Construction Contract Template Example

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What is a construction contract and why is it important?

There are several different types of construction contracts, and they aim to encourage best practice, ensure timescales are reached and protect the interests of all parties involved. As well as setting out expectations, terms, conditions and financial agreements, construction contracts usually include a schedule of work to make sure expectations are met, and any delay or unforeseen cost risk is mitigated.

All completed and signed construction contract templates should be clear, legally binding, and detailed enough to include the full scope of work, any risks which could occur, and planned clauses to mitigate and/or compensate should something go wrong. Construction contract administrators are key roles to help with tendering, signing and negotiating on large projects - working in partnership with the project manager to make sure any agreed terms are met from all sides.

For construction contract template UK versions, both the Joint Contracts Tribunal (JCT) and the New Engineering Contract (NEC) organisations offer standard or ready-to-use contracts for the construction industry, and provide a wide range of templates to best suit your individual project.

Key elements of construction contract templates

Any construction project, whether it’s big or small, needs a comprehensive construction contract template in the UK, to make sure all parties are in agreement on cost, the work to be carried out, who takes responsibility for each aspect and what happens if something goes wrong.

Parties involved: property owner and contractor

Both the client (owner) and the contractor (sometimes known as the constructor) will need to be named on the document, with their home address and signature. Ideally, this should be witnessed, to prevent any potential signatory dispute later on.

Scope of work: description of the construction project

The scope of work should be as detailed as possible, to prevent any misunderstanding. Each stage should be listed, covering as much detail as required.

Payment terms: methods and schedule for payment

Payment terms (or fees) must be included on the contract. This should show the total cost, plus how and when fees will be paid. If there is a payment plan in place, this should be included here, with the payment method (eg. BACS). Any expected material costs, hire, and licence or inspection fees should also be noted, with who is liable for paying.

Duration and completion date: timeline for the project's completion

The project start and finish dates will be on the contract, but it is generally expected that this may change over time. Again, both parties must agree to this in writing. Termination agreements and notice periods should also be stated.

Change order provisions: handling modifications to the original scope of work

It’s common for contracts to need to be updated, particularly if work over runs, unforeseen issues arise or if the contractor has under-quoted for a job. The contract should set out that both parties need to agree to this before any amendments or updates are made, as well as naming a resolution party if an agreement cannot be reached.

Types of Construction Contracts

The main types of construction construct include:

• Subcontractor contracts - where a third party undertakes work on behalf of a contractor, such as a specialist roofing company for an extension

• Design-build contracts - the designing and building are done simultaneously, to save time and money

• Guaranteed maximum price - a detailed service and costs contract with a maximum price quoted

• Unit price contract - an itemised contract with all aspects broken down and quoted for separately

• Cost-plus contracts - where the cost price and profit are separated, clearly shown and pre-agreed

• Time and materials contracts - an agreed price contract covering the contractor’s labour, time and costs

• Lump sum contracts - a pre-agreed price, but this can fluctuate with extenuating circumstances

• Fixed-price contracts - an unchanging pre-agreed price, but this can occasionally lead to over-payment

Download our construction contract template

Download our sample construction contract template for UK standard projects, to give you an idea of which clauses and information to include when you’re drawing up your agreements.

Construction Contracts: FAQs

What are the 5 elements of a construction contract?

Every construction contract must include full details and signatures of the client (or homeowner) and the contractor (or constructor), the scope of work, the costs and fees, intention (when, where and how the project will unfold), responsibilities of both parties and any insurances, plus additional pre-agreed clauses decided.

How to amend the contract?

The contract itself should state how - if any - amendments can be made. Usually this must be agreed in writing. It’s generally understood that unforeseen circumstances can affect a project’s timescale, costs or scope-of-work, so it’s within everyone’s interest to agree these both verbally and in writing, signed by both parties.

Overall, construction contracts may seem intimidating and complex, but they exist to ensure projects succeed and run smoothly, as well as to protect both parties in case something goes wrong. Using construction contract templates can make contract drawing up and signing a much more simplified, and a less costly, process.

For more articles related construction contract administration and the different types of construction contracts, plus industry advice and inspiration, visit the Travis Perkins Trade Hub.

Disclaimer: Information displayed in this article is correct at the time of publication, but note that legislation changes periodically. The information contained on this page is intended as an overall introduction and is not intended as advice from a professional. Travis Perkins aims to avoid, but accepts no liability, in the case that any information stated is out of date.