Construction contracts formalise a project and reduce room for uncertainty or misinterpretation of the intention by the client; therefore – get it clear, and get it in writing. This is the advice from Herman du Randt, senior associate at PH Attorney’s dispute resolution division. 

Du Randt told the OFM Business Hour whilst clients may question the necessity or even the type of contract they may need for their construction project, having the right contract in place for your project, which may be as small as building a house, reduces room for confusion, uncertainty, and any legal dispute.

Recommended forms of construction contracts 

Du Randt said there are four recommended standard forms of contract in South Africa according to the Construction Industry Development Board (“CIDB”) of South Africa. 

• FIDIC (French acronym for International Federation of Consulting Engineers) which is for major infrastructure projects like the erection of power stations or dams for example. They do make provisions for smaller projects but in South Africa, if it’s a FIDIC contract it’s likely for a big project like the aforementioned examples. 
• NEC3 is a British suite of contracts. They have different options you can use within the suite of contracts. It’s a comprehensive set of contracts.
• The JBCC Series has been specifically developed for South Africa by stakeholders in the country but the series is only for building works, not engineering works. The JBCC is the household contract in SA.
• GCC (General Conditions of Contract for Construction Works) is often used in government contracts and small-scale projects.

ALSO READ: Dear contractors, take extra note of those time-bar clauses!

Ask these questions 

• What do you need? That is usually your point of departure.
• What is the value of the project? Don’t overcomplicate a low-value project
• What are the risks associated with the project? Regulate your risks, do so at the inception via the contract
• How complex is the project? Your level of complexity is important to consider.
• What are the regulatory or compliance requirements associated with the project? That might be safety requirements need to be taken into consideration

ALSO READ: Building of 14 Free State bridges to start without tenders advertised

What about bespoke agreements?

"A standard form contract is not a necessity, and a bespoke drafted construction agreement can also be used. However, given the extensive use, accepted provisions and terminology, and relatively minor cost of using standard-form contracts, there is a strong case for considering a standard-form contract before a bespoke agreement. 

Before you therefore proceed with your building project consult your attorney or construction law specialist for guidance on the correct contract form for your project and avoid issues and headaches arising later" explained Du Randt.  

OFM Business Hour dg