On August 21, 2024, the Joint Contracts Tribunal (JCT) published 2024 updates to the Standard Building Contracts and associated sub-contracts suite. This follows the release of earlier updates, such as the Design & Build Contract, Minor Works Contracts, and Intermediate Building Contracts. Changes made in the Standard and Intermediate Building Contracts appear to be generally consistent with updates to the Design & Build Contract, including the introduction of gender-neutral language and provisions for electronic communications. Additionally, contractors are now required to provide information on the environmental impact of goods and materials and are required to suggest economically viable modifications to reduce environmental impact.
One notable change is the elevation of the “good faith” obligation from a supplemental provision in the 2016 suite to a core clause across the 2024 contracts. Other revisions include, a confirmation that liquidated damages cannot be levied in respect of any period following termination, more detailed compensation provisions upon termination, an expanded definition of insolvency, and an enhanced design obligation—though fitness for purpose design obligations are expressly excluded in the “with design” versions.
The 2024 contracts also introduce provisions regarding extensions of time for events like epidemics and changes in law, which generally align with updates made in the Design & Build Contract. Additionally, the Standard Building Contract contains specific timelines for the Architect or Contract Administrator to request further details for time extension decisions. In this regard, the Architect/Contract Administrator is required to notify any further particulars required to make an extension of time decision within 14 days from receipt of the contractor’s initial notice and, to notify any award within eight weeks from receipt of such particulars. On the other hand, the Intermediate Building Contracts uses a more simplified approach for handling time extensions.
The use of JCT Standard Contract Forms in Nigeria
JCT standard form contracts are generally acceptable locally especially for private projects and remains one of the more common international contract forms used in Nigeria[1]. However certain challenges persist with the use of the JCT standard form contracts in Nigeria. Firstly, the JCT contracts are based on UK law, particularly English contract law, and contain expectations that may not align with Nigeria’s legal framework or court systems. For example, terms regarding dispute resolution, delays, or termination may need modification to be enforceable or effective under Nigerian law. Also, JCT contracts are designed for markets with advanced construction sectors. In Nigeria, the local construction environment often features informal practices, labour shortages, and procurement inefficiencies. These factors could lead to difficulties in adhering to the rigid processes of a JCT contract, such as timelines for claims, variations, or payments. Finally, JCT contracts may not fully account for the specific political and economic risks faced in Nigeria. Provisions relating to price extensions of time or compensation for unforeseen events (such as force majeure) might require adaptation to local conditions.
Final Comments
To fully leverage the benefits of JCT contracts, Nigerian projects would require improved project management practices, including better procurement processes, contractor performance tracking, and dispute resolution mechanisms. Legal experts familiar with both JCT contracts and Nigerian law should adapt the contract terms to align with local regulations. For instance, issues like adjudication or arbitration clauses may need to be modified to ensure they are enforceable under Nigerian law. There may also be a need to customise provisions, such as those related to insurance, environmental regulations, or building safety, to reflect Nigerian market realities, such as gaps in infrastructure and regulatory enforcement.
[1] Other standard form contracts used in Nigeria’s construction industry include (a) the International Federation of Consulting Contracts Engineers Forms (the FIDIC Books); (b) The Standard form of Building Contract in Nigerian 1990 (SFBCN); (c) The General Conditions of Contract for the procurement of works, 2011 (the GCC) and; (d) Federal Ministry of Works Contract, which is a variant of the JCT.
This publication is not intended to provide legal advice and is not prepared with a specific client in mind. Kindly seek professional advice specific to your situation. You may also reach out to your usual Balogun Harold contact or contact us via support@balogunharold.com for support.
