The following article is all about contract conditions in construction contracts. It deals with specifically with what contract conditions in construction are and gives some discussion and examples of the most common.
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When two parties in a construction contract sign the contract they are agreeing to a new formal, enforceable legal relationship. The conditions will set out the details of this relationship between the parties allocating the risk, duties and responsibilities of each party.
A construction contract can of course be bespoke but it is prohibitively expensive and inefficient for a new contract with bespoke contractual terms to be issued for projects that are quite similar.
Over time, multiple competing organisations have researched and published (for a price) standard forms of construction contracts that can be used repeatedly on typical construction projects e.g. a house, an apartment block, a hotel and so on.
There are several forms (templates) of standard contract documents in the construction industry including the:
Each of these suites of contracts have standard forms of contracts that can be used for different procurement types. For example the JCT suite of contracts has standard forms for traditionally procured projects as well as design and build.
As well as traditional and design and build, all of the suites of contracts deal with one or more of the following procurement routes:
Its important to remember that conditions are simply the rules that hold the contract together. But these rules would be nothing without the actual meat on the bones of the agreement. In construction a contract must include:
A construction contract is typically one party agreeing to carry out the works as described (the design) for £xxxxx amount (the contract sum) within xxxxxx amount of weeks (the program).
The conditions just set out the rules for how to deal with expected events such as regular payments and unexpected events, a Government shutdown.
Construction contracts spell out in detail the expectations relating to time, cost and quality of the contracted works.
Several conditions can be found in one guise or another in most construction contracts.
See below an an extract from the JCT Standard Building Contract with Approximate Quantities 2016.
In this contract is starts of with the articles of agreement, the contract particulars and then moves on to the conditions of the contract.
See below an extract showing the conditions of the contract.
These are just examples of the conditions. The creators of the contract layout the conditions under the following headings:
This is just the way the JCT decided to layout their conditions. It doesn’t mean its the right or wrong way. It does mean that the JCT contract is quite large and perhaps difficult to read.
Most standard forms of construction contracts will be laid out differently but will contain very similar conditions regarding payment, program and so on. We have listed some of the standard conditions below which concern the following key areas of a construction project:
The organisations also publish standard forms for the appointment of consultants and also collateral warranties.