Homeowners are getting a mature, attractive new contract
A new standard form of building contract always causes a ripple of excitement in the still waters of construction law but Tony Bingham, arbitrator, adjudicator and columnist for another well read rag, was positively beside himself. 'Have you seen the new JCT contract for homeowners?' he asked. 'It's gorgeous, absolutely gorgeous!' Later that day I got my hands on a copy. Gorgeous? It certainly didn't look it. No well- cut cover to turn my head, no muscular embellishments to admire, no suggestively chunky pages, no bulging clauses, no ... but enough. It is in fact a modest little chap, simply entitled 'Building Contract for a home owner/occupier': more Woody Allen than Chippendale. It is slim, comprising eight pages of contract, a page or two of guidance notes aimed at both the homeowner, or 'customer' and the builder, and a letter of introduction from the jct's chairman. The jct, it seems, is rather proud of its boy. It recognise that building works cause upheaval in the home and believes that its useful new contract will help to make things run smoothly - is it Paul Daniels then?
The jct are particularly pleased that, as a result of using crisp clear language and avoiding technical and legal jargon, the contract has won the Plain English Campaign's Crystal Mark. A touch of Andrew Motion? The guidance notes advise the customer to obtain three quotations and to discuss the work with the builder beforehand. 'A good builder,' the customer is told, 'will always want to do his best for you, right from the start.' The builder is reminded that what is simply another job for him is a worrying time for the customer. Thus introduced and advised, the parties are sent off with the new contract and the chairman's best wishes 'for a trouble free and successful contract'.
So what are the prospects for this plain-speaking, no nonsense little fellow? It comprises two parts. The arrangements section describes the works with reference to the quotation, drawings or specification (tick which apply). The builder is to obtain planning permission, building- regulation approval and party-wall consents, unless otherwise agreed. The contract indicates which facilities the contractor is allowed to use, recognising the grief caused by unauthorised use of the power supply, the telephone and even, it seems, the loo. The contract price is described in six paragraphs and clarifies the very contentious matter of vat. What is called 'the working period' can be defined by a finishing date or by a period in weeks. This can be extended to accommodate delay caused by the customer, in which case the builder is entitled to 'his reasonable costs'. Insurance cover is provided by the builder. The working hours are defined.
The contract provides for disputes and gives the parties the option of starting court proceedings or appointing an adjudicator under the schemes run by the riba or rics. Interestingly, they do not have to decide between litigation and adjudication or the riba or the rics at the time. The adjudication option is an innovation since adjudication under the Housing Grants etc Act is expressly excluded where the contract is with a residential occupier. The conditions define the rights and obligations of the parties further and cover such things as variations ('changing the work details'), extensions of time ('extending the working period') and determination ('bringing the contract to an end'). It also spells out the six- year limitation period for claims by the customer for faulty work, something that you won't find expressed in any other contract. Importantly, although the customer can recover compensation in the event of breach by the builder, there is no equivalent of the liquidated damages clause. What is the verdict - gorgeous or what?
Well, it depends how you like your contracts really. Ultimately, the omission of liquidated damages reveals a pro-contractor bias. Homeowners can seldom establish any financial loss caused by delay and are deprived of the one incentive which operates upon the builder to get the job done. Nevertheless, its commonsense approach reveals insight and experience: both attractive qualities (which usually come with age). So we're talking more Harrison Ford than Leonardo di Caprio here or maybe the worldly wise Frasier. Either way it is not at all bad.