Last edited 06 Feb 2017

Construction contract

This article refers to the contract for the main contractor to construct the works (and on some contracts also to design, operate and finance the project). For agreements for the appointment of consultants, independent client advisers, site inspectorate, project managers, client representatives etc see the article on appointing consultants.

1 Introduction
2 Standard forms of contract in common use for construction in the UK.
3 Contract conditions
4 Building information modelling (BIM)
5 Modified standard forms of contract
6 Bespoke contracts
7 Notes
8 Find out more
- 8.1 Related articles on Designing Buildings Wiki
- 8.2 External references

[edit] Introduction

The classic nineteenth century definition of a contract is 'a promise or set of promises which the law will enforce' (Pollock, Principles of Contract 13th edition). That is to say, there is reciprocity of undertaking passing between the promisor and the promisee. In contract, the rights and obligations are created by the acts of agreement between the parties to the contractual arrangement.

In the procurement of construction, contracts can be:

Standard forms.
Modified standard forms.
Bespoke.

[edit] Standard forms of contract in common use for construction in the UK.

[edit] JCT (The Joint Contracts Tribunal)

DB: Design and build contract.
CD: Standard form with contractors design.
CE: Constructing excellence contract.
CM: Construction management contract.
IFC: Intermediate form of building contract.
MC: Management contract.
MTC: Measured term contract.
MW: Agreement for minor work.
PCC: Prime cost building contract.
MP: Major project construction contract.
RM: Repair and maintenance contract (commercial).
SBC: Standard form of building contract.

NB the JCT traditional forms of contract remain by far the most popular forms of contract in the UK (ref nbs: National Construction Contracts and Law Survey 2012).

[edit] ACA (The Association of Consultant Architects).

Form of building agreement.
PPC: Standard form of contract for project partnering.
SPC: Standard form of specialist contract for project partnering.

[edit] Chartered Institute of Building

CPC 2013: CIOB Contract for use with Complex Projects.

[edit] FIDIC (Fédération Internationale des Ingénieurs-Conseils).

FIDIC's core suite of contracts includes:

Conditions of Contract for Construction. The Red Book.
Conditions of Contract for Plant & Design-Build. The Yellow Book.
Conditions of Contract for EPC Turnkey Projects. The Silver Book.
The Short Form of Contract. The Green Book.

[edit] NEC (The New Engineering Contract): Engineering and Construction Contract).

Option A: Priced contract with activity schedule.
Option B: Priced contract with bill of quantities.
Option C: Target contract with activity schedule.
Option D: Target contract with bill of quantities.
Option E: Cost reimbursable contract.
Option F: Management contract.
Option G: Term contract.

For more information see NEC3.

[edit] Other forms of contract

Other less commonly used forms of contract include:

The GC Works suite of standard government conditions of contract are no longer being updated by the government who are now moving to the New Engineering Contracts, now in their third edition NEC3. See GC Works for more information.
IChemE (The Institution of Chemical Engineers) forms of contract.
ICC Infrastructure Conditions of Contract. A relaunch of CoC (see below)
The ICE Conditions of Contract (CoC) (previously maintained by the Institution of Civil Engineers) have been withdrawn in favour of NEC contracts. See ICE Conditions of Contract for more information.
IMechE/IET (The Institution of Mechanical Engineers / The Institution of Engineering Technology) Model Forms of General Conditions of Contract for electrical works (MF/1-4).
The Civil Engineering Contractors' Association (CECA) subcontracts for the ICC (above).

[edit] 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.

See: Contract conditions for more information.

[edit] Building information modelling (BIM)

The adoption of building information modelling (BIM) on a project requires the definition of specific obligations and liabilities, and limitations must be placed on the agreed use of the model. This is generally achieved by adopting a BIM protocol. BIM protocols can be incorporated into contract documents by the addition of a model enabling amendment such as that proposed in the CIC BIM protocol.

[edit] Modified standard forms of contract

See: Modifying clauses in standard forms of contract.

[edit] Bespoke contracts

24% of respondents to the nb National Construction Contracts and Law Survey 2012 indicated that they use purpose-written bespoke contracts. Not only is this considered inadvisable because of the risk that bespoke contracts may not adequately or fairly make provision for all circumstances, and that they are not supported by a history of case law, but it is also a poor reflection of how inflexible and ineffective the industry perceives many of the standard forms of contract to be.

For more information, see Bespoke construction contract.

[edit] Notes

NB The first stage appointment of a two-stage procurement process might be made using a separate pre-construction services agreement (PCA or PCSA), sometimes called early works agreements, rather than under the provisions of the main, second-stage contract.

For a detailed description of the tender process for appointing the main contractor see the free work plan stages: