Fill in the blanks - a JCT 2005 guide

Many of you will be familiar with completing the blanks in the appendix of the JCT 1998 building contract. You know the sort of stuff: contract sum, date of possession, date of completion and so on.

However, JCT 2005 contains a more extensive contract particulars section instead of an appendix and you must be scrupulous when filling out the contract, perhaps even more so than before. Leave nothing to chance and make sure that optional provisions apply in the way you want them to apply. Ensure each entry is completed correctly or, if not required, clearly marked accordingly and make sure there is no discrepancy between the contract particulars and any information concerning them in underlying contract documents.

Also, read the small print and the JCT published guides. Particular points to watch out for include:

Referencing

Ensure documents (such as employer's requirements, contractors proposals and contract sum analysis) are properly incorporated into the contract by correctly referencing them in the relevant part of the contract particulars.

Arbitration

If it is important that disputes be settled by arbitration proceedings then care must be taken to complete the contract particulars accordingly. If the contract particulars remain incomplete then the default provision will be court proceedings. This reverses the position under the old JCT forms which defaulted to arbitration.

Notices

Unless the contract particulars are completed to include an address for service of notices, then the default provision is that notices will be properly served at the registered office of the parties. If the registered office is not the place of business, then important notices could be overlooked.

Emailing

Unless specified, electronic communications are potentially invalid for the purposes of the administration of the building contract and must be in writing, unless subsequently agreed otherwise. Think carefully at the outset about the communications that will be electronic, and complete the contract particulars accordingly.

Damages

When completing the section specifying the level of liquidated damages, the figure must be a genuine pre-estimate of loss, otherwise the courts will treat it as a penalty provision. In other words, they won't enforce it. Stop and think before inserting ‘nil', ‘zero' or ‘N/A' in this bit of the contract - the courts have interpreted this as foregoing rights to all damages for delay (whether liquidated or unliquidated).

Insurance

Levels of insurance cover: pay attention when specifying whether the insurance is for any one occurrence (or a series) or an aggregate amount. Similarly, if a design and build contractor is required to continue to maintain professional indemnity after practical completion, then ensure that the period selected is 12 years for contracts executed as a deed (commensurate with the 12 year limitation period for deeds).

Identities

Make sure the identity of beneficiaries of third-party rights and collateral warranties and warrantors (in the case of sub-contractors giving warranties) are comprehensive and accurate.

Retentions

Unless a different rate is stated in the contract particulars, the retention percentage will be 3%.

Paul Brampton is a specialist in construction law at Taylor Wessing. He can be contacted on p.brampton@taylorwessing.com