Do I need a Contract with my Builder?

It is extremely important to have a contract for any works being undertaken to protect both the client and the builder and to lay down the terms and conditions under which the work will be undertaken. A contract will define the scope of the works, insurance requirements and the price of the works, together with details of when payments should be made. There are numerous contracts to choose from and the most common in use today are the Federation of Master Builders Contract, the JCT Minor Works Contract (intermediate contract and full contract), the New Engineering Contract and the ICE Conditions of Contract. The type of contract will depend upon the nature of the works to be undertaken. The JCT and New Engineering Contracts come in many different forms. The best way to decide which contract to use is to obtain professional advice and the important issue to bear in mind is the significance of entering into a binding contract.

A contract protects a client from unreasonable claims for extras, proper recovery on savings, late completion of a contract and against defective workmanship. It will also ensure that the builders provide the necessary insurances to protect the works during the contract. If the correct insurances are not in force, then it may be necessary for the client to bear the cost of any problems, such as a fire or collapse, which may not be covered by a normal domestic insurance policy while works are being undertaken.

From a builder's viewpoint, the contract will lay down the terms for payment and make provision for interest should payments be received late. The contract will also lay down various provisions and will define what work has been priced. Any additions to the contract instructed by the client can then legitimately be claimed as extras and costs recovered through provisions in the contract. The project may be delayed for a reason outside the builder's control and the contract will enable an extension of time to be granted to the builder to avoid liquidated damages being imposed when the delay was outside his control. For example, if the client has intstructed additional works which delay the project that the contract was originally priced for, then the hold up is not the fault of the builder.

In order for a contract to work efficiently, then it should be administered by an engineer or other suitably qualified professional.