Changes to the JCT Standard Form of Building Contract 1998 Edition

Profession:Herbert Smith
 
FREE EXCERPT

This article contains a brief summary of some of the changes made by JCT '98 Amendment 4 (Amendment 4) to the JCT Standard Form of Building Contract 1998 Edition (the Contract). These changes were issued in January 2002 and apply to Clause 25 (extension of time), Clause 26 (loss and expense) and Clause 30 (certificates and payment). The amendment to Clause 30 applies to private JCT contracts only.

New "relevant event" for EOT claims

Pursuant to Amendment 4 a new definition of relevant event for extension of time claims has been added to Clause 25:

"25.4.19 - Save as provided for in Clause 25.4.1 to 25.4.18 any impediment, prevention or default, whether by act or omission, by the employer or any person for whom the employer is responsible except to the extent that it was caused or contributed to by any default, whether by act or omission, of the Contractor or his servants, agents or sub-contractors."

The new definition was introduced on the basis that the original list of relevant events did not deal adequately with acts by the employer that led to potentially legitimate claims for time extension but which did not fall within any one of the original definitions of relevant event. The new definition attempts to rectify this shortcoming and thereby preserve the employer's right to liquidated damages.

The new definition of relevant event is very broad. The words contained in the phrase 'impediment, prevention or default' are not defined and will therefore need to be considered by the employer on a case by case basis. Given the wide range of acts that could fall within the phrase, it is likely that there will be a relative increase in the number of claims for an extension of time in any one project. However, the new definition provides for mitigating circumstances in that if the contractor, his servants, agents or sub-contractors have caused or contributed to the 'impediment, prevention or default' by the employer then the contractor's claim for an extension of time, under this definition of relevant event, may be denied.

New "matter" materially affecting regular progress of works

In order for the contractor to claim monetary compensation as a result of disruptions to the progress of the works, he must fulfil the requirements set out in Clause 26 of the contract.

Pursuant to Amendment 4 a new matter has been added to Clause 26.2:

'Clause 26.2.11 - Save as provided for in Clause 26.2.1 to 26.2.10 any impediment, prevention or default, whether...

To continue reading

REQUEST YOUR TRIAL