JCT contracts explained — a plain English guide

A JCT contract is a standard form building contract — a pre-written legal agreement that sets out the rights and obligations of both the client and the contractor. JCT contracts are drafted by a panel of industry experts representing clients, contractors, subcontractors, and professional bodies, which means they are balanced and have been tested extensively in the courts. The alternative — a bespoke contract written by one party — is almost always weighted in favour of the party who wrote it. A contractor who presents you with their own two-page contract has written it to protect themselves, not you. A client who insists on their own contract terms may inadvertently create unreasonable obligations that lead to disputes. JCT contracts are available to purchase from the JCT website and from legal publishers. They are not expensive — the Building Contract for Homeowner/Occupier costs around £30. This is one of the best £30 you can spend on any construction project.

JCT produces different contracts for different types of project and procurement route. The most relevant for private clients are: The Building Contract for Homeowner/Occupier (HO/C) is designed specifically for private homeowners employing a contractor directly without a professional contract administrator. It is written in plain English, relatively short, and covers the most common issues that arise in residential projects. This is the right contract for most homeowners. The Minor Works Building Contract (MW) is suitable for smaller commercial or residential projects where a contract administrator — typically an architect — is appointed to manage the contract. It is more detailed than the Homeowner contract and provides stronger protections for both parties. The Intermediate Building Contract (IC) is for medium-sized projects, typically £500,000 to £5 million in value, with full design documentation. The Standard Building Contract (SBC) is for larger projects and is the most comprehensive and detailed of the JCT forms. For most private homeowners, the Homeowner/Occupier contract is appropriate. For developers and those with an architect or project manager in place, the Minor Works or Intermediate contract are more suitable.

Whatever form of JCT contract you use, there are several key provisions that every client should understand before signing. The contract sum is the agreed price for the works. Under a fixed price contract, this is what you pay — subject only to agreed variations and any provisional sums. Provisional sums are estimates for items where the scope or cost cannot be determined at contract stage. They are adjusted up or down in the final account based on the actual cost. Always understand what is a fixed price and what is a provisional sum in your contract. The completion date is the date by which the contractor must complete the works. The contract should include provisions for what happens if the contractor overruns — typically liquidated damages, which are pre-agreed daily or weekly sums deducted from the final payment. The defects liability period is the period after practical completion during which the contractor is obliged to return and fix any defects at their own cost. Under JCT this is typically six or twelve months. Retention is a percentage of each interim payment that is held back until practical completion and the end of the defects liability period. This gives the client financial leverage to ensure defects are addressed. Practical completion is reached when the works are complete in all material respects, even if minor snagging items remain. It triggers the release of retention and starts the defects liability period.

The most common situation where construction disputes escalate into litigation is where the parties have no contract, or a poorly drafted one. Without a clear contract, there is no agreed process for handling variations, no defined completion date, no retention mechanism, and no dispute resolution procedure. When something goes wrong — and on any significant project, something always goes wrong — the absence of a contract means the parties fall back on arguing about what was agreed. This is expensive, time-consuming, and unpredictable. A JCT contract does not prevent disputes, but it provides a clear framework for resolving them. Both parties know their rights and obligations. The variation process is defined. The dispute resolution mechanism is agreed in advance. This makes disputes easier and cheaper to resolve.

Most homeowners sign whatever contract their builder presents without reading it carefully, or agree to work on a handshake with no contract at all. Either approach leaves them significantly exposed. Before any significant construction project, insist on using a JCT Homeowner/Occupier contract. If your contractor is reluctant, this is itself a warning sign. Any legitimate contractor who is confident in their work should welcome the protections a standard contract provides — for both parties.