JBCC: delegating authority and the role of employer’s agents

Clause 6.0 of the agreement deals with delegations of authority in terms of the JBCC and the nature of instructions issued under the JBCC by the principal agent.

This clause is critical in projects, as it governs who can act on behalf of the employer and how those powers are exercised.

Contractual basis for delegation

The principal agent’s authority stems directly from the contract. Under the JBCC, the principal agent is appointed by the employer with full authority to act in terms of the agreement. This is a broad delegation that empowers the principal agent to bind the employer but with one important limitation: the principal agent cannot amend the agreement.

Read more on South Africa’s JBCC construction contract

• https://www.pinsentmasons.com/out-law/analysis/south-african-contractors-pba-clauses-consequences
• https://www.pinsentmasons.com/out-law/analysis/jbcc-commercial-considerations-contracting-south-Africa
• https://www.pinsentmasons.com/out-law/analysis/jbcc-pba-construction-management-south-Africa
• https://www.pinsentmasons.com/out-law/analysis/jbcc-payment-issues-pba

While the principal agent plays a central role, an employer may appoint other agents to handle specific aspects of the works. This can include specialists such as quantity surveyors, architects or engineers. When this happens, the principal agent must notify the contractor of the delegation so that these agents can issue instructions and perform their duties in respect of the works.

However, agents cannot subdelegate their authority without the employer’s prior written consent and notice to the contractor in terms of clause 6.2. This ensures accountability and clarity in the chain of command.

How should agents act?

Both the principal agent and other agents must declare any interest in the works beyond their professional one. Their independence is vital to the integrity of the project. Should a principal agent breach the contract the consequences can be severe, ranging from suspension to termination.

If an agent fails to act within their delegated authority, the contractor must notify the principal agent and the employer, requesting rectification within five working days. If the default persists, work may be suspended following the issuing of written notice. Common triggers include delays in certifying payment certificates or failure to inspect works when requested.

Potential impacts

When defaults occur, the employer must appoint a new principal agent within 10 working days of receiving notice. The contractor then has five days to respond to the intention to appoint a replacement. These timelines are designed to keep projects moving and minimise disruption to the time for completion specified in the contract.

At the same time, the employer cannot interfere with, or prevent, the principal agent or other agents from exercising their fair and reasonable judgment. This prohibition reinforces the independence of the principal agent, whose authority is broad and binding.

The principal agent also plays a pivotal role in achieving practical completion. They must inspect the works, provide interpretations on standards, and issue instructions after each inspection. If the works are not ready for practical completion, the principal agent will prepare a comprehensive and conclusive list of defects and outstanding work.

This process repeats until all items are addressed, after which the principal agent issues the certificate of practical completion.

What does this mean for you?

The principal agent’s powers under the JBCC are extensive, with the only limitation being the inability to amend the contract. Courts have reinforced this view, describing the principal agent as “an agent in every sense of the word”, with significant authority and obligations.

Importantly, while the principal agent binds the employer, the contractor cannot claim directly against the principal agent for losses caused by breaches. Instead, recourse lies against the employer, who may then pursue recourse against the principal agent under contract or delict.

The principal agent’s authority even extends to payment certificates. Once issued, these certificates create a binding obligation on the employer to pay, effectively forming a liquid document that can be enforced independently of the contract.

Clause 6.0 underscores the importance of clear delegation and accountability in construction projects. The principal agent is not just a procedural role, it is a cornerstone of the JBCC framework, influencing everything from payment to completion. Understanding these dynamics are essential for employers, contractors and agents alike to ensure smooth project execution and mitigate risk.

Co-written by Christoff Ferreira and Melandri Naidoo of Pinsent Masons