) required. but in calculating reinstatement cost there are several factors to be borne in mind.period. the Employer should include in his calculation of the reinstatement cost not only the normal VAT-exclusive cost of reinstatement (adjusted for interim increases in those costs) and the percentage to cover professional fees. clause 6·10 provides the Employer (Private or Local Authority) with the option of assuming the risk or terminating. the Contract Particulars now make separate provision for cover against pollution and contamination. asbestos and fungal mould claims. Minor amendments have been made here and in the clause 1·1 definition to underline the obligation to comply with any amendments which may from time to time be made to the code. In respect of amendments made after the Base Date there is an option as to which Party bears the cost. the terms and period agreed for the purposes of clause 6·11 will apply in relation to the Third Party Rights and each Collateral Warranty that the Contractor is required to give. 144 145 146 147 149 150 Page 18 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . users of JCT contracts should ensure that they are familiar with the requirements and take professional advice where necessary. In addition there are financial or consequential losses of the Employer’s Delay in Completion/Advance Loss of Profits (ALOP)-type for which Employers may require their own separate cover. the Employer may employ others for the purpose. Under Revision 2. or under the existing structures policy where Insurance Option C applies. maintain PI insurance of the type(s). The costs of reinstatement generally include those of removing debris. together with increases in the cost of the unbuilt portion through inflation. Unless otherwise specifically agreed. Professional Indemnity insurance (clauses 6·11 and 6·12) 148 The Employer may require the Contractor to effect and thereafter. whichever Insurance Option applies. provided it is available at commercially reasonable rates. all within the general cover. other potential costs and losses may also need to be considered. Under clause 6·15 the Contractor is to ensure that any remedial measures required by the insurers to achieve compliance are carried out and. a person who is carrying on by way of business and in the United Kingdom any insurance mediation activity for remuneration is required either to have obtained authorisation from the Financial Services Authority (FSA) or to be exempt as the appointed representative of an authorised firm. Joint Fire Code (clauses 6·13 to 6·16) 151 The Joint Fire Code is generally required by insurers to apply and the Parties should comply both with its requirements and the other provisions of clauses 6·14 and 6·15. They are often covered automatically by insurers’ policy terms but appear on occasion to require to be dealt with by a separate item under the All Risks policy: the Parties and their advisers should ensure that there is an appropriate level of cover for them. there are only minor changes in the sub-section itself. with limit(s) of indemnity and for a period not less than that stated in the Contract Particulars. Reinstatement and other costs 143 The three Works Insurance Options are designed solely to meet the cost of restoring lost and damaged work and materials. If the Employer is exempt from VAT registration or if supplies made by him in the course of the business are wholly or partially exempt. With effect from 15 January 2005. to the extent that he would not be able to recover it. 142 The JCT continues to keep the matter under review. with an appropriate deduction being made from the Contract Sum.
e. Clause 7·4 provides for the mode of execution of collateral warranties. In terms of completing it. Under Revision 2. assignment. or as a member of a class or as answering a particular description. in the case of clauses 7C and 7D. Part 2 of the particulars requires careful completion. for example. the Funder will no doubt be named. Unless collateral warranties are stipulated by entries in the third column in the Table at (A).g. Where known. the same principle may need to be applied to identify relevant sub-contractors for the purposes of the Table at (E). however. the Employer and the Contractor should recognise that not all Sub-Contractors carry or are able to obtain PI insurance cover. The first requirement is the identification of the Purchaser/Tenant beneficiaries and the Funder. the lead bank providing finance for the project or as the special purpose vehicle to be incorporated or established under a specified agreement. In completing the third column. “all first purchasers” and/or “all original/first lessees” of the building or of particular units or parts of the Works. i. upon the necessary particulars being given. regard should be had to the default positions in paragraphs (i) to (iii) and the footnotes following the Table. The class or description can of course be quite simple and general. as should the selection of Sub-Contractors from whom collateral warranties may be required. where a consultant’s appointment is intended to be novated to the Contractor by the Employer. where reference may have to be made to those selected for identified work packages. together with the enabling provisions for Third Party Rights/Collateral Warranties. but there should be no problem describing an as-yet unascertained Funder as.Section 7 – Assignment. to facilitate that correspondence in terms of the particulars. the relevant forms of JCT Collateral Warranty are available as separate published documents. and the Employer’s limited optional right of.e. In completing the Sub-Contractor particulars at (E) in Part 2. they are followed by five clauses (7A to 7E) which perform essentially the same functions as the enabling clauses formerly included with the JCT Collateral Warranty forms. As previously indicated different forms of warranty may be needed for sub-contracted consultants. either on a per event basis or at all: some will at best carry only Product Liability insurance and any specified cover levels should be realistic. the matter may be better dealt with as part of the original arrangement. in the case of clause 7E. Part 2 of the Contract Particulars 156 157 As indicated in the Contract Particulars section of this Guide. After the ancillary provisions of clauses 7·3 and 7·4. 154 In relation to each form of grant the required details are those set out or referred to in Part 2 of the Contract Particulars. a Funder or the Employer. in addition to minor consequential changes in each case. the point to be emphasised for the Parties and beneficiaries is that obtaining the rights and/or warranties is in legal terms dependent upon certainty. The terms of any third party rights from the Contractor are substantially identical to those in the corresponding Collateral Warranty. rights under the Act will apply. There is then the question as to whether rights to be granted by the Contractor are third party rights under the 1999 Act or to be granted by collateral warranty. 158 159 160 161 162 © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 19 . to the grant by the Contractor of third party rights for Purchasers/Tenants and a Funder respectively. the requirement for certainty applies equally for collateral warranties. Unless already selected. Section 1(3) of the Act goes on to provide that the third party need not be in existence when the contract is entered into. Section 1 of the Contracts (Rights of Third Parties) Act 1999 provides that a third party may enforce a term of a contract if the contract expressly so provides but (by section 1(3)) that the third party must be expressly identified in the contract by name. These provisions relate: • • • 155 in the case of clauses 7A and 7B. to the alternative of collateral warranties by the Contractor. The assignment provisions are set out in clauses 7·1 and 7·2. to Sub-Contractors’ obligations to grant collateral warranties in favour of Purchasers/Tenants. Third Party Rights and Collateral Warranties (and Schedule 5 – Third Party Rights) 153 This section comprises the restrictions on. the clause numbering of the relevant Collateral Warranties is the same as that of the paragraphs in the relevant Part of Schedule 5. The Third Party Rights which the Contractor may be called upon to give are set out in Schedule 5. the period for exercise of step-in rights is extended from 7 to 14 days. As a matter of general law.
Termination by the Employer (clauses 8·4 to 8·8) 172 Clause 8·4 sets out the Employer’s right to terminate for default. after a notice of default. it appears on the basis of the House of Lords decision in Melville Dundas Ltd v. but not if the insolvency occurred before that expiry and not if the termination was on grounds other than insolvency. the provisions of the Contract which require any further payment cease to apply. clause 8·2·3. giving an opportunity for the default to be remedied. Clause 8·3·1 then provides that the provisions of the section are without prejudice to the rights of the Employer or. In the case of default by either Party. not the Contract itself. It comprises five sub-sections: General (defining insolvency and setting out certain ancillary provisions that apply to the section generally). In the case of sums that are due but unpaid where no withholding notice has been given and the last date for giving such notice has passed. the Contractor. George Wimpey UK Ltd  UKHL 18 that the sum may be validly withheld if termination is on the grounds of insolvency and the insolvency has occurred after the period for giving a withholding notice has expired. pending the final account under clause 8·7·4 or 8·8. clauses 8·5·3 and 8·7·3 respectively provide that. Where either Party is insolvent or the Contractor commits a corrupt act. a 21 day period for giving notice of termination.) That provision appears entirely valid in respect of sums that have not then become due under the Contract and also in the case of sums that have become due where a valid withholding notice is given under section 111(1) of the HGCR Act and clause 4·10·4 within the appropriate period. The extension of the period to 21 days mirrors the extension to the period for a Funder’s election to exercise step-in rights. in a substantial proportion of insolvency cases. (There is a similar provision in clause 8·12·1 and also in clause 6·10·3. a warning notice is required. professional advice should be taken.Section 8 – Termination 163 164 The section contains provisions for termination of the Contractor’s employment under the Contract. General (clauses 8·1 to 8·3) 169 The clause 8·1 definition of insolvency introduced by DB 2005 was framed with the assistance of the Association of Business Recovery Professionals (R3) and was intended to provide greater consistency. The basis of the section is that each Party may terminate the Contractor’s employment either for a specified default or insolvency on the part of the other or where substantially the whole of the Works is suspended for the period stated in the Contract Particulars through a range of events outside the control of either Party. In addition the Employer may terminate for corruption. the insolvency will also be preceded and/or accompanied by contractual default. However. albeit now by reference to clause 1·7·4. there is a requirement for a warning notice of the default to be given prior to termination. clause 8·5 his right to terminate for insolvency and clause 8·6 the right to terminate for corruption. which remains in force to deal with the consequences of termination. a withholding notice should of course be given where that is still practicable. If it is not remedied within 14 days of that notice. Where. it will be noted that the grounds of termination for default are specific and that both the warning notice and any notice of termination also therefore need to be specific. the Party not in default again becomes entitled to give notice of termination within a reasonable time. is aimed at ensuring that there is no scope for argument on the question of receipt. These differ. Termination by Employer. 165 166 167 168 170 171 173 Page 20 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . Termination by Contractor. The default entry in the Contract Particulars is a period of 2 months. Termination by either Party (in cases of extended no-fault suspension). In relation to the consequences of insolvency and termination on those grounds or for Contractor’s default. as relevant. commencing with the long-standing requirement that notice of termination is not to be given unreasonably or vexatiously. there may for example be occasions where there is repudiatory breach by a Party that is not within the specified grounds for termination but upon which the innocent Party wishes to treat the Contract as being at an end. Clause 8·2 makes provision with respect to notices. It is only the Contractor’s employment under the Contract that is terminated. under Revision 2. If there is any doubt as to the position in relation to any actual or prospective termination. a notice of termination is not given within the 21 day period but the default is repeated. the other Party may terminate without a warning notice but. dependent on the grounds for termination. and Consequences of Termination (in cases of termination by the Contractor or extended no-fault suspension). Notice of termination takes effect on receipt. there is. where termination is due to prolonged no-fault suspension of the Works.
Termination by the Contractor (clauses 8·9 and 8·10) 175 Over and above breach of the prohibition on assignment and breach of CDM Regulations (which are also grounds under clause 8·4). clause 8·8 provides for the final account to be prepared on the alternative basis of the value of work properly executed less direct loss or damage.) Clause 8·10 relates to Employer insolvency. Where he has given Third Party Rights or a Collateral Warranty to a Funder. negligence or default of Statutory Undertakers. the Parties have a contractual as well as a statutory right to refer disputes to adjudication (Article 7 and clause 9·2). providing for notice to the Funder to enable the Funder to decide whether to exercise its ‘stepin’ rights. etc. It is based on events beyond the reasonable control of either party – force majeure. but considers that it would not be appropriate to endorse specific techniques or bodies. Specified Perils damage. the Parties may litigate except insofar as they have specifically agreed to refer disputes to arbitration. As under clause 8·8. Termination by either Party (clause 8·11) 176 177 The bilateral right of termination under clause 8·11 is not entirely dissimilar to termination by the Contractor for continuous extended suspension under clause 8·9. clause 8·11·2 contains the appropriate exclusion for Contractor’s negligence. the final account is based on value of work properly executed and other amounts due to the Contractor under the Conditions. plus 14 days for a warning notice. the consequences are the same. • • Mediation (clause 9·1) and ADR 180 The JCT supports the use of mediation and ADR in appropriate cases. the Parties may agree to refer disputes to arbitration. prevention or default on the part of the Employer or others for whom the Employer is contractually responsible. entitlement to direct loss and damage apart. possible exposure © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 21 . the Contractor’s right to terminate will. clause 8·9 gives the Contractor the right to terminate if the Employer fails to pay amounts properly due and for continuous extended suspension caused by any impediment. The consequences of termination are not dissimilar to those of termination under clause 8·11 and those are dealt with together in the final sub-section (clause 8·12). (clause 8·12) 178 This sub-section covers the consequences of termination under clauses 8·9 to 8·11 and also where termination arises under clause 6·10·2·2 (withdrawal of Terrorism Cover) or paragraph C·4·4 of Schedule 3 (material loss of or damage to existing structures). DB 2005 provides for adjudication to be conducted in accordance with the Scheme for Construction Contracts. If the Employer decides not to complete the Works or fails within 6 months of the termination to make arrangements to that end. or by subsequent agreement. subject only to the clause 9·2 provisions regarding the nomination of adjudicators and for cases of opening up and testing. (Here also the default period for the suspension is 2 months. The variety of techniques and bodies that have developed over recent years would appear to suggest that such choices are frequently better made by the Parties when the dispute has actually arisen and its nature is clear: in cases where mediation is likely to assist. (In relation to Specified Perils damage. it has the same default period and.174 The provisions of clause 8·7 as to the Employer’s rights. That is however predicated upon completion of the Works by a completion contractor. Section 9 – Settlement of Disputes 179 The Contract contains provisions in relation to four external means of settling disputes: • • the Parties may agree to attempt to resolve disputes through mediation. using a third party to assist the negotiation process. as indicated above.) Consequences of Termination under clauses 8·9 to 8·11. the arbitration agreement in DB 2005 is subject to the three exceptions mentioned in Article 8 and provides that an arbitration under it is to be conducted in accordance with the JCT 2005 edition of the Construction Industry Model Arbitration Rules (CIMAR). either through the appropriate entry in the Contract Particulars. Contractor’s obligations and the basis of the final account (clause 8·7·4) are reasonably straightforward. In addition the Contractor is entitled to direct loss and damage arising from the termination where he has terminated for Employer’s default or insolvency or where Specified Perils damage giving rise to an extended suspension and then to termination under clause 8·11 has been caused by negligence or default on the part of the Employer or those for whom the latter is responsible. civil commotion and UK Government action. the final account being based on cost to complete and direct loss or damage caused to the Employer. be subject to either paragraph 6 in Part 2 of Schedule 5 or clause 6 of Collateral Warranty CWa/F.
that either Party has the right to apply to the appointor. requesting him to name the arbitrator.3 in effect provides that an arbitrator cannot be named by the appointor identified in the Contract Particulars until at least 14 days after the arbitration notice is served and it is only after that period. which are outside the scope of this Guide. if no agreement is reached as to who is to act as arbitrator. Arbitration (clauses 9·3 to 9·8) and litigation (Article 9) 182 183 A range of factors. the adjudicator may be named and the nominating body identified in the Contract Particulars.to litigation costs under the Civil Procedure Rules may be sufficient incentive for the Parties to agree such matters. will determine the choice between arbitration and litigation. Where arbitration is agreed under the Contract and CIMAR Rules apply. Adjudication (clause 9·2) 181 In the case of adjudication. and the Employer’s advisers should consider with their client whether the adjudication provision is desirable or whether it should be deleted. Rule 2. which (by clause 9·7) the Parties agree may be referred to the courts. Where the Employer is a residential occupier (as defined by section 106 of the Act) there is no statutory requirement for the contract to contain an adjudication provision. The award of the arbitrator is final and binding on the Parties except in respect of any question of law arising in the course of the reference or arising out of an award. Litigation is the default position and will apply unless the Parties specifically make arbitration operative. Page 22 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 .
Appendix A – Amendment 1 (DB) CDM Regulations Clause number and heading Article 5 heading Article 5 Article 6 Footnote  Action Delete ‘Planning Supervisor’ and insert ‘CDM Co-ordinator’ Delete ‘Planning Supervisor’ and insert ‘CDM Co-ordinator’ (twice). a project which is not likely to involve more than 30 days. the minimum amount of time referred to in regulation 10(2)(c) of the CDM Regulations. the plan prepared by the Principal Contractor. Delete ‘6(5)’ and insert ‘14(1)’ Delete ‘6(5)’ and insert ‘14(2)’ ‘Insert the name of the CDM Co-ordinator only where the Contractor is not to fulfil that role. Insert the following new definitions: ‘CDM Co-ordinator: CDM Planning Period: the Contractor or other person named in Article 5 or any successor appointed by the Employer. delete Articles 5 and 6 in their entirety.’ Delete existing text and insert: Contract Particulars. or 500 person days. and that of the Principal Contractor only if that is to be a person other than the Contractor. If the project is not notifiable under the CDM Regulations 2007 (i. Delete the definitions of ‘Health and Safety Plan’ and ‘Planning Supervisor’.e. including any updates and revisions. There may be cases where that planning and preparation needs to be completed earlier than the Date of Possession and adaptation of the entries may be needed where there are Sections. 1·1 Insert new entry: ‘CDM Planning Period[ ] shall mean the period of ______________________ * days/weeks * ending on the Date of Possession/ * beginning/ending on _________________________ 20 _____’ ‘Under the CDM Regulations 2007 every client is expressly required to allocate sufficient time (the CDM Planning Period) prior to the commencement of construction to enable contractors and others to carry out necessary CDM planning and preparation.’ Insert new footnote text for [ ] : Clause 1·1 ‘CDM Regulations’: Delete ‘1994’ and insert ‘2007’.’ Construction Phase Plan: Clause 2·1 Delete ‘Health and Safety’ and insert ‘Construction Phase’. of construction work or which is being carried out for a homeowner as a purely domestic project). where the project is notifiable under the CDM Regulations and in order to comply with regulation 23. After ‘Plan and’ delete ‘the’ and insert ‘other’ © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 23 . as specified in the Contract Particulars (against the reference to clause 1·1).
promptly upon the written request of the CDM Co-ordinator. Without limitation. he shall ensure that: ·1 the Construction Phase Plan is prepared and received by the Employer before construction work under this Contract is commenced. and deliver to the Employer.’. he shall promptly inform the Principal Contractor of the identity of each sub-contractor that he appoints and each subsubcontractor appointment notified to him. provides. Renumber existing sub-clauses ·3. Delete ‘regulation 14’ and insert ‘regulation 20 (if he is the CDM Co-ordinator) or regulation 22’. together with any pre-construction information required for the purposes of regulation 10 of the CDM Regulations’ Delete ‘3·18·4’ and insert ‘3·18·5’ Insert new sub-clause as 3·4·2·3: ‘that each party undertakes to the other in relation to the Works and the site duly to comply with the CDM Regulations. to the CDM Co-ordinator (or. where the Contractor is not the Principal Contractor.’ ·5 ‘There is a duty on contractors to ensure compliance with Schedule 2 of the CDM Regulations so far as is reasonably practicable. whether or not the project is notifiable and whether or not the contractor is the Principal Contractor.Clause number and heading Clause 2·7·2 Clause 2·27 Clause 3·4·2 Action After ‘of the Contract Documents’ insert ‘. he shall comply with all the duties of a CDM Co-ordinator and shall without charge prepare. where the project that comprises or includes the Works is notifiable: ·1 where the Contractor is not the CDM Co-ordinator. if the Contractor is not the Principal Contractor. where the Contractor is and while he remains the Principal Contractor. the Employer shall ensure both that the CDM Co-ordinator carries out all his duties and. the health and safety file. and welfare facilities complying with Schedule 2 of the CDM Regulations are provided from the commencement of construction work until the end of the construction phase [ ] . and that any subsequent amendment to it by the Contractor is notified to the Employer and the CDM Coordinator. where the Contractor is not or ceases to be the CDM Co-ordinator. Clause 3·9·4 Clause 3·14 Clause 3·18 ·2 ·3 ·2 ·4 where the Contractor is not the Principal Contractor. he’ and insert ‘The Contractor’. and shall ensure that any sub-contractor. the Contractor shall provide.·5 and ·6 respectively Delete ‘Where the Contractor is and while he remains the Planning Supervisor.·4 and ·5 as ·4. Delete ‘If he has such objection’ and insert ‘If the Contractor has any reasonable objection’ Delete ‘Health and Safety’ and insert ‘Construction Phase’ Delete existing text and insert: ‘Each Party acknowledges that he is aware of and undertakes to the other that in relation to the Works and site he will duly comply with the CDM Regulations. where the Contractor is and while he remains the CDM Co-ordinator. that the Principal Contractor carries out all his duties under those regulations. to the Principal Contractor) such information as the CDM Co-ordinator reasonably requires for the preparation of the health and safety file.’ Insert new footnote text for [ ]: Clause 3·19 Delete ‘Planning Supervisor’ and insert ‘CDM Co-ordinator’ Page 24 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . through the Contractor.
(iv) and (v) as (ii).)’ Delete existing bracketed text under Sections and insert: ‘(If clause 7·2 applies. They also incorporate the provisions of the Construction (Health. the Health and Safety file provisions remain. After ‘identified sub-contractor’ insert ‘’ Delete item number and text. health and safety duties on site.Assignment. After ‘(C) above’ insert ‘and the Employer’. middle column heading Part 2 (E) Notes.e. SCWa/F. After ‘SCWa/P&T’ delete ‘or’ and insert comma. state the particular type(s). 7·2 Action Delete ‘(where Sections do not apply)’ and insert ‘(If neither entry is deleted.e. and a ‘construction phase plan’ replaces the Health and Safety Plan. for a Funder (SCWa/F) and for the Employer (SCWa/E)).’. and on others controlling the way in which any construction work is carried out (e. Amendment 1 incorporates the changed terms.g. welfare facilities and inspection report particulars. the Sub-Contractor Collateral Warranty for a Purchaser or Tenant (SCWa/P&T). clause 7·2 will apply. (iii) and (iv) respectively After ‘Collateral Warranty’ delete ‘–’ and insert ‘SCWa/E and’ Delete existing text and insert: Part 2 (E). item (v) Footnote  ‘Where a sub-contractor is required to grant only a particular type or types of the Collateral Warranties referred to in clause 7E (i. safety and welfare duties. SCWa/E) limited to’ Delete ‘where clause 7E is stated to apply. amend the entry if rights under that clause are to apply to certain Sections only. designers. item (i) Part 2 (E) Notes. Third Party Rights and Collateral Warranties Clause number and heading Contract Particulars.’ Footnote  Footnote  Clause 7E heading Clause 7E Delete ‘and sub-contractors who maintain Product Guarantee cover only’ Delete footnote number and text Delete ‘– Purchasers and Tenants/Funder’ After ‘to a Purchaser. item (ii) Part 2 (E) Notes.)’ Delete ‘State whether clause 7E and/or clause 7F applies’ and insert ‘Type(s) of warranty required’ and after ‘’ insert ‘(SCWa/P&T. After ‘clause 7E’ delete ‘’. The latter provisions are contained in Part 4 and Schedules 2 and 3 respectively. After ‘(A) above’ delete ‘and’ and insert comma. the functions of the Planning Supervisor are replaced by those of a CDM co-ordinator. the 2007 Regulations impose on clients. Renumber existing items (iii). construction or project managers and contract administrators). i. contractors (including sub-contractors at all levels). After ‘SCWa/F’ insert ‘or SCWa/E’ Delete clause heading. As a result. As part of the greater emphasis placed on the need to plan and on communication and co-ordination. a wider and more coherent set of health. Safety and Welfare) Regulations 1996 not incorporated in the Work at Height Regulations 2005. The 2007 Regulations also eliminate the distinction in the 1994 Regulations between the notification requirements and applicability DB/G (2009) Page 25 © The Joint Contracts Tribunal Limited 2009 . All three Collateral Warranties are documents prepared by JCT. Tenant or Funder’ insert ‘or to the Employer’. number and text Clause 7F Guidance Notes to Amendment 1 CDM Regulations General The Construction (Design and Management) Regulations 2007 replace the 1994 Regulations with effect from 6 April 2007.
Part 3 – Notifiable Project duties Part 3 (regulations 14 to 24) relates to notifiable projects. Consequential changes have been made to Part 2(E) of the Contract Particulars and clause 7F deleted. Assignment. Third Party Rights and Collateral Warranties The Contract Particulars associated with clause 7·2 have been revised to make clear that clause 7·2 applies unless otherwise stated. The duties of the CDM co-ordinator and principal contractor are slightly more widely drawn than in the 1994 Regulations and the principal contractor’s responsibilities now include ensuring the provision of Schedule 2 welfare facilities. designers and contractors respectively. In the case of clients. which (in addition to access restrictions) is also conditional on the appointment of the principal contractor. Domestic clients. so far as reasonably practicable. These in general follow naturally from the Part 2 obligations and the functions and duties of the two appointees but there is now a duty on all contractors promptly to supply to the principal contractor any information relevant to health and safety. 30 days or 500 person days of construction work. i. Page 26 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . They have also been revised so that where clause 7·2 applies it will apply to each Section of the Works unless the relevant entry is amended. safety and welfare aspects of the project. Main contractors are under similar obligations with respect to their sub-contractors and so on down the chain. These include the requirement of competence and the duty to check appointees.e. to make Schedule 2 welfare provision. as well as that identified for inclusion in the Health and Safety file. production of the construction phase plan and notification to the Health and Safety Executive. Part 2 then sets out specific duties for clients. The commencement of work by any contractor is conditional (inter alia) upon reasonable steps having been taken to prevent unauthorised site access. commencing with duties that apply to clients. This is coupled with obligations to supply information on the site and its proposed use and to specify the minimum period to be allowed to contractors for planning and preparation before construction starts (referred to in the Amendment as the ‘CDM Planning Period’). Part 3 imposes certain additional duties on each participant both with respect to these appointees and generally. so far as is practicable. designers and contractors alike. Part 2 – General duties Part 2 of the 2007 Regulations (regulations 4 to 13) sets out the duties that apply to all projects. Part 2 also sets out in detail contractors’ information and training obligations with respect to their workers and an obligation. as is construction. those not acting in the course or furtherance of a business. The client is required to appoint the CDM co-ordinator as soon as is practicable after initial design work or other preparation has begun – further design work is conditional on that appointment.provisions for particular regulations. provisions are being inserted in the JCT sub-contracts and sub-subcontract. While the Regulations maintain the basic 1994 criteria as to notifiability. i. whether or not notifiable. a general duty to co-operate and seek co-operation with others concerned (now expressly extended to adjoining construction sites) and duties for all. are exempt from duties under the 2007 Regulations in relation to purely domestic projects. Clause 7E now additionally provides for a warranty for Employer (previously clause 7F) and incorporates specific reference to the recently published Sub-Contractor Collateral Warranty for Employer (SCWa/E). both to coordinate their activities with others and to ensure the application of general principles of prevention (specified in the Management of Health and Safety at Work Regulations 1998). including the allocation of sufficient time for construction phase planning and preparation for health and safety purposes. these include a duty to ensure that suitable arrangements are in place for the management of health. which in turn are treated as non-notifiable. there are now only two types of project – notifiable and non-notifiable. The ‘five or more workers’ requirements of the 1994 Regulations have been omitted.e.
8·12·5 9·1* 9·4·1 9·5 © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 27 . For an explanation of those changes. Revision 2 2009 numbering Recitals Sixth* Seventh* Articles Article 3 Article 8* Contract Particulars (entries) Part 1: Sixth Recital* Seventh Recital and Part 1 of Schedule 2* Seventh Recital and Part 2 of Schedule 2* Article 8 Clause 1·7* Clause 4·7 Alternative B* Clause 4·15·4 Clause 4·15·5 Clause 4·17* Clause 4·18·1* Clause 4·19 and Schedule 7 Clause 5·5* Clause 6·11* Clause 7·2 Clause 9·2·1 Part 2* Conditions (clauses) 1·1: Acceleration Quotation* Confirmed Acceptance* Employer’s Final Statement Employer’s Persons Final Statement Fluctuations Options A. please refer to the main body of the Guide. 6·10·4·2* 6·11·1*. The provisions with substantive textual changes have been identified with *. 8·12·3·2. 2·25·6·4 2·26·2* 2·27 introduction 2·28 2·29·1·2. 2·29·2·2. 2·25·5 introduction. 2·29·4 2·30 2·31 2·36 2·37 2·38·2 3·3·1. 6·5·3 6·6 6·10·1. 6·10·2 introduction. 8·12·3 introduction. 3·16·5 3·17 Section 4* (except 4·1. B and C Joint Fire Code* Relevant Matter Retention Retention Percentage 1·3* 1·7* 1·8* 1·9 1·10 2·1·4 2·2·1 2·5·1 2·6·2 2·10 2·12·1 2·13 hanging paragraph 2·14 2·15·1 hanging paragraph 2·16·2 2·17·3 Revision 2 2009 numbering 2·20 2·21 2·22 2·23·2* 2·24·1. 3·3·2 3·4* 3·5 3·6 3·7* 3·8 3·9·1. 2·25·4. 2·29·1 hanging paragraph. 6·11·2* 6·12 6·14* 6·16* 7·1 7·3* 7·4 8·2·3* 8·3·2 8·4·1·3. 8·9·3* 8·10·2 8·11·1 hanging paragraph 8·12·2·2. 3·16·4. 3·9·4 3·15 3·16·1. 8·4·1·5. 8·4·2* 8·5·2 8·7·2·2 8·8·1 introduction 8·9·1·3. 4·4) 5·1·1·3 5·2 5·5* 6·1* 6·4·3 6·5·1·5.Appendix B – Revision 2 changes The following provisions in Revision 2 2009 contain textual changes. 2·24·3 2·25·2.
A·9·2·2 paragraph B·4·1 paragraph B·5 paragraphs B·10·1. 6·2. C·4·2*. A·4·6 paragraph B·2·2 paragraph B·3·1 paragraph C·1 paragraphs C·4·1*. C·4·4 introduction* paragraph 2 paragraph 4 paragraph 6 paragraph 7* paragraph 2 paragraph 5 paragraphs 6·1·1. 6·4 paragraph 8 paragraph 9* paragraph 10 paragraph 11* Part 3* paragraph A·3·1 paragraph A·4 paragraphs A·9·1. B·10·2·2 paragraphs C·5·1. 6·3*.Revision 2 2009 numbering Schedules Schedule 1 Schedule 2* Schedule 3: Option A Option B Option C Schedule 5: Part 1 paragraph 1* paragraph 7 paragraph A·2 paragraphs A·4·1. C·5·2 paragraph C·6·2·2 Part 2 Schedule 6 Schedule 7: Option A Option B Option C Page 28 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . C·4·3*. A·4·4*.
paragraph 5) □ applicable? Acceleration Quotation (Schedule 2. title. paragraph 4) Loss and expense – Contractor’s estimates (Schedule 2. parties) □ applicable? □ applicable? □ applicable? □ applicable? Supplemental Provisions (Seventh Recital and Schedule 2) Site Manager (Schedule 2. paragraph 1) Named Sub-Contractors (Schedule 2. paragraph 7) © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 29 . Parties’ details □ Employer’s name and address □ Contractor’s name and address Works (First Recital) □ nature □ location Construction Industry Scheme (Fourth Recital and clause 4·5) □ Is the Employer a ‘contractor’? Sections (Fifth Recital) □ applicable? □ description Framework Agreement (Sixth Recital) □ Is the Contract supplemented by a Framework Agreement? □ details (date. paragraph 6) □ applicable? □ applicable? Collaborative working (Schedule 2. paragraph 3) Valuation of Changes – Contractor’s estimates (Schedule 2. paragraph 2) Bills of Quantities (Schedule 2.Appendix C – DB User Checklist This is a checklist of the key information that will help you to complete the Articles of Agreement.
paragraph 10) □ applicable? Performance Indicators and monitoring (Schedule 2. paragraph 9) Sustainable development and environmental considerations (Schedule 2.Health and safety (Schedule 2. paragraph 8) □ applicable? □ applicable? Cost savings and value improvements (Schedule 2. paragraph 11) □ applicable? Notification and negotiation of disputes (Schedule 2. paragraph 12) □ applicable? □ name of the Employer’s nominee □ name of the Contractor’s nominee Contract Sum (Article 2) □ amount Employer’s Agent (Article 3) □ name and address □ identification □ identification Employer’s Requirements (Article 4) Contractor’s Proposals (Article 4) Contract Sum Analysis (Article 4) □ identification CDM Regulations (Article 5) □ applicable? CDM Co-ordinator (Article 5) □ name and address □ name and address Principal Contractor (Article 6) CDM Planning Period (clause 1·1) □ period (days/weeks) □ commencement/end date Adjudication (Article 7) □ applicable? □ Adjudicator’s name Page 30 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 .
□ Adjudicator nominating body? Arbitration (Article 8) □ applicable? □ appointor of Arbitrator? □ date Base Date (clause 1·1) Date for Completion (clause 1·1) □ Works: date □ Sections: date for each Section □ Employer □ Contractor Address for service of notices (clause 1·7) Date of Possession (clause 2·3) □ Site: date □ Sections: date for each Section Deferment of possession (clause 2·4) □ applicable? □ Site: period □ Sections: period for each Section □ amount Limit of Contractor’s liability for loss or use etc.) □ Works: period □ Sections: period for each Section Rectification Period (clause 2·35) Advance payment (clause 4·6) □ applicable? (Not applicable for Local Authority employer) □ amount or percentage DB/G (2009) Page 31 © The Joint Contracts Tribunal Limited 2009 . (clause 2·17·3) Liquidated damages (clause 2·29·2) □ Works: rate and period □ Sections: rate and period for each Section Section Sums (clause 2·34) □ amount for each Section (These must add up to the Contract Sum.
□ payment date □ reimbursement: amount(s) and time(s) □ Advance Payment Bond: applicable? Method of payment (clause 4·7) □ Stage Payments (Alternative A) or Periodic Payments (Alternative B) Alternative A: Stage Payments (clauses 4·9·1 and 4·13) □ description of each stage □ cumulative value for the stage (Cumulative value of final stage must be equal to the Contract Sum. B and C (clause 4·19·1 and Schedule 7) □ applicable option: A. B or C? Option A □ percentage addition (paragraph A·12) □ percentage addition (paragraph B·13) □ Base Month (rule 3) □ Non-Adjustable Element (percentage) (rule 3) (For Local Authority employer only) □ Method of formula adjustment (Section 2 of the Formula Rules: Part I or Part II?) (rules 10 and 30(i)) Option B Option C Daywork (clause 5·5) □ identification of document for Percentage Additions and All-Inclusive Rates © The Joint Contracts Tribunal Limited 2009 Page 32 DB/G (2009) .) □ first date for the Application for Interim Payment Alternative B: Periodic Payments (clauses 4·9·2 and 4·14) Bond for Listed Items uniquely identified (clause 4·15·4) □ applicable? □ amount Bond for Listed Items not uniquely identified (clause 4·15·5) □ applicable? □ amount Contractor’s Retention Bond (clause 4·17) □ applicable? (Not applicable for Local Authority employer) □ amount □ expiry date □ percentage Retention Percentage (clause 4·18·1) Fluctuations Options A.
B or C? Option A □ percentage to cover professional fees □ renewal date of annual policy □ percentage to cover professional fees □ percentage to cover professional fees Option B Option C Professional Indemnity insurance (clause 6·11) □ type. amount. B and C (clause 6·7 and Schedule 3) □ applicable option: A. expiry □ applicable? □ amount PI insurance sub-limit: Cover for pollution and contamination claims (clause 6·11) PI insurance sub-limit: Cover for asbestos claims (clause 6·11) □ applicable? □ amount □ applicable? PI insurance: Cover for fungal mould claims (clause 6·11) Joint Fire Code (clauses 6·13 and 6·16) □ applicable? □ Has the insurer specified the Works are a ‘Large Project’? □ Who is to bear the cost for amendments? □ applicable? □ applicable to each Section? □ period Assignment of rights (clause 7·2) Period of suspension (clause 8·9·2) © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 33 .Insurance: Contractor’s liability – injury to persons or property (clause 6·4·1·2) □ amount Insurance: Employer’s liability (clause 6·5·1) □ applicable? □ amount Works Insurance Options A.
7C and 7E) □ applicable? □ identification of Purchasers/Tenants □ the part of the Works to be purchased or let □ Third Party Rights (clause 7A) or Collateral Warranty (clause 7C)? Contractor’s liability for costs (paragraph/clause 1·1·2 of Schedule 5. SCWa/E) required □ levels of Professional Indemnity insurance required for each sub-contractor □ Execution under hand □ Execution as a Deed □ Other forms of Attestation Collateral warranties from Sub-Contractors (clauses 3·3 and 3·4) Attestation Page 34 DB/G (2009) © The Joint Contracts Tribunal Limited 2009 . Part 1 or CWa/P&T) □ applicable? □ amount and type Funder Rights (clauses 7B.Period of suspension (clauses 8·11·1·1 to 8·11·1·6) □ period P&T Rights (clauses 7A. SCWa/F. 7D and 7E) □ applicable? □ identity of Funder □ Third Party Rights (7B) or Collateral Warranty (7D)? □ applicable? □ identification of sub-contractors □ type(s) of warranty (SCWa/P&T.
where required: • Design and Build Sub-Contract Agreement comprising: • • Agreement (DBSub/A) and Conditions (DBSub/C) • • • • • • • • Design and Build Sub-Contract Guide (DBSub/G) Short Form of Sub-Contract (ShortSub) Sub-subcontract (SubSub) Partnering Charter (Non-binding) Framework Agreement (FA 07) and Framework Agreement Guide (FA/G 07) Pre-Construction Services Agreement (General Contractor) (PCSA) Pre-Construction Services Agreement (Specialist) (PCSA/SP) Consultancy Agreement (Public Sector) (CA) Collateral Warranties • • • • • Contractor Collateral Warranty for a Purchaser or Tenant (CWa/P&T) Contractor Collateral Warranty for a Funder (CWa/F) Sub-Contractor Collateral Warranty for a Purchaser or Tenant (SCWa/P&T) Sub-Contractor Collateral Warranty for a Funder (SCWa/F) Sub-Contractor Collateral Warranty for Employer (SCWa/E) • • Adjudication Agreement (Adj) and Adjudication Agreement (Named Adjudicator) (Adj/N) JCT 2005 edition of the Construction Industry Model Arbitration Rules (CIMAR) © The Joint Contracts Tribunal Limited 2009 DB/G (2009) Page 35 .Appendix D – Related Publications The 2005 editions of the following documents have been issued by the JCT for use with DB 2005.
Revision 2009 Design and Build Contract Guide Members British Property Federation Limited Construction Confederation Local Government Association National Specialist Contractors Council Limited Royal Institute of British Architects The Royal Institution of Chartered Surveyors Scottish Building Contract Committee Limited All parties must rely exclusively upon their own skill and judgment or upon those of their advisers when using this document and neither Sweet & Maxwell. Thomson Reuters (Legal) Limited nor its associated companies assume any liability to any user or any third party in connection with such use. .
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