Key Construction Works Standard Agreements in Kenya
If you are a developer or an individual looking to begin a construction project, you might need a written construction agreement to govern the project. Construction agreements will govern the engagement between you and a contractor and the various professional service providers within the project and spell out the scope and crucial terms to govern the final execution of the project. Construction agreements can be prepared by your lawyer, although the use of standard construction agreements is also common in construction work practice. Standard contract agreements are most of the time preferred because they are readily available for use, more affordable option and trusted because they are usually prepared in consultation with multiple professional bodies involved in the construction process. Depending on the nature of the construction to be completed, parties may elect either one of the standard contract templates for use. There being multiple standard construction templates to choose from, let us begin by first outlining the most common types of standard construction contracts used in Kenya.
Types of Construction Contracts
The more common standard commercial contracts used in Kenya are:
- The Agreement and Condition of Contract for Building Works (JBC contracts)
- Public Procurement Oversight Authority Standard Bid Document for Procurement of Works (Building and Civil engineering Works) PPRA contracts and
- FIDIC contracts.
Other professional bodies such as the institute of quantity surveyors of Kenya also have a repository of standard contract templates that can be used for construction work projects.
Agreement and Condition of Contract for Building Works (JBCC Contract)
In full the JBCC standards for Joint Building and Construction Council. The JBCC is a corporate body formed by the Architectural Association of Kenya (AAK) and the Kenya Association of Building and Civil Engineering Contractors (KABCEC) but currently includes several other associations of professionals involved in the construction industry.
Its objectives among others are to promote the consideration and discussion of all questions affecting the building industry. Towards meeting this objective, the council has formulated a standard construction contract, the Agreement and Condition of Contract for Building Works (The Green Book).
This standard contract is popularly used in Kenya as the primary contract for private construction projects.
Public Procurement Oversight Authority Standard Bid Document For Procurement of Works (Building and Civil engineering Works) PPRA Contracts
Pursuant to Sections 9, 58 and 70 of the Public Procurement and Asset Disposal Act, 2015 (the Public Procurement Regulatory Authority (the Authority) developed and issued the Standard Public Procurement and Asset Disposal Documents and formats for use by public entities and other stakeholders.
These standard documents include contract agreements for use in public construction projects. The PPRA contract templates are the most commonly preferred and recommended for public construction works, especially those that involve government projects.
FIDIC forms of contracts
FIDIC acronym for The Fédération Internationale des Ingénieurs-Conseils (FIDIC) is the international federation of consulting engineers.
FIDIC is an international body of consulting engineers from all over the world. The organization has over the years developed standard contract templates that are internationally used for construction and other project work contracts.
FIDIC contracts are preferred where the parties are multi-national or multi-national corporations, for projects that require interaction with different legal, regulatory and trade practice customs.
Why you should consider a Lawyer’s advice when using standard Construction Agreements.
Despite the availability of various standard form contracts as discussed above, it is often recommended to have standard contracts reviewed and assessed by your lawyer to ensure they suit your specific needs.
Lawyers can review standard contracts and help you negotiate fairer terms, practical to the exact nature of the project and solution you are looking for. They can also amend and tweak contracts as convenient for parties.
Lawyers also better explain to you the implication of certain contract terms which are often times described in complex legal jargon, that may be difficult for you to understand.
As with any contract agreement, parties may disagree and enter into dispute resolution process. Involving your lawyer, as early as at the contact negotiation process, increases your chances of a favorable outcome in case you get into a dispute resolution process, be it court litigation or arbitration.
HOW CAN WE HELP YOU?
At CM ADVOCATES LLP, our team of lawyers work with individual, corporate developers, architects, engineers, quantity surveyors and contractors. We review and advise on a number construction work contract agreement. We also draft bespoke agreements, suited for specific project needs.
To access our free construction agreement templates, join our CM SME membership club.
For more information, book a consultation to speak to our Advocates.
This alert is for informational purposes only and should not be construed as legal advice.