The JCT is due to release a new suite of contracts within the year ahead. Aside from the homeowner’s building contracts released in 2021, this will be the first new suite since 2016. The new contract suite is expected to address several issues that have arisen over the last seven years, including insolvency – a particular concern in the current economic climate. Reports have predicted around 6,000 insolvencies in the construction sector in 2023, which is almost double the amount that occurred last year.

How is insolvency dealt with in the JCT contracts?

Under the 2016 JCT contracts, when the corporate contractor becomes insolvent, both parties have a right to terminate the contract. Ultimately, this is so the contractor can recover its costs and protect its position. For the contractor, it will want to step away from its contract obligations. For the employer, it will usually want to progress the project with someone else as efficiently as possible.

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