Traditional Construction Contracts UK: A Practical Guide

What this document is

A traditional construction contract is an arrangement where the employer (often called the client) takes responsibility for the design and then appoints a contractor to build what has been designed. You typically engage an architect, and often a structural engineer, quantity surveyor and other consultants, to produce a full set of drawings and specifications.

Once the design is sufficiently developed, contractors are invited to price the work, usually on a lump sum basis. The successful bidder then enters into a building contract with you and constructs the project to the design you have supplied.

Standard form contracts published by the Joint Contracts Tribunal (JCT) are the most common in England and Wales, with variants for minor works, intermediate projects and larger schemes. The defining feature is the split of responsibility: the design team owes you a duty in relation to the design, and the contractor owes you a duty to build it properly.

That separation is what gives traditional contracts their clarity, but it is also where most disputes originate when things go wrong.

How to use this document

1. Define your brief and appoint a design team. Start by writing down what you want the project to achieve, your budget ceiling, and any non-negotiable requirements such as planning constraints, timescales or sustainability goals. Appoint an architect and any other consultants you need, and agree clear terms of engagement covering fees, scope, and professional indemnity insurance before any design work begins.
2. Develop the design to a biddable level. Work with your consultants to produce drawings, specifications and, where appropriate, a bill of quantities that describe the project in enough detail for contractors to price accurately. Skimping at this stage is the single biggest source of later cost overruns and variations, so allow time for planning permission, building control input and any specialist surveys.
3. Tender the work to suitable contractors. Invite a shortlist of contractors to submit competitive prices against the tender documents. Ask for references, check financial standing, confirm insurance cover, and compare not just the headline price but also programme, method statements and any qualifications contractors have attached to their bids. The cheapest quote is rarely the best value once risk is accounted for.
4. Put the building contract in place. Select an appropriate standard form, typically a JCT contract sized to the project, and complete the contract particulars to reflect what has been agreed on price, programme, liquidated damages, retention, insurance and dispute resolution. Do not start work on site until the contract is signed; oral or ad hoc arrangements are where homeowners and small developers most often come unstuck.
5. Administer the contract through to completion. During construction, your contract administrator (often the architect) issues instructions, certifies payments, manages variations and assesses any claims for extensions of time. Keep written records of everything, attend site meetings, and deal with issues promptly. After practical completion, a defects rectification period follows, at the end of which a final certificate is issued and any retention released.