Standard Form of Building Contract

1998 Edition
incorporating Amendments 1 to 4

' Private versions

 . __ - --

Contents

38 Contribution, levy and tax Page

fluctuations
Private Edition With Quantities 1
Private Edition Without Quantities 5

39 Labour and materials cost and

tax fluctuations
Private Edition With Quantities 9
Private Edition Without Quantities 75
Private Edition With Approximate 27
Quantities

40 Use of price adjustment formulae

Private Edition With Quantities
Private Edition Without Quantities
Private Edition With Approximate
Quantities

List of amendments incorporated

in this reprint

FS:P 98 (03/03) CD The Joint Contracts Tribunal Limited 2003

 JCT Standard Form of Building Contract
1998 Edition

Clause 38 - For use with the

Private Edition With Quantities

38 Contribution, levy and tax fluctuations

Oeemed 38.1 The Contract Sum shall be deemed to have been calculated in
calculation of and shall be subject to adjustment in the events specified her
Contract Sum -
types and rates of
contribution etc. 38.1 .1 The prices contained in the Contract Bills are
contribution, levy and tax payable by a perso
which at the Base Date are payable by the CO
in clause 38.1.2 referred to as a 'tender type' an

increases or 38.1 .2 If any of the tender rates other th f the Industrial

decreases in rates Training Act 1964 is increased or
of contribution
etc. -payment or or if a new type of contribution, I
allowance capacity as an employer becomes pa n in any such case
the net amount of the diff ctually pays or will
pay in respect of

.2 .I workpeople engaged upon orks either on or

adjacent to the site, and

.2 -2 workpeople directly e who are engaged upon the

production o f m t e r i a l connection with the Works and
site and to the extent that they are
so engaged

eople and what he would have paid

of contribution, levy or tax not become
id to or allowed by the Contractor.

Persons employed 38.1 .3 There shall b ount paid to or allowed by the Contractor u?der
on site other than rson employed by the Contractor who is engaged
'workpeople'
ither on or adjacent to the site and who is
' in clause 38.6.3, the same amount as is

unt to a whole working day;

rase "the same amount as is payable or allowable in respect of a

. .

wage, emolument or other expense for a craftsman, shall refer t o the amount in
respect of a craftsman employed as aforesaid to whom the highest rate is
applicable; and

the phrase "the employed by the Contractor" shall mean an employment to

which the Income Tax (Employments) Regulations 1993 (the PAYE Regulations),
or any amendment or re-making thereof, apply.

PW (381 98 (OW31 0The Joint Contracts Tribunal Limited 2003

Refunds end 38.1 *5 The prices contained in the Contract Bills are based upon the types and rates of
premiums refund of the contributions, levies and taxes payable by a person in his capacity as
an employer and upon the types and rates of premium receivable by a person in his
capacity as an employer being in each case types and rates which at the Base Date
are receivable by the Contractor. Such a type and such a rate are in clause 38.1.6
referred to as a 'tender type' and a 'tender rate'.

38.1 *6 If any of the tender rates is increased or decreased or if a tender type ceases to be
payable or if a new type of refund of any contribution, levy or tax payable by a
person in his capacity as an employer becomes receivable or if a new type of
premium receivable by a person in his capacity as an employer becomes receivable
after the Base Date, then in any such case the net amount of
what the Contractor actually receives or will receive in respec
referred to in clauses 38.1-2.1 and 38.1.2.2 or because of h
workpeople and what he would have received had the alt
type of refund or premium not become effective shall, as
to or allowed by the Contractor.

38.1 -7 The references in clauses 38.1.5 and 38.1.6 to premi

meaning all payments howsoever they are descri
virtue of an Act of Parliament to a person in his
affect the cost to an employer of having person

Contracted out 38.1 *8 Where employer's contributions are payable by

employment
workpeople as referred to in clauses 38.1
contracted-out employment wi
the Contractor shall for the pur
deemed to pay employer's con
out employment.

Meaning of 38.1 *9 The references taxes shall be construed as

contribution etc. ity as an employer
howsoever the which are imposed under
cost to an employer of

38.2 The Contract Sum s lated in the manner set out below
and shall be subject ied hereunder.

-
Materials duties 38.2 -1 h x p e s and rates of duty, if any, and tax, if any
and taxes
hich is treated, or is capable of being treated, as
soever payable which at the Base Date are
, appropriation, processing, use or disposal of
materials taken from the site as waste or any
the execution of the Works by virtue of any
pe and a rate so payable are in clause 38.2.2 referred to as a

38-2 *2 If, to y aterials or goods or any electricity or fuels or materials taken

from he site as w e or any other solid, liquid or gas necessary for the execution of
g temporary site installations for those Works, a tender rate is

,then in any such case the net amount of the difference between what the

or any other solid, liquid or gas and what he

d the alteration, cessation or imposition not
paid to or allowed by the Contractor. In clause
uty or tax" includes an additional duty or tax
any of the above in respect of which no duty
or tax whatever was previously payable (other than any value added tax which is
treated, or is capable of being treated, as input tax by the Contractor).

2 0 The Joint Contracts Tribunal Limited 2003

 38.3 - -
Fluctuations work sub-let Domestic Sub-Contractors

Sublet work - 38.3 -1 If the Contractor is obliged by clause 19.3, or shall decide subject to clause 19-2, to
incorporetion of sub-let any portion of the Works to a Domestic Sub-Contractor he shall incorporate
provisions to like
effect in the sub-contract provisions to the like effect as the provisions of

clause 38 (excluding clause 38.3) including the percentage stated in the

Appendix pursuant to clause 38.7

which are applicable for the purposes of this Contract.

Sub-let work - 38.3 -2 If the price payable under such a sub-contract

fluctuations - increased above or decreased below the price
payment to or
allowance by the operation of the said incorporated provisions, then the
Contractor or decrease shall, as the case may be, be paid to or allo
this Contract.

38.4 to .6 Provisions relating t o clause 38

Written notice by 38.4 -1 The Contractor shall give a written notice to th

Contractor the events referred to in such of the following
purposes of this Contract:

*1 .1 clause 38.1.2;

-1 -2 clause 38.1-6;

.1 -3 clause 38.2.2;

-1 -4 clause 38.2.3; fi(

Timing and effect

of written notices
38.4
-1 .5 clause 38.3.

*2 Any notice required

reasonable time
0, \

and

Agreement -
Quantity Surveyor
and Contractor

38.4 .4 An am rom time to time becomes payable to or allowable by the

(?&;
Fluctuations
added to or C tr tor y e f clauses 38-1 and .2 or clause 38.3 shall, as the case may be,
deducted from
Contract Sum b ad d o d ducedfrom:

-4 *1 and

to the Contractor and which are calculated in accordance

to which clause 38.4.4 refers shall be subject to the

n
9 of clauses 38.4.5 to .4.7.

as is reasonably practicable the Contractor shall provide such evidence and

putatr s as the Architect or the Quantity Surveyor may reasonably require to
enab h amount payable to or allowable by the Contractor by virtue of clauses
38.1 an -2 or clause 38.3 to be ascertained; and in the case of amounts payable to
or allowable by the Contractor under clause 38.1-3 (or clause 38.3 for amounts
payable to or allowable by the Domestic Sub-Contractor under provisions in the
sub-contract to the like effect as clauses 38.1-3 and 38.1.4) -employees other than
workpeople -such evidence shall include a certificate signed by or on behalf of the
Contractor each week certifying the validity of the evidence reasonably required to
ascertain such amounts.

No elteration to 38.4 .6 No addition to or deduction from the Contract Sum made by virtue of clause 38.4.4
Contractor's profit shall alter in any way the amount of profit of the Contractor included in that Sum.

PW 138)98 103/03) (B The Joint Contracts Tribunal Limited 2003 3

Position where 38.4 e7 Subject to the provisions of clause 38.4.8 no amount shall be added or deducted in
Contractor in the computation of the amount stated as due in an Interim Certificate or in the Final
default over
completion Certificate in respect of amounts otherwise payable to or allowable by the
Contractor by virtue of clauses 38.1 and .2 or clause 38.3 if the event (as referred to
in the provisions listed in clause 38-4.1) in respect of which the payment or
allowance would be made occurs after the Completion Date.

38.4 .8 Clause 38.4.7 shall not be applied unless:

-8 -1 the printed text of clause 25 is unamended and forms part of the Conditions;
and

.8 .2 the Architect has, in respect of every written notificatio

clause 25, fixed or confirmed in writing such Completi
be in accordance with clause 25.

Work etc. to which 38.5 Clauses 38.1 to -3 shall not apply in respect o f
clauses 38.1 to .3
not applicable
38.5 .1 work for which the Contractor is allowed daywor

38.5 -2 work executed or materials or goods supplied

Nominated Supplier (fluctuations in relation to
Nominated Suppliers shall be dealt with under
which may be included in the appropriate sub-c

38.5 -3 work executed by the Contractor for w e u c l a u s e 35.2 has

with under any

38.5 .4 changes in the rate of of goods or services

Definitionsfor use 38.6 In clause 38:

with clause 38
38.6 .1 the expression in the Appendix;

38.6 -2 the expressio e timber used in formwork but do not

rsons whose rates of wages and other

re governed by the rules or decisions or
Joint Council or some other wage-fixing

38.6 lays down recognised

use 38, 'recognised terms
n comparable employment
which the employer in
ent or award to which
oyers' associations and independent trade unions which
or in the district in question, as the case may be) a substantial
ployers and of the workers in the trade, industry or section
description to which the agreement or award relates.

uation payments or allowances

the amount paid to or allowed by the Contractor under:

.1 e3 clause38.1.6,

-1 .4 clause 38-2.2

the percentage stated in the Appendix.

4 (B The Joint Contracts Tribunal Limited 2003

 JCT Standard Form.of Building Contract
1998 Edition

-
Clause 38 For use with the
Private Edition Without Quantities

38 Contribution, levy and tax fluctuations

Deemed 38.1 The Contract Sum shall be deemed to have been calculated in
calculation of and shall be subject to adjustment in the events specified he
Contract Sum -
types and rates of
contributionetc. 38.1 .1 The Contract Sum is based upon the types and rates of
payable by a person in his capacity as an emp
payable by the Contractor. A type and rate so
as a 'tender type' and a 'tender rate'.

Increases or 38.1 .2 If any of the tender rates other t f the Industrial

decreases in rates Training Act 1964 is increased or
of contribution
-
etc. payment or or if a new type of contribution, I
en in any such case
allowance capacity as an employer becomes pa
the net amount of the difference be ctually pays or will
pay in respect of

-2 .1 workpeople engaged either on or

adjacent to the site, and

connection with the Works and

nd to the extent that they are

e of contribution, levy or tax not become

aid to or allowed by the Contractor.

Persons employed 38.1 .3 There shall ount paid to or allowed by the Contractor under
on site other than
'workpeople'

in clause 38-6.3, the same amount as is

rase "the same amount as is payable or allowable in respect of a

ractor (or by any Domestic Sub-Contractor under a sub-contract to which

ction Industry Joint Council or other wage-fixing body and, where the
d rules or decisions or agreements provide for more than one rate of
wage, emolument or other expense for a craftsman, shall refer to the amount in
respect of a craftsman employed as aforesaid to whom the highest rate is
applicable; and

the phrase "employed by the Contractor" shall mean an employment to which

the Income Tax (Employments) Regulations 1993 (the PAYE Regulations), or any
amendment or re-making thereof, apply.

PWO (38)98 (03/03) (0 The Joint ContractsTribunal Limited 2003 5

Refunds and 38.1 .5 The Contract Sum is based upon the types and rates of refund of the contributions,
premiums levies and taxes payable by a person in his capacity as an employer and upon the
types and rates of premium receivable by a person in his capacity as an employer
being in each case types and rates which at the Base Date are receivable by the
Contractor. Such a type and such a rate are in clause 38.1-6 referred to as a 'tender
type' and a 'tender rate'.

38.1 .6 If any of the tender rates is increased or decreased or if a tender type ceases to be
payable or if a new type of refund of any contribution, levy or tax payable by a
person in his capacity as an employer becomes receivable or if a new type of
premium receivable by a person in his capacity as an employer becomes receivable
after the Base Date, then in any such case the net amount of the
what the Contractor actually receives or will receive in re
referred to in clauses 38.1.2.1 and 38.1-2.2 or because of
workpeople and what he would have received had the al

38.1

Contracted-out 38-1 -8 Where employer's contributions are p

employment

the Contractor shall for the purpose e under clause 38.1 be

deemed to pay employer's contr ent were not contracted-
out employment.

Meaning of 38.1 .9 The references in clause 38

contributionetc.

38.2 calculated in the manner set out below

and shall be subj nts specified hereunder.

-
Materials duties 38.2 -1 The Contract and rates of duty, if any, and tax, if any
and taxes

le, appropriation, processing, use or disposal of

Is, materials taken from the site as waste or any

38-2 or goods or any electricity or fuels or materials taken

other solid, liquid or gas necessary for the execution of
ry site installations for those Works, a tender rate is

,then in any such case the net amount of the difference between what the
or actually pays in respect of those materials, goods, electricity, fuels,
en from the site as waste or any other solid, liquid or gas and what he
i d in respect of them had the alteration, cessation or imposition not
as the case may be, be paid to or allowed by the Contractor. In clause
ession "a new type of duty or tax" includes an additional duty or tax
and a duty or tax imposed in regard to any of the above in respect of which no duty
or tax whatever was previously payable (other than any value added tax which is
treated, or is capable of being treated, as input tax by the Contractor).

6 (0 The Joint ContractsTribunal Limited 2003 PWO (36)98 (03/03)

 38.3 - -
Fluctuations work sub-let Domestic Sub-Contractors

Sub-let work- 38.3 .1 If the Contractor is obliged by clause 19.3, or shall decide subject to clause 19.2, to
incorporation of sub-let any portion of the Works to a Domestic Sub-Contractor he shall incorporate
provisions to like
effect in the sub-contract provisions to the like effect as the provisions of

clause 38 (excluding clause 38.3) including the percentage stated in the

Appendix pursuant to clause 38.7

which are applicable for the purposes of this Contract.

Sub-let work - 38.3 .2 If the price payable under such a sub-contract as referre
fluctuations - increased above or decreased below the price in such s
payment to or
allowance by the operation of the said incorporated provisions, then the
Cont rector or decrease shall, as the case may be, be paid to or alto
this Contract.

38.4 to .6 Provisions relating to clause 38

Written notice by 38.4 .1 The Contractor shall give a written notice to th

Contractor the events referred to in such of the
purposes of this Contract:

.1 .1 clause38.1.2;

-2 clause 38.1.6;

-3 clause 38.2-2;

.4 clause 38.2.3;

Timing and effect 38.4

of written notices
shall be a condition precedent to any
respect of the event in question.

Agreement - r may agree what shall be deemed for all

Quantity Surveyor e net amount payable to or allowable by the
and Contractor
e of any event such as is referred to in any of

Fluctuations added or allowable by the

to or deducted
from Contract Sum
hall, as the case may be,

ts payable to the Contractor and which are calculated in accordance

lause 28.4.3.1.

n or deduction to which clause 38.4.4 refers shall be subject to the

of clauses 38.4.5 to -4.7.
n
sonably practicable the Contractor shall provide such eviden'ce and
the Architect or the Quantity Surveyor may reasonably require to
nt payable to or allowable by the Contractor by virtue of clauses
e of amounts payable to
or allowable by the Contractor under clause 38.1.3 (or clause 38-3for amounts
payable to or allowable by the Domestic Sub-Contractor under provisions in the
sub-contract to the like effect as clauses 38.1.3 and 38.1.4)-employees other than
workpeople - such evidence shall include a certificate signed by or on behalf of the
Contractor each week certifying the validity of the evidence reasonably required to
ascertain such amounts.

No alteration to 38.4 .6 No addition to or deduction from the Contract Sum made by virtue of clause 38.4.4
Contractor's profit shall alter in any way the amount of profit of the Contractor included in that Sum.

PWO 1381 98 (03/031 The Joint Contracts Tribunal Limited 2003 7

Position where 38.4 -7 Subject to the provisions of clause 38.4.8 no amount shall be added or deducted in
Contractor in the computation of the amount stated as due in an Interim Certificate or in the Final
default over
completion Certificate in respect of amounts otherwise payable to or allowable by the
Contractor by virtue of clauses 38.1 and .2 or clause 38.3 if the event (as referred to
in the provisions listed in clause 38.4.1) in respect of which the payment or
allowance would be made occurs after the Completion Date.

38.4 -8 Clause 38.4.7 shall not be applied unless:

.8 -1 the printed text of clause 25 is unamended and forms part of the Conditions;
and

.8 -2 the Architect has, in respect of every written

clause 25, fixed or confirmed in writing such
be in accordance with clause 25.

Work etc. to which 38.5 Clauses 38.1 to .3 shall not apply in respect of:
clauses 38.1 to .3
not applicable
38.5 a1 work for which the Contractor is allowed daywork r -*i;
38.5 .2 work executed or materials or goods supplied
Nominated Supplier (fluctuations in relation to
Nominated Suppliers shall be dealt with under
which may be included in the appropriate sub-

lause 35.2 has

been accepted (fluctuations in re e dealt with under any
provision in the accepted tender

38.5 .4 changes in the rate of value ad ply of goods or services

Definitions for use 38.6 In clause 38:

with clause 38
38.6 .1 the expression

e timber used in formwork but do not

include other c

ndustry Joint Council or some other wage-fixing

he building industry;

y' shall mean a body which lays down recognised

or section of trade or industry, in which the employer in

ich have been settled by an agreement or award to which
rs' associations and independent trade unions which

kers of the description to which the agreement or award relates.

be added to the amount paid to or allowed by the Contractor under:

.1 -3 clause38.1.6,

-1 4 clause 38.2.2

the percentage stated in the Appendix.

8 0 The Joint Contracts Tribunal Limited 2003 PWO (381 98 (03B3)

 JCT Standard Form of Building Contract
1998 Edition
-
-
Clause 39 For use with the
Private Edition With Quantities

39 Labour and materials cost and tax fluctuations

Deemed 39.1 The Contract Sum shall be deemed to have been calculated in
calculation of and shall be subject to adjustment in the events specified her
Contract Sum -
rates of wages etc.
39.1 -1 The prices (including the cost of employer's liabil
insurance) contained in the Contract Bills are bas
other emoluments and expenses (including holid
the Contractor to or in respect of

e1 -1 workpeople engaged upon or in connectio

adjacent to the site, and

-1 .2 workpeople directly employed b

production of materials or goods ith the Works and
who operate neither on nor adjac to the extent that they are
so engaged

in accordance with:

-1 .3 therulesor ry Joint Council or other wage-

sand which have been

oductivity Incentive Schemes and/or

he Construction Industry Joint Council
Incentive Schemes and/or
aforesaid Council to which Rule 1.16

Civil Engineering Annual and Public Holidays

credits) are in accordance with the rules or decisions of a

other than the Construction Industry Joint Council) which will
he Works and which have been promulgated at the Base Date;
W

3 9 . y

increase or decrease in the cost of employer's liability insurance, of third patty

insurance and of any contribution, levy or tax payable by a person in his capacity as
an employer shall, as the case may be, be paid to or allowed by the Contractor.

PW (391 98 ~03hl3) Q The Joint Contracts Tribunal Limited 2003 9

._ . .
Persons employed 39.1 -3 There shall be added to the net amount paid to or allowed by the Contractor under
on site other than clause 39.1.2, in respect of each person employed by the Contractor who is engaged
'workpeople'
upon or in connection with the Works either on or adjacent to the site and who is
not within the definition of 'workpeople' in clause 39.7.3, the same amount as is
payable or allowable in respect of a craftsman under clause 39.1.2 or such
proportion of that amount as reflects the time (measured in whole working days)
that each such person is so employed.

39.1 .4 For the purposes of clauses 39.1.3 and 39.2-3:

no period of less than 2 whole days in any week shall be taken into account and
periods of less than a whole working day shall not be agg
a whole working day;

Contractor (or by any Domestic Sub-Contractor

clause 39.4 refers) under the rules or decisions

wage, emolument or other expenses for a

in respect of a craftsman employed as afo
applicable; and

Regulations), or any

Workpeople -
wage-fixing body -
reimbursement of
fares charges list submitted by
nd incurred by the Contractor
capacities referred to in

eimbursable by the Contractor to

ities referred to in clauses 39.1.1.1
r decisions of the Construction

r emoluments and expenses are governed by the

e-fixing body other than the Construction
dance with the rules or decisions of such other

ent of fares is increased or decreased by reason of any

which at the Base Date are payable by the Contractor. A type and a rate so payable
are in clause 39.2.2 referred to as a 'tender type' and a 'tender rate'.

10 CB The Joint Contracts Tribunal Limited 2003

 39-2 -2 If any of the tender rates other than a rate of levy payable by virtue of the Industrial
Training Act 1964 is increased or decreased or if a tender type ceases to be payable
or if a new type of contribution, levy or tax which is payable by a person in his
capacity as an employer becomes payable after the Base Date, then in any such case
the net amount of the difference between what the Contractor actually pays or will
pay in respect of workpeople as referred to in clauses 39.1.1.1 and 39-1.1.2 or
because of his employment of such workpeople and what he would have paid had
the alteration, cessation or new type of contribution, levy or tax not become
effective shall, as the case may be, be paid to or allowed by the Contractor.

39.2 -3 There shall be added to the net amount paid to or allowed by the Contractor under
clause 39.2.2, in respect of each person employed by the
upon or in connection with the Works either on or adjace
not within the definition of 'workpeople' in clause 39.7.3,
payable or allowable in respect of a craftsman under clau
proportion of that amount as reflects the time (measure
that each such person is so employed. The provisions o
clause 39.2.3.

39.2 *4 The prices contained in the Contract Bills are ba

refund of the contributions, levies and taxes
an employer and upon the types and r
capacity as an employer being in each t the Base Date
are receivable by the Contractor. Such

39.2
referred to as a 'tender type' and a 'tend

*5 If any of the tender rates is incr

mW nder type ceases to be
payable or if a new type of refu or tax payable by a
or if a new type of
oyer becomes receivable

of his employment of such

alteration, cessation or new
as the case may be, be paid

39.2 -6 5 to premiums shall be construed as

e described which are made under or by
in his capacity as an employer and which
aving persons in his employment.

39.2 *7 yable by the Contractor in respect of

Construction Industry Joint Council or of some other wage-fixing

ibutions to such occupational pension scheme are within the
nd allowance provisions of clause 39.1.

nces in clauses 39.2.1 to 39.2.5 and 39.2.7 to contributions, levies and

I be construed as meaning all impositions payable by a person in his
as an employer howsoever they are described and whoever the recipient
posed under or by virtue of an Act of Parliament and which affect the
mployer of having persons in his employment.

PW (39)98 (03/03) 0The Joint Contracts Tribunal limited 2003 17

 39.3 The Contract Sum shall be deemed to have been calculated in the manner set out below
and shall be subject to adjustment in the events specified hereunder.

Materials, goods. 39.3 .I The prices contained in the Contract Bills are based upon the market prices which
electricity and fuels were current at the Base Date of the materials, goods, electricity, fuels or any other
solid, liquid or gas necessary for the execution of the Works, and upon the duty or
tax payable at that Date on the disposal of waste from the site.

39.3 -2 If after the Base Date the market price of any of the above things increases or
decreases, or the duty or tax on the disposal of waste from the site increases or
decreases, then the net amount of the difference shall, as the case may be, be paid
to or allowed by the Contractor.

39.3 -3 The references in clauses 39.3.1 and 39.3.2 to 'market pric

including any duty or tax (other than value added tax whi
of being treated, as input tax by the Contractor) by whom
payable under or by virtue of any Act of Parliament on t

mv
appropriation, processing, use or disposal of any of the
39-3.1.

39.4 - -
Fluctuations work sub-let Domestic Sub-Contra or9

Sub-let work - 39.4 -1 If the Contractor is obliged by clause 19- o clause 19.2, to
incorporation of sub-let any portion of the Works to a D
provisions to like
effect in the sub-contract provisions to the li

clause 39 (excluding clause

Appendix pursuant to cleus

Sub-let work - 39.4 .2 red to in clause 39-4.1 is

fluctuations- increased abov
payment to or
allowance by the operation of the sat
Contractor or decrease shall, as t to or allowed by the Contractor under
this Contract.

39.5 to .7

Written notice by 39-5 .1

Contractor

.1

.1

39.3.4.2;

39.4.2.

required to be given by clause 39.5.1 shall be given within a reasonable

time after the occurrence of the event to which the notice relates and the giving of
written notice in that time shall be a condition precedent to any payment being
made to the Contractor in respect of the event in question.

12 0 The Joint Contracts Tribunal Limited 2003 PW (39) 98 l03/03)

Agreement - 39.5 .3 The Quantity Surveyor and the Contractor may agree what shall be deemed for all
Quantity Surveyor the purposes of this Contract to be the net amount payable to or allowable by the
8nd Contractor
Contractor in respect of the occurrence of any event such as is referred to in any of
the provisions listed in clause 39.5.1.

Fluctuations 39.5 .4 Any amount which from time to time becomes payable to or allowable by the
added to or Contractor by virtue of clauses 39.1 to .3 or clause 39.4 shall, as the case may be, be
deducted from
Contract Sum added to or deducted from:

.4 -1 the Contract Sum; and

.4 -2 any amounts payable to the Contractor and which are calculated in accordance
with clause 28.4.3.1.

The addition or deduction to which clause 39.5.4 refers sh

provisions of clauses 39.5.5 to e 5 . 7 .

Evidence end 39.5 .5 As soon as is reasonably practicable the Cont

computations by computations as the Architect or the Quantity
Contractor
enable the amount payable to or allowable by
39.1 to -3 or clause 39.4 to be a
allowable by the Contractor und
to or allowable by the Domestic
to the like effect as clauses 39.1.
such evidence shall include a ce
each week certifying the validit
such amounts.

No alteration to 39.5 -6 No addition to or deduction fr y virtue of clause 39.5.4

Contractor’s profit shall alter in any way the amo included in that Sum.

Position where 39.5 .7 t shall be added or deducted in

Contractor in nterim Certificate or in the Final
default over
completion to or allowable by the
9.4 if the event (as referred to in
which the payment or allowance
would be made occu

39.5 .8

*8 IS unamended and forms part of the Conditions;

.8 f every written notification by the Contractor under

in writing such Completion Date as he considers to

Work etc. to which 39.6 Clau t apply in respect of:

clauses 39.1 to .4
not applicable
39.6 a1 w& for d k d h e k o n t r a c t o r is allowed daywork rates under clause 13.5-4;

d Suppliers shall be dealt with under any provision in relation thereto

y be included in the appropriate sub-contract or contract of sale);

39.7 .2 the expressions ‘materials‘ and ‘goods’ include timber used in formwork but do not
include other consumable stores, plant and machinery;

PW 139)98 (03AXV 0The Joint Contracts Tribunal Limited 2003 13

 39.7 -3 the expression 'workpeople' means persons whose rates of wages and other
emoluments (including holiday credits) are governed by the rules or decisions or
agreements of the Construction Industry Joint Council or some other wage-fixing
body for trades associated with the building industry;

39.7 *4 the expression 'wage-fixing body' shall mean a body which lays down recognised
terms and conditions of workers. For the purposes of clause 39 'recognised terms
and conditions' means terms and conditions of workers in comparable employment
in the trade or industry, or section of trade or industry, in which the employer in
question is engaged which have been settled by an agreement or award to which
the parties are employers' associations and independent trade unions which

14 The Joint Contracts Tribunal Limited 2003 PW (39)98 (03/03)

 JCT Standard Form of Building Contract
1998 Edition

Clause 39 - For use with the

Private Edition Without Quantities

39 Labour and materials cost and tax fluctuations

Deemed 39.1 The Contract Sum shall be deemed to have been calculated i
calculation of and shall be subject to adjustment in the events specified he
Contract Sum -
rates of wages etc.

party insurance) is based upon the rates of wage

expenses (including holiday credits) which will b
respect of

adjacent to the site, and

who operate neither on nor ad to the extent that they are

so engaged

in accordance with:

ry Joint Council or other wage-

s and which have been

ing Incentive Schemes and/or

the aforesaid Council to which Rule 1.16

ivil Engineering Annual and Public Holidays

reements to similar effect in respect of

Works and which have been promulgated at the Base Date;

to, the rates of wages and other emoluments and expenses (including
edits) referred to herein.

said rates of wages or other emoluments and expenses (including

its) are increased or decreased by reason of any alteration in the said
ns or agreements promulgated after the Base Date, then the net
increase or decrease in wages or other emoluments and expenses
day credits) together with the net amount of any consequential
crease in the cost of employer's liability insurance, of third party
of any contribution, levy or tax payable by a person in his capacity as
hall, as the case may be, be paid to or allowed by the Contractor.

PWO 139)98 (03#3) 0 The Joint Contracts Tribunal Limited 2003 15

. _..
Persons employed 39.1 .3 There shall be added to the net amount paid to or allowed by the Contractor under
on site other than clause 39.1.2, in respect of each person employed by the Contractor who is engaged
'workpeople'
upon or in connection with the Works either on or adjacent to the site and who is
not within the definition of 'workpeople' in clause 39-7.3, the same amount as is
payable or allowable in respect of a craftsman under clause 39.1.2 or such
proportion of that amount as reflects the time (measured in whole working days)
that each such person is so employed.

39.1 -4 For the purposes of clauses 39-1.3 and 39.2.3:

no period of less than 2 whole days in any week shall be taken into account and
periods of less than a
a whole working day;

the phrase "the same amount as is payable or allowa

clause 39.4 refers) under the rules or decisio

Construction Industry Joint Council or other
aforesaid rules or decisions or agreements
wage, emolument or other expenses for a
in respect of a craftsman employed as afor
applicable; and

amendment or re-making thereof

Workpeople - 39.1 .5 The Contract Sum is based up0

wage-fixing body -
reimbursementof
fares the transport charges re
the Contractor and att
either of the capacities referred
to in clause
VAT\
9.1. - 1 and

reimbursable by the Contractor to

cities referred to in clauses 39.1.1.1
rules or decisions of the Construction
applicable to the Works and which have
or, in the case of workpeople so engaged
er emoluments and expenses are governed by the
ge-fixing body other than the Construction
the rules or decisions of such other
ave been promulgated as aforesaid.

ent of fares is increased or decreased by reason of any

said rules or decisions promulgated after the Base Date or by
tual increase or decrease in fares which takes effect after the Base Date,

mount of that increase or decrease shall, as the case may be, be paid .
by the Contractor.

m shall be deemed to have been calculated in the manner set out below
ject to adjustment in the events specified hereunder.

ct Sum is based upon the types and rates of contribution, levy and tax
a person in his capacity as an employer and which at the Base Date are
actor. A type and a rate so payable are in clause 39.2.2 referred
to as a 'tender type' and a 'tender rate'.

16 (0 The Joint ContractsTribunal Limited 2003 PWO (39) 98 103/03)

 39.2 -2 If any of the tender rates other than a rate of levy payable by virtue of the Industrial
Training Act 1964 is increased or decreased or if a tender type ceases to be payable
or if a new type of contribution, levy or tax which is payable by a person in his
capacity as an employer becomes payable after the Base Date, then in any such case
the net amount of the difference between what the Contractor actually pays or will
pay in respect of workpeople as referred to in clauses 39.1-1.1 and 39.1.1.2 or
because of his employment of such workpeople and what he would have paid had
the alteration, cessation or new type of contribution, levy or tax not become
effective shall, as the case may be, be paid to or allowed by the Contractor.

39.2 *3 There shall be added to the net amount paid to or allowed by the Contractor under
clause 39.2.2, in respect of each person employed b
upon or in connection with the Works either o
not within the definition of 'workpeople' in cla
payable or allowable in respect of a craftsman
proportion of that amount as reflects the time (meas
that each such person is so employed. The provisions
clause 39.2.3.

39.2 .4 The Contract Sum is based upon the types and r m & c & r i b u t i o n s ,

being in each case types and rates which at

Contractor. Such a type and such a rate are
type' and a 'tender rate'.

39.2 -5 If any of the tender rates is increase if a tender type ceases to be

payable or if a new type of r or tax payable by a
person in his capacity as an or if a new type of
premium receivable by a pe oyer becomes receivable
after the Base Date, then in

se of his employment of such

the alteration, cessation or new
all, as the case may be, be paid

39.2 -6 5 to premiums shall be construed as

e described which are made under or by
in his capacity as an employer and which
aving persons in his employment.

39.2 .7 yable by the Contractor in respect of

.1.1.1 and 39.1.1.2 whose employment is

occupational pension scheme, by reference to membership of

ent of workpeople is contracted-out employment, is established
Construction Industry Joint Council or of some other wage-fixing
ibutions to such occupational pension scheme are within the
and allowance provisions of clause 39.1.

nces in clauses 39.2.1 to 39.2.5 and 39.2.7 to contributions, levies and

rued as meaning all impositions payable by a person in his
oyer howsoever they are described and whoever the recipient
imposed under or by virtue of an Act of Parliament and which affect the
employer of having persons in his employment.

PWO 0 9 ) 98 f03/03) 0The Joint Contracts Tribunal Limited 2003 17

 39.3 The Contract Sum shall be deemed to have been calculated in the manner set out below
and shall be subject to adjustment in the events specified hereunder:

Materials, goods, 39.3 -1 The Contract Sum is based upon the market prices which were current at the Base
electricity and Date of the materials, goods, electricity, fuels or any other solid, liquid or gas
fuels
necessary for the execution of the Works, and upon the duty or tax payable at that
Date on the disposal of waste from the site.

39.3 -2 If after the Base Date the market price of any of the above things increases or
decreases, or the duty or tax on the disposal of waste from the site increases or
decreases, then the net amount of the difference shall, as the case may be, be paid
to or allowed by the Contractor.

39.3 -3 The references in clauses 39.3.1 and 39.3.2 to 'market p

including any duty or tax (other than value added tax w
of being treated, as input tax by the Contractor) by who
payable under or by virtue of any Act of Parliament on th
appropriation, processing, use or disposal of any of the t
39.3.1.

39.4 - -
Fluctuations work sub-let Domestic Sub-Contra

Sub-let work -
incorporation of
provisions to like
effect in the subcontract provisions to the li

clause 39 (excluding clause

Appendix pursuant to claus

which are applicable for the

Sublet work - red to in clause 39.4.1 is

fluctuations- sub-contract by reason of the
payment to or
allowance by the
Contractor

39.5 to -7 Provisions re1

Written notice by 39.5 .1 The notice to the Architect of the occurrence of any of
Contractor
e following provisions as are applicable for the

to be given by clause 39.5-1 shall be given within a reasonable

time after the occurrence of the event to which the notice relates and the giving of
written notice in that time shall be a condition precedent to any payment being
made to the Contractor in respect of the event in question.

Agreement - 39.5 -3 The Quantity Surveyor and the Contractor may agree what shall be deemed for all
Quantity Surveyor
and Contractor
the purposes of this Contract to be the net amount payable to or allowable by the
Contractor in respect of the occurrence of any event such as is referred to in any of
the provisions listed in clause 39.5.1.

18 Q The Joint Contracts Tribunal Limited 2003 PWO (391 98 (03/03)

Fluctuations 39.5 .4 Any amount which from time to time becomes payable to or allowable by the
added to or Contractor by virtue of clauses 39.1 to -3 or clause 39.4 shall, as the case may be, be
deducted from
Contract Sum added to or deducted from:

-4 -1 the Contract Sum; and

.4 .2 any amounts payable to the Contractor and which are calculated in accordance
with clause 28.4-3.1.

The addition or deduction to which clause 39.5.4 refers shall be subject to the
provisions of clauses 39.56 to 5.7.

Evidence and 39.5 -5 As soon as is reasonably practicable the Contractor shall

computations by computations as the Architect or the Quantity
Contractor
enable the amount payable to or allowable by
39.1 to .3 or clause 39.4 to be ascertained; and in
allowable by the Contractor under clause 39.1-3 (or c
to or allowable by the Domestic Sub-Contractor under
to the like effect as clauses 39.1.3 and 39.1.4) -
such evidence shall include a certificate signe
each week certifying the validity of the eviden
such amounts.

No alteration to 39.5 .6 No addition to or deduction from of clause 39.5.4

Contractots profit shall alter in any way the amount

Position whet73 39.5 .7 Subject to the provisions of clause II be added or deducted in

Contractor in the computation of the amount st Certificate or in the Final
default over
comoletion Certificate in respect of amou
Contractor by virtue of clause the event (as referred to in
the provisions listed in cla the payment or allowance
would be made occurs aft

39.5 .8 Clause 39.5.7

-8 .1 the printe ed and forms part of the Conditions;

ry written notification by the Contractor under

iting such Completion Date as he considers to

Work etc. to which 39.6 Clauses 39.1 to

clauses 39.1 to .4
not applicable
39.6 -1 rates under clause 13.5-4;

terials or goods supplied by any Nominated Sub-Contractor or

(fluctuations in relation to Nominated Sub-Contractors and
shall be dealt with under any provision in relation thereto
d in the appropriate sub-contract or contract of sale);

e Contractor for which a tender made under clause 35.2 has

tions in relation to such works shall be dealt with under any
in the accepted tender of the Contractor);

n the rate of value added tax charged on the supply of goods or services
ontractor to the Employer under this Contract.

sion the 'Base Date' means the Date stated in the Appendix;

-2 the expressions 'materials' and 'goods' include timber used in formwork but do not
include other consumable stores, plant and machinery;

7 .3 the expression 'workpeople' means persons whose rates of wages and other
emoluments (including holiday credits) are governed by the rules or decisions or
agreements of the Construction Industry Joint Council or some other wage-fixing
body for trades associated with the building industry;

W O 139)98 lOW03) CD The Joint Contracts Tribunal Limited 2003 19

- . . . . .... . ... -_
- ..- -

39-7 -4 the expression 'wage-fixing body' shall mean a body which lays down recognised
terms and conditions of workers. For the purposes of clause 39 'recognised terms
and conditions' means terms and conditions of workers in comparable employment
in the trade or industry, or section of trade or industry, in which the employer in
question is engaged which have been settled by an agreement or award to which
the parties are employers' associations and independent trade unions which
represent (generally, or in the district in question, as the case may be) a substantial
proportion of the employers and of the workers in the trade, industry or section
'
being workers of the description to which the agreement or award relates.

39.8 Percentageaddition to fluctuation payments or allowances

-1 -1 clause 39.1.2,

-1 -2 clause 39.1.3,

-1 -3 clause 39.1.6,

-1 -4 clause 39.2.2,

-1 -5 clause39.2.5,

-1 -6 clause 39.3.2

20 Q The Joint Contracts Tribunal Limited 2003 PWO 139)98 (03%')

 JCT Standard Form of Building Contract
1998 Edition

-
Clause 39 For use with the
Private Edition With Approximate Quantities

39 Labour and materials cost and tax fluctuations

Deemed 39.1 The prices in the Contract Bills shall be deemed to have been
calculation of set out below and an adjustment shall be made in calculatin
prices in the
Contract Bills - in the events specified hereunder.
rates of wages etc.
39.1 -1 The prices (including the cost of employer's lia
insurance) contained in the Contract Bills are b

-1 .1 workpeople engaged upon or in connecti

adjacent to the site, and

production of materials or g
who operate neither on nor e extent that they are
so engaged

in accordance with:

-1 -3 the rules ry Joint Council or other wage-

s and which have been

y agreement under the provisions of

ule (Productivity Incentive Schemes and/or
les of the Construction Industry Joint Council

refers) or provisions on incentive schemes and/or

ntained in the rules or decisions of some other

the rates or amounts of any contribution, levy or tax which will be payable
ntractor in his capacity as an employer in respect of, or calculated by
to, the rates of wages and other emoluments and expenses (including
edits) referred to herein.

es of wages or other emoluments and expenses (including

increased or decreased by reason of any alteration in the said

(including holiday credits) together with the net amount of any consequential
increase or decrease in the cost of employer's liability insurance, of third party
insurance and of any contribution, levy or tax payable by a person in his capacity as
an employer shall, as the case may be, be paid to or allowed by the Contractor.

PWA 139)98 (03D3) 0 The Joint Contracts Tribunal Limited 2003 21

Persons employed 39.1 .3 There shall be added to the net amount paid to or allowed by the Contractor under
on site other than clause 39.1.2, in respect of each person employed by the Contractor who is engaged
'workpeople'
upon or in connection with the Works either on or adjacent to the site and who is
not within the definition of 'workpeople' in clause 39.7.3, the same amount as is
payable or allowable in respect of a craftsman under clause 39.1.2 or such
proportion of that amount as reflects the time (measured in whole working days)
that each such person is so employed.

39.1 .4 For the purposes of clauses 39.1.3 and 39.2.3

no period of less than 2 whole days in any week shall be taken into account and
periods of less than a whole working day shall not be agg
a whole working day;

the phrase "the same amount as is payable or allowa

craftsman" shall refer to the amount in respect of a
Contractor (or by any Domestic Sub-Contrac
clause 39.4 refers) under the rules or decisio
Construction Industry Joint Council or other
aforesaid rules or decisions or agreements
wage, emolument or other expenses for a
in respect of a craftsman employed as afor
applicable; and

Regulations), or any

Workpeople - 39.1 -5 The prices contained in the Cont

wage-fixing body -
reimbursementof
fares

e capacities referred to in

ferred to in clauses 39.1.1.1

ions of the Construction
the Works and which have

e-fixing body other than the Construction

with the rules or decisions of such other
ich have been promulgated as aforesaid.

ent of fares is increased or decreased by reason of any

said rules or decisions promulgated after the Base Date or by
ual increase or decrease in fares which takes effect after the Base Date,

t amount of that increase or decrease shall, as the case may be, be paid
ed by the Contractor.

ontract Bills shall be deemed to have been calculated in the manner

an adjustment shall be made in calculating the Ascertained Final Sum
ified hereunder.

The prices contained in the Contract Bills are based upon the types and rates of
contribution, levy and tax payable by a person in his capacity as an employer and
which at the Base Date are payable by the Contractor. A type and a rate so payable
are in clause 39-22 referred to as a 'tender type' and a 'tender rate'.

22 0 The Joint Contracts Tribunal Limited 2003 PWA (39198 (03/03)

~. . .
 39.2 *2 If any of the tender rates other than a rate of levy payable by virtue of the Industrial
Training Act 1964 is increased or decreased or if a tender type ceases to be payable
or if a new type of contribution, levy or tax which is payable by a person in his
capacity as an employer becomes payable after the Base Date, then in any such case
the net amount of the difference between what the Contractor actually pays or will
pay in respect of workpeople as referred to in clauses 39.1.1.1 and 39.1.1.2 or
because of his employment of such workpeople and what he would have paid had
the alteration, cessation or new type of contribution, levy or tax not become
effective shall, as the case may be, be paid to or allowed by the Contractor.

39.2 -3 There shall be added to the net amount paid to or allowed by the Contractor under
clause 39-2.2, in respect of each person employed by the

that each such person is so employed. The provisions of

clause 39.2.3.

39.2 *4
refund of the contributions, levies and
an employer and upon the types and r
capacity as an employer being in each

39.2 -5 If any of the tender rates is i er type ceases to be

payable or if a new type of r

referred to in c of his employment of such

alteration, cessation or new

39.2 .6 5 to premiums shall be construed as

e described which are made under or by
in his capacity as an employer and which
avrng persons in his employment.
39.2 -7 are payable by the Contractor in respect of
ses 39.1.1.1 and 39.1.1-2 whose employment is
in the meaning of the Pension Schemes Act 1993,
ubject to the proviso hereto, for the purpose of recovery or

cupational pension scheme, by reference to membership of

of workpeople is contracted-out employment. is established
truction Industry Joint Council or of some other wage-fixing

s an employer howsoever they are described and whoever the recipient

posed under or by virtue of an Act of Parliament and which affect the

PWA (39)98 (03/03) 0 The Joint Contraas Tribunal Limited 2003 23

 39.3 The prices in the Contract Bills shall be deemed to have been calculated in the manner
set out below and an adjustment shall be made in calculating the Ascertained Final Sum
in the events specified hereunder:

Materials, goods, 39.3 .1 The prices contained in the Contract Bills are based upon the market prices which
electricity and
fuels
were current at the Base Date of the materials, goods, electricity, fuels or any other
solid, liquid or gas necessary for the execution of the Works, and upon the duty or
tax payable at that Date on the disposal of waste from' the site.

39.3 -2 If after the Base Date the market price of any of the above things increases or
decreases, or the duty or tax on the disposal of waste from the site increases or
decreases, then the net amount of the difference shall, as the
to or allowed by the Contractor.

39.3 -3 The references in clauses 39.3.1 and 39.3.2 to 'market

including any duty or tax (other than value added ta
of being treated, as input tax by the Contractor) by w
payable under or by virtue of any Act of Parliament o
appropriation, processing, use or disposal of any of
39.3.1.
m-
3 clause

39.4 -
Fluctuations -work sub-let Domestic Sub-Contradqrs c/ /
Sublet work - 39.4 .1 If the Contractor is obliged by clause 1n-3, or shau deci t o clause 19.2, to
incorporation of sub-let any portion of the Works ctor he shall incorporate
provisions to like
effect in the sub-contract provisions to sions of

clause 39 (excluding clause tage stated in the

Appendix pursuant to cl

Sublet work - 39.4 *2 as referred to in clause 39.4.1 is

fluctuations- in such sub-contract by reason of the
payment to or
allowance by the then the net amount of such increase
Contractor to or allowed by the Contractor under

39.5 to -7

Written notice by 39.5 *1 n notice to the Architect of the occurrence of any of

Contractor
he following provisions as are applicable for the

-1

Any notice required to be given by clause 39-5.1 shall be given within a reasonable
time after the occurrence of the event to which the notice relates and the giving of
written notice at that time shall be a condition precedent to any payment being
made to the Contractor in respect of the event in question.

24 OThe Joint Contracts Tribunal Limited 2003 PWA 1391 98 103/031

Agreement - 39.5 .3 The Quantity Surveyor and the Contractor may agree what shall be deemed for all
Quantity Surveyor the purposes of this Contract to be the net amount payable to or allowable by the
and Contractor
Contractor in respect of the occurrence of any event such as is referred to in any of
the provisions listed in clause 39.5-1.

Fluctuations taken 39.5 a4 Any amount which from time to time becomes payable to or allowable by the
into account in Contractor by virtue of clauses 39.1 to .3 or clause 39.4 shall be taken into account in
calculating the
Ascertained Final calculating:
Sum
-4 -1 the Ascertained Final Sum; and

- 4 -2 any amounts payable to the Contractor and which

with clause 28-4-31.

The calculation to which clause 39.5.4 refers shall be

clauses 39.5.5 to .5.7.

Evidence and 39.5 .5 As soon as is reasonably practicable the Contr

computations by computations as the Architect or the Quantity
Contractor

allowable by the Contractor under cl

to or allowable by the Domestic Sub
contract to the like effect as clauses 3
workpeople -such evidence shall inc
sonably required to

No alteration to 39.5 -6 No calculation made by virtue

Contractor's profit profit of the Contractor due to
Sum.

Position where t shall be added or deducted in

Contractor in nterim Certificate or in the Final
default ovar
completion Certificate in r to or allowable by the

of which the payment or allowance

39.5 -8 Clause 39.5.

is unamended and forms part of the Conditions;

ect of every written notification by the Contractor under

r confirmed in writing such Completion Date as he considers to
with clause 25.

Work atc. to which 39.6 Chu t apply in respect of:

clauses 39.1 to .4
not applicable
ontractor is allowed daywork rates under clause 13.5.4;

ted or materials or goods supplied by any Nominated Sub-Contractor or

Supplier (fluctuations in relation to Nominated Sub-Contractors and
Suppliers shall be dealt with under any provision in relation thereto
y be included in the appropriate sub-contract or contract of sale);

d by the Contractor for which a tender made under clause 35.2 has
d (fluctuations in relation to such works shall be dealt with under any
he accepted tender of the Contractor);

changes in the rate of value added tax charged on the supply of goods or services
by the Contractor to the Employer under this Contract.

Definitions for
with clause 39
39.7 -1 the expression the 'Base Date' means the Date stated in the Appendix;

39.7 -2 the expressions 'materials' and 'goods' include timber used in formwork but do not
include other consumable stores, plant and machinery;

PWA (391 98 (OW31 0 The Joint ContractsTribunal Limited 2003 25

 39.7 -3 the expression 'workpeople' means persons whose rates of wages and other
emoluments (including holiday credits) are governed by the rules or decisions or
agreements of the Construction Industry Joint Council or some other wage-fixing
body for trades associated with the building industry;

39.7 -4 the expression 'wage-fixing body' shall mean a body which lays down recognised
terms and conditions of workers. For the purposes of clause 39 'recognised terms
and conditions' means terms and conditions of workers in comparable employment
in the trade or industry, or section of trade or industry, in which the employer in
question is engaged which have been settled by an agreement or award to which
the parties are employers' associations and independent trade unions which

39.8 Percentage addition to fluctuation payments or allowances

-1 -1 clause 39-1.2,

.I .2 clause 39.1.3,

-1 -3 clause 39.1.6,

.1 -4 clause 39.2.2,

e1 4 clause 39.2.5,
.1 .6 clause 39.3.2

26 @The Joint Contracts Tribunal Limited 2003 PWA 139) 98 (03/031

... - .
 JCT Standard Form of Building Contract
1998 Edition

-
Clause 40 For use with the
Private Edition With Quantities
40 Use of price adjustment formulae

Adjustment of 40.1 .1 -1 The Contract Sum shall be adjusted in accordance w

Contract Sum - 40 and the Formula Rules current at the Base Date is
price adiustment
formulae for by the JCT (hereinafter ca!led the 'Formula Rules').
building contracts -
Formula Rules
-1 .2 Any adjustment under clause 40 shall be to s
and nothing in clause 40 shall affect in any w
the VAT Agreement.

40.1 2 The Definitions in rule 3 of the Formula Rules s

40.1 -3 The adiustment referred to in clause 40 shall b

40.1 .4
payment issued under the provisions of

If any correction of amounts of a

R- included in previous
certificates is required followin Formula Rules, such
correction shall be given effect ent to be issued.

Amendment to 40.2 Interim valuations shall be ma

-
clause 30 interim
valuation8
deemed to have be

Fluctuations - les applies the Contractor shall insert

articles rice of the article in sterling (that is the
manufactured
outside the United
Kingdom ses or decreases then the net amount of the
the market price inserted in the aforesaid
ractor and current when the article is

e construed as including any duty or tax (other

or is capable of being treated, as input tax by

Power to agree -
Quantity Surveyor
and Contractor

whichever Part is

the determination
of any adjustment payable by the Contractor to any sub-contractor.

PWl40198 lo;vo31 0The Joint Contracts Tribunal Limited 2003 27

 ... . .

Position where 40.6 -1 If at any dme prior to the issue of the Final Certificate under clause 30.8formula
Monthly Bulletins adjustment is not possible because of delay in, or cessation of, the publication of the
are delayed, etc.
Monthly Bulletins, adjustment of the Contract Sum shall be made in each Interim
Certificate during such period of delay on a fair and reasonable basis.

40.6 -2 If publication of the Monthly Bulletins is recommenced at any time prior to the issue
of the Final Certificate under clause 30.8, the provisions of clause 40 and the
Formula Rules shall apply for each Valuation Period as if no delay or cessation as
aforesaid had occurred and the adjustment under clause 40 and the Formula Rules
shall be substituted for any adjustment under clause 40.6.1.

40.6 .3 During any period of delay or cessation as aforesaid the Contra

shall operate such parts of clause 40 and the Formula Rules
amount of formula adjustment due to be readily calculated
of publication of the Monthly Bulletins.

Formula
adjustment - adjustment of the Contract Sum under
failure to complete
Certificates issued after the aforesaid C

.1 .2 If for any reason the adjustment

Certificate which is or has been i

40.7 .2 Clause 40.7.1 shall not be appli

s part of the Conditions;

and

cation by the Contractor under

pletion Date as he considers to

28 0The Joint Contracts Tribunal Limited 2003 PW (40) 98 i03/03)

 JCT Standard Form of Building Contract
1998 Edition

-
Clause 40 For use with the
Private Edition Without Quantities

40 Use of price adjustment formulae

Adjustment of 40.1 .1 -1 The Contract Sum shall be adjusted in accordance with t

Contract Sum - 40 and the Formula Rules current at the Base Date issu
price adjustment
formulae for by the JCT (hereinafter called the 'Formula Rules')
building contracts - adjustment shall be made unless the Contract Doc
Formula Rules
to which rule 11b of the Formula Rules refers.

-1 - 2 Anv adiustment under clause 40 shall be to s - o k e A d e d tax

and noihing in clause 40 shall affect in any v/ay JlGTperqdoppf cl&e 15 and

40.1

40.1
the VAT Agreement.

-3 The adjustment referred to in clause 4n -hall

i f ibe
cates
k
" L s )o4 0 .
-2 The Definitions in rule 3 of the Formula Rules sh I appl

for
payment issued under the provisions

40.1 -4 If any correction of amounts of included in previous

certificates is required followin he Formula Rules, such
correction shall be given effe payment to be issued.

Amendments to 40.2 -1 Interim valuati each Interim Certificate, and

clause 30 -interim accordingly th iders them to be necessary"
valuations
shall be deeme

40.2 -2 The Contractor shall pr n of the Schedule referred to in clause

Fluctuations - 40.3 For any article to e Formula Rules applies the Contractor shall insert
articles in a list attached ments the market price of the article in sterling
manufactured
outside the United nt at the Base Date. If after that Date the
Kingdom oresaid list increases or decreases then the

ever payable under or by virtue of any Act of

e, sale, appropriation or use of the article specified as

urveyor and the Contractor may agree any alteration to the methods and
ascertaining the amount of formula adjustment to be made under clause
ounts ascertained after the operation of such agreement shall be deemed
ses of this Contract to be the amount of formula adjustment payable to
he Contractor in respect of the provisions of clause 40. Provided always:

that no alteration to the methods and procedures shall be agreed as aforesaid

unless it is reasonably expected that the amount of formula adjustment so
ascertained will be the same or approximately the same as that ascertained in
accordance with Part I or Part II of Section 2 of the Formula Rules whichever Part is
stated to be applicable in the Contract Documents; and

40.5 -2 that any agreement under clause 40.5 shall not have any effect on the determination
of any adjustment payable by the Contractor to any sub-contractor.

PWO (401 98 (OW3) OThe Joint Contracts Tribunal Limited 2003 29

Position where 40.6 -1 If at any time prior to the issue of the Final Certificate under clause 30.8 formula
Monthly Bulletins adjustment is not possible because of delay in, or cessation of, the publication of the
are delayed, etc.
Monthly Bulletins, adjustment of the Contract Sum shall be made in each Interim
Certificate during such period of delay on a fair and reasonable basis.

40.6 .2 If publication of the Monthly Bulletins is recommenced at any time prior to the issue
of the Final Certificate under clause 30.8,the provisions of clause 40 and the
Formula Rules shall apply for each Valuation Period as if no delay or cessation as
aforesaid had occurred and the adjustment under clause 40 and the Formula Rules
shall be substituted for any adjustment under clause 40.6-1.

40.6 -3 During any period of delay or cessation as aforesaid the Cont

of publication of the Monthly Bulletins.

Formula 40.7 -1 .1 If the Contractor fails to complete the Works by

adjustment - adjustment of the Contract Sum under clause 4
failure to complete

Date falls.

be corrected to
comply with that clause.

40.7 -2 Clause 40.7.1 shall not be applied

part of the Conditions;

.2 -2 the Archit ification by the Contractor under

pletion Date as he considers to

30 0 The Joint Contracts Tribunal Limited 2003 PWO (40) 98 (03#3)

. -- -- .
 JCT Standard Form of Building Contract
1998 Edition

Clause 40 - For use with the

Private Edition With Approximate Quantities
40 Use of price adjustment formulae

Adjustment of 40.1 .1 .1 In calculating the Ascertained Final Sum adj

Ascertained Final accordance with the provisions of clause 40
Sum -price
adjustment the Base Date issued for use with clause 40
formulae for 'Formula Rules').
building contracts -
Formula Rules
.1 .2 Any adjustment under clause 40 shall be to
and nothing in clause 40 shall affect in any
the VAT Agreement.

40.1 -2 The Definitions in rule 3 of the Formula Rules s

40.1 -3 The adjustment referred to in clause 4

payment issued under the provisions

40.1 .4 If any correction of amounts of

certificates is required followin mula Rules, such
correction shall be given effect

40.2 [Number not used1

Fluctuations - 40.3 For any article to wh ies the Contractor shall insert
articles in a list attached t o t e article in sterling (that is the
manufactured
outside the United
Kingdom
arket price inserted in the aforesaid
and current when the article is

ted, or is capable of being treated, as input tax by

under or by virtue of any Act of Parliament on
or use of the article specified as aforesaid.

Power to agree -
Quantity Surveyor f formula adjustment to be made under clause
and Contractor
operation of such agreement shall be deemed

nce with Part I or Part II of Section 2 of the Formula Rules whichever Part is

under clause 40.5 shall not have any effect on the determination
any sub-contractor.

PWA 140)98 103/031 Q The Joint ContractsTribunal limited 2003 31

Position where 40.6 a1 If any time prior to the issue of the Final Certificate under clause 30.8formula
Monthly Bulletins adjustment is not possible because of delay in, or cessation of, the publication of the
ere deleved, etc.
Monthly Bulletins, adjustment shall be made in each Interim Certificate during such
period of delay on a fair and reasonable basis.

40.6 -2 If publication of the Monthly Bulletins is recommenced at any time prior to the issue
of the Final Certificate under clause 30.8,the provisions of clause 40 and the
Formula Rules shall apply for each Valuation Period as if no delay or cessation as
aforesaid had occurred and the adjustment under clause 40 and the Formula Rules
shall be substituted for any adjustment under clause 40.6.1.

40.6 -3 During any period of delay or cessation as aforesaid t

shall operate such parts of clause 40 and the Formula
amount of formula adjustment due to be readily calcu
of publication of the Monthly Bulletins.

Formula 40.7 -1 .1 If the Contractor fails to complete the Works

adjustment -failure adjustment under clause 40 shall be effected
to complete
after the aforesaid Completion Date by refer
applicable to the Valuation Period in wh

.1 -2 If for any reason the adjustment included

Certificate which is or has been issued aft
not in accordance with clause 40.7.1.1, s

40.7
comply with that clause.
nW
-2 Clause 40.7.1 shall not be applied unl ss’
!A\
.2 .1 the printed text of clause part of the Conditions;
and

cation by the Contractor under

pletion Date as he considers to

32 0The Joint Contracts Tribunal Limited 2003 PWA (40) 98 103/03)

Fluctuation clauses: Private versions

This reprint incorporates the following amendments.

A Amendment 2. January ZOO0

Sundry arnendrnenta
(Incorporated August2001)

1. clauw38
clauses 38.2.1 and 38.2.2
amended
clauso 38.2.3 deleted
clause 38.6.2 amended
2. Clause39
cleuses 39.3.1.39.3.2 and 39.3.3
amended
clause 39.3.4 delated ,
clause 39.7,2 amended

Amendments 1. 3 and 4 did not

affect the fluctuation cIau58s.

E Updating
(incorporated Februery 2003)

1. Statutory rdsrencra
Income tax end pension scheme
referencesupdated

0 The Joint Contracts Tribunal Limited 2003 FS:P 98 (OW03)

. .

For the purpose of inserting the relevant fluctuation clause Standard Form of Building Contract
after clause 37 in Part 3 of the Main Contract fin accordance 1998 Edition
with footnote [tt]to clause 371, the parties to the contract incorporating Amendments 1to 4
may take the clause from this booklet by extraction or
photocopy. Fluctuations

Fluctuation clauses for use with t

Private versions

Published for the JCT by

1-3 Dufferin Street, Lond

@TheJoint Contra

fssued by The Joint Contracts Tribunal Limited

Members
Association of Consulting Engineers Limited
British Property Federation Limited
Construction Confederation
Local Government Association
National Specialist Contractors Council Limited
Royal Institute of British Architects
The Royal Institution of Chartered Surveyors
The Scottish Building Contract Committee