JCT Minor Works 2016 – Please Explain!
Problem: My building company specialises in refurbishment and our client base is a mixture of local authority work and private developers. Most of the time when the company receive orders for work, it is just a purchase order with a few pages of terms and conditions. Occasionally, a purchase order refers to the JCT Minor Works insofar that the terms and conditions of contract apply, and sometimes a complete copy of the JCT Minor Works is received and the company is asked to sign and return it.
Because nearly all the clients that the company works for are familiar to me, I have never really bothered to check the terms; all I am interested in is carrying out the work and getting paid. However, on a recent contract we had a bit of trouble. The company had signed up to a JCT MW and part way through the works, the client sacked the administrator and took that role on directly. Although the job was eventually completed, we did have some difficulties, like with instructions not being confirmed in writing and irregular payments. I tried to quote the contract to the client but was met with what seemed to be plausible responses, and not really understanding how the contract works, I was a bit stumped.
This job has therefore got me thinking that my staff and I should really start familiarising ourselves with how the JCT MW works. Can you help?
Response: It is crucial that prior to accepting any order or entering / executing any contract, you are aware of the terms and conditions that you are agreeing to, and just as importantly, you actually understand what the T&C’s mean.
As regards to explaining how the JCT MW works, the best advice I can give is to seek either a supplier that specialises in construction contracts training or make enquiries with solicitors, architects or quantity surveyors that are local to you to see if they would be prepared to do some in-house training on construction contracts / the JCT MW.
The JCT MW is a great little contract providing the standard terms and conditions are not [heavily] amended and that the project it is being used on is appropriate for use with the JCT MW. For example, the construction works must be relatively small and of a simple nature (although the value of the works should not be a deciding factor). The JCT MW should not be used when the employer requires suppliers to be named or nominated.
Administration of a JCT MW is straight-forward as there are few procedural rules, whilst the conditions are contained over 7 sections. Some of the important areas to understand are as follows:
- The payment terms – the contractor is entitled to monthly valuations and payments;
- the contract must identify the contract administrator (“CA”). However, where a CA is provided by an external company from the outset (ie, not a member of the employer’s staff), that CA cannot then be replaced by a member of the employer’s staff;
- if the date for completion is going to the delayed, the onus is on the contractor to notify the CA;
- the CA is obliged to value the works and issue a payment notice every month regardless whether the contractor makes an application for payment;
- all instructions must be in writing;
- the rectification period is 3 months; and
- the contractor has a right to suspend works for non-payment (subject to the mandatory 2 notices being given), and a right to refer any dispute or difference arising from under the contract to adjudication. I hope this helps you, but you should by now be searching for a suitable training partner!
© Michael Gerard 2019
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.
Michael is a Solicitor, Chartered Builder & Registered Construction Adjudicator, and is a director at Michael Gerard Law Limited, a solicitors practice regulated by the SRA.