Construction contract solicitors

Construction projects can involve significant financial stakes. 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 is for a a commercial unit, a mixed-use scheme, or large-scale residential development, our team of lawyers have the experience to draft, negotiate, and finalise project documents.

Our clients choose us because our lawyers are experts at drafting, negotiating, and reviewing all types of construction contracts.

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.

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. For qualifying construction contracts, statutory payment notice and pay less notice regimes must be observed; failure to do so may render the notified sum temporarily conclusive pending any true value process (Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), ss 110A, 111; Scheme for Construction Contracts (as amended) 2011 (Scheme 2011)).

• 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. Where the contract is a “construction contract” within the HGCRA 1996, either party has a statutory right to refer a dispute to adjudication at any time. Adjudicator decisions are binding on an interim basis and are commonly enforced on a summary basis by the Technology and Construction Court (HGCRA 1996, ss 108, 110A, 111; TCC Guide). If contractual payment or adjudication provisions are absent or non-compliant, the Scheme 2011 will be implied.

• 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

On JCT Design and Build and other forms, we routinely negotiate risk allocation on design liability, fitness for purpose wording, and net contribution, and we align change control with valuation mechanics to avoid later disputes on loss and expense or compensation events. We also harmonise parent-company guarantees, performance bonds, and collateral warranties with step‑in rights required by funders.

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 or suppliers for the performance of specialist works or the supply of materials, typically on back-to-back terms with the main contract.

• Collateral warranties – direct contractual undertakings from the contractor, sub-contractors, or professionals to third parties such as funders, purchasers, or tenants, granting them rights to rely on the warrantor’s performance and, where appropriate, step-in rights.

• Bonds – performance bonds or advance payment bonds provided by a surety (typically a bank or insurer) to secure the contractor’s obligations, offering recourse to the employer in the event of contractor default.

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

Before signature, we run a compliance check against the HGCRA 1996 to confirm payment milestones, pay less notice dates, and adjudicator nomination provisions are effective or, if not, to ensure the Scheme will not introduce unintended timelines (Scheme 2011).

We work to help our clients get the right contracts and supporting documents in place to reduce the risk of disputes and ensure a successful construction project.