Introduction

Construction contracts are the legal foundation of every building project, setting out the responsibilities, scope, time, cost, quality, and risk allocation between the parties involved. They provide the framework for how the work will be executed, how payments will be made, and how disputes or changes will be managed, helping to keep projects organized and accountable from start to finish.

Why to consider a standard form?

There are many reasons why the industry and contract users benefit from the use of standard contracts:
  • It saves time
  • It minimises transaction cost
  • It allocates risk in a fair and recognisable way
  • Standard forms are designed in a way that is comprehensive, and cover most of the pitfalls which surround contractual relations in the building industry
  • Standard forms reflect the benefits that are accrued through precedent – this is achieved by defining benchmark provisions which reflect a generally acceptable position in practice
  • contracts are developed via a cross-section of the building industry involved in the contract process. This means that clients (private and public sector), consultants, contractors, specialists, and sub-contractors are all involved in the development of JCT contracts.

Most common standard contracts in construction field

1. FIDIC[1]

FIDIC is renowned for its international standard forms of contract for use on national and international construction projects. FIDIC publish standard forms of contracts for works and agreements for clients, consultants, sub-consultants, joint ventures, and representatives. FIDIC also publishes various business practice documents such as policy papers, guidelines and training manuals.

FIDIC forms of Contracts (Read More about ICC types)
  • Conditions of Contract for Construction For Building and Engineering works designed by the Employer (The Red Book)
  • Conditions of Contract for Plant and Design-Build for Electrical and Mechanical Plant and for Building and Engineering Works Designed by the Contractor (The Yellow Book)
  • Conditions of Contract for EPC/Turnkey Projects (The Silver book)
  • Conditions of Contract for Design, Build and Operate Projects (The Gold book)
  • The terms of the Client/Consultant Model Services Agreement (the White Book)
  • Short Form of Contract (the green Book)
  • Pink Book – MDB Harmonised Construction Contract
  • Emerald Book – Underground Works (FIDIC–ITA)
  • Blue-Green Book – Dredging and Reclamation Contract

2.JCT (The Joint Contracts Tribunal)[2]

Since 1931 JCT has produced standard forms of construction contract, guidance notes and other standard forms of documentation for use by the construction industry.

JCT forms of Contracts
  • Standard Building Contract
  • Intermediate Building Contract
  • Minor Works Building Contract
  • Major Project Construction Contract
  • Design and Build Contract
  • Target Cost Contract
  • Management Building Contract
  • Construction Management Contract
  • JCT-CE Contract
  • Measured Term Contract
  • Prime Cost Building Contract
  • Repair & Maintenance Contract
  • Home Owner Contracts

3.NEC (The New Engineering Contract)[3]

NEC contracts aim to prevent costly disputes. First developed in 1993, they were designed to replace typical construction contracts which until then had been largely ‘adversarial’ in approach.
An adversarial contract is one where people who’ve signed up to it are likely to act in their own interests if something goes wrong. Adversarial contracts can mean companies going out of business when they’re hit with severe contract penalties – for example when a project falls behind schedule.
NEC contracts are endorsed by governments and industry bodies. They have a strong track-record for helping to deliver large-scale projects successfully.
NEC forms of Contracts
  • NEC4: Alliance Contract
  • NEC4: Design Build and Operate Contract
  • NEC4: Dispute Resolution Service Contract
  • NEC4: Engineering and Construction Contract
  • NEC4: Engineering and Construction Subcontract
  • NEC4: Engineering and Construction Short Contract
  • NEC4: Engineering and Construction Short Subcontract
  • NEC4: Framework Contract
  • NEC4: Professional Service Contract
  • NEC4: Professional Service Subcontract
  • NEC4: Professional Service Short Contract
  • NEC4: Supply Contract
  • NEC4: Supply Short Contract
  • NEC4: Term Service Contract
  • NEC4: Term Service Subcontract
  • NEC4: Term Service Short Contract

4. ICC (Infrastructure Conditions of Contract)[4]

Issued by  The Association for Consulting and Engineering (ACE) and the Civil Engineering Contractors Association (CECA), This contract designed specifically for civil engineering and infrastructure projects, these contracts are based on the earlier ICE (Institution of Civil Engineers) conditions. They provide a clear, standardized contractual framework drafted jointly by employers, consultants, and contractors
ICC forms of Contracts (Read More about ICC types)
  • Measurement Version
  • Design and Construct Version
  • Term Version
  • Minor Works Version
  • Target Cost Version
  • Ground Investigation Version
  • Archaeological Investigation Version
  • Partnering Addendum.

5. Project Partnering Contracts - by ACA[4]

  • The original ACA (Association of Consultant Architects) building forms were produced as a reaction to alleged deficiencies and complexities in other standard forms (like the JCT) and were utilized by private clients.
  • The base building agreement aims to produce a flexible contract with a wide range of alternative provisions suitable for many project types.
  • Today, ACA is most notable for publishing standard form contracts specifically drafted for project partnering and collaborative supply chain working
PPC forms of Contracts 
  • PPC2000 Standard Form of Contract for Project Partnering 
  • SPC2000 Standard Form of Specialist Contract for Project Partnering 
  • TPC2005 Standard Form of Contract for Term Partnering 
  • TAC-1 Term Alliance Contract

6.IChemE (Institution of Chemical Engineers)[4]

  • The IChemE currently publishes two suites of contracts – one for use in the UK and another for use internationally. Both suites are used extensively across a wide range of process
  • industries and are suitable for the provision of any performance-based plant or project. 
  • The contract forms have been formulated to reflect best practice and relationships in the process plant sector. This practice information will focus on the UK suite of contracts.
  • The IChemE first published its contracts in 1968 and the latest versions (including helpful introductory guidance notes).
IChemE forms of Contracts 
  • IChemE Form of Contract for Lump Sum Contracts (the ‘Red Book’)
  • IChemE Form of Contract for Reimbursable Contracts (the ‘Green Book’) 
  • IChemE Form of Contract for Target Cost Contracts (the ‘Burgundy Book’)
  • IChemE Form of Contract for Minor Works (the ‘Orange Book’), 
  • IChemE Form of Contract for Subcontracts (the ‘Yellow Book’) 
  • IChemE Form of Contract for Civil Engineering Subcontracts (the ‘Brown Book’)

References

  1. https://fidic.org/history ↩
  2. https://corporate.jctltd.co.uk/about-us/about-our-contracts/ ↩
  3. https://www.ice.org.uk/what-is-civil-engineering/infrastructure-projects/new-engineering-contract-nec#:~:text=The%20New%20Engineering%20Contract%20(NEC,aim%20to%20prevent%20costly%20disputes. ↩
  4. https://www.rics.org/content/dam/ricsglobal/documents/standards/Appropriate-contract-selection-2nd-edition.pdf ↩