JCT Intermediate Building Contract 2011 - what's new?

The principal implication of not adopting the 2011 edition of the JCT Intermediate contract is non compliance to the Local Democracy, Economic Development and Construction Act 2009’s requirements for payment terms. A contract made after 1 October 2011 will not comply with the act if it purports to set due dates for payments by reference to the giving to the payee of a notice.

The IBC 2005 edition provided that the final date for payment of sums certified in both interim and final certificates would be a set number of days from the issue of the certificate. This would fall foul of the new regime and would necessitate use of the provisions of the Scheme for Construction contracts.

The previous edition should therefore be used with care. Its use is not likely to invalidate or avoid the contract entirely, but the parties’ express rights as recorded in the contract are not likely to reflect the true provision. If any of those clauses are susceptible to challenge under the new regime, the parties’ rights will instead be contained in the Scheme for Construction contracts.

Parties and their advisors should also be aware that if old editions of the IBC are used, some of the parties’ statutory rights will not be referred to at all in the contract. For example, there will be no reference to the payee’s entitlement, in the event that the party who is due to pay him fails to issue a payment notice, to serve his own payment notice on the payer (under the Construction Act 1996, s.110B) or of the contractor’s right to claim from the employer any reasonable expenses that he incurs as a result of the lawful exercise of a right to suspend performance (Construction Act 1996, s.112(3A)).