FAQs for Contracts

Question 1

What should I check before signing a subcontract?

Accepted Answer

Five things: the payment timetable, the notice time bars, what counts as the contract documents, design responsibility, and the deductions machinery. Read for five things before anything else. First, the payment machinery: the Due Date, the Final Date For Payment and the notice deadlines, checked against the Construction Act minimums, because amended payment terms are where cash flow problems are built. Second, time bars: clauses making notice within so many days a condition of being paid for changes and delays, the single most expensive kind of term to discover late. Third, the contract documents themselves: the order, the numbered documents, the schedule of amendments and whatever the enquiry letters say is incorporated, because the deal is the whole stack, not the order form on top. Fourth, responsibility you may not mean to take: design liability dressed as coordination, or a fitness for purpose obligation, the duty that the finished work will do a job rather than that you took reasonable care doing it. Fifth, the deductions machinery: contra charge rights, retention percentages and release triggers, and how liquidated damages flow down. None of this takes a law degree; it takes an hour with a highlighter before the signature instead of after the first dispute.

Question 2

Can I push back on amended payment terms before signing?

Accepted Answer

Yes, and before signature is the only cheap moment to do it. The Act guarantees the machinery; the periods and the paperwork are what you negotiate. Yes. Whatever the draft says, the Construction Act already guarantees the machinery: a Due Date, a Final Date For Payment, notices with fixed deadlines, no pay when paid, and where the terms fall short the Scheme fills the gap. So you are never negotiating for those rights, only about the numbers hung on them. The negotiation is about the periods and the paperwork: a 45 or 60 day final date, application windows that skip a month if you miss a day by a day, notice deadlines shorter than the defaults, retention held longer than the job justifies. Push back in writing, briefly and specifically: name the clause, state the term you can hold, and give a commercial reason, cash flow on materials heavy packages being the usual honest one. Two or three amendments framed that way read as a firm doing its administration properly rather than a firm being difficult, and buyers accept them far more often than subcontractors expect. What signature changes is the price of the conversation: before it you are trading terms, after it you are asking for favours.

Question 3

What notice periods apply under JCT contracts?

Accepted Answer

Fewer hard deadlines than people fear in the unamended forms, but amendments routinely harden them into time bars, so read your own schedule first. JCT's unamended forms are gentler on notice than their reputation. The payment notices carry the hard statutory deadlines: the Payment Notice window after the Due Date and the Pay Less Notice deadline before the Final Date For Payment, with the exact periods set by the particular form and its contract particulars. The progress side is softer in the standard text: the contractor notifies delay when it becomes reasonably apparent and applies for loss and expense as the need becomes apparent, duties written as promptness rather than as conditions with cliff edges. The danger is that almost no JCT subcontract is signed unamended. Schedules of amendments routinely convert those soft duties into hard ones: notice within a fixed number of days as a condition precedent, the legal term for a step that must happen before the right exists at all, often with fully priced applications required inside fixed windows. So the honest answer to what notice periods apply under JCT is: the statutory payment deadlines, always; and for everything else, whatever your schedule of amendments made them, which is why the schedule is the first thing to read, not the standard form summary.

Question 4

What notice periods apply under NEC contracts?

Accepted Answer

The headline is the 8 week compensation event bar. Around it sit short reply and quotation periods that keep the whole process moving week by week. NEC runs on the compensation event, its single mechanism for changes, delays and most other money and time events, and the unamended NEC4 ECC hangs default periods off it. The contractor notifies a compensation event within 8 weeks of becoming aware that the event has happened, and for the events the contractor should notify, that 8 weeks is written as a condition of entitlement, the classic time bar; events arising from the Project Manager or Supervisor giving an instruction, issuing a certificate or changing an earlier decision sit outside it, because those are the Project Manager's to notify. The Project Manager then replies to a notification within 1 week, a quotation follows within 3 weeks of being instructed, and the Project Manager replies to the quotation within 2 weeks, with deemed acceptance rules picking up silence at several steps. Early warnings sit alongside: each party notifies as soon as it could be aware of a matter that could raise cost or time, and a matter that was not early warned can have its compensation assessed as if it had been. All of these are the unamended defaults, and Z clauses, NEC's schedules of amendments, shorten them often enough that the printed numbers are only the starting point.

Question 5

What is an amended standard form?

Accepted Answer

A standard contract like JCT or NEC, plus a schedule of changes drafted by one side, and that schedule is where the risk hides. A standard contract like JCT or NEC with a schedule of changes drafted by one side, and that schedule is where the risk moves. A standard form is a ready made contract published by an industry body, JCT and NEC being the two most common, each a balanced position worked out over years so risk sits roughly where it should between the party paying and the party doing the work. A schedule of amendments is a list of edits bolted on by whoever sends you the contract, to suit them, and it is not balanced. So the danger is rarely the printed form, it is the amendments behind the familiar cover page, moving risk onto you under the standard form's good reputation. Read them as carefully as the form they change.

Question 6

Can a contract override the Construction Act?

Accepted Answer

No: where a construction contract falls short of the Act, the Scheme for Construction Contracts fills the gap. No. The Construction Act, the Housing Grants, Construction and Regeneration Act 1996 as amended, sets a floor of rights for most construction contracts, and where a contract falls short the Scheme for Construction Contracts, a standard set of fallback rules, is read in automatically to fill the gap. That is why a contract cannot take away your right to adjudication, the fast 28 day dispute process the Act guarantees, your right to interim payments, the staged payments due as the work goes along rather than only at the end, the notice rules around those payments, or your right to stop work if you are not paid, which comes with its own written notice steps. What drafting can still do is obey the letter of the Act while working against you in the detail, through tight timings, extra conditions and payment mechanisms that are lawful but loaded in the other side's favour. So compliant and safe are not the same thing: check how the machinery runs, not just that the required words appear.

Question 7

What happens if the contract documents contradict each other?

Accepted Answer

An order of precedence clause decides which document wins, so a low-ranked set of conditions can quietly lose. The order of precedence clause decides which document wins, so a lower ranked set of terms can quietly lose. A construction contract is rarely one document: it is a bundle, the conditions that set out the legal rights and duties, the amendments that change them, plus specifications, drawings and appendices, and these contradict one another far more often than anyone admits. An order of precedence clause is the tie breaker: it lists the documents in rank order and says that if two clash, the higher ranked one wins. The trap is a ranking that puts a technical document like a specification above the conditions, because then something legal sounding buried in the specification can override the negotiated terms without anyone noticing. So check the ranking, and read the technical documents for terms doing legal work in the wrong place.

Question 8

What is a time bar, and why is it dangerous?

Accepted Answer

A clause that can extinguish a right entirely if you miss a notice deadline, however good the underlying claim is. A time bar is a clause that can wipe out a right entirely if you miss a deadline for giving notice, however strong the underlying claim is. A notice here just means a formal written message telling the other side something has happened, for example that an event has delayed you or added cost, given within a set number of days. The wording to look for is condition precedent: language saying that giving the notice in time shall be a condition precedent to any entitlement, which is shorthand for you get nothing unless you did this first. Without it a late notice is usually only a procedural slip affecting how strong your evidence looks; with it the claim can be gone the day after the deadline, no matter how good. Short deadlines, strict formats and demands for full details up front make the trap worse, each another way a notice can technically fail. Treat every notice deadline as a hard date and diarise it the day you sign.

Question 9

Do I really need a contract review before signing?

Accepted Answer

If the contract is amended, bespoke, or bigger than you can afford to get wrong, then yes. If the contract is amended, bespoke, or simply bigger than you can afford to get wrong, yes. An unamended standard form, one of the ready made industry contracts like JCT or NEC used exactly as published, is a known quantity, but almost nothing you are asked to sign is unamended. The schedule of amendments, the edits bolted on by the other side, is where payment terms get stretched, time bars get sharpened into deadlines that can wipe out a claim, and liability gets shifted onto you, each change reading harmlessly on its own. A review reads them all together, against the law and against what is normal for this kind of contract, while you still have the power to change the wording. Once you have signed, that power is gone, so the value of a review is almost entirely in the timing.

Question 10

What makes a contract term onerous?

Accepted Answer

A term that is lawful but shifts risk to you well beyond the normal position for that kind of contract. A term that is perfectly lawful but pushes risk onto you well beyond what is normal for that kind of contract. Onerous terms are the hardest to spot because nothing about them is technically wrong. Take three examples: an uncapped indemnity, a promise to cover the other side's losses with no upper limit; a seven day time bar, a deadline so short that a genuine claim can be lost because notice was a few days late; or a set off clause reaching across other contracts, letting the other side hold back money owed on this job to cover a dispute on a different one. The law generally lets parties agree all of these, so the question is never only whether a term is legal, but whether you understand the risk it moves onto you and are being paid enough to carry it. If you cannot answer both, flag it before you sign.

Question 11

Can the other side just refuse my amendments?

Accepted Answer

They can, but far fewer refuse than people expect, and how you present the amendments changes the odds. They can, but far fewer refuse than people expect, and how you ask changes the answer. A vague complaint invites a no; handing over specific replacement wording invites a yes, because you have done the drafting for them. It also depends what point you are making. Some amendments simply correct terms drafted wrongly or that do not comply with the Construction Act, the law that sets minimum rights for most construction contracts, and those are hard to defend against. Conceding on the fixable points builds the credibility that wins the genuinely commercial asks about money and risk. And if a counterparty refuses every amendment on a heavily one sided draft, that itself tells you something about the relationship you are about to enter, so weigh it before you commit.

Question 12

Is it safe to start work on a letter of intent?

Accepted Answer

Only if you read it as carefully as a full contract, because in law that is what it is. Only if you have read it as carefully as a contract, because that is what it is. A letter of intent is a short document sent to let work start before the full contract is signed, usually a thin one drafted to protect the party who sent it rather than you. Before relying on it, check four things: exactly what work it authorises, the spending cap, meaning the maximum you will be paid, and what happens when you reach it; how either side can end it; and which terms govern the work you have already done if the full contract is never signed. The common way this goes wrong is momentum: the job quietly runs past the cap on a document nobody looked at again, and the fuller protection everyone assumed was coming never arrived. So stop and reassess as you near the cap, rather than working on in the hope the main contract lands.

Question 13

I've already signed. Is a review still worth it?

Accepted Answer

Yes, but the job changes: it is no longer about changing the terms, it is about running them. Yes, but the job changes: it is no longer about changing the terms, it is about running the contract you already have without losing your rights under it. A review after signing maps out every notice period and time bar, the deadlines for telling the other side about a delay or a cost, so nothing lapses by accident. It flags the clauses most likely to be used against you with how to manage each, and turns a dense legal document into a short set of working rules the project team can follow. The terms are now fixed and cannot be renegotiated, but how much they cost you is still open, and that is what the review protects.

Question 14

What is the difference between JCT and NEC?

Accepted Answer

JCT values what happened after the fact; NEC prices change prospectively against a live programme, on strict deadlines. The practical difference is when things get decided. JCT and NEC are the two main families of ready made construction contract, and they handle change and money in opposite directions. JCT works after the fact: the work proceeds, then valuations and certificates follow, a certificate being a formal statement from the contract administrator confirming how much is due or that a stage is complete, and disagreements are often argued out after the event. NEC works in advance: extra time or cost is handled through compensation events, the NEC name for anything that entitles you to more money or time, each notified, quoted and agreed as it arises, priced against a programme, the live project timetable, kept updated. Depending on the edition and any amendments, its notification deadlines can act as time bars, so a late notice can reduce or wipe out your entitlement. Neither family is safer in the abstract: a JCT job punishes weak records at the final account, an NEC job punishes slow paperwork week by week. What decides your risk is rarely the logo on the cover, it is the schedule of amendments behind it.

Question 15

Are liquidated damages enforceable?

Accepted Answer

Usually yes. Courts uphold an LD rate unless it is out of all proportion to any legitimate interest in timely completion. Usually yes. Liquidated damages, often shortened to LDs, are a fixed sum, normally set per day or per week, that the contract says you must pay if you finish late, agreed in advance so nobody has to prove the actual loss. The courts will normally hold the parties to that figure. Under the leading modern cases the test is not whether the rate is a genuine advance estimate of the likely loss, but whether it is out of all proportion to any legitimate interest the employer, the party paying for the work, has in the job finishing on time, and that is a high bar, so most rates stand. The agreed rate applies whether the real loss turns out higher or lower, which can cut in your favour as well as against you. Two checks before signing: make sure the rate and any overall cap are clearly stated and the arithmetic works, and remember that deleting the clause does not delete your liability for finishing late, it usually just replaces a known, capped number with unliquidated damages, an open ended claim for whatever loss the other side can prove.

Question 16

I never signed the contract. Do the terms still apply?

Accepted Answer

Often yes. Starting work can accept the terms by conduct, and where no terms were agreed the Scheme fills the payment gaps. Often yes. A construction contract does not need a signature to bind you. If one side put terms forward and you then started work against them without objecting, a court or an adjudicator, the independent person who decides construction disputes quickly, may well find you accepted those terms by conduct, meaning by your actions rather than your signature. Where both sides kept sending competing terms back and forth, sometimes called the battle of the forms, the last set sent before work began can prevail, though it depends on what the emails and conduct show was accepted, which is why the final message often matters more than the first. And if no complete set of terms was ever agreed, there can still be a contract on the basics, with the Scheme for Construction Contracts, the fallback rules the law reads in, filling the gaps on payment and dispute resolution. Assuming no signature means no obligations is the dangerous position: it usually just means nobody is certain which obligations apply, and that uncertainty surfaces at the worst moment, so pin down from the paper trail what you are working under before a dispute forces the question.

FAQs for Contracts, Claims & Disputes

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How contracts work