JCT target cost contract family launched as part of the 2024 edition

Essentially TCC is a contract based on the JCT Design and Build Contract 2024 which provides for financial risk sharing between the contract parties on pain/gain principles.  The sum to be paid under the main contract is the Target Cost which comprises a detailed schedule of Allowable Cost and a Contract Fee (fixed or a percentage of Allowable Cost as agreed ).

The Target Cost may be adjusted in a similar way to the Contract Sum under other JCT contracts and once adjusted is referred to as the Adjusted Target Cost. The Difference Share is the difference between the actual cost of the Works namely the Allowable Cost plus Contract Fee on the one hand  and the Adjusted Target Cost on the other.   The Difference Share whether positive or negative is shared by the parties in pre- agreed percentages or amounts.

JCT has published on its website a brief introduction to the new forms and helpful worked examples showing how to calculate the various components of the sums payable as described above JCT Target Cost Contract Hub – The Joint Contracts Tribunal.  Members of the Wedlake Bell construction team will also be happy to advise on its use on projects,  generally those involving larger works with detailed design,  as well as its terms.

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1. 

   • Sarah Elliott

   • Partner
   • Construction

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2. 

   • Suzanne Reeves

   • Consultant
   • Construction

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