Updated Build UK Guidance on Contract Terms

BUILD UK has published updated guidance on contract terms for construction projects.

The trade association, which represents construction contractors, published its Contract Terms Recommendation to form a common ground between clients and the supply chain on contractual practice in the construction industry.

It says the objectives are to promote collaboration, encourage a fairer allocation of risk through the supply chain, and deliver better project outcomes.

Build UK recommends that, as a minimum, its members do not use certain contract terms.

The association points out that under competition law all contract terms are non-binding. It recommends companies considering on an individual basis whether they wish to accept or reject all or some of the terms in their own contracts.

The contract terms Build UK recommends should be avoided relate to:

• Fitness for Purpose
• Unquantifiable Risks
• ‘Specified Perils’
• Breach of Contract
• Uncapped Liabilities
• Performance Securities

The guidance explains why each term should be avoided and how to manage the underlying issues more effectively, with specific guidance for JCT and NEC contracts.

Updated Build UK Guidance

Build UK is reminding the sector that the Construction Sector Deal (page 34) commits to improving procurement practices, and government is promoting the use of unamended forms of contract on publicly funded projects.

The Construction Leadership Council (CLC) says that a fair allocation of risk through the supply chain is more important than ever.

Isabel Coman, the CLC’s Next Generation Delivery Industry Sponsor, said: “Fairer contract terms and a better approach to apportioning risk, based on who is best placed to manage it, are essential if we are to improve industry performance and strengthen supply chains.

“The Build UK contract terms recommendation and supporting guidance are a step along the way towards ensuring risks are managed by those best placed to do so which is a key principle of the Government’s Construction Playbook. The CLC will continue to work closely with Government and industry to encourage the adoption towards more collaborative and responsible contractual practices for all in the supply chain.”

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