This overview provides a comparison of the NEC and JCT forms of contract. Both NEC and JCT contracts are standard forms of contract that are part of standard families for procuring works or consultancy services (JCT), goods, works or services (NEC). Each has an allocated person to act on behalf of the employer (contract administrator in JCT, project manager in NEC). They both include obligations relating to time, cost and quality, although the explicit requirements are quite different, NEC includes procedures providing for a more proactive and collaborative approach to managing the contract and requires the parties to follow these procedures. Key NEC drafting features centre around flexibility, clarity and simplicity, and a stimulus to good management.
NEC
- Standard form of contract
- Part of standard family for procuring works
- Designed for international use ‘with a choice of governing law and language’
- Suite of contracts specifically designed to stimulate good management, for clarity and flexibility
- Drafting in plain English – attempts to eliminate the use of legal terms and instead provides for simple language, and gives words their natural meaning.
- Provides for a person to act on behalf of the employer should the employer not have appropriate people in-house in
terms of capacity or capability (the Project Manager) - Provide for an employer to state a starting date, a completion date, access dates and any sectional completion (if required)
- Allows for damages to be included for late completion by the contractor
- Demands a more detailed set of documents that make up the programme to be submitted at the regular basis prescribed by the
employer - Early warning process where both the project manager and contractor are required to notify each other of any matter which could affect time, cost or quality
- Provides for the price payable to the contractor to be based on Bills of Quantities
- Adds further options of lump sum or cost based open-book contracts (cost reimbursable, management contracting or target cost contract)
- Provides for change control (compensation events)
- Deals with the effects of time and cost together
- Anticipates that the precise employer quality requirements are stated in a separate technical document
- Allows for employer-design, contractor-design or part and part
- Identifies a state at completion which is defined within the works information
- Provides for searching for defects
- Deals with the contractor’s responsibility for correcting defects and the contractor’s failure to correct any defects
- Obligation on both contractor and supervisor to notify each another of defects as soon as they are aware of them
- Provides a process for accepting any contractor’s defects
JCT
- Standard form of contract
- Part of standard family for procuring works
- Described as a ‘traditional’ contract, for use in UK domestic projects, not internationally
- Provides for a person to act on behalf of the employer should the employer not have appropriate people in-house in
terms of capacity or capability (the Contract Administrator) - Provide for an employer to state a starting date, a completion date, access dates and any sectional completion (if required)
- Allows for damages to be included for late completion by the contractor
- Requires the contractor to submit a master programme for execution of the works as soon as
possible after the contract is executed - The contractor is only obliged to claim for more time and money after the risk event has
occurred - Provides for the price payable to the contractor to be based on Bills of Quantities
- Provide for lump sum or other arrangements
- Provides for change control (variations/claims)
- Splits up the components of time and cost, dealing with them and their sub-parts independently at
various stages after the change arises - Anticipates that the precise employer quality requirements are stated in a separate technical document
- Provides separate contracts for employer-design or contractor-design
- Relies upon a subjective judgement of Practical Completion determined at the time
- Provides for instructions to open up works for inspection
- Makes the contractor responsible to provide workmanship in accordance with the contract
- Provides a process for accepting any contractor’s defects
