Last edited 28 Jul 2016

Construction contract conditions

Contract conditions set out the principal legal relationship between the parties to a construction project, determining the allocation of risk and consequently, price.

English law, unlike the codified legal systems in Europe, which recognise a duty of good faith, is not concerned with fairness but with certainty (unless it is a consumer contract protected by statute such as the Consumer Protection Act 1987 or the Unfair Contract Terms Act 1977 )

The construction sector has a wide range of standard forms of contract which are intended to balance the risk of the parties but more importantly, through extensive and repeated use, give rise to a certainty of meaning. Well known standard form contracts include the Joint Contracts Tribunal (JCT), the New Engineering Contract (NEC) and for international projects Fédération Internationale des Ingénieurs-Conseil (FIDIC). NB see the article on contracts for more information.

Standard form contracts also provide for different procurement routes, such as:

See the article on procurement routes for more information.

Typical conditions found in construction contracts can include (in alphabetical order):

Conditions of contract must be read in conjunction with specification documents, drawings bills of quantities, activity schedules and special conditions. Standard form contracts often comprise suites of contracts with ‘back to backsubcontracts, consultant appointments and collateral warranties. The use of core conditions with option schedules or supplemental provisions is also now common (see NEC contract)

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