Practical Law

You would be amazed by the number of cases I come across where otherwise sane and rational people agree to employ a builder to carry out major and expensive works to their home on the basis of little or no formal record of:

• What is to be done.
• Who is to do it.
• How much it will all cost.
• Who is to be responsible for what.

The documentation that does exist is often worse than useless, because it is confusing, misses out vital details or just does not make sense. Funnily enough, disputes often arise out of this sort of arrangement, which is when my clients tend to come to see me.

Clearly my clients should have come to me first, and I could have saved them a great deal of aggravation and cost by recommending that they use the JCT building contract and consultancy agreement for a home owner/occupier.

This neglected poor relation of the big JCT commercial contracts is a really excellent contract, of which I am a devoted fan. Not many people know it exists, which is a great shame, and in my view, it should be used more often.

But what is so marvellous about it?

Plain English

The contract is written in plain English.  Out goes all the jargon we professionals love to bandy about, and in comes simple language:

• The employer is a customer.
• There is no practical completion; retention; defects liability period; or variation.  These concepts exist in the contract but they are described in language that anyone can understand. For example, retention is described as “the remaining 5% of the total price”.
• The contract uses tick boxes to fill in certain details.
• It is easy to follow and easy to complete.

Flexibility

There are two standard forms, one where there is a professional consultant involved in the project, which includes a simple standard consultant’s appointment, and one where there is not a professional consultant involved.

Responsibilities

The parties’ responsibilities are set out, and they deal with practical issues such as use of water and toilet facilities, hours of working and leaving the working area clean and tidy after finishing the work, all important issues when the site is also someone’s home.

The contract also deals with issues such as insurance, which is vital, but the importance of which the home owner may not appreciate. For example, the home owner is required to tell his/her household insurer that work is about to be done to the property; the contractor to have all risks insurance and a public liability policy.

Cost

The contracts are quite cheap, about £16, and are available from a number of websites, including the RIBA, the RICS and Construction Industry Publications.

In the context of the sums that may be spent on legal fees when something goes wrong, the cost is infinitesimal and well worth incurring.

Comprehensive

Although short and to the point (the longest one is only 7 pages), the contract deals with all the issues one would expect to see in a commercial contract:

• There are procedures for changes to the work and the consequent costs and delays.
• There is provision for payment schedules.
• There is a duty on the consultant to exercise reasonable skill and care.
• The dispute resolution clause includes the right to refer a dispute to adjudication.
• The customer even agrees to consider advice given by the consultant!

If this contract was used more often the number of residential building disputes would probably reduce and projects would run more smoothly because the parties would have a sensible document to govern their relationship.