On 24 June 2016, JCT issued their newest edition of the JCT MW contracts – one of their most popular products. The changes to this contract are not major – they are a tidy up and twiddle round the edges.
The most important changes are those to the payment provisions as they now include monthly payments throughout construction and defects periods, an interim valuation date and a contractor application for payment (clauses 4.3, 4.4) with revised payment and pay less notice provisions (clauses 4.5 and 4.6).
The changes encompass:
- reference to the 2015 CDM Regulations (sixth recital) and associated terminology changes (eg article 4)
- clauses to make the contract more easily used by public sector bodies eg reference to the Public Contracts Regulations (termination rights under clauses 6.6 and 6.10, supplemental provisions 7 and 8)
- a new over-arching clause on consents and approvals not being unreasonably delayed or withheld (clause 1.7)
- a discretionary right to liquidated damages (‘the Employer may require the Contractor to pay pay‘, clause 2.9.1 – previously ‘the Contractor shall pay to the Employer‘)
- practical completion to be dependent on providing as built drawings and documents as well as the CDM paperwork (clause 2.10)
- clarifying that an instruction NOT to make good defects permits the Employer to make ‘an appropriate deduction from the Contract Sum‘ (clause 2.11)
- ensuring that subcontracting design is covered by the requirement for consent (clause 3.3.1)
- revised definition of a variation (clause 3.6.1)
- new mutual obligations to pay interest on late payments (clause 4.6.1, previously JCT MWD only referred to the Employer)
- new drafting covering liability for existing structures and a right to terminate (clauses 5.2 and 5.7; see also clause 5.4B)
- changes to deal with insurance for works on a multi-let property (clause 5.4C)
- provisions relating to insurance claims (clause 5.6)
- revised definition of insolvency (clause 6.1).
There have also been minor changes to simplify the wording but phrases such as ‘the Contractor shall thereupon notify‘ (clause 2.8) remain a thorn in JCT’s drafting. Parties deserve clarity and the lack of time limits in JCT procedures creates flexibility but also confusion.
There are no changes to deal with the use of Building Information Modelling.
The improvements are not enough to make this contract simple to read, understand and use (56 pages of booklet) but will avoid some of the changes lawyers currently insist on making to its text.
NB clauses references are from JCT MWD 2016