Why might I need a building contract?

You simply shook hands at an agreed price for your building works with a builder who was recommended to you by a friend. The job was meant to take three months, but now you’re six months down the line, the work still isn’t completed and there are some extra costs being charged for work he believes hadn’t been accounted for previously. Now you’re in dispute with the contractor who’s left site, with time and money at the centre of a situation which could potentially head to court. Plus, your construction work remains unfinished.

You can never guarantee that there won’t be any unwanted surprises during building works, but by putting a building contract in place between yourself and the contractor much of the uncertainty and stress can be removed.

A contract protects you

There are levels and types of building contracts for a whole range of work ranging from a homeowner’s contract for minor domestic works to standard forms of contract for major construction works. Whether you are getting an extension built or constructing a multi-storey office block, it’s important you have a contract agreed and signed before any building work begins. The contract not only protects the party having the works carried out but protects the contractor’s interests too, should circumstances change. A contract can as a minimum head off potential disputes.

The main elements of a building contract will include:

Details of the work: A clear outline of what the contractor has been employed to do, including reference to drawings of the project and any specifications / scope of works included.

Dates: The contract will include the start and completion date for the project as agreed upon by both parties.

Details of parties involved: The address and contact details the contractor and the client will be included together with details of the professional team and perhaps key sub-contractors or suppliers required to be used

Obligations of each party: The contract will clearly state what the contractor has been employed to do, as well as the money due to be paid for carrying out their services. It will also outline the frequency and means of calculating how payments will be made to the contractor (whether by stage payments or periodic).

Insurance: The work and those involved must be covered by insurance and this will be outlined in the contract.

Circumstances for alterations: The contract will outline the circumstances for which any changes to the works will be instructed and paid for and whether or not such changes will affect the time the contractor is given to complete the works. The contract also sets out whether additional payments should be made to the contractor to cover the costs for that extra time on site where granted. Likewise, if the contractor has no genuine reason for spending longer on site than was agreed, the contract sets out a mechanism where the client can charge the contractors a reasonable sum to cover their own loss or expense due to the delay.

It’s advisable to always use a contract, even on minor construction works and there’s no excuse not to! Contracts such as the JCT homeowner’s contract are available to be purchased online for a small fee and can easily be completed by the homeowner themselves even if not represented by a professional consultant. Large projects require more detailed contracts that again might be standard off the shelf documents but more complex and perhaps adapted by a quantity surveyor or construction lawyer to suit the circumstances of the project and the specific needs of the parties involved.

Ultimately, a building contract is completed in the hope of never having to refer to it again, as the expectation will be that the work will run smoothly and without issues. However, it is a vital safety net when a problem occurs. A contract can be the difference between a speedy resolution and a lengthy, expensive legal dispute.