adding sectional comlpetion to a jct contract

3 min read 23-11-2024

adding sectional comlpetion to a jct contract

The Joint Contracts Tribunal (JCT) suite of contracts is widely used in the UK construction industry. However, standard JCT forms may not always perfectly suit every project's unique requirements. One common modification is adding a clause for sectional completion. This article explores how to add sectional completion to a JCT contract, outlining the key considerations and potential pitfalls.

What is Sectional Completion?

Sectional completion allows for the certification and payment of completed sections of a project before the overall project's final completion. This is beneficial for large, complex projects where different sections can be finished at varying times. It provides an important cash flow benefit to the contractor, and allows the client to utilize completed sections sooner.

Benefits of Sectional Completion

Improved Cash Flow: Contractors receive payments for completed work as it progresses, rather than waiting for the entire project's completion. This mitigates financial risk and improves liquidity.
Faster Access to Facilities: Clients can start using completed sections of the project earlier, potentially generating revenue or realizing other benefits.
Early Identification of Issues: Sectional completion can highlight problems earlier in the process, allowing for quicker remediation and reducing overall project delays.
Easier Project Management: Breaking a large project into smaller, manageable sections simplifies project management and tracking progress.

Adding Sectional Completion to a JCT Contract: Key Considerations

Adding sectional completion to a JCT contract requires careful consideration and precise drafting to avoid ambiguities and disputes. Here's a breakdown of the crucial elements:

1. Defining Sections: Precisely Defining the Work

Clearly define each section in the contract. This includes specific details of the work involved, its boundaries, and any interdependent elements. Vague descriptions can lead to disputes over what constitutes a "completed section." Consider using detailed drawings and specifications to avoid ambiguity.

2. Stage Payments: Establishing Payment Mechanisms

Clearly outline the payment mechanism for each section. This includes specifying the method of valuation (e.g., agreed price, measurement, or a combination), the timing of interim certificates, and any retention clauses. Alignment with standard JCT payment processes is recommended for consistency.

3. Testing and Commissioning: Defining Completion Criteria

Specify the testing and commissioning requirements for each section. The contract needs to explicitly state when a section is considered "complete" and ready for certification. This may include performance testing, inspections, and the achievement of specific milestones.

4. Risk Allocation: Addressing Potential Issues

Carefully consider risk allocation for each section. Who bears the risk for defects discovered after sectional completion but before overall project completion? The contract must clearly define responsibilities and liabilities.

5. Snagging and Defects: Handling Post-Completion Issues

The contract needs to address how snagging and defects within a completed section will be handled. Will these be rectified as part of the sectional completion process, or dealt with during the final account? A clear process will prevent delays and disputes.

Sample Clause for Sectional Completion in a JCT Contract

While drafting a bespoke clause is crucial, a sample clause might include the following elements:

"The Works shall be carried out in the following Sections: [List of Sections with detailed descriptions]. Upon completion of each Section, as certified by the Architect, the Contractor shall be entitled to payment for that Section in accordance with Clause [relevant JCT clause modified for sectional payments]. Completion of a Section shall be deemed to have occurred when [clearly defined criteria, including testing and commissioning]. The Contractor shall remain liable for defects in any completed Section until the Final Completion of the Works."

Remember: This is a sample. Legal advice is crucial for correctly integrating this into the contract.

Seeking Professional Advice

Adding sectional completion to a JCT contract is complex. It's highly recommended to engage legal professionals specializing in construction contracts. They can help ensure the modifications are legally sound, protect both parties' interests, and avoid potential disputes down the line. Using a lawyer experienced in JCT contracts is particularly important for minimizing risk.

This article aims to provide an overview of adding sectional completion to a JCT contract. Always consult with legal professionals before making any significant changes to a standard JCT contract. Incorrectly drafted clauses can lead to costly disputes and delays, negating the benefits of sectional completion.