In response to the construction industry’s request for further guidance on amendments to new contracts to tackle COVID-19’s impact, the Construction Leadership Council has today published its “Future Proofing Guidance: JCT/NEC Contract Amendments” available here.
The publication builds on the CLC’s previous guidance emphasising the importance of complying with any obligations in respect of contract administration in respect of the risks of COVID-19 on projects. It provides useful starting points for amendments to the unamended JCT Design & Build Contract 2016 and the NEC 3 & 4 Engineering & Construction Contract standard forms. Armed with this guidance, parties can then adapt the amendments to suit the actual wording of their underlying contracts/subcontracts/consultancy agreements.
The CLC’s future-proofing guidance assumes that the contract programme and contract sum/prices do not already allow for COVID-19 related delays/costs. Three options are catered for:
- the grant of an EoT;
- the grant of an EoT plus payment of all the Contractor’s loss and expense incurred in dealing with COVID-19; and
- the grant of an EoT plus the Contractor to be paid a predetermined percentage of the loss and expense incurred.
In the event of a further wave or further delays caused by COVID-19 then the amendments allow for termination in certain circumstances, the final formulations of which will need to be informed by the contract’s treatment of COVID-19 related delays and costs.
Practical points to keep in mind include:
- agreeing commercially how COVID-19 related delays and costs should be addressed before amendments (or further amendments) to the contract are prepared
- using a deed of variation when making changes to existing contracts to mitigate the risk of arguments further down the line
- checking what (if any) allowances have already been made for COVID-19 related delays and costs (e.g. in the contract programme and the contract sum/prices) since any newly-introduced drafting will need to dovetail with these
Contract drafting and amendments are core support activities we provide at Constructive Law; contact us for a no obligation discussion to establish what amendments would support you to manage the legal risks in your business.
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