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).
See the article on Contracts for more information.
Standard form contracts also provide for different procurement routes, such as:
- Construction management.
- Design and build.
- Design build finance and operate (PPP / PFI / DBO / BOOT).
- Emerging cost contracts.
- Engineering Procurement and Construction Contract (EPC) / Turnkey contract
- Engineering Procurement and Construction Management contract (EPCM)
- Furniture, Fixtures and Equipment contract (FF&E).
- Framework agreements.
- Management contract.
- Measured term contracts
- Measurement contract ('re-measurement' or ‘measure and value’ contract)
- Partnering.
- Prime cost contract / cost plus contract / cost reimbursable contract
- Prime contracting / prime-type contracting
- Traditional contract.
See the article on Procurement routes for more information.
Typical conditions found in construction contracts can include (in alphabetical order):
- Access to the construction site.
- Assignment, rights of third parties and collateral warranties.
- Commissioning.
- Contractor's design.
- Contract sum and adjustment,
- Date for possession, deferment of possession, progress, delays, completion date, suspension of works and termination.
- Dispute resolution procedures and alternative dispute resolution.
- Employer's instructions.
- Force majeure.
- Information release schedule.
- Insolvency.
- Injury, damage and insurance.
- Joint Fire Code.
- Liquidated damages.
- Net contribution clause.
- Partial possession.
- Payment, valuation (including off-site materials), certificates, fluctuations and retention.
- Practical completion.
- Project management and contract administration.
- Quality of works.
- Relevant events (compensation events), extensions of time and loss and expense.
- Sectional completion.
- Statutory obligations.
- Sub-contractors.
- Testing and defects (defects liability period)
- Variations, prime cost sums and provisional sums.
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 back’ subcontracts, consultant appointments and collateral warranties. The use of core conditions with option schedules or supplemental provisions is also now common (see NEC contract).
[edit] Related articles on Designing Buildings
- Addendum.
- Alternative dispute resolution.
- Articles of agreement.
- Common law.
- Competitive procedure with negotiation.
- Condition.
- Construction contract.
- Construction law.
- Contract administrator.
- Contract negotiations.
- Contract strategy.
- Contractual right.
- Delay damages.
- Disallowed cost.
- Escalation.
- Essentials of a contract.
- Excepted risk.
- Extension of time.
- Form of tender.
- Hybrid construction contract.
- Key dates.
- Liquidated damages.
- Loss and expense.
- Modifying clauses in standard forms of contract.
- Named specialist work.
- Negotiated Procedure without Prior Publication NPwPP.
- Outturn cost.
- Payment for extra work.
- Pre-contract management.
- Proprietary information.
- Quantum meruit.
- Right to payment.
- Supply chain management.
- Variation.
- Z clauses.
Featured articles and news
The UK's Modern Industrial Strategy: A 10 year plan
Previous consultation criticism, current key elements and general support with some persisting reservations.
Building Safety Regulator reforms
New roles, new staff and a new fast track service pave the way for a single construction regulator.
Architectural Technologist CPDs and Communications
CIAT CPD… and how you can do it!
Cooling centres and cool spaces
Managing extreme heat in cities by directing the public to places for heat stress relief and water sources.
Winter gardens: A brief history and warm variations
Extending the season with glass in different forms and terms.
Restoring Great Yarmouth's Winter Gardens
Transforming one of the least sustainable constructions imaginable.
Construction Skills Mission Board launch sector drive
Newly formed government and industry collaboration set strategy for recruiting an additional 100,000 construction workers a year.
New Architects Code comes into effect in September 2025
ARB Architects Code of Conduct and Practice available with ongoing consultation regarding guidance.
Welsh Skills Body (Medr) launches ambitious plan
The new skills body brings together funding and regulation of tertiary education and research for the devolved nation.
Paul Gandy FCIOB announced as next CIOB President
Former Tilbury Douglas CEO takes helm.
UK Infrastructure: A 10 Year Strategy. In brief with reactions
With the National Infrastructure and Service Transformation Authority (NISTA).
Ebenezer Howard: inventor of the garden city. Book review.
The Grenfell Tower fire, eight years on
A time to pause and reflect as Dubai tower block fire reported just before anniversary.
Airtightness Topic Guide BSRIA TG 27/2025
Explaining the basics of airtightness, what it is, why it's important, when it's required and how it's carried out.
Construction contract awards hit lowest point of 2025
Plummeting for second consecutive month, intensifying concerns for housing and infrastructure goals.
Understanding Mental Health in the Built Environment 2025
Examining the state of mental health in construction, shedding light on levels of stress, anxiety and depression.
The benefits of engaging with insulation manufacturers
When considering ground floor constructions.
Lighting Industry endorses Blueprint for Electrification
The Lighting Industry Association fully supports the ECA Blueprint as a timely, urgent call to action.
Comments
this site is indeed very informative👍 worth to spend sometime reading during work break