A construction project is only as strong as the agreement that sits behind it. A well-drafted contract does far more than record what has been agreed.
It sets clear expectations, allocates risk, establishes responsibilities and provides a framework for dealing with issues if things do not go to plan.
While every project has its own requirements, several core provisions should be carefully considered to support successful delivery and help avoid costly disputes.
Scope of works
The scope of works forms the foundation of the contract. It should clearly describe the services, materials and deliverables required, supported by drawings, specifications, programmes and any other relevant project information.
A detailed scope reduces the risk of misunderstandings and helps ensure all parties are working towards the same objectives.
It should also outline how changes to the agreed works will be assessed, approved and recorded throughout the project lifecycle.
Poorly defined scopes remain one of the most common causes of delays, cost overruns, claims for variations and additional works and contractual disputes.
Roles and responsibilities
Each party should have a clear understanding of its obligations before work begins.
This includes identifying who is responsible for carrying out specific tasks, supplying materials, obtaining approvals and managing key project risks.
The contract should also address compliance responsibilities, particularly in relation to health and safety legislation, building regulations and duty holder obligations under the Building Safety Act 2022 where applicable.
Clear allocation of responsibilities helps reduce duplication, gaps in delivery and uncertainty when issues arise.
Delays and extensions of time
The contract should include realistic completion dates together with procedures for dealing with delays.
It is important to identify circumstances that may justify an extension of time, such as exceptionally adverse weather, variations, delayed information or other events outside the contractor’s control.
Many contracts also include liquidated damages provisions, setting out a pre-agreed level of compensation payable if completion is delayed beyond the contractual completion date and no extension of time applies.
To remain enforceable, these amounts should represent a genuine and proportionate estimate of the losses likely to be suffered as a result of delay rather than a punitive sum.
A clear approach to managing delay helps maintain project certainty while providing a fair mechanism for addressing unforeseen events.
Payment provisions
Payment clauses should leave no room for ambiguity. They should set out the contract sum, valuation process, payment intervals, due dates, final dates for payment and the notices required throughout the payment cycle.
Under the Housing Grants, Construction and Regeneration Act 1996, as amended, most construction contracts must include an adequate payment mechanism and provide entitlement to interim or stage payments for projects exceeding 45 days.
Where contractual payment terms fail to comply with the legislation, the relevant provisions of the Scheme for Construction Contracts may be applied automatically.
Given the continued focus on fair payment practices across the construction sector, ensuring compliance with statutory payment requirements remains essential for both employers and contractors.
How can Palmers help?
Creating construction contracts can be quite the challenge, so it is always best to get in contact with a solicitor to do it for you.
Here at Palmers, our team of solicitors is here to build you bespoke contracts that are robust and in your best interests.
For support with construction contracts, get in touch with our team today!