Understanding Your Building Contract: A Plain-English Guide
A building contract is one of the most important documents you'll sign as a homeowner. It protects both you and your builder — but only if it's written clearly and covers the right things. Here's what to look for, what to watch out for, and how to make sure you're properly protected before work starts.
The golden rule
Never start work without a written contract. A verbal agreement is almost impossible to enforce if something goes wrong. If a builder refuses to provide a written contract, walk away.
What Should a Building Contract Include?
A professional building contract should clearly set out the following:
1. Scope of works
A detailed description of exactly what work will be carried out. This should be specific — not just 'rear extension' but the dimensions, materials, finishes, and any items that are excluded. The more detail, the better.
2. Contract price
The agreed total price, clearly stated including VAT. If any items are 'provisional sums' (estimated costs for work that can't be priced exactly until it's underway), these should be clearly identified and separated from the fixed-price elements.
3. Payment schedule
When payments are due and what they're linked to. Reputable builders use stage payments tied to progress milestones — not large upfront deposits. A typical schedule might include: deposit on signing, payment on completion of foundations, payment on completion of structure, payment on first fix, and final payment on handover.
4. Start date and programme
The agreed start date and an estimated completion date or programme of works. This doesn't need to be a day-by-day schedule, but you should know roughly when key stages will be reached.
5. Variation procedure
How changes to the agreed scope will be handled. Any variation should be agreed in writing before work proceeds, with the cost and any programme impact clearly stated. This protects both parties.
6. Insurance
Confirmation that the builder holds adequate public liability insurance, employers' liability insurance, and contract works insurance. Ask to see certificates before signing.
7. Dispute resolution
What happens if you disagree. Most standard contracts include a process for resolving disputes — often through adjudication or mediation before any legal action.
8. Retention
Some contracts allow the client to hold back a small percentage of the final payment (typically 2.5–5%) for a period after completion to cover any defects that emerge. This is common on larger projects.
Standard Contract Forms
You don't need to write a contract from scratch. Several recognised standard forms are widely used in residential construction:
JCT Minor Works
The most widely used standard form for smaller residential projects. Clear, balanced, and well understood by builders and solicitors alike.
FMB Contract
The Federation of Master Builders provides a straightforward contract specifically designed for homeowner projects. Simple to understand and fair to both parties.
HomeOwner Contract
Available from the JCT, this is designed specifically for homeowners commissioning work on their own home. Plain English and easy to follow.
Bespoke Contract
Some builders use their own contract documents. These are fine as long as they cover all the key elements above — read carefully before signing.
Red Flags in a Building Contract
Large upfront deposit required (more than 10–15% of the contract value)
Vague scope of works — 'extension as discussed' with no detail
No payment schedule or payments not linked to progress
No mention of Building Regulations or planning compliance
No variation procedure — changes handled verbally
No insurance details or confirmation
Unrealistic completion date with no programme
Clauses that heavily favour the builder with no client protections
Understanding Provisional Sums
A provisional sum is an estimated allowance for work that can't be priced exactly at the time of contracting — for example, if groundwork reveals unexpected conditions, or if you haven't yet chosen your kitchen. Provisional sums are common and legitimate, but you need to understand them:
They're estimates, not fixed prices
The actual cost may be higher or lower than the provisional sum. Make sure you understand which items are fixed and which are provisional.
They should be clearly identified
Every provisional sum should be listed separately in the contract with a clear description of what it covers.
Changes should be agreed in writing
When a provisional sum is resolved (i.e. the actual cost is known), it should be confirmed in writing as a variation before work proceeds.
What Happens If Something Goes Wrong?
Even with the best builders, disputes can arise. A good contract gives you a clear process:
Our Approach to Contracts
At Paul Bailey Construction, every project starts with a clear, written contract. We provide detailed, itemised quotations that form the basis of the agreement — so you know exactly what's included, what the payment schedule looks like, and how variations will be handled. We don't ask for large upfront deposits, and we don't proceed with any changes without written agreement. Our clients tell us this transparency is one of the things they value most about working with us.
Ready to Get a Proper Quote?
We provide detailed, itemised quotations and clear contracts on every project. No hidden costs, no vague terms.