Construction Law
Construction contracts, adjudication, defects, health and safety, and procurement.
Introduction
Construction law governs the contractual and regulatory framework for building and engineering projects. The Housing Grants, Construction and Regeneration Act 1996 ('the Construction Act') provides a statutory right to adjudication for construction disputes and regulates payment terms. Standard-form contracts (JCT, NEC, FIDIC) are widely used. The Defective Premises Act 1972 imposes duties on those involved in providing dwellings. Health and safety in construction is regulated under the Health and Safety at Work etc. Act 1974 and the Construction (Design and Management) Regulations 2015.
In Brief
Any party to a construction contract has a statutory right to refer disputes to adjudication at any time under the Housing Grants, Construction and Regeneration Act 1996 — the adjudicator must decide within 28 days ('pay now, argue later'). Payment provisions are strictly regulated: always serve the correct payment and pay-less notices within the prescribed periods or you must pay the notified sum in full.
Core Principles
Adjudication — Any party to a construction contract has a statutory right to refer disputes to adjudication at any time (HGCRA 1996, s.108). The adjudicator must reach a decision within 28 days (extendable by 14 days with consent).
Payment — The Construction Act regulates payment: interim payments must be made by a specified date, and a paying party must give payment and/or pay-less notices within prescribed periods or pay the notified sum in full.
Standard Form Contracts — JCT (Joint Contracts Tribunal) and NEC (New Engineering Contract) are the most commonly used standard forms. They allocate risk, set payment mechanisms, and provide for variations and extensions of time.
Defective Premises — The Defective Premises Act 1972, s.1, imposes a duty on persons taking on work for or in connection with the provision of a dwelling to ensure the work is done in a workmanlike manner with proper materials so the dwelling is fit for habitation.
Professional Negligence — Architects, engineers, and surveyors owe duties of care in tort and contract. Limitation periods may be extended where the defect is latent (Latent Damage Act 1986).
Retention — The employer typically withholds a percentage (usually 5%) of interim payments as security for defects. Half is released at practical completion, the remainder at the end of the defects liability period.
Health and Safety — The CDM Regulations 2015 require duty-holders (clients, designers, principal contractors) to manage health and safety risks throughout a construction project.
Bond and Guarantees — Performance bonds, parent company guarantees, and retention bonds provide security for project completion and defect rectification.
Key Statutes
Leading Cases
Coulson v Knowles
[1969] 1 QB 577
Linklaters Business Services v Sir Robert McAlpine
[2010] EWHC 2931
Common Scenarios
Builder abandons work halfway through
The homeowner can terminate the contract for repudiatory breach, engage another contractor to complete the work, and claim the additional cost as damages. Under the Defective Premises Act 1972, there may be an additional statutory claim.
Dispute over an interim payment
Under the Construction Act 1996, the paying party must serve a payment notice and/or pay-less notice within the prescribed period. If they fail, they must pay the notified sum in full, regardless of the true value of the work.
Related Careers
Frequently Asked Questions
What is adjudication in construction disputes?
Adjudication is a rapid, interim dispute resolution process that any party to a construction contract has the right to use at any time under the Housing Grants, Construction and Regeneration Act 1996. The adjudicator must reach a decision within 28 days (extendable by consent). The decision is temporarily binding — it can be finally resolved by arbitration or litigation, but must be complied with in the meantime ('pay now, argue later').
What defects liability period means in a building contract?
The defects liability period (usually 6–12 months after practical completion) is the period during which the contractor is obliged to return and remedy defects at their own cost. The employer retains a portion of the contract price (retention) as security — half is released at practical completion, the remainder after the defects liability period ends.
Can a contractor stop work if not paid?
Under the Construction Act 1996, a contractor who is not paid the amount stated in a payment notice has the right to suspend performance of their obligations after giving at least 7 days' written notice. The suspension right is a statutory one; the contractor is entitled to an extension of time and additional costs caused by the suspension.
What is the difference between practical completion and final account?
Practical completion occurs when the works are complete for all practical purposes (de minimis snagging may remain). It triggers release of half the retention, the start of the defects liability period, and the transfer of risk to the employer. The final account is the financial settlement of all outstanding amounts — including variations, loss and expense, and retention release — agreed after the defects period ends.
Important Deadlines
Typical Costs
Official Resources
What To Do Next
Step-by-Step Guides
Know Your Rights
Common Scenarios
Get Professional Help