Top ten things you will find in good building contracts

1. Schedule of payments
This as the title suggests details the client?s responsibilities and the clear deliverables that form the frame work for the payment of the deposit, staged payments, final payments and retentions.
2. Schedule of works
Again as the title suggests is this section of the builder?s contract it shows the scheduled works. This is a detailed and definitive list of the works and costs as agreed with the building contractor or contracts administrator.
3. Retention
Retention is a pre agreed amount usually 2.5-5% of the contract?s value that is retained by the client until all works are complete and the defects period has lapsed.
4. Defects periods
A defect period is a clear pre agreed period of time (Usually six months) at the end of the defects period all minor cracks are filled and any other issues and snags are resolved. Once this has been done to the satisfaction of the client or contracts administrator the final retention payment then falls due.
5. Provisional sums
Provisional sums are costs for works that are very difficult to pre determined prior to works commencing. They are usually items like the repair of defective existing timbers or works below ground. The building contractor will place in a provisional sum for the building tender process and the final costs will be controlled with the use of scheduled rates or at the digression of the client or contracts administrator.
6. Contract administrator
Contracts administrators are usually commercial or general surveyors, quantity surveyors or architects that are employed by the client for their specialist experience of costs and good practice in the building and construction industry.
7. Schedule of rates
Schedule of rates are used mainly for repairs to existing building fabric, they will be set rates for items like ?supply of joiner for one day to cut out and splice rotten and friable timber?. They are pre agreed and determined rates that protect the client from being over charged.
8. Contractors statement of inclusion
This is simply a list and agreement of which items are included or omitted in the schedule of works. They are often items like waste removal of taking delivery of items ordered direct by the client. Or it may be for works associated with mechanical or electrical installations, like service trenches or access equipment.
9. Contingency
A contingency is usually a percentage of the contract value 10-15% that is set aside and controlled by the client or contracts administrator for additional costs that could not have been foreseen prior to works commencing, additional ground works or hidden items.
10. Variations
Works variations or change of works are items that the client or contracts administrator have requested as a personal preference items like additional electrical sockets or extra kitchen units. These should also be used to monitor items that may be omitted like items that a client chooses to supply after the contract has been signed.