Completion and claims under JCT Design and Build

The rectification period provides the contractor with a period of time after practical completion in which he or she can return to the site and remedy any of the defects in his or her work. This gives the contractor an opportunity to rectify any defects using his or her knowledge of the site and enables him or her to ensure costs are kept to a minimum. The length of the rectification period is governed by the period inserted into the contract particulars, which will usually be 12 months.

Following expiry of the rectification period, the employer has 14 days to issue a schedule of defects and the contractor has a reasonable time after receipt of this schedule in which to make good the defects at no cost to the employer (clause 2.35).

Following this period the contractor will still be liable for any inherent defects which become manifest but he or she will not have a right to access the site to rectify them without the employer's consent.

Late completion and liquidated damages

If the contractor does not complete the works or a section by the completion date (as stated in the contract particulars), the employer may claim liquidated damages at the rate specified in the contract particulars (clause 2.29.2). Liquidated damages must be a genuine pre-estimate of the loss otherwise they may be construed as a penalty which may be contractually unenforceable.

Liquidated damages can only be claimed by the employer if they have, first, issued a non-completion notice and, second, given written notice that they may require payment of liquidated damages, before the due date for final payment.

To claim liquidated damages the employer must issue a notice no later than 5 days before the final date for payment, stating that he or she intends to either obtain payment from the contractor or withhold or deduct monies due to the contractor, at the rate stated in the contract particulars.

Extensions of time

If it becomes reasonably apparent that there will be a delay to the completion date for the works, the contractor must give the employer written notice of such delay (clause 2.24). If applicable, this notice should specify whether the reason for the delay is due to the occurrence of a relevant event (as listed under clause 2.26).

If a relevant event has occurred, the contractor must provide the employer with the particulars of it and the effect that the delay will have on the programme for the works (clause 2.24).

The employer will then consider whether they intend to grant an extension of time in respect of each relevant event and notify the contractor of his or her decision, no later than 12 weeks following receipt of the particulars or before the completion date (clause 2.25).

In considering the material circumstances claimed by the contractor within their notice and particulars, the employer is to give fair and reasonable extensions of time where necessary.

Contractors should ensure that they notify all delays to the employer as any failure to do so may constitute a breach of contract and affect the decision of the employer to grant an extension of time.

Loss and/or expense

To claim for direct loss and/or expense the contractor must make a written application to the employer in accordance with clause 4.20. The contractor should not delay in making any application and should provide supporting evidence of the anticipated loss, as a failure to do so may preclude the award of an amount for direct loss and/or expense.

Before making an application, the contractor should consider whether he or she has a remedy under any other provision of the contract. If there is an entitlement to recover under another provision of the contract the clauses regarding claims for loss and/or expense cannot be relied upon by the contractor.

An application can be made if the work being undertaken by the contractor has been materially affected by one of the relevant matters listed under clause 4.21.

If the contractor's claim is successful the amount granted will not amend the contract sum but it will instead be added to it (clause 4.22). The contract provides for this in article 2 by reference to 'such other sum as shall become payable under this contract'.

The government’s fair payment charter principals have impacted the loss and expense provisions of the new 2016 suite. The 2016 suite requires claims and potential claims to be notified at the earliest opportunity supported by monthly updates from the contractor. The contract administrator or other party managing the contract must assess a claim within 28 days and on receipt of any additional information form the contractor will be required to respond within a period of 14 days.