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JCT or NEC Contract, what is the difference?

16 April 2023

JCT or NEC Contract, what is the difference?

When embarking on a construction project, one of the most important decisions to make is which building contract to use. Two of the most commonly used building contracts in the UK are the Joint Contracts Tribunal (JCT) and the New Engineering Contract (NEC). While both contracts aim to provide a clear framework for construction projects, there are some key differences between them.

The JCT contract is a traditional building contract that has been used for over 100 years. It is often used for smaller-scale projects, such as residential or commercial buildings, and is widely understood within the construction industry. The JCT contract places an emphasis on the role of the architect or engineer in overseeing the project and ensuring that it is delivered on time and within budget.

In contrast, the NEC contract is a more modern contract that was first introduced in the 1990s. It is often used for larger, more complex projects, such as infrastructure or public sector projects. The NEC contract places an emphasis on collaboration and communication between the parties involved in the project, with a view to ensuring that the project is delivered in a timely and cost-effective manner.

One of the key differences between the JCT and NEC contracts is the level of detail that they provide. The JCT contract is often seen as more prescriptive, with a greater focus on the specific details of the project. This can be beneficial for smaller projects where the requirements are relatively straightforward. However, for larger, more complex projects, the level of detail provided by the JCT contract can be restrictive and may not allow for the flexibility needed to manage the project effectively.

The NEC contract, on the other hand, is often seen as more flexible, with a focus on the overall goals of the project rather than the specific details. This can be beneficial for larger projects where the requirements may be more complex and where there is a need for greater collaboration and communication between the parties involved.

Another key difference between the JCT and NEC contracts is the way in which they allocate risk. The JCT contract is often seen as more traditional in its approach to risk allocation, with the contractor taking on a greater share of the risk. This can be beneficial for clients who are looking for greater security and assurance that the project will be delivered on time and within budget.

In contrast, the NEC contract is often seen as more balanced in its approach to risk allocation, with the parties involved sharing the risk more evenly. This can be beneficial for both clients and contractors, as it allows for a more collaborative approach to managing risk and can help to ensure that the project is delivered in a timely and cost-effective manner.

In conclusion, both the JCT and NEC contracts provide a clear framework for construction projects. The key differences between the two contracts lie in their level of detail, approach to risk allocation and emphasis on collaboration and communication. While the JCT contract is often used for smaller, more straightforward projects, the NEC contract is often preferred for larger, more complex projects where collaboration and flexibility are key. Ultimately, the choice of which contract to use will depend on the specific requirements of the project and the preferences of the parties involved.

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