JCT Contracts in Construction Law

PHYSICAL PLANNING AND CONSTRUCTION LAW
LIST OF CASES
1. Blue circles Industries plc v Holland Dredging Co. UK Ltd (1987) 37 BLR 40
2. Brunswick Construction v Nowlan [1974]21 BLR 27
3. Contract Cotton v Wallis [1955] 1 WLR 1168
4. County and Districts Properties v C.Jenner &Sons Ltd [1967]
5. Debenture Assets Crop v William Moss [1984] 1 Const LJ 131
6. Edward Lidenberg v Joe Cannning & Jerome Construction Ltd [1992] 62 BLR 147
7. Gloucester CC v Richardson [1968] 1 AC 480
8. Hoenig v Isaacs [1952]2 ALL ER 176
9. John Mowlem & Co. v BICC Pension Trust ltd & S.Jampel and Partners (1977) 3 Con
LR 64
10. Kaye v Hoiser & Dickism [1972] WLR
11. Leedsford Ltd v Bradford Corporations (1956)24 BLR
12. Plant Construction PLC v Clive Adams Associate & JMH Construction Services [2000]
BLR 137
13. R & H Green Silley Weir Ltd v British Railway Board [1980] 17BLR 137
14. Robert v Bury Commmissioners (1870) LR 5 CP 310
15. Scheldebouw BV v St James Homes [2006] 1 BLR 113
16. Sumpler v Hedges [1898] 1 QB 673
17. Sutcliffe v Thackrah [1947] AC 727
18. Test Valley Borough Council v Greater London Council [1979] 13 BLR 77
19. University of Glasgow v. William Whitfield and John Laing [1988]42 BLR 27
20. Victoria University of Manchester v. Hugh Wilson [1984] Const LJ 162
21. Young & Marten Ltd v. McManus Childs Ltd (1969) 9 BLR 77
1
LIST OF ABBREVIATIONS
CDP Contract Designed portion

HGCRA Housing Grant, Construction and Regeneration Act.
IOB Institute of Building
ICD JCT Intermediate Building Contract with Contractor’s
Design
JCT Joint Contract Tribunal

MWD JCT Minor works Building Contract with contractor’s
design
NFBTE National Federation of Building Trades Employers
PII Professional Indemnity Insurance
SBC Standard Building Contract
RIBA Royal Institute of British Architects
2
CONSTRUCTION LAW
THE STANDARD BUILDING CONTRACT
Definition
The Standard Building Contract (SBC), also known as the JCT contract is a form issued by the
Joint Contract Tribunal (JCT) that is used in all types of building works, especially larger works
with a high value.1The purpose of this contract is to set out all of the relevant terms and
conditions, including the obligations of the parties, the costs involved and specification of the
project. This allows all parties to see exactly what needs to be done, when it needs to be done,
who needs to do the work and what the cost will be.
It also sets out procedures for certain issues such as:2
 How the contractor can have time allowed for the construction to be extended.
 How the architect can get an instruction carried out if the construction is slow.
 Grounds on which parties may bring their duties under the contract to an end.
Crucially, a JCT contract provides clarity on the roles and responsibilities of each party to try to
ensure a smooth delivery of the project. Under the SBC there is an employer (who employs the
contractor) and the contractor (who carries out the construction works). There is also a contract
administrator who in most times is the Architect and the quantity surveyor who is concerned
with valuing the work. The contract administrator oversees the whole project and is a link
between the employer and contractor during the construction process.3
Background of the SBC
The first standard form of the building contract in the United Kingdom came towards the end of
the 19th Century, with 19 clauses. From 1903, to 1979 it was known as the “RIBA Contract”.
After 1979 it was called the JCT Contract. From 1903 the SBC was put together by a body
consisting of representatives of Royal Institute of British Architects (RIBA), Construction
Federation and the Institute of Building. In 1931 Institute of Building (IOB) pulled out, leaving
the ‘joint’ that is RIBA and National Federation of Building Trades Employers (NFBTE), now
the Construction Federation. In 1952, Royal Institute of Chartered Surveyors became involved.
1
Isaak Ndekugri, The JCT 05 Standard Building Contract, (2nd Ed. Elsevier Ltd, United Kingdom,2009.)
2
David Chappell, The JCT Standard Building Contract 2011, 1st Ed., Oxford United Kingdom,2014)
3
https://www.designingbuildings.co.uk/wiki/Contract_administrator_for_construction_contracts
3
By 1963, JCT consisted of ten bodies. The Standard form was substantially rewritten in 1939,
1963 and 1980.4 Following amendments, it was revised in 1998, then 2005 and 2011. The current
version 2016 was amended to principally take account of legislation and following the
referendum in June 2016 that saw the withdrawal of United Kingdom from the European Union.5
The Joint Contract tribunal
The JCT is a body that represents a wide range of interests in the building and construction
industries. It does not sit in judgement on others since its founding in 1931, the JCT has
produced standard forms of documentation, such as contracts and guidance notes, for use in the
construction industry.
The members were listed by the JCT in 2014 as6:
i. the British property federation
ii. the Contractors Legal Group, comprising:
1. the National Federation of Builders
2. the UK Contractors Group
3. the National Access and Scaffolding Confederation and
4. the Scottish Building Federation;
iii. the Local Government Association,
iv. the National Specialist Contractors Council,
v. the Royal Institute of British Architects,
vi. the Royal institution of chartered surveyors and
vii. The Scottish Building Contract Committee.
THE CONTRACT
FORM
The Standard Building Contract is divided into three variations7;
4
David Chappell, The JCT Standard Building Contract 2011 (1st Ed. Oxford, United Kingdom,2014)
5
Sweet and Maxwell, Construction Law, Law and Practice relating to Construction Industry,(11th edition.
London,2013)
6
John Murgoch, Ronan Champion & Will Hughes, Construction Contracts Law and Management (5th edition,
Taylor and Francis,2015)
7
David Chappell, The JCT Standard Building Contract 2011, An explanation and guide for busy practitioners and
students( 1st Ed. John Wiley & sons Ltd, 2014)
4
a) Standard Building contract with quantities- it is a lump sum contract, but in order to
provide a basis for comparing tenders, the building owner commissions a Quantity
Surveyor to prepare a bill of quantities describing the work required, which the tenderers
then price. Where bills are used, the tenderers may rely on the contents at face value in
the knowledge that the cost arising out of any errors should be corrected at the building
owner’s expense.
b) Standard building contract with approximate quantities – it is a `remeasurement
contract`, it is used where appropriate quantities to be used in the project are subject to
remeasurement. The reason for use may be in instances where there is insufficient time to
produce detailed drawings necessary for preparation of accurate bills of quantity or due to
the nature of the project.
c) Standard Building Contracts without quantities – it is also a pure lump sum contract
in which the contractor provides a single price for building considering what is shown on
drawings and described in specifications prepared by the building owner or consultants.
The tenderer is required to bear the cost of his own error in coming to his price, including
underestimation of the work involved. Consequently over estimation of the work will be
to his benefit.
The above variations of the Standard Building Contract are suitable for both private
employers and local authority employers.
According to the Joint Contract Tribunal, the Contract will be made by executing Articles of
Agreement which may be either by hand or by deed. A deed is a written document that is
executed with the necessary formality (more than a single signature), and by which an
interest, right or property passes or is confirmed, or an obligation binding on some person is
created or confirmed.8
Attributes of a deed include:
a) No need for consideration, that is, a promise that one party will do something for
another is legally binding.9
8
https://uk.practicallaw.thomsonreuters.com accessed 2:03pm 10/10/2022
9
students (1st Ed. John Wiley & sons Ltd, 2014)
5
b) Limitation period can be extended from six to 12 years.10
c) Statements in a deed are conclusive as to their truth as between the parties to the
deed.
Neither method is essential for condition of contract may be incorporated in any other documents
of agreement by the parties provided the essential terms which are identified in the Articles of
Agreement are recorded in some other manner.
CONTENTS
Contents of the Standard building contracts are:
 Articles of agreement – it contains the essential information about parties to the contract11. It
is the core statement of what parties have agreed on. Without the Articles of Agreement and
some other contractual arrangement, there can be no contract12. The Articles not only set out
the obligations of the parties but can also be looked upon as a mission statement. The section
begins by recording the names and addresses of the parties, who are introduced immediately
as the Employer and the Contractor. The parties’ names are not used again except to identify
signatories. The parties may be companies or individuals.
 Recitals – they form the first two pages of after the Articles of Agreement. They are also
known as introductory statements showing what the contract is about.13 They give the
background to the contract and what the parties intend to do or perhaps have already done.
The recitals cannot override the rest of the contract, however, they can be used to show the
true meaning of other parts of the contracts that may be ambiguous. The SBC uses recitals to
convey specific information such as list of drawings and definition of works.14
10
Issaka Ndekugri, Michael Rycroft, The JCT 05 Standard Building Contract, Law and Administration (2nd Ed.
Elsevier Ltd, 2009)
11
Sweet and Maxwell, Construction Law, Law and Practice relating to Construction Industry, (11th Ed.
London,2013)
12
Issaka Ndekugri, Michael Rycroft, The JCT 05 Standard Building Contract, Law and Administration (2nd Ed.
Elsevier Ltd, 2009)
13
students (1st Ed. John Wiley & sons Ltd, 2014)
14
Ibid 12
6
 Articles – these are the formal opening parts of the contract and they set out the essential
elements agreed upon and made subject to the rest of the contract terms. The Articles provide
as follows according to the Joint Contract form of 201115 :
Article 1; this Article lays out the obligations of a contractor. He/she is required to carry
out the work in accordance with the contractual documents
Article 2; the employer is mandated to pay the contractor an amount (excluding VAT) as
specified in the conditions of the contract. In case of any changes in the specified amount, the
figure is to be updated by an addition or deduction.
Articles 3 and 4; the names and addresses of the architect and quantity surveyor are
provided for, respectively in these Articles. If either of the two cease to act in their capacities
for any reason, the employer must employ respective replacements within 21 days. However,
there are certain exceptions where the Employer is a local authority, and the replacement
duty holder is an official of it, contractor can object within 7 days. The Contractor’s
objection does not have to be reasonable; the test is that the Contractor’s reasons are
‘considered to be sufficient’ by employer or a person appointed under the dispute resolution
procedure in the contract. In the case of Scheldebouw BV v St James Homes (Grosvenor
Dock) Ltd16, it was emphasized that an employer (because of self-interest) could not appoint
himself into a role required by the contract to be that of an independent certifier, unless it was
agreed by the Contractor, or the Contractor had tendered on that understanding. Even the
appointment of a sympathetic replacement will not assist the Employer with past decisions
since Clause 3.5.2 expressly provides that the replacement Architect cannot disregard or
overrule any certificate, opinion, decision, approval or instruction of the replaced Architect.
Article 5; the architect will act as the planning supervisor/ CDM coordinator if the
Construction (Design and Management) CDM Regulations apply.
Article 6; this Article names the contractor as the principal contractor for the purposes of the
CDM Regulations unless stated otherwise.
Article7; provides that the parties have a right to refer any arising dispute to adjudication.
15
John Murgoch, Ronan Champion & Will Hughes, Construction Contracts Law and Management (5th edition,
Taylor and Francis,2015)101
16
[2006]BLR 113.
7
Articles 8 and 9; states that parties have a right to refer issues for arbitration or litigation
respectively. The choice of arbitration is noted in the contract particulars while that of
litigation being the default provision.
 Contract Particulars – The contractual particulars are made up of Contract documents.
Under Clause 2.117 of the conditions the contractor is required to “carry out and complete the
works in a proper and workmanlike manner and in compliance with Contract documents.
These contract documents include: Contract Drawings, the Contract Bills, the Agreement,
and the Conditions and, where the Contractor takes part of the design, the Employer’s
Requirement and Contractor’s proposal. The relationship of the said documents is as follows;
i. Works included in the Contract Sum
This is provided for under Clause 4.1 of the Joint Contract Tribunal form of 2011.It states that,
the quality and quantity of the work included in the Contract Sum shall be deemed to be that set
out in the Contract Bills and, where there is a Contractor’s Designed Portion, in the CDP
(Contract Designed Portion) Documents.
ii. Agreement
This is provided for under Clause 1.318 and it states that, the Agreement and these Conditions are
to be read as a whole but nothing contained in the Contract Bills or the Contract Designed
Portion (CDP) Documents shall override or modify the Agreement or these Conditions.
iii. Preparation of Contract Bills & Employers Requirement
This requirement is provided for under Clause 2.13.1 states that, unless in respect of any
specified item or items it is otherwise specifically stated in the Contract Bills, the Contract Bills
are to have been prepared in accordance with the Standard Method of Measurement and any
addendum bills to be issued for the purposes of obtaining a Schedule 2 Quotation shall be
prepared on the same basis.
iv. Contract Bills and CDP Documents—errors and inadequacy
17
John Uff, Construction Law, (12th Edition Sweet & Maxwell, 2017)380.
18
The Joint Contract Tribunal form of 2011.
8
The Joint Contract Tribunal form provides that19, if in the Contract Bills, or any such addendum
bill as is referred to in clause 2.13.1, there is any unstated departure from the method of
preparation referred to in that clause or any error in description or in quantity or any omission of
items (including any error in or omission of information in any item which is the subject of a
Provisional Sum for defined work), the departure, error or omission shall not vitiate this Contract
but shall be corrected. Where the description of a Provisional Sum for defined work does not
provide the information required by the Standard Method of Measurement, the description shall
be corrected so that it does provide that information.
Clause 2.14.3 provides that, subject to the contractor’s obligation to comply with statutory
requirements, any such error or omission is to be treated as a variation.
Where the works include a Contractor’s Designed Portion the Contractor is required, in
accordance with the Contract Drawings and Contract Bills where relevant, to “complete the
design for the Contractor’s Designed Portion, including the selection of any specifications … to
be used in the CDP works …” so far as not otherwise described (cl.2.2.1). The effect of the
above clauses is that, save for questions of quality or quantity of the work, the conditions
override the Contract Bill. A provision intended to amend the conditions (such as one for
Sectional Completion) may therefore be ineffective if placed in the Bills. The Contract Bills are,
however, permitted to include a limitation on the contractor’s access to or use of parts of the site,
limitation of working hours or the execution or completion of the work in any specific order
(cl.5.1.2). The Bills will also override the Contract Drawings in that, while the contractor must
perform all the work shown on the drawings, any part which is not included in the Bills is an
extra to be paid for20.
v. Specifications
In addition to the Contract Documents, in contracts of any size there are likely to be extensive
documents described as “specifications” or other descriptive schedules. These are conventionally
incorporated within the Contract Bills as they contribute to the description of the quality of the
work. As stated in clause 1.3, the agreement and the conditions are to be read as a whole and
afforded equal status.
19
The JCT Contract Tribunal form of 2011 Clause 2.14.1
20
Sweet and Maxwell, Construction Law, Law and Practice relating to Construction Industry, (11th Ed.
London,2013) 381
9
vi. Relationship between the Contractor and Architect.21
The contract provides for the mutual provision of necessary information as between the
contractor and the architect as follows:
a. Construction information and Contractor’s master programme
Clause 2.9 (1) provides that: As soon as possible after the execution of this Contract, if not
previously provided: the Architect/Contract Administrator, without charge to the Contractor,
shall provide him with 2 copies of any descriptive schedules or similar documents necessary for
use in carrying out the Works (excluding any CDP Works); and (2)the Contractor shall without
charge provide the Architect/ Contract Administrator with 2 copies of his master programme for
the execution of the Works and, within 14 days of any decision by the Architect/Contract
Administrator under clause 2.28.1 or of agreement of any Pre-agreed Adjustment, with 2 copies
of an amendment or revision of that programme to take account of that decision or agreement. 22
However, under this clause, nothing in the descriptive schedules or similar documents (or in that
master programme or any amendment or revision of it) shall impose any obligation beyond those
imposed by the Contract Documents.
b. Information Release Schedule
Under clause 2.11 , Except to the extent that the Architect/Contract Administrator is prevented
by an act or default of the Contractor or of any of the Contractor’s Persons, the
Architect/Contract Administrator shall ensure that 2 copies of the information referred to in the
Information Release Schedule are released at the time stated in that Schedule. The Employer and
the Contractor may agree to vary any such time, such agreement not to be unreasonably
withheld.
c. Further drawings, details and instructions23

1. Where not included in the Information Release Schedule, the Architect/Contract
Administrator shall from time to time, without charge to the Contractor, provide him with
2 copies of such further drawings or details as are reasonably necessary to explain and
21
John Uff, Construction Law, (12th Edition Sweet & Maxwell, 2017) Page. 382
22
Ibid 19
23
John Uff, Construction Law, (12th Edition Sweet & Maxwell, 2017) Page. 382, as provided under Clause 2.12 of
the Joint Contract Tribunal form of 2011.
10
amplify the Contract Drawings and shall issue such instructions (including those for or in
regard to the expenditure of Provisional Sums) as are necessary to enable the Contractor to
carry out and complete the Works in accordance with this Contract.
2. Such further drawings, details and instructions shall be provided or given at the time it is
reasonably necessary for the Contractor to receive them, having regard to the progress of
the Works, or, if in the Architect/Contract Administrator’s opinion practical completion of
the Works or relevant Section is likely to be achieved before the relevant Completion
Date, having regard to that Completion Date
3. Where the Contractor has reason to believe that the Architect/ Contract Administrator is
not aware of the time by which the Contractor needs to receive such further drawings,
details or instructions, he shall, so far as reasonably practicable, advise the
Architect/Contract Administrator sufficiently in advance as to enable the
Architect/Contract Administrator to comply with this clause 2.12.
In addition, clause 2.10 requires the architect to provide accurately dimensional drawings to
enable the contractor to set out the works.
d. Control of the Work 24
The Conditions envisage that the work will be under the joint control of the parties. The RIBA
Conditions of Engagement provide for periodic but not constant supervision. Day to day
supervision is therefore left to the contractor and, to the extent necessary, the employer:
e. Access for Architect/Contract Administrator 25
The Architect/Contract Administrator and any person authorized by him shall at all reasonable
times have access to the Works and to the workshops or other premises of the Contractor where
work is being prepared for this Contract. When work is to be prepared in workshops or other
premises of a sub-contractor the Contractor shall by a term in the sub-contract secure so far as
possible a similar right of access to those workshops or premises for the Architect/Contract
Administrator and any person authorized by him and shall do all things reasonably necessary to
24
the Joint Contract Tribunal form of 2011
25
the Joint Contract Tribunal form of 2011
11
make that right effective. Access under this clause 3.1 may be subject to such reasonable
restrictions as are necessary to protect proprietary rights.
f. Person-in-charge26
The Contractor shall ensure that at all times he has on the site a competent person-in charge and
any instructions given to that person by the Architect/Contract Administrator or directions given
to him by the clerk of works in accordance with clause 3.4 shall be deemed to have been issued
to the Contractor.
g. Employer’s representative 27
The Employer may appoint an individual to act as his representative by giving written notice to
the Contractor that from the date stated the individual identified in the notice will exercise all the
functions ascribed to the Employer in these Conditions, subject to any exceptions stated in the
notice. The Employer may by written notice to the Contractor terminate any such appointment
and/or appoint a replacement.
h. Clerk of works28
The Employer shall be entitled to appoint a clerk of works whose duty shall be to act solely as
inspector on behalf of the Employer under the directions of the Architect/Contract Administrator
and the Contractor shall afford every reasonable facility for the performance of that duty. If any
direction is given to the Contractor by the clerk of works, it shall be of no effect unless given in
regard to a matter in respect of which the Architect/ Contract Administrator is expressly
empowered by these Conditions to issue instructions and unless confirmed in writing by the
Architect/Contract Administrator within 2 working days of the direction being given.
Any direction so given and confirmed shall, as from the date of issue of that confirmation, be
deemed an instruction of the Architect/Contract Administrator.” On larger projects the architect
and employer may agree to employment of a resident architect on the work. They will have no
specific power or duty such as those of the engineer’s representative under the ICE Conditions.
26
John Uff, Construction Law, (12th Ed.Sweet & Maxwell, 2017) Page. 382, as provided under Clause 3.2 of the
Joint Contract Tribunal form of 2011
27
John Uff, Construction Law, (12th Ed.Sweet & Maxwell, 2017) Page. 382, as provided under Clause 3.3 of the
28
John Uff, Construction Law, (12th Ed. Sweet & Maxwell, 2017) Page. 382, as provided under Clause 3.4 of the
12
B) GENERAL OBLIGATIONS OF THE CONTRACTOR
According to John Uff in his book Construction Law, he describes a main contractor as one who
carries out the works under the traditional general contracting systems as used in the United
Kingdom. They are also referred to as the builder, building contractor, civil engineering
contractor etc. The employer and the main contractor are the two parties to the main or head
contract that may also be called the construction contract or building or engineering contract
depending on the nature of works.
The contractor in all but the smallest jobs, sub-contracts parts of the work to one or more sub-
contractors to do all or part of the work. John Uff notes that subcontracting does not reduce the
liability of the contractor to the employer to the work sub-let29. It also requires written consent
from the architect or Contract Administrator which must not be unreasonably delayed or
withheld30.
The Contractor’s primary obligation is to carry out and complete the works in accordance with
the Contract Documents within the stipulated time. It also includes to complete any Contractor’s
Design Portion (CDP) included in the contract and to comply with proper instruction of the
architect31. The contractor’s obligation to carry out the works in accordance with the prescribed
standards is generally absolute.
Clause 2.1 (JCT Standard Building Contract) on general obligations states that “the contractor
shall carry out and complete the Works in a proper and workmanlike manner and in compliance
with the contract Documents, the Health and Safety Plan and Statutory Requirements and shall
give all notices required by the Statutory Requirements.”
Question is what is considered work like manner in common law?
The common understanding of ‘workmanship’ in the construction industry concerns the skill and
care exercised by an ordinary competent contractor in the physical execution of work. However,
to the extent that choice of materials is left to the contractor, this may also mean design for
29
John Uff, Construction Law, (11th ed., Sweet& Maxwell, 2013) 390
30
Ibid pg. 390
31
John Uff, Construction Law,( 11th ed., Sweet & Maxwell,2013 ) 382
13
example, suitability of the materials for the purpose for which they have been used. In the
absence of terms to the contrary, the law has for a long time implied a term that the work will be
done in a proper and workman-like manner. It was asserted in the case of Test Valley Borough
Council v Greater London Council32
Materials and workmanship go hand in hand and contractor is under an obligation to ensure
compliance with the specification where materials are specified in the contract. If it states a
brand name or a particular supplier of the material, the contractor would still be under a warranty
that such materials are of good quality when used. This obligation is absolute meaning it is no
defence to the liability for a defect that it was not discoverable even with the most careful
examination. Such warranty of fitness of purpose may also apply if the circumstances indicate
that there was reliance on the contractor’s skills regarding suitability of the materials like the
leaving the choice of the type of material to the contractor. In the case of Young & Marten Ltd
v. McManus Childs Ltd33. The brief facts of the case were that the developers and the main
contractor (the defendants) sub-let the roofing to the plaintiff. Soon after construction, some of
the tiles began to disintegrate. The problem was traced to a batch of the tiles that contained
defects which could not have been discovered even with reasonable inspection. The defendant
sought to recover the costs of re-roofing from the sub-contractor. The plaintiff argued that, since
they had not been relied upon regarding the type of tile and they could not reasonably have
discovered the defects, thus were not liable.
House of Lords held that unless the circumstances of a case are such as to exclude it, there will
be implied into a contract for work and materials a term that the materials will be of good quality
and a further term that they will be reasonably fit for the purpose for which they were used. It
was held that, in this particular case, although there was no obligation for fitness for purpose,
there was still a duty to ensure that the materials were of good quality, as the plaintiff had a
choice whether or not to accept the batch of defective tiles, they were required to inspect them
before acceptance. The plaintiff was thus liable.
However, in circumstances indicating that there is no reliance on the skill and care of the
contractor on the issue of quality, like when the architect gives instruction to receive the
32
(1979) 13 BLR 63
33
(1969) 9 BLR 77
14
materials, the contractor will not be liable for defects in them, the same was the case in
Gloucestershire C.C. v. Richardson34
With regard to CDP Works, the Contractor’s obligation is limited, under Clause 2.19, to that of a
professional designer thus the duty is that of reasonable skill and care.
However, generally on the quality of materials and workmanship, the case of Contract Cotton
v. Wallis35 prescribed that the specification in the contract requires all materials and
workmanship to be the best of their kind and to the full satisfaction of the Architect. The contract
also provided that ‘the contractor shall carry out and complete the works in accordance with this
contract in every respect with the direction and to the reasonable satisfaction of the architect’. It
was held by a majority that it was reasonable for the Architect to accept work and materials not
of the best quality because the contract price was very low.
Substitution of materials is generally prohibited under clause 2.1 however, the construction of a
similar phrase in Leedsford Ltd v. Bradford Corporation36 suggests that such a strategy gives
the Architect absolute discretion whether or not to accept materials of similar specification
offered by the Contractor.
Other obligations of the contractor include;
1. Duty to warn
There are circumstances in which a contractor may be held liable under a construct contract for
design defects on the basis of breach of an implied duty to warn the owner, or his representatives
of design defects. This has however been suggested in case law37 In Equitable Debenture
Assets Corp. Ltd v. William Moss38 Judge Newey QC decided that a contractor owed a duty to
warn of design defects of which the contractor was actually aware. Similarly in Victoria
University of Manchester v. Hugh Wilson 39he held that it is an implied term of a construct
contract that the contractor should warn the employer of defects in the design that he believed to
34
[1968] 1 AC 480; 2 All ER 1181
35
[1955] 1 WLR 1168
36
(1956) 24 BLR 45.
37
David Chappell Understanding JCT Standard Building Contracts (10th Ed., Routledge, New York ,2018 )14-15
38
(1984) 1 Const LJ 131.
39
(1984) 1 Const LJ 162
15
exist. He explained that ‘belief’ in this context required more than mere doubts as to the
correctness of the design but less than actual knowledge of errors.
In certain circumstances the contractor may have a duty to warn the employer if it can be shown
that the employer is placing special reliance upon the contractor this was as in the case
University of Glasgow v. William Whitfield and John Laing 40 the case arose from the
subsequent version of the JCT 63 that expressly imposed obligations to warn after defects had
been detected. The judge however in the case concluded that there was no evidence of such
reliance.
Where the architect is making the original drawings but taking no further part in the project, the
contractor has a duty to warn the employer of any defects. This was deduced from the case of
Brunswick Construction v Nowlan41.
The Supply of Goods and Services Act imposes the contractor’s duty to exercise reasonable skill
and care while performing their construction contract. Thus, the limitation of a contractor’s duty
to warn is where the defects were not easily detectable by a person of skill. Especially those
defects that present a risk of health and safety rather than aesthetic and other defects that affect
the pocket of the employer. This was adopted by Judge Newey in Edward Lindenberg v. Joe
Canning and Jerome Construction Ltd42 where he held that the defendant should have had
grave doubts about the correctness of the information on the drawing, not only from the fact that
so obviously an important structural member as the chimney breast wall was indicated as non-
load-bearing, but also from the fact that 9-inch walls should be required for a non-load-bearing
function. From his previous decisions, he held that the defendants were in breach of an implied
term of the agreement that the defendant should exercise the skill and care expected of an
ordinary competent builder.
A contractor may warn an architect but if such an architect ignores the warning they would be
misguided and no blame can attach to the contractor. There are occasions when there is a danger
of death or injury where it seems that no amount of warning on the part of the contractor will
suffice and only refusal to proceed will discharge the responsibility. This was illustrated in the
case of Plant Construction PLC v Clive Adams Associates and JMH Construction Services
40
(1988) 42 BLR 27
41
(1974) 21 BLR 27
42
(1992) 62 BLR 147
16
Ltd43The Court of Appeal decided unanimously that a contractor was under an implied
obligation to exercise the skill and care of an ordinarily competent contractor and that such an
implied obligation carried with it a duty to warn of danger perceived by the contractor. The
Court further decided that, considering the seriousness of the danger, JMH should have protested
against complying with the instruction in more vigorous terms. The factors considered by the
Court to be crucial were that the works were obviously dangerous and that JMH knew them to be
so.
It is advisable that the warning be in writing.
2. Duty to Indemnify the Employer.
A contractor has a duty to indemnify the employer against any loss, claim expense, liability or
proceedings in any of the following matters;
 Statutory fees/charges under Clause 2.21. Furthermore, the Contractor is required to price
the work in the tender so that the employer does not take any financial risk44.
 the Contractor’s infringement of patent rights in the carrying out of the Works described
in the Contract Bills under Clause 2.22
 Personal injury or death under Clause 6.1. However, if the employer is partly negligent,
the contractor’s liability will be significantly reduced. This has to be drafted in very
precise terms.
 Damage to property under Clause 6.2. The property may be real or personal.
The injury or damage to property of all kinds excludes works and materials on site. The
indemnification is to the extent of negligence or default of the contractor or their persons.
Liability may also extend to undoing works already done, fines or delays.
A cause of action under an indemnity accrues only when the employer’s loss from the relevant
matter is established. This is as asserted in County & District Properties v. C. Jenner & Son
Ltd45 and R. & H. Green Silley Weir Ltd v. British Railway Board46.
43
[2000] BLR 137
44
John Uff, Construction law, (11th ed. Sweet & Maxwell, 2017)391
45
[1967] 2 Lloyd’s Rep.728
46
(1980) 17 BLR 94
17
It is possible for a contractor to incur liabilities for indemnities many years after it occurred. For
example, under the Latent Damage Act 1986, such an action may be brought against the
employer 15 years after the date on which the damage occurred. In practice one who has suffered
personal injury would institute a claim against the employer who then joins the contractor as a
third party. It is important to note that the contractor does not provide indemnity against the
employer’s own negligence.
The employer’s remedy for failure to pay by the contractor will be to sue for damages of breach
of contract.
3) Insurance Obligations of the Contractor
The contractor is required to take out and maintain insurance policies against certain risks.
There are three main types of insurance products available to the construction industry to meet
the risks that may accrue from the industry. They are however not designed to meet the insurance
requirements of any standard form of contract. They include;
(i) Employer’s Liability Insurance- protects the Contractor as an employer of people against
his legal liability for accidents to or diseases sustained by his employees in the course of
their employment. It is compulsory under the Employer’s Liability (Compulsory
Insurance) Act 1969 to ensure that an injured employee, or his dependents, obtains
compensation regardless of whether or not the Contractor has the financial resources to
meet the employee’s claim.
(ii) Public Liability Insurance- Also ‘Third Party Policy’, covers the Contractor’s liability for
injury to or death of people other than the Contractor’s own employees and damage to
property other than the construction works. It therefore covers only part of the Contractor
liabilities47 under clauses 6.1 and 6.2. Sometimes, it is extended to provide the cover
required by Clause 6.5.1.
(iii) Contractors’ All Risk Insurance- covers loss/damage to the Contractor’s construction
works and site materials. The name is a misnomer as no policy covers all possible forms
and causes of loss or damage. Although JCT 05 does not require it, for reasons of
47
Issaka, N. and Michael., The JCT 05Standard Building Contract: Law and Administration, (2nd ed., Elsevier Ltd,
2009) 233
18
prudence, this policy is often extended to cover the Contractor’s temporary
accommodation, plant, tools and equipment.
For insurance purposes, it is important to distinguish between the contractor’s direct employees
and others. Other than the covers listed, there are also the following insurance covers;
a) Insurance for personal injury or death

b) Insurance against damage to property
c) Insurance against the employer’s risks
d) Insurance of works and site materials
e) Insurance of off-site materials.
f) Contractor’s Designed Portion Professional Indemnity Insurance.
a) Insurance for personal injury or death
Contractor’s insurance against this risk must comply with all relevant legislation. The minimum
cover against injury to the Contractor’s employees is stated in the Employer’s Liability
(Compulsory Insurance) Act 1969. The Contractor’s insurance against liability for death and
injury of people other than his own employees should comply with the minimum amount of
cover stated in the Contract.
b) Insurance against damage to property
The Contractor is to take out and maintain insurance against their liability under Clause 6.2. The
amount of cover is subject to a minimum stated in the Contract Particulars.
c) Insurance against the employer’s risks
The Contractor is only responsible for damage to property due to negligence, breach of statutory
duty, omissions or default on the part of the Contractor or of parties for whom the Contractor is
responsible in law48.Where the damage is neither the fault of the Contractor nor professional
negligence, the Employer will have to foot the bill. Clause 6.5.1 envisages that a prudent
Employer may wish to insure against this type of liability. Thus, it should be indicated in the
Contract Particulars that insurance under Clause 6.5.1 may be required including the amount of
48
Issaka, N. and Michael., The JCT 05Standard Building Contract: Law and Administration (2nd ed., Elsevier Ltd,
2009)221
19
cover per occurrence or series of occurrences arising from the same event. Furthermore, the
Architect must instruct the Contractor to take out the insurance. The cost of effecting and
maintaining this category of insurance is to be added to the Contract Sum. Clause 6.5.1 insurance
covers injury and damage to any property caused by collapse, subsidence, vibrations, weakening
or removal of support or lowering of groundwater attributable to the carrying out of the Works.
The clause expressly excludes damage and injury:
● for which the Contractor is responsible under Clause 6.2
● Attributable to defective design (covered by the professional indemnity insurances of the

designers and the Contractor’s Designed Portion Professional Indemnity Insurance)
● which are reasonably foreseeable as the inevitable consequence of the carrying out of the
Works
● to existing structures and their contents if Insurance Option C applies
● to the Works and Site Materials
● covered by any other insurance already arranged by the Employer
● arising from the consequences of war, invasion
This is because they are covered under other covers. The insurance must be in the joint names of
the Contractor and the Employer and placed with insurers approved by the Employer. The
Contractor must send the policy and all premium receipts to the Employer through the Architect.
If the Contractor fails to take out or maintain the insurance, the Employer can arrange remedial
insurance or pay the premiums.49
d) Insurance of works and site materials
There are three alternative clauses for the insurance of the Works and Site Materials: Insurance
Options A, B, or C of the Schedule 3. The decision on which is to apply is contemplated in the
particulars of the contract.
49
Issaka, N. and Michael., The JCT 05Standard Building Contract: Law and Administration,(2nd ed., Elsevier Ltd,
2009)222
20
Insurance Option A is intended for projects involving new work where the intention of the
parties is that the Contractor is the Insuring Party.
Insurance Option B is also intended for new work but where it is the Employer who is
responsible for obtaining the cover. This may appear strange that an Employer should take such
responsibility when it is the Contractor who carries the relevant risk. This arrangement is there to
ensure obtaining of a cheaper insurance considering that the employer is in a position to obtain
cheaper insurance on account of bulk business and the economies of scale.
Insurance Option C is to be used where the Works consist of refurbishment of, or modifications
to, or extension of existing structures. The Employer is the Insuring Party.
e) Insurance of off-site materials
The cover is required for the period commencing with transfer of ownership of the materials to
the Contractor until their delivery to the site. It is further required that the policy protects the
interests of the Employer and the Contractor in respect of the insured risks.
f) Contractor’s Designed Portion Professional Indemnity Insurance
By virtue of the Contractor being under a duty to exercise the standard of skill and care expected
of a reasonably competent architect or another appropriate designer. They would be liable for
any loss or damage caused to the Employer by failure to exercise such skill and care. Depending
upon how the Contract Particulars are completed and commercial availability, the Contractor
would be under a duty to take out insurance against this liability. It is referred to in the Contract
as Professional Indemnity Insurance (PII). The entries called for against Clause 6.11 are
designed to specify the level of cover and the period for which the cover must be maintained
4) Duty to give notices
According to Clause 2.1 of the JCT 05 Standard Building Contract ‘The Contractor shall carry
out and complete the Works in a proper and workmanlike manner and in compliance with the
Contract Documents, the Health and Safety Plan and Statutory Requirements, and shall give all
notices required by the Statutory Requirements.
21
The Contractor is therefore required to give a variety of notices to the Architect and /or the
Employer that serve a number of purposes, including to:
1. Enable the Architect to deal with the matter notified or to take timely and appropriate remedial
action to minimize its negative effects;
2. Alert the Architect to monitor the situation and to collect contemporaneous information with a
view to avoiding future disagreements concerning what actually happened;
3. Allow the Architect properly to keep the Employer informed about the project;
4. Allow the Employer to make necessary arrangements to deal with the notified matter (e.g.
making arrangements for additional funds);
5. Assist the Quantity Surveyor in valuing the Works. 50
Where, in respect of a particular requirement for a notice or a document, the Contract prescribes
the manner of giving or serving it, the Contractor must comply with the prescription. In
situations where the Contract does not state the manner of notice, the Contractor must give the
notice or serve the document by any effective means to the address stated in the Contract
Particulars or any agreed address.
Failure to serve any notice in accordance with the stipulations of the Contract is technically a
breach of contract for which the Employer may claim damages or even terminate the Contract at
common law for a fundamental breach. Also, the Contractor may not be able to enforce his
contractual rights in relation in the matters he failed to notify. For example, under Clause 4.23 of
the JCT 05, it is a precondition for ascertainment of loss and/or expense under the Contract that
the Contractor has made a written application that regular progress is being, or will be,
disturbed.51 In any event, to the extent that the failure to notify prevented operation of the
appropriate contractual machinery, he cannot enforce such operation because it is a long standing
common law principle that ‘no person can take advantage of the nonfulfillment of a condition the
performance of which has been hindered by himself '.
50
Issaka, N. and Michael, R., The JCT 05 Standard Building Contract, Law and Administration(2nd Edition, Elsevier
Ltd,2009)
51
See Ibid
22
In the case of Roberts v. Bury Commissioners, 52An Engineering contract contained an
extension of time clause pursuant to which the architect was permitted to grant an extension of
time for failure to supply directions and drawings to the contactor in good time. There was a
separate forfeiture clause which enabled the employer to terminate the contract if, in the opinion
of the architect, the contractor failed to proceed with due diligence. In the contractor's action for
wrongful termination the employer contended that the architect had certified that the contractor
had not proceeded with due diligence. The contractor's answer to that allegation was that the
delay had been caused by a failure to supply plans and drawings and to set out the land. Since the
delay was caused by the architect, it was held (by a majority of the Court of Exchequer
Chamber) that he could not take advantage of the nonfulfillment of a condition whose
performance was hindered by him.
5) The Contractor’s design responsibility
The term “design” includes decision-making during the drawing up of specifications for the
Works, determination of dimensions, determination of reinforcement needs and choice of
working methods.53 In general, the contractor will have no obligation to, nor liability for, design
under a traditional contract unless the contract documents clearly set out such an obligation and
liability. The wording of Article 1 and Clauses 2.1 and 2.2 of JCT 05 Standard Building Contract
suggests that, except where a Contractor’s Design Portion(CDP) is included in the Works, it is a
construct contract as the Contractor is simply to carry out the works in accordance with the
Contract Documents.54 The Contractor only implements what has been designed. This
proposition is based on a presumed common intention that the contractor is not to be responsible
for a matter on which the employer never placed reliance upon his skills.
Architects often specify items which unavoidably involve design and the contractor secures the
items by means of sub-contractors or suppliers. Problems arise when design defects appear.
Although the sub-contractor or supplier may have design liability to the contractor under the sub-
contract, the contractor does not have the same liability to the employer under the main contract.
52
(1870) LR 5 CP 310
53
See Hudson’s Building and Engineering Contracts, ed. Wallace, I.N.D. (11th edition Sweet &Maxwell, 1995),
paras 4.064 and 4.065
54
Standard Building Contract (2005 edition)
23
The result is that the employer has no remedy except against the architect who should have
arranged things, perhaps by means of a sub-contractor warranty, so that the employer had a
means of redress.
This is what brought about the need for a CDP. Now, the general position has been modified by
SBC, ICD and MWD, all of which provide for a Contractor’s Designed Portion (CDP)
incorporated as part of the contract. There is no longer any necessity to use additional
supplements. The architect should now use the CDP when the supply of such things as roof
trusses, precast floor beams or any other element having a design content is required and which
the architect does not wish to design. It is convenient to consider the CDP in each contract as a
little design and build section.
In the case of John Mowlem & Co. Ltd v. BICC Pensions Trust Ltd &S. Jampel &Partners55it
was decided on the unchallenged assumption that a Contractor under JCT 63, which is virtually
indistinguishable from JCT 05 without a requirement for any CDP on this issue, had no
responsibility for design. A section of the Contract Bills contained a performance specification
which stated: “retaining walls forming external walls to buildings and basement slabs are to be
constructed so that they are impervious to water and damp penetration, and the contractor is
responsible for maintaining these in this condition.” Clause 12(1) of JCT 63, which is similar to
Clause 1.3 of JCT 05, provided that nothing in the Contract Bills was to modify or override the
printed conditions. The action concerned cracking and water penetration that occurred. It was
held that the performance specification imposed a design responsibility on the contractor and that
it was therefore ineffective against Clause 12(1).
6) Duty to comply with Architect’s Instructions (AIs)
Clause 3.10 of the JCT 2011, requires the Contractor to comply with all instructions of the
Architect issued under the Contract.56 The contractor is obliged to obey all instructions given by
the architect that are within the architect’ powers under the contract.57 However, the contractor is
entitled to request from the architect in writing details of the clause of the contract under which
55
(1977) 3 ConLR 63.
56
The JCT Standard Building Contract(2011)
57
David Chappell, The JCT Standard Building Contract 2011: An explanation and guide for busy practitioners
and students (John Wiley &Sons Ltd, West Sussex, 2014)
24
the instructions are given. The architect must answer the request by specifying a clause and the
contractor can choose whether or not to dispute it. If it chooses to dispute it, the matter can be
resolved by adjudication or whichever of the alternative dispute resolution procedures,
arbitration or legal proceedings, are stipulated in the contract. If the contractor chooses not to
dispute the specified clause, the architect is deemed to have properly issued the instruction under
the clause for all the purposes of the contract. This means that the contractor will not be able to
subsequently claim that the architect’s instruction was not validly given.
A very important consideration is sometimes overlooked. The contractor must not comply with
instructions that the architect is not empowered to issue and if it does so, it is in breach of
contract and certainly not entitled to payment. Some of the most problematical issues in contract
administration arise from this duty.
7) Duties relating to the Contractor’s master programme
A properly prepared and updated programme is a very powerful tool for managing a project,
particularly where a method statement is provided with and cross-referenced to it. Such a
programme not only alerts the project participants to the timetable for performance of their
various obligations but also allows analysis and prediction of the impact of any event likely to
cause delay for appropriate control action. A master programme of some sort is normally
submitted with the contractor’s tender.
The Contractor therefore has a duty to provide the Architect with two copies of his master
programme as soon as possible after execution of the Contract as provided for in clause 2.9.1.2
of the JCT 05.58 The Contractor is to amend the programme to reflect any extension of time
granted or any Pre-agreed Adjustment of the Completion Date and supply the Architect with two
copies of the revised programme within 14 days after the granting of extension of time or the
agreement. JCT 98 did not impose any obligation on the Contractor to produce or update a
master programme. The imposition of these obligations by JCT 05 is therefore to be welcomed.
However, the provisions on the Contractor’s programme still suffer from a number of
shortcomings:
58
See Ibid
25
I. There is no indication of the nature of the programme required. It could be a simple list of
activities, a bar chart, a linked bar chart or a Critical Path Method (CPM) network
diagram. Technically, the Contractor would be complying with Clause 2.9.1.1 if he
supplies any form of programme;
II. The programme does not have to be to the satisfaction of the Architect. This means that
the Architect has no effective way of getting the Contractor to amend an unrealistic
programme;
III. The Contractor is not required to amend his master programme for reasons other than
extension of time or a Pre-agreed Adjustment (e.g., for delay due to his own
inefficiency); neither is the Contractor required to give copies of the revised programme
to the Architect if he produces one for such other reasons;
IV. The Contract provides no sanction against failure of the Contractor to comply with his
programming obligations.
8) Obligations with respect of other contractors of the Employer
It is not uncommon for the Contract to be for only a part of a larger project. Clause 2.7 of the
JCT 05 is designed to facilitate other work to be carried out by the Employer or his other
contractors in parallel with the carrying out of the Works. It provides that where such other work
is identified in the Contract Bills with sufficient information to enable the Contractor to carry out
and complete the Works, the Contractor must allow such other work to be carried out. Where the
other work is not so identified, consent of the Contractor must first be obtained but such consent
is not to be unreasonably delayed or withheld if requested. However, withholding consent for
health and safety reasons would be considered reasonable.59
9) Duties with respect to assignment and sub-contracting
Assignment is the transfer of the benefit of an obligation that A owes to B into a benefit from A
to C. This might be an obligation to pay money, construct a building or any other contractual
duty. However, it is important to understand that the nature and content of the obligation cannot
be changed by the assignment. Therefore, if A is obliged to provide B with tiles for his roof, the
59
See Ibid
26
benefit to B is the tiles. A cannot be obliged to provide C, after assignment, with a different kind
of tile even if the tiles that A was obliged to provide to B are not suitable for C.
Where an assignment is involved, neither the employer nor the contractor is entitled to assign the
contract without the written consent of the other as provided for under Clause 7.1 of JCT 05
which states that ‘Subject to clause 7.2, neither the Employer nor the Contractor shall without the
written consent of the other assign this Contract or any rights thereunder’.60
On the other hand, Sub-contracting/sub-letting is when A has an obligation to B and A

delegates the carrying out of the obligation to C. This is frequently done in construction
contracts. Importantly, sub-contracting does not remove A’s obligation to B. If C fails to carry
out the obligation, it is up to A to sort out the problem. Under this system, A is liable for
performance to B and C is liable for the same performance to A. C is not liable to B for any
failure to perform.
In relation to this, the contractor must not sub-let without the architect’s consent. The architect
must not unreasonably delay or withhold consent (SBC and IC/ICD Third parties 37 clause 1.11,
DB clause 1.10 and MW/MWD clause 1.7). A similar condition relating to the consent of the
employer to sub-letting work (3.3.1) and design (3.3.2) is contained in DB16.61 However, there is
no requirement that the contractor must inform the architect of the names of sub-contractors. It is
merely consent to the fact of sub-contracting that is required. Nevertheless, it is probably
reasonable for the architect to refuse to give consent until the name and perhaps other details of
the prospective sub-contractor were made known. If the architect does give consent, the
contractor’s obligations to carry out and complete the Works in accordance with the contract
documents, the construction phase plan and statutory requirements are not affected by sub-
contracting part of the Works. In practice, the architect will normally give consent if the
contractor provides evidence that the proposed sub-contractor is capable of doing the work in
accordance with the contract and the contractor’s programme.62
C) CERTIFICATION AND PAYMENT.

60
The JCT Standard Building Contract (2005)
61
Design and Build Contract 2016
62
David Chappell, Understanding JCT Standard Building Contracts, Understanding Construction Series(10th
edition, Routledge, Newyork,2017)
27
INTRODUCTION.
Certificates.
Chitty in his book Chitty on Contracts describes a certificate as a document that embodies a
decision that requires the exercise of professional skill and judgement on issues that will likely
require subjective assessments. A certificate can also be described as a formal expression of the
architect’s professional opinion.63 It has to be the clear expression of the skill, judgement or
opinion of the architect. The architect is considered as the certifier in construction contracts. In
the case of Sutcliffe v Thackrah,64 the role of the certifier was emphasized by Lord Reid where
he stated:
“The building owner and the contractor make their contract on the understanding that in all such
matters the architect will act in a fair and unbiased manner and it must therefore be implicit in
the owner’s contract with the architect that he shall not only exercise due care and skill but also
reach such decisions fairly, holding the balance between his client and the contractor.”
Form and Validity.
The validity of the contract depends on a number of things. The document must be either headed
certificate or must begin with the words ‘I certify’.65 It is not necessary that the architect must
sign all certificates for them to be valid. A properly authorized person can sign the certificates on
behalf of the architect. For there to be a complete issuing of the certificate, the architect must at
least bring the contents of the certificate to the attention of the employer.66 Once the certificate
has been issued it cannot be withdrawn except in the case of arithmetical and factual errors. The
effect of a certificate will be no more than what the parties have agreed to.
Types of Certificates.
There are various types of certificates and they include;
63
students( 1st Ed. John Wiley & sons Ltd, 2014), pg 63
64
[1974] AC 727
65
David Chappell, Understanding JCT Standard Building Contract, (10th edition, Routledge, New York2018) 75
66
Ibid pg 76
28
a) Non completion certificate.
b) Practical completion certificate.
c) Section completion certificate.
d) Certificate of making good.
e) Certificate following employer’s termination of contractor’s employment.
f) Certificates releasing insurance money.
g) Interim certificates.
h) Final certificates.67
a). Non completion certificate.This certificate is issued by an architect if the contractor has
failed to complete the works within the stipulated time in the contract or by any extended date.
The architect lacks discretion in the matter and the certificate must be issued.68
b). Practical Completion Certificate.
This certificate is issued by the architect when;
 The work is nearly complete except for some minor things that still need to be done and
there are no visible defects.
 The contractor has provided design drawings in connection with the contractor’s design
portion (CDP) work as specified in the contract showing the work as built.
 The contractor has provided information for the health and safety file as CDM
coordinator reasonably requires.
It must be issued as soon as the architect can after ascertaining that all criteria has been met.69
c). Section Completion Certificate.
67
Ibid pg 75
68
students( 1st Ed. John Wiley & sons Ltd, 2014), pg. 64
69
Ibid pg. 64
29
It is the identical certificate of the practical completion certificate except that it is in reference to
practical completion of a section. The criteria for issue is also the same with practical.70
d). Certificate of Making Good.
The architect issues this certificate when all the defects notified to the contractor during the
rectification period and in the schedule sent to him during 14 days after the end of the period
have been made good.71 Defects discovered and notified to the contractor after schedule of
defects has been sent out are not covered by this certificate.72 This certificate is important
because it marks one of the dates starting off the two month period within which the final
certificate must be issued.73
e). Certificate after termination.
Termination of contractor’s employment allows the employer to get another contractor to

complete the work. After completion and making good of defects, an account must be drawn up
and this account reflects;
 All the expenses and direct loss and/or damage caused to the employer by the
termination. It will include the cost of completing the contract, including all professional
fees consequent on the termination, the cost of engaging another contractor and if
appropriate the cost of securing the site after insolvency.
 The amount paid to the original contractor before termination.
 The amount that would have been payable for the Works.74
This account is set out in the architect’s certificate and the certificate may or may not be issued.
This certificate is not like one normally issued during the contract period. It is simply a piece of
paper signed by an architect bearing the words ‘I certify…’
70
students( 1st Ed. John Wiley & sons Ltd, 2014) pg. 64
71
JCT SBC of 2011 clause 2.35
72
ibid 2.39
73
Ibid 4.15.2
74
Ibid 8.7.4
30
f). Certificates Releasing Insurance Money.
If a contractor is to insure new buildings, he must authorize the insurers to pay the insurance
money to the employer. If there is loss caused by one of the insured risks, the contractor is to
notify the architect. After necessary inspection by the insurers, the architect must issue
certificates for payment of all insurance money in installments on dates interim certificates are to
be issued.75
g). Interim Certificate.
This is a certificate that certifies the payment to be made to the contractor. The architect is
required from time to time to issue an interim certificate stating the amount due to the contractor
from the employer and specifying to what the amount relates and basis on which amount was
calculated.76 An interim valuation date is first set and it determines the due date for each interim
payment which is 7 days after the interim valuation date.77 The interim payment must be made
within 14 days from the due date which is 21 days after the interim valuation date. The amount
to be paid must be certified and this is done by the architect. The architect must issue the
certificate not later than five days after the due date and failure to do so renders the certificate
invalid.78 It shall be issued on dates provided for in the contract particulars till the date of
practical completion of the works or the date within one month thereafter.79 They are issued
based on valuation of work carried out and require a full valuation of work properly done,
together with materials delivered to the site. The architect may ask the quantity surveyor to carry
out a valuation not more than seven days before date of issue of the certificate. But responsibility
for correctness on the sum remains with the architect.80
Retention is the amount of money retained by the employer to ensure making good of defects is
carried out. In the amounts to be included in the interim certificate, some are subject to retention
while some are not subject to it. Those subject to retention include;
 Total value of work properly executed.
75
Ibid Schedule 3 paragraph A.4.4
76
ibid 4.9.1
77
Ibid 4.3
78
Ibid 4.10.1
79
Ibid 4.9.2
80
David Chappell, Understanding JCT Standard Building Contracts, (10th edition, Routledge New York2018) 75-76
31
 Total value of materials delivered to site for incorporation, if not premature.
 Value of listed offsite materials.
Those not subject to retention include;
 In respect of payments due to various insurance costs, statutory fees, patent rights,
opening up and testing, contractor suspension, loss and/or expense.
 In respect of restoration, repair or replacement following certain insured loss or damage.
 Fluctuation payments.81
Any additional materials not yet delivered may be included in valuation provided they are listed
in the contract and subject to the conditions stated. Fluctuations can also be included to interim
payments provided that they are in accordance with the contract.
h). Final Certificate.
It must be issued not later than 2 months from the latest of these events;
 End of rectification period.

 Issue of certificate of making good.
 Date the statement and ascertainment is sent to contractor.
Date of issue depends on the contractor’s timely and adequate provision of sufficient details to
the architect. The final certificate shall state;
 The adjusted contract sum.

 The amounts previously certified.
 The balance expresses as either a sum due to the employer or sum due to the contractor.82
The one who owes the other after the balance has been calculated must pay the outstanding
balance within 28 days of the date of issue. Not later than five days before the final payment of
the balance, the employer may give written notice to the contractor which shall specify any
81
David Chappell, Understanding JCT Standard Building Contracts, (10th edition, Routledge New York 2018) 76
82
Ibid 4.15.2
32
amount proposed to be withheld and grounds for the withholding should be given. Unless any
dispute resolving mechanism has been commenced by either party within 28 days of the date of
issue83, the final certificate is conclusive evidence that;
 Where the quality or standard of materials, goods or workmanship are expressly stated to
be a matter for the contract administrator’s satisfaction, he/she is satisfied.
 The contract terms requiring adjustment of contract sum have been correctly applied.
 All due extensions of time or adjustments to the completion date have been given.
 Reimbursement of loss and/or expense is in final settlement of all and any claims the
contractor may have.84
A final certificate is considered conclusive evidence that the work has been well done. In the
case of Kaye v Hosier and Dickison85, an architect gave his final certificate under a JCT
contract during the course of court proceedings concerning some defects. The certificate was
held to have the effect of preventing the employer from claiming that the work had been
executed poorly. Lord Pearson held that:
“…If in a contract such as this the parties agree that the architect’s final certificate shall be
conclusive evidence of certain matters, I do not think there is any invasion of the court’s
jurisdiction or any affront to its dignity. The court’s function in a civil case is to adjudicate
between the parties, and if they have agreed that a certain certificate shall be conclusive evidence
the court can admit the evidence and treat it as conclusive.”
PAYMENT
Introduction
The Standard Building Contract is known as a lump sum contract. The contract sum refers to
the tender value, tendered price, contract value or project value as agreed and signed between the
contractor and the owner86 . The owner has a duty to pay the total agreed lump sum. This is
despite any defects that may be present in the work but which do not go to the root of the
contract. In the case of Hoenig v Isaacs87the court held that the entire performance of the
83
Ibid 1.10.2
84
Ibid 1.10.1
85
[1972] WLR
86
The National Construction Authority Regulations ,2014 section 2
87
Hoenig v Isaacs [1952] 2 All ER 176
33
contract was not a condition precedent to payment. However, it is only upon completion of the
construction that the contractor is discharged from his duties and entitled to payment. In the case
of Sumpter v Hedges88 the contractor was to carry out a construction for a lump sum. The
contractor did not complete the construction and the owner had other contractors take it up. The
court held that the only payment the contractor was entitled to was that involving building
materials belonging to him.
The contract sum should not be altered or adjusted in any way as stated under JCT Building
Contract clause 4.2 unless provided for in the conditions of the contract. Clause 4.4 of SBC 05
require these changes to take immediate effect .The changes are to be reflected in the subsequent
interim certificate. Permissible changes can be classified under89:
1. Reimbursement of the contractor for certain expense caused by the contract administrator,
employer, or certain events outside the control of the contractor. This may be in cases where
disruption is caused by the employer or the employer fails to cooperate with the contractor90.
2. Payment for extra work brought about by a contract administrator’s instruction.
3. Reimbursement of extra expense brought about by market fluctuations affecting the

contractor’s inputs.
The contractor is entitled to the contract sum only upon completion of substantial work. Notably,
interim payments are made to ensure cash flow to the contractor in order to carry out the
construction91.
Major terms in payment under the Standard Building Contract
 Due date – This refers to the date by which the interim certificate ought to have been
issued by the architect92.This date may be set out in the contract or may be on a monthly
basis until the construction is complete.
 Interim Application – This is an application made by the contractor to the quantity
surveyor not less than seven days before the due date. It stipulates the sum that is due on
88
[1898] 1 QB 673
89
John Murgoch & Will Hughes, Construction Contracts Law and Management (4th edition, Taylor and
Francis,2008) page 237
90
JCT SBC 05 Clause 4.23-4.26
91
David Chappelle, The JCT Standard Building Contract 2011 (1st edition, Wiley Blackwell,2014)page 255
92
JCT SBC 2011, Clause 4.9.1
34
the due date and the way it can be calculated. Failure of the architect to issue an interim
certificate makes the interim application an interim pay notice. The owner is then
required to pay the sum stated therein93
 Interim pay notice – This is issued to the quantity surveyor by the contactor within 5
days after the due date upon failure of the architect to issue an interim certificate. It
includes the amount payable and the calculation. The employer is then required to pay
this amount94.
 Final payment date- Refers to the 14 days from the due date within which payment
ought to have been made by the owner. It may be postponed to the number of days in
which the interim application was given by the contractor after the expiry of the 5-day
period of the due date95.
 Pay less notice – Is a notice that is to be given not less than 5 days before the final date
of payment when the owner is unsatisfied by the amount which is to be paid to the
contractor. It must state the amount the employer considers due and the basis for its
calculation96.Consequently, this notice cannot be issued unless the interim certificate has
been issued first97.
 Final payment certificate – Given by the architecture upon completion of the
construction.
 Final payment notice- Issued by the contractor upon failure of the architect to issue the
final payment certificate within two months of completion.
THE PAYMENT PROCESS
Issue of interim certificate
Clause 4.9.1 of the SBC provides that the architect shall from time to time issue the interim
certificate which indicates the amount payable to the contractor by the employer and the basis for
the calculation. This duty of the architect renders him liable if one of the parties suffer due to his
negligence in the valuation98 .Interim certificates are to be issued on the dates provided for in the
contract particulars. Where specification has not been made in the contract, the payment is to
93
Ibid clause 4.11.1,4.12.3
94
David Chappelle, The JCT Standard Building Contract 2011 (1st edition, Wiley Blackwell,2014) 242
95
ibid
96
David Chappelle, The JCT Standard Building Contract 2011 (1st edition, Wiley Blackwell,2014) 243
97
JCT ,SBC 2011,Clause 4.13.1.3
35
take place on a monthly basis. The amount stated in the certificate, not the amount of work done,
determines the sum that is due99
Issuance of Interim application100
This is made by the contractor to the quantity surveyor not less than seven days before the due
date. It shows the sum due on the due date and the way in which it can be calculated. Failure of
the architect to issue an interim certificate within five days from the due date, it becomes an
interim payment notice. The owner is hence obligated to pay the amount stated in the payment
notice.
Final payment101
The contractor must provide the architect with all the documents that are reasonably required for
the final adjustment of the Contract Sum. The contractor may send them either before practical
completion or the last section completion certificate, but no later than six months afterwards. The
quantity surveyor, under the instruction of the architect is to calculate the loss or expense
incurred by the contractor. The contractor may issue the quantity surveyor with his version of the
calculations .However, the quantity surveyor is expected to have kept a version of their
calculations of the expenses in the construction. The quantity surveyor is to prepare a statement
of the losses and expenses incurred as well as the adjusted contract sum. The architect must send
this copy to the contractor within three months of receipt of the information from the contractor.
In theory, the whole process should take 9 months from practical completion. But if the
contractor is unreasonably late in sending its documents, it cannot expect the architect to adhere
to this timetable.
Pay less notice102
This may be given by the owner where the owner wishes to pay less than the amount stated in
the interim certificate or the interim payment notice. It is to be issued not less than five days
98
See Sutcliffe v Thackrah [1974] All ER 319 which stated that the architect is to exercise due care and skill and a
balance of both the contractor and the client.
99
See Rupert Morgan Building (LLC)Ltd v Jervis [2003] EWCA Civ 1563 where the court held that where a sum
had been certified for payment ,the certification itself was sufficient to give contractor right of payment.
100
Clause 4.11.1,4.12.3
101
David Chappelle, The JCT Standard Building Contract 2011 (1st edition, Wiley Blackwell,2014) at page 245
102
Clause 4.12.5,4.13.1.3
36
before the final date of payment. It states the amount the owner considers due and the basis for
its calculation. It may be given to the contractor on behalf of the employer by the architect. The
contract clearly states that this notice cannot be issued before an interim certificate is issued.
Interest
Interest becomes payable when the amount either in the interim certificate or interim payment
notice is long overdue. This is taking into account any pay less notice by the employer that has
been issued within the prescribed period. The amount chargeable is 5% which becomes
chargeable at the date when the payment became overdue103.
VARIATIONS
The definitions of ‘variation’ encompasses changes to the design, to the material specification,
removal of work properly executed and changes relating to access to the site and working
conditions104.The ways in which variations may occur are105:
1. Clients may change their minds about what they asked for before the work is complete
2. Designers may not have finished all of the design and specification work before the contract
was let.
3. Changes in legislation and other external factors may force changes upon the project team.
Clause 5.6 provides for the guidelines where the additional or substituted work can properly be
valued by measurement. However, this clause applies to work that has not been altered or
modified in any other way than in quantity106. To the extent a variation cannot properly be
measured, it is to be valued on the basis of prime cost or day works. Where a variation relates to
Contractor’s Design Portion (CDP) work, additional or substituted work is to be valued
consistent with the value of similar work set out in the CDP analysis making allowance for
significant changes107.
103
Clause 4.12.6
104
Francis,2008) 239
105
Ibid page 238
106
Clause 5.6.1.5
107
John Uff, Construction Law (12th edition, Sweet &Maxwell, London, 2017) 467
37
However, there are limitations to the variations. They cannot go beyond the scope of the contract
original contract. In the case of Blue Circle Industries plc v Holland Dredging Company
(UK) Ltd, 108the use of the dredge material to build an artificial island was held to be beyond the
scope of a variation.
FLUCTUATIONS
The contract provides for a fluctuation clause in order to reimburse contractors for changes in
input prices over which they have no control over. However, where the fluctuation is the fault of
the contractor’s delay, the clause will not apply109.Clause 4.21 brings into operation the
fluctuation clause and states that the fluctuations shall be dealt with in accordance with the
following alternatives110:
Option A: Contributions, levy and tax fluctuations. This clause applies to items which are
affected by the government and are thus completely beyond both the control and the prediction
of the contractor.
Option B: Labour and materials cost and tax fluctuations. This covers the market costs of input,
such as wage rates and prices of materials.
Option C: Use of price adjustment formulae. This is a completely different type of calculation. It
incorporates by reference a set of formula rules which define a technical financial calculation
based on a wide variety of categories.
Option A is referred to as limited fluctuations while options B and C are referred to as full
fluctuations
RETENTION
In construction, it is a common practice for the owner to retain some money from each interim
certificate until practical completion is achieved. The retention on fund is intended to be
available to each employer for the purposes of underpinning contractual performance, in
108
(1987) 37 BLR 40
109
Francis,2008) 245
110
Ibid
38
particular rectifying, or inducing contractor to rectify, any defects in the work appearing during
the defect’s liability period111.
Clause 4.10.1 and 4.20 of the Standard Building Contract illustrate how a retention scheme
operates. It states that the owner is entitled to deducting the agreed retention amount before
practical completion is achieved. Rules to the ascertainment of the retention fund are specified
under clause 4.20. It is stated that the retention percentage will be agreed within the contract.
However, the default contract under the SBC is 3%. After the issuance of the certificate of
practical completion but before the issue of the certificate of making good, the owner is required
to reduce the deduction by one half. Under clause 4.9.2 the remaining amount is to be issued
either at the end of the rectification period or upon the issuing of the certificate of making good,
whichever is the later.
Clause 4.18.1 provides that the owner’s interest in the retention money is that of a fiduciary
relationship. The owner holds the money in trust for the contractor without an obligation to
invest. In the case of Rayack Construction v Lampeter Meat112, the court issued an injunction
over the retention money as there were concerns that the defendant was undergoing financial
difficulties. This action by the contractor protected them from the possible insolvency of the
owner. Consequently, both the owner and the contractor are cushioned from each other’s
insolvency under this contract.
D) DISPUTES.
In Contractual relations, it’s inevitable for disputes to occur ranging from payment by the
employer to the quality of work done by the employee113.They arise when one or both of the
parties become intransigent from a behavioral point of view but definitely when the argument
revolves around rights and is justiciable114.In the 1980s, innumerable construction disputes arose
due to the adversarial nature of contract terms, cases of arbitration and litigation occurred with
111
Francis,2008) 246
112
(1980)12 BLR 30
113
John Uff, Construction Law, Law and Practice relating to Construction Industry (11th Ed., Thomas Reuters,
London 2013) 400.
114
John Murdoch and Will Hughes, Construction Contracts Law and management (4th Ed. United States of America
2008) pg. 347
39
contractual disputes becoming expensive and time consuming for all parties to resolve.
Arbitration and litigation as dispute resolution methods could not be launched until project
completion was achieved. Michael Latham115, termed the procedure as adversarial, ineffective
and incapable of delivering for its customers116.
Following the concerns by Michael Latham, the Housing, Grant, Construction and Regeneration
Act (HGCRA) came into force in 1996, allowing disputes to be addressed in a more faster way
e.g. through adjudication117, which is available at any time. The Act also paved way for parties to
resort to formal dispute resolution at a time of their choosing, either before or after practical
completion118.
Section 9 of the contract119 provides four methods of dispute resolution namely:
 Mediation.
 Adjudication.
 Litigation.
 Arbitration
A.) MEDIATION.
Mediation is provided in clause 9.1 of the Contract, which states that ‘… by agreement, the
parties may choose to resolve any dispute or difference arising under the Contract through the
medium of mediation. ..’ 120Mediation, being a form of Alternative Dispute Resolution, is a
process that involves a neutral mediator finding middle ground between the position of the
parties with the aim of achieving a negotiated solution acceptable to all parties121.This means that
the mediator does not come to a decision nor does he/she give an opinion directly on the merits
115
Michael Latham, Constructing the Team: Joint Review of Procurement and Contractual Arrangements in the
United Kingdom Construction Industry, (1st edn , United Kingdom,1994) pg. 87 Available at
https://constructingexcellence.org.uk/wp-content/uploads/2014/10/Constructing -the-team-The-Latham-Report.pdf
Accessed on 7-October-2022.
116
Dean Suttling, The Housing, Grant, Construction and Regeneration Act (HGCRA) and the Scheme for
Construction Contract, 2020 Available at https://c-link.com/blog/the-housing-grants-construction-and-regeneration-
act-hgcra-and-the-scheme-for-construction-contracts/ Accessed on 7-October-2022.
117
ibid
118
N1 pg. 400.
119
Ibid
120
N2 pg. 357.
121
N1 pg. 64.
40
of the case but simply suggesting a solution to the disputing parties. The role of the mediator also
includes separate and private negotiation with each party in order to discover what each party is
willing to settle on. The actual settlement is achieved by a legally enforceable contract 122setting
out the terms agreed and once the settlement is reached, it is binding on the parties to the
contract and precludes further proceedings resulting from the same concluded matter.
Mediation, compared to arbitration and litigation, which are cost heavy and uncertain in
outcome, provides a forum in which the commercial decision-makers assess their case against
that of the other sides. It also gives broader range of outcomes, some of which may be much
more suited to the parties’ commercial objectives, which may include a desire for ongoing
commercial relationships rather than a black-and-white finding of damages due123.
It is also imperative to note that for mediation to take place, all parties must have given their
consent for the dispute to be referred to mediation, the mediation procedure as often termed, is
also described to be a confidential124 process, barring the mediator from disclosing the contents
of the dispute. But in some instances, exceptions may be made regarding confidentiality. In Firm
Assist V Minister for the Environment125, a party to mediation sought to set aside the contract
of settlement entered into under economic duress. A witness summons was issued against the
mediator compelling her to give evidence. This was resisted on the basis that the mediator’s
agreement with the parties precluded her from being called as a witness. It was held that the
interests of justice prevailed over the mediator’s terms and the witness summons would not be
set aside126.
122
ibid
123
Richard Wilmot-Smith QC , Construction Contracts, (3rd Ed. London 39 Essex Street Chamber, United Kingdom,
2014) 517
124
See Cumbria Waste Management ltd, Lakeland Waste Management Ltd V Baines Wilson, [2208] EWHC 786
(QB), [2008] BLR 330, where the court was asked to order disclosure of mediation papers on the application of a
party which had played no part in the mediations in question .Applicants had settled their disputes with DEFRA
about payments allegedly due to them. They then sued their solicitors for alleged negligence in connection with the
negotiation and drafting of the original agreements, arguing that disputes had arisen because of ambiguities in the
drafting of documents. The solicitors sought for an order of the court for the disclosure of documents used in
mediation, which were relevant in their defence. DEFRA refused to issue such disclosure, whose decision was later
supported by the court since documents emanating from mediation were not to be disclosed due to the without-
prejudice rule.
125
[2009] B.L.R 399
126
N1 pg 64.
41
Mediation services are also offered by various institutions e.g. Centre for Effective Dispute
Resolution (CEDR), International Chamber of Commerce (ICC) and the London Court of
International Arbitration (LCIA).
B.) ADJUDICATION.
In adjudication, a neutral third party is appointed by the parties as an adjudicator. The

adjudicator has mandate to give an interim decision which binds the parties for the duration of
the contract, after which a party is at liberty to take the matter to arbitration or courts.
Adjudication proved to be a light at the end of the tunnel for subcontractors and contractors who
were unable to obtain payment for work carried out127. This is because, adjudication operated
under the policy of “pay now, argue later”, which was a radical change from the old position of
‘complete the work first and, if you are financially strong enough, litigate to receive the price
later.’128
With regard to an award of costs, sub-contractors, as a term of the sub-contract, were required to
pay the costs either of the adjudicator or of the contractor whatever the outcome of the
adjudication. But with the new Local Democracy, Economic Development and Construction Act,
2009 that amended the HGCRA of 1996, Section 108A provides that any agreement as to costs is
ineffective unless it relates to the appointment of the adjudicator’s fees.
Article 7 and Clause 9.2 of the contract, provides that any party may (at any time) refer a
dispute to adjudication in which case the statutory scheme is to apply. The adjudicator or the
nominating 129body is to be that stated in the Contract Particulars130. The right to invoke
adjudication is also set out in Section 108 of HGCRA, 1996 which states that;
“Section 108(1) a party to a construction contract has the right to refer a dispute arising under
the contract for adjudication under a procedure complying with this section.”
Where the contractual terms in writing do not invoke adjudication as a form of dispute
settlement, or where an appropriate set of rules governing adjudication is not met, parties are
127
N1 pg 67.
128
N11 pg 542.
129
Scheme for Construction Contracts (England and Wales) Regulations 1998
130
N1 pg. 400.
42
bound to subject to the Scheme for Construction Contracts131.Section 108(2) of the HGCRA132,
provides for rules which must be met for a complete adjudication process to be carried out.
However, in JCT SBC 05, the whole adjudication procedure has been omitted133.Clause 9.2 of
the contract states that statutory adjudication scheme, shall apply subject only to certain
provisions which relate to the nomination of adjudicators and in cases of opening up or revising
any certificates issued under the contract.
Enforcement of an Adjudicator’s decision.
Section 108(3) of the HGCRA, 1996 requires that the contract should provide for a requirement
that an adjudicator’s decision is binding on the parties before the dispute is referred to other
methods e.g. legal proceedings or arbitration. An adjudicator’s decision is still enforceable
despite containing an error, if the matter in question fell within the adjudicator’s jurisdiction.
Even if the adjudicator has answered the correct question wrongly, his decision is still
enforceable134.
In Austin Hall Building V Buckland Securities135, where the defendant contended that the
effect of the adjudication was to deny them a fair trial. They contended specifically that they had
not had a proper and equal opportunity to present their case or a reasonable time within which to
respond to the claim against them. The Judge, Bowsher Q.C held that the adjudicator had not
acted in a way incompatible with the Convention since, by virtue of the 28 day time limit, he
could not have acted differently. It was also held that the adjudicator’s decision is not directly
enforceable like a judgment or award, since an adjudicator’s decision was enforceable by a
summary judgment.
In Macob Civil Engineering Limited V Morrison Construction Limited,136 the usual remedy
to enforce an adjudicator’s decision on payment of a sum of money will be to issue proceedings
claiming the sum due, followed by a summary judgment. The case sought to adopt a purposive
approach, seeking to give effect to the perceived intention of the HGCRA Dyson J. said,
131
N2 pg. 363
132
1996
133
N 19
134
N1 pg. 77
135
[2001] BLR 272.
136
[1999] BLR 93
43
“It, is clear that Parliament intended that adjudication should be conducted in a manner which
those familiar with the grinding detail of the traditional approach to the resolution of
construction disputes apparently find it difficult to accept. But parliament has not abolished
arbitration and litigation of construction disputes; it has merely introduced an intervening
provisional stage in the dispute resolution process. Crucially it has made it clear that decisions
of Adjudicators are binding and are to be complied with until the dispute is finally resolved.”137
Appointment of an adjudicator is also made by a selection from various bodies138 e.g. The Royal
Institute of British Architects, the Royal Institute of Chartered Surveyors and the National
Specialist Contractor’s Council.
C). ARBITRATION
Arbitration may be defined as a private procedure for settling disputes whereby a dispute
between parties is decided judicially by an impartial individual or a panel of individuals
appointed for that purpose.139 An arbitrator does not have to possess any particular skills or
qualifications unless they are specified in the agreement to resolve disputes by arbitration. In
most cases, a person is appointed to act as an arbitrator on the strength of his expertise and
experience in the subject matter of the dispute.
Most of the law on arbitration is enshrined in the Arbitration Act (AA) 1996, Part I of which
applies where the seat of the arbitration is England and Wales or Northern Ireland.140
Before you can have an arbitration, you must have an agreement to arbitrate. An arbitration
agreement is an agreement to submit to arbitration present or future disputes; those disputes can
be of any nature and do not have to be contractual.141 There have been oral agreements to
arbitrate, but they are so rare as to be for practical purposes non-existent. This is all the more the
case now that the Arbitration Act 1996, which governs all arbitrations in England and Wales,
provides that an arbitration agreement is made in writing if;
137
N1 pg. 76
138
Issaka Ndekugri and Michael Rycroft, The JCT O5 Standard Building Contract Law and Administration (2nd Ed.
United States of America ,2009) 472
139
David Chappell, The JCT Design and Build Contract( Third Edition, united kingdom 2005) pg 255
140
See s. 2(1) of AA 1996. Scotland has adopted the Model Arbitration Law of the United Nations Commission on
International Trade Law most of which is also adopted in the AA 1996.
141
Section 6, arbitration act 1996
44
(a) it is made in writing; or
(b) it is made by an exchange of communications in writing; or
(c) it is evidenced in writing; or
(d) it is not made in writing but is made by reference to terms which are in writing, or
(e) It is made orally and the parties exchange written submissions in arbitration or legal
proceedings and an arbitration agreement is alleged by one party and not denied by the other
party.
. If the parties have agreed that the method of binding dispute resolution will be arbitration, a
party who attempts to use legal proceedings instead will fail in a costly way if the other party
relies on section 9 of the Arbitration Act 1996. Thus in Ahmad Al-Naimi v. Islamic Press
Agency Incorporated ,142 it was observed that Section 9 requires the court to grant a stay of
legal proceedings until the arbitration is concluded unless the arbitration is null, void, inoperable
or incapable of being performed. The court has no discretion about the matter and the successful
party will claim its costs. The result is not only that the party intent on legal proceedings will
have to revert to arbitration, but it will have to pay the other party’s legal costs in opposing the
legal proceedings
The first step for any employer, contractor, or sub-contractor when involved in a dispute is to
check whether the dispute is governed by an arbitration agreement.
In many jurisdictions, if a dispute is subject to an arbitration agreement the courts will refuse to
hear the case. In England and Wale, if a court action is begun then the defendant may apply for
stay of action and the stay will be granted unless the applicant has taken steps in the proceedings
to answer the substantive claims or the arbitration agreement is null and void or otherwise
incapable of being performed.
Arbitration Procedure
The first matter for consideration is whether the arbitration is subject to a particular set of rules
or whether the arbitration and the procedure is left in the hands of the arbitrator and the parties.143
More and more arbitration clauses provide that the arbitration should be subject to specific rules.
142
Ahmad Al-Naimi v. Islamic Press Agency Incorporated CA[2000]28
143
Richard Wilmot-Smith QC , Construction Contracts, (3rd Ed., London 39 Essex Street Chamber, United
Kingdom, 2014) 631
45
This is a trend which has accelerated over the last 25 years. Now common standard forms, such
as the JCT each provide that the arbitration is subject to rules.
Other arbitrations, often called 'ad hoc' arbitrations, stem from arbitration agreements which are
contained within a set of contract conditions which in turn provide only that all disputes shall be
referred to the arbitration of a person to be agreed between the parties or, failing an agreement,
someone nominated by particular nominating body. The most popular nominating bodies for
domestic (non-international) arbitrations are in construction disputes are;144
(a) The Royal Institution of Chartered Surveyors;
(b) The Royal Institute of British Architects;
(c) The Institution of Civil Engineers; and
(d) The Chartered Institute of Arbitrators.
Once a dispute is established, the aggrieved party should serve a notice specifying the dispute
and inviting the other party to agree their choice of arbitrator.145 This was held by the court in the
case of Taylor Woodrow Construction v RMD Kwikform ;146 The claimant engaged the
defendant for design, supply and erection of scaffolding roads and onto a railway line. This led to
a claim by the claimant of 600,000 pounds while as the defendant claimed 180,000 pounds as the
sum due under the contract. The claimant’s solicitors wrote to the defendant enclosing a draft
particulars of the claim. The letter enquired whether the defendant wished to on clause 26 of the
standard conditions of subcontracts which provide that a dispute should be referred to arbitration
or whether it would be agreeable to the matter being litigated.
The claimant commenced high court proceedings and the defendant sought to stay proceedings
to arbitration under section of the Act. The claimant applied for the appointment of an arbitrator
and an arbitrator was appointed but the court was supposed to determine whether the receipt of
the letter was sufficient.
144
Ibid 632
145
Commonly called a ‘notice of dispute’ or a notice ‘to concur in the appointment of an arbitrator’ Arbitration Act
1996, s14
146
Taylor Woodrow Construction v RMD Kwikform Ltd [2008] EWHC 825 (TCC)
46
It was held that if the parties agreed that arbitral proceedings shall be commenced on receipt by
the other party of a notice referring the dispute to arbitration that is sufficient to be an agreement
as to when arbitration proceedings are to be regarded as commenced.
If a settlement is reached in arbitration, the final arbitral award is taken to be binding and an
appeal to that award lies in the court.147
(D). LITIGATION
Generally, the court has the power to settle disputes between individuals.148 Furthermore, the
parties often need the court to enforce settlements reached by the other techniques like
arbitration. Article 9 of JCT05 is a non-exclusive jurisdiction clause (i.e. the parties are not
limited to resolving their disputes in only the English courts). A party may choose to bring
proceedings in the court of another country provided the jurisdiction of that other court can be
established by the law of that country.
Construction litigation which litigation by or against contractors, sub-contractors and

construction professionals usually take place in the Technology and Construction court (TCC)
which is a branch under Queen’s Bench Division of the High Court.149
The types of cases tried by the TCC are numerous and are not limited to cases involving
construction and engineering. Nevertheless, the core disputes which are tried in the TCC and are:
(a) Claims for damages for breach of contract or negligence arising out of work not being
carried out in accordance with the contract or negligently done work. The most frequent
type relates to defective work which leads to a failure in the building requiring expensive
remedial work. The most frequent types of claim will be by the building owner against
the contractor or the contractor against the sub-contractor.
(b) Allied with the claim against the builder is a claim by the building owner against the
professional. Most frequently this involves poor inspection or supervision of construction
or poor design.
(c) Claims by contractors or sub-contractors for payment of sums due under the contract.
147
Ibid
148
David Chappell, The JCT Design and Build Contract( 3rd Ed. United Kingdom 2005) 249
149
Richard Wilmot-Smith QC , Construction Contracts, (3rd Ed. London 39 Essex Street Chamber, United Kingdom,
2014) 652
47
(d) Claims for enforcement of decisions by adjudicators.
(e) Applications under the Arbitration Act 1996.
Procedure in civil litigation in the County Court, High Court and the Court of Appeal is
governed by the so-called Civil Procedure Rules (CPR). The overriding objective of the CPR, as
stated in Rule 1.1, is to ensure that cases are dealt with justly. The litigation is governed by the
TCC protocol which sets out how construction cases are to be handled. 150
Compliance with the Pre-Action Protocol

This protocol is designed to encourage greater contact between the parties at the earliest
opportunity for the purpose of sharing information relevant to the dispute, thereby promoting
settlement without litigation or speedier court proceedings in relation to the issues on which
settlement could not be reached. It requires parties at the pre-action stage of their dispute to
follow a procedure involving a Letter of Claim, Letter of Response and Pre-Action Meeting as
vital signposts.151
The purpose of these steps is to ensure that, before court proceedings commence, the claimant
and the defendant have a reasonable amount of information on their respective positions on the
issues in the dispute. It also encourages them to meet and, if necessary, to carry out further pre-
action investigation to fix any gaps in the information necessary to dispose of the dispute without
the need for the proceedings. 152
The first step is where the claimant or their solicitors send a letter of claim to the defendants153.
The letter of claim should contain the addresses of both parties, a clear summary of the facts, the
basis of each claim, the nature of the relief they claim and a list of witnesses and any other
evidence to be relied on during the trial.154
150
David Chappell, The JCT Design and Build Contract (3rd Ed, United Kingdom, 2005) 486
151
Richard Wilmot-Smith QC , Construction Contracts, (3rd Ed, London 39 Essex Street Chamber, United
Kingdom,2014) 654
152
Richard Wilmot-Smith QC , Construction Contracts, (3rd Ed. London 39 Essex Street Chamber, United Kingdom
2014) 376
153
TCC Protocol, paragraph 3
154
Ibid pg. 655
48
After receipt of the letter of claim, the defendant must acknowledge the Claim Letter within 14
calendar days after its receipt. In the acknowledgement document, the defendant may raise any
objection to the commencement of the proceedings on account of lack of jurisdiction of the
court, the existence of an arbitration agreement covering the dispute or other valid ground. If the
defendant fails to serve any acknowledgement, the claimant may curtail further compliance with
the Protocol and commence the proceedings.
Within 28 days after receipt of the Letter of Claim the defendant must serve a Letter of Response
and Counterclaim, if any.155 With the agreement of the claimant, this period may be extended to a
maximum of 3 months. If the Letter of Response is not served on time, the claimant may go
ahead with the proceedings without further compliance with the Protocol.
It is an expectation that the parties will meet within 28 days after the claimant’s receipt of the
Letter of Response. The objective is the same as exchange of correspondence and should take
place without prejudice156. This meeting should normally be attended by a senior representative
of each party, their legal advisors and, where relevant, insurers. It affords them the final
opportunity, with the knowledge of the dispute outlined in the correspondence, to craft a solution
to the problem that does not require litigation. They should now know in some detail what their
differences are. Alternatives to litigation available to resolve the dispute should then be explored.
In the event that they conclude that litigation is inevitable, they should consider the most sensible
and cost-effective way of managing the impending proceedings.
Notes of the meeting must be taken and kept, as any party who attended it is allowed to inform
the court what happened in the meeting so that the court may consider appropriate sanctions
where there was unreasonable conduct.157 The meeting is, however, ‘without prejudice ’in that
any admissions of liability must not be disclosed and, if disclosed, must be ignored by the court
in deciding the case. The rationale for this principle is that a party who compromised in the
interest of amicable settlement should not be penalized by the court for doing so.158
155
TCC Protocol para 4.2.1
156
TCC Protocol, para 56
157
TCC Protocol, para 5.8
158
Penny Brooker and Anthony Lavers, ‘Construction lawyers ’ experience with mediation post-CPR ’ (2005) 18
Const LJ 97-116.
49
One the questions that the courts face is awarding cost to the winning party. In McGlinn v.
Waltham Contractors and Others, 159 the court answered this question in the affirmative. The
justification given for this position was that it would be contrary to the whole purpose of the
Protocol if claimants are penalized for not pursuing in litigation claims they had included in the
pre-action correspondence. For the same reason, a defendant who lost in the proceedings is not
entitled to recover its cost of defending allegations not pursued in the proceedings. In recognition
that this position is open to abusive use to oppress, the court stated that gross misconduct in
pursuing highly speculative claims would be liable to be punished.
The court may grant summary judgement without trial.160 Summary judgement enable a court
either of its volition or on application of a party, to dispose a claim, a defence or a particular
issue without full trial. For this to happen two conditions must be satisfied;
 The court considers either that the claimant has no real prospect of success on the claim,
or that the defendant has no real prospect of success on the defence; and
 There is no other reason why the case should go to a full trial.
Does a similar form or tribunal exist in Kenya?

In Kenya there exists the Joint Building Construction Council that is registered as a company
founded by the Architectural Association of Kenya (AAK) and the Kenya Association of
Building and Civil Engineering Contractors (KABCEC) in 1980.161
They are mandated to monitor and review developments in the building and construction
industry. They also publish relevant sets of contract documents, forms and guidelines relating to
building and construction industry.
In Kenya, with regards to a form similar to the Standard Building Contract form, the Joint
Building Council Contract formulated by the Joint Building Construction Council applies.
However, there are other regulatory institutions that on which the construction industry is
founded. They include;
159
[2005] EWHC 1419 (TCC); BLR 432.
160
CPR, part 24
161
https://jbcc.or.ke <accessed on 8October2022>
50
a) The National Construction Authority established under Section 3 of the National
Construction Authority Act162.Some of the functions of the Authority as listed in
Section 5 are to;
(i) promote and stimulate the development, improvement and expansion of the
construction industry
(ii) advise and make recommendations to the Minister on matters affecting or
connected with the construction industry
(iii) undertake or commission research into any matter relating to the construction
industry
(iv) prescribe the qualifications or other attributes required for registration as a
contractor under this Act
(v) assist in the exportation of construction services connected to the construction
industry
(vi) provide consultancy and advisory services with respect to the construction
industry
(vii) promote and ensure quality assurance in the construction industry
(viii) enforce the prescribed Building Code in the construction industry
(ix) encourage the standardization and improvement of construction techniques and
materials
(x) initiate and maintain a construction industry information system
(xi) provide, promote, review and co-ordinate training programmes organized by
public and private accredited training centres for skilled construction workers and
construction site supervisors
(xii) accredit and register contractors and regulate their professional undertakings
(xiii) accredit and certify skilled construction workers and construction site supervisor
(xiv) Develop and publish a code of conduct for the construction industry and to do all
other things that may be necessary for the better carrying out of its functions
under the Act.
The underlined functions of the Authority also align with the function of the JCT of representing
the wide interests in the building and construction industries. That is why we cannot look at the
162
No.41 of 2011 [Rev 2020]
51
Joint Building Construction Council in isolation. Furthermore, by virtue of Section 43 of the Act,
the Act is the mother law of all matters concerning construction. This is because, in case of any
conflict with the provisions of other Acts on the training, registration and regulation of
contractors and construction workers, this Act prevails.
b) Building Surveyors Registration Board as established under Section 3 of the Building
Surveyors Act163. The functions of the Board are listed in Section 4 of the Act. Primarily,
it is responsible for registering and regulating the activities and conduct of building
surveyors who are also important assents in the building and construction industry.
c) Section 3 of the Architects and Quantity Surveyors Act164 provides for the establishment
of a Board of Registration of Architects and Quantity Surveyors. Its mandate is to
regulate the professions of Architecture and Quantity Surveying through training,
registration and enhancement of ethical practice165.
163
No. 19 of 2018
164
Cap. 525 Laws of Kenya
165
https://boraqs.or.ke
52

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PHYSICAL PLANNING AND CONSTRUCTION LAW

CDP Contract Designed portion

JCT Joint Contract Tribunal

THE STANDARD BUILDING CONTRACT

Background of the SBC

The Joint Contract tribunal

Attributes of a deed include:

Contents of the Standard building contracts are:

iii. Preparation of Contract Bills & Employers Requirement

iv. Contract Bills and CDP Documents—errors and inadequacy

a. Construction information and Contractor’s master programme

b. Information Release Schedule

c. Further drawings, details and instructions23

d. Control of the Work 24

e. Access for Architect/Contract Administrator 25

Question is what is considered work like manner in common law?

Other obligations of the contractor include;

It is advisable that the warning be in writing.

2. Duty to Indemnify the Employer.

3) Insurance Obligations of the Contractor

a) Insurance for personal injury or death

b) Insurance against damage to property

c) Insurance against the employer’s risks

● for which the Contractor is responsible under Clause 6.2

● Attributable to defective design (covered by the professional indemnity insurances of the

● to existing structures and their contents if Insurance Option C applies

● to the Works and Site Materials

● covered by any other insurance already arranged by the Employer

● arising from the consequences of war, invasion

d) Insurance of works and site materials

e) Insurance of off-site materials

f) Contractor’s Designed Portion Professional Indemnity Insurance

4) Duty to give notices

5. Assist the Quantity Surveyor in valuing the Works. 50

5) The Contractor’s design responsibility

6) Duty to comply with Architect’s Instructions (AIs)

7) Duties relating to the Contractor’s master programme

9) Duties with respect to assignment and sub-contracting

On the other hand, Sub-contracting/sub-letting is when A has an obligation to B and A

C) CERTIFICATION AND PAYMENT.

Form and Validity.

There are various types of certificates and they include;

b). Practical Completion Certificate.

This certificate is issued by the architect when;

c). Section Completion Certificate.

d). Certificate of Making Good.

e). Certificate after termination.

Termination of contractor’s employment allows the employer to get another contractor to

g). Interim Certificate.

 Total value of work properly executed.

Those not subject to retention include;

h). Final Certificate.

 End of rectification period.

 The adjusted contract sum.

2. Payment for extra work brought about by a contract administrator’s instruction.

3. Reimbursement of extra expense brought about by market fluctuations affecting the

Major terms in payment under the Standard Building Contract