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This Article was published in Contract Journal, 23 April 2008, page 27
Time to change to standard contracts
It was most interesting to hear the Confederation of Construction Specialists' view that changes to standard contracts cost the industry £18bn a year (CJ 26 March 2008).
If this figure is correct, it is a significant expenditure that offers very little value. Standard forms of contract are produced to minimise transaction costs and reduce the learning curve, but their use at sub-contract level is very patchy. As acknowledged in the article, JCT produces a suite of subcontracts for use with its main contracts. These contracts provide for a fair apportionment of risk and should generally require little or no amendment.
There is a strong case for the industry to move towards more general adoption of standard subcontracts that are not amended or, if they are, not in a way to increase cost to the industry and its users.
Professor Peter Hibberd
Secretary General
JCT