Construction contracts

 

A construction contract is a legally binding agreement between two parties which contains the terms agreed upon by those parties and is formed for the purpose of construction. The contract must comply with the legal elements in order to be enforceable in law.

Construction law is a very niche area of law and there are few solicitors who really specialise in this area.

How does a construction contract work?

Most commonly, construction contracts are between a contractor and a client. The client is often a private individual or a developer. There are two common situations in which a construction agreement is used:

  • When a single dwelling house is being built or developed by the owner
  • When a commercial developer contracts with a major construction company to develop a commercial or residential site

In order for a construction agreement to be legally binding the parties need to fulfil the legal requirements of the contract. The contract must consist of an offer, an acceptance, consideration and the intention to create legal relations.

Offer and acceptance

Any contract must be arrived at by a clear offer which is met by an unconditional acceptance.

A conditional acceptance such as, “I’ll take your offer - if you will include a free delivery”, would constitute a counter-offer.

Consideration

A contract must also contain consideration, which is the payment for the goods or service agreed. Consideration may be any item or service of value, but more often than not it is a payment of money.

Intention to create legal relations

The last part a contract must include is an intention to create legal relations. In a construction contract this is hardly ever an issue, since the law assumes that two commercial entities intend to create such relations.

A construction contract may or may not be written and there is no requirement that it be signed, although both are highly recommended and standard practice.

Using a solicitor

If you are intending to be a party to a construction contract it is important to understand the legal position you will be in after entering into the contract.

This position depends on the terms of the contract as well as the governing law. There are several terms in your construction contract which may not be enforceable in law, whilst other terms may be implied into the contract by statute. It is always best to seek legal advice before entering into a contract, if you are unsure about any of the proposed terms.

A solicitor is also essential if your construction agreements break down. Perhaps you feel that the work your builder has carried out is not of a high-enough standard. Your solicitor can represent you if your dispute goes to court. If your builder broke any building regulations that you are punished for, your solicitor can represent you when your case is heard.

Do you need help finding a specialised construction lawyer to help with a contract issue? Contact Law can make a free, same-day, recommendation for you. Please call us on 0800 1777 162 or complete the web-form above.

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