The most recent version of the JCT suite of contracts is the 2016 edition (2024 as of today). In this article, we will explain the Management JCT contract options. While the traditional or conventional JCT contracts remain the most widely used, management-based contracts provide useful alternatives for specific types of projects.
Management Building Contract
The price is based on the prime cost of the project plus a management fee for the management contractor. Interim payments are monthly unless otherwise stated.
The contract is divided into two periods: the Pre-Construction Period and the Construction Period. The Management Contractor should be appointed early so they can cooperate with the architect or contract administrator, quantity surveyor, and other members of the professional team on matters such as the project programme and construction methods.
In the Construction Period, the Management Contractor is responsible for setting out, managing, organising, supervising, and securing completion of the project through the works contractors, who are directly contracted to them. Although the Management Contractor operates the contract terms, they are not liable for defaults by the works contractors if they comply with the terms.
This contract is most appropriate for large-scale projects requiring an early start on site where full design information is not yet available.
Construction Management Appointment
This contract is used when the employer appoints a construction manager to work on their behalf. The cost of the construction manager is based on their fee plus certain reimbursable costs such as fuel.
Construction Management Trade Contract
This contract is entered into between the employer and the trade contractor in conjunction with the Construction Management Appointment. Because it is a direct contractual arrangement, it is not a sub-contract but more akin to a main contract.
The construction manager acts as agent for the employer in issuing instructions, making decisions, and preparing certifications. The price is based on either a lump sum or complete remeasurement, with interim payments made monthly or at pre-determined stages.
Format and Structure of a JCT Contract
The standard JCT format consists of:
- Articles of Agreement
- Contract Particulars (containing project-specific information)
- Conditions of Contract
- Schedules
With the main sections covering:
- Definitions
- Carrying out the works
- Control of the works
- Payment
- Variations
- Injury, damage, and insurance
- Assignment, third party rights, and collateral warranties
- Termination
- Settlement of disputes
Conclusion
JCT management contracts provide flexibility for projects requiring early commencement, direct employer involvement, or multiple trade contractor arrangements. Choosing the right form of management contract ensures responsibilities, risks, and relationships are clearly defined and aligned with the project’s needs.
Watch our video on The JCT Management Contract here:
