Terms of Business Template for Construction Businesses (UK 2026)

Terms of BusinessConstruction

Last updated: February 2025

Why Construction Businesses Need a Terms of Business

Construction terms of business establish the standard commercial framework for all project engagements, complementing project-specific SOWs with consistent provisions on payment, variations, disputes, and statutory compliance. These must comply with the Housing Grants, Construction and Regeneration Act 1996, including mandatory adjudication provisions and payment notice requirements. The terms should be robust enough to withstand the adversarial nature of construction disputes while remaining commercially practical for everyday use.

Key Clauses for Construction

  • Payment terms compliant with the Construction Act including notice requirements
  • Variation procedure with cost and time implications
  • Statutory adjudication and dispute resolution provisions
  • Insurance requirements and indemnity provisions

Common Mistakes

  • Not including Construction Act compliant payment notice and pay-less notice procedures with specified deadlines
  • Omitting statutory adjudication provisions, resulting in the less favourable Scheme for Construction Contracts being implied

Template Sections

  • Payment application and notice procedures
  • Variation and change order process
  • Adjudication and dispute resolution

FAQ

What payment notice requirements must construction terms of business include?

Under the amended Construction Act, the payer must issue a payment notice within 5 days of the payment due date specifying the amount to be paid. If they wish to pay less, a pay-less notice must be issued at least one prescribed period before the final date for payment. Your terms must specify these dates and periods clearly, or the Scheme for Construction Contracts will be implied.

Can construction disputes be resolved without going to court?

Yes, and the Construction Act gives either party the right to refer any dispute to adjudication at any time, with the adjudicator's decision binding until finally determined by arbitration, litigation, or agreement. Your terms should include a tailored adjudication procedure nominating a specific adjudicator nominating body and specifying procedural rules.

Related Templates

Terms of Business Template for Professional Services Businesses (UK 2026)

Service Agreement Template for Construction Businesses (UK 2026)

Generate this contract in 60 seconds

AccountsOS generates customised, UK-compliant terms of businesss. From £10/month.

Get Started Free

This is guidance for UK businesses, not legal advice. Templates are illustrative. Consult a solicitor for complex matters.

View all templates