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The JCT Design and Build Contract is a widely used UK standard form where the contractor takes responsibility for both design and construction.
Offers cost and programme certainty, with a single point of responsibility, but requires a clear and detailed specification from the employer.
Key clauses cover design obligations, payment terms, completion, defects, and termination.
The contract is generally acceptable to funders, provided it is supplemented with appropriate protections like collateral warranties, step-in rights, and security documents.
Legal advisers commonly assist with tailored amendments, risk management, and alignment with funding and commercial goals.
The JCT Design and Build Contract is suitable where the employer wants the contractor to take responsibility for both finalising the design and delivering the construction.
Under the Design and Build model, the employer provides a set of Employer’s Requirements, defining their needs, objectives, and performance criteria. The contractor responds with Contractor’s Proposals, setting out how those requirements will be met. These documents become binding once incorporated into the contract. It’s most effective when the employer has:
A clear performance brief
A desire for price and programme certainty
A preference for reduced interface risk between designers and builders
The contract is widely accepted across the UK property and construction sectors.
Where employers/developers prefer a streamlined procurement route with clear delivery obligations.
Where main contractors have an in-house or managed design capabilities.
For funders and lenders requiring reliable structures and third-party protections
Potentially simpler and preferable approach for property development where purchasers and tenants who may benefit from collateral warranties or future rights
Design Responsibility - contractor assumes responsibility for completing the design based on the Employer’s Requirements. The obligation is usually to a reasonable skill and care standard; imposing fitness for purpose increases contractor risk and may require additional insurance.
Employer’s Requirements - functional, aesthetic, and performance requirements.
Planning and Statutory Approvals - requiring the contractor to comply with all applicable laws, including building regulations and planning consents.
Price and Payment - usually based on a lump sum with staged interim payments. Adjustments can be made for variations, delay, or unforeseen conditions. Includes retention provisions, typically 3–5%, released at practical completion and the end of the defects period.
Completion and Practical Completion - practical completion marks when the works are complete except for minor snags and defects and triggers the release of retention and the start of the defects liability period (usually 6 or 12 months). Delays beyond the agreed date attract liquidated damages (pre-agreed compensation).
Snagging and Defects - contractors must complete all works to a satisfactory standard and remedy any defects or snags identified during the defects period. A schedule of defects may be issued near the end of the defects liability period, requiring prompt rectification.
Variations - employer may instruct changes; these may entitle the contractor to additional time or payment. It’s essential to follow formal variation procedures to avoid disputes over scope creep.
Extensions of Time - if a relevant event (e.g., weather, changes, delays by the employer) occurs, the contractor may claim more time. Entitlement to loss and expense may also arise from certain events.
Termination - whether for insolvency, material breach, or prolonged suspension of works. Termination provisions deal with payment for completed works, recovery of materials, and post-termination liabilities.
Dispute Resolution - default mechanisms include adjudication, arbitration, or litigation. Parties can amend this clause to require mediation first, or nominate a specific adjudicator or body.
Capping liability, both generally and for specific heads (e.g. delay, defects)
Liquidated damages levels and enforcement rights
Control of variations and evidential thresholds for time/money claims
Collateral warranty obligations and their timing
Dispute resolution processes, especially for high-value or complex projects
Contractors typically negotiate to:
Exclude responsibility for inadequacies in Employer’s Requirements.
Widen the definition of Relevant Events to include client delays, approvals, and force majeure.
Cap exposure to liquidated damages and indirect loss.
Clarify their liability in relation to novated designs or retained consultant work.
Reflect PI insurance exclusions or coverage limitations directly in the contract.
Funders generally accept the JCT as a starting point but will almost always require quite significant additions and amendments such as :-
Step-in rights via direct agreements
Collateral warranties or third-party rights from the contractor and key parties
Design liability and insurance clarity, especially for professional indemnity
Defined completion dates and capped risk exposure
Funders may also want to approve key documents like the Employer’s Requirements and schedule of amendments before funding is released.
Although the contractor is responsible for design, the employer must provide:
A detailed Employer’s Requirements document
Clear expectations for performance, quality, layout, compliance, and finishes
Any mandatory systems or suppliers
Weak Employer Requirements can lead to cost disputes, disappointing outcomes, or even design gaps. Lawyers and technical consultants should review these before contract execution.
Often required in addition to the contract:
Collateral Warranties or third-party rights schedules
Parent Company Guarantees
Novation agreements for consultants
Programme and milestone schedules
Insurance documentation and responsibility matrix
ESG plans, digital collaboration protocols, or sustainability trackers
Whether acting for employer or contractor, it is essential to scrutinise the documents, align expectations early, and consider tailored amendments where appropriate. With the increasing complexity of projects and evolving legal frameworks, specialist advice remains a critical safeguard. We support clients by :-
Drafting and negotiating contract amendments, warranties, and funder agreements
Reviewing Employer’s Requirements to reduce ambiguity and risk
Advising on appropriate performance security and insurance arrangements
Ensuring funder compliance and step-in protections
Managing risk allocation around design responsibility, delays, and variations
Advising on dispute resolution and contract administration
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Solicitor - Construction & Engineering
Daniel is a Consultant.
He is a Construction & Engineering law specialist and covers the full span of construction matters across a range of sectors including private wealth, office, living, logistics, hospitality & leisure and energy &am...
