Construction contract solicitors

Construction projects can involve significant financial stakes, a complex contractual matrix, and multi-tiered legal relationships. If a project is to begin with clarity, it is crucial to address key issues in your construction contracts from the very outset. A good contract should precisely define obligations and offer a transparent allocation of risks.

Whether your project concerns the construction of your home, a commercial unit, a mixed-use scheme, or large-scale development, our team of lawyers have the experience to draft, negotiate, and finalise project documents.

The key issues in a construction contract will inevitably centre on the quality of delivery, time, money, and the allocation of risks.

Our experience and sector focus results in clear, practical, cost-effective advice on the most important issues.

Types of Construction Contract

There are several types of construction contract, which can be purchased ‘off-the-shelf’. In our experience, within the UK domestic market, the most commonly used contracts are published by the Joint Contracts Tribunal; the “JCT”.

The JCT publishes a wide variety of forms of contract, a suite which is mindful that construction projects can be vastly different in their size, nature, and complexity. It follows, the JCT’s standard forms vary in the way they allocate design and construction risk.

Our clients regularly use a JCT contract as the starting point. We are then instructed to amend the JCT’s standard terms to better reflect the agreed allocation of risk. That said, the JCT is not always the most appropriate option. Our clients choose us because our lawyers are experts at drafting, negotiating, and finalising all types of construction contracts such as the JCT, NEC, ICE or preparing bespoke agreements to meet our clients’ specific needs.

Key clauses in construction contracts

Whatever form of contract is ultimately chosen, the main contract will address some of the following key themes:

• Scope of work – a clear and comprehensive definition of the works to be performed by the contractor, including a suitable specification setting out the requirements of the employer.

• Contractor’s obligations – amongst other matters, the contractor’s responsibility for the design of the works, or any design portion, together with clear obligations on its liability for workmanship and the materials used.

• Variations - a mechanism and process for change, regulating additions or omissions to the work including how these will be documented, priced, and approved, together with how this may impact on the date for completion of the works.

• Payment terms – regulating how progress/milestones will be measured for interim payments of the contract sum, the percentage of retention and the terms for its release, and a mechanism for calculating the final payment.

• Time – following specific risk events, a mechanism which allows a contractor to apply for more time, resulting in an extension to the date for completion of the works, offering relief from any liquidated damages for late delivery.

• Dispute resolution - a suitable mechanism to resolve disputes which may arise between the parties, such as negotiation, mediation, and/or adjudication.

• Termination rights - clauses setting out grounds for the termination of the contract and the consequences which will follow, including payment on termination.

• Insurance - specifying the types and levels of insurance required.

• Governing law and jurisdiction – the governing law that will apply to the contract and the jurisdiction where disputes will be resolved.

Important supporting documents

In addition to the main contract, other project documents may also be essential parts of the contractual matrix. Some of these documents may include:

• Professional appointments – agreements which appoint an architect, engineer, contract administrator, employer's agent, project manager, quantity surveyor or other designer or construction professional.

• Drawings and plans - architectural, engineering, and construction drawings which help to set out the scope of work to be performed.

• Programme – a timeline for various activities to be undertaken by the construction team.

• Sub-contracts – agreements between the main contractor and sub-contractors, who are engaged to perform specific tasks as part of the overall project e.g., where a contractor requires additional specialist advice or design services.

• Collateral warranties – agreements which create direct contractual links between parties at different tiers of the usual contractual matrix. For example, between the contractor and a third party who has or will acquire an interest in the project.

• Bonds - an agreement which provides a financial guarantee that offers protection from some of the risks associated with contractor default.

• Permits and licenses - necessary permits and licences for the project.

By carefully addressing these key issues and incorporating necessary supporting documents, we work to help our clients get the right project structure, contracts and supporting documents in place to reduce the risk of disputes and ensure a successful construction project.