Builder Contracts & JCT: Protecting Yourself

Most renovation disasters don’t start with bad workmanship, they start with a bad (or missing) contract. Without a written agreement that defines the scope, the price, the programme, and each party’s rights, you’re relying on goodwill and verbal recollection when things get difficult. And in construction, things often get difficult.

This guide covers what your builder contract should contain, how JCT contracts work in practice, and the specific protections you should never give up.

Why a Written Contract Matters

A building project involves a series of financial commitments over weeks or months. You’re paying a contractor significant sums, often in stages, for work that can only be properly assessed once it’s done, and sometimes not even then (what’s behind the plasterboard?).

A written contract:

• Creates a clear record of what was agreed, eliminating the “that’s not what I said” disputes
• Defines when and how much you pay, protecting you from being pressured to overpay early
• Sets out what happens if the builder doesn’t finish, or if you want to change the scope
• Gives both parties an enforceable mechanism for resolving disputes without immediately going to court

Building contracts are not just for the homeowner’s benefit, good contractors prefer them too, because they define what’s expected and protect against scope creep.

The JCT Minor Works Building Contract

The JCT (Joint Contracts Tribunal) Minor Works Building Contract is a widely used standard form for renovation and extension work that is designed and overseen by an architect or other consultant. JCT describes it as designed for smaller, basic construction projects where the work is of a simple nature, and says it is not suitable where the project is complex enough to require bills of quantities or detailed control procedures.¹

The current edition, MW 2024, costs £50 plus VAT from the JCT online store.² Minor Works Building Contracts are normally administered by the architect or a contract administrator, so a homeowner without one will usually find JCT’s Home Owner contracts (below) a better fit.¹ A solicitor is not required, though for very large projects it may be worth a brief review.

The standard form covers:

• Contractor’s obligations, to carry out and complete the works in accordance with the contract documents
• Employer’s obligations (that’s you, the homeowner), to pay the contract sum in accordance with the payment schedule, to provide access, and to take out any required insurance on the property
• Contract documents, the drawings, specification, and any other documents that define the scope; these must be agreed and appended before signing
• Contract sum, the agreed lump-sum price for the work in the contract documents (JCT publishes separate forms for prime cost and measured-rate work)
• Programme and completion date, the agreed end date, and what happens (liquidated damages) if the contractor is late
• Variations, how changes to the scope are valued and authorised
• Interim payments, the schedule of stage payments, and the mechanism for valuing interim applications
• Rectification period (often called the defects liability period), a period after practical completion, stated in the contract, during which the contractor must put right notified defects at no extra cost
• Termination, the grounds on which either party can end the contract, and what happens to money owed

For domestic clients, JCT publishes Home Owner contracts that are written in plain English.³ The Building Contract for a Home Owner/Occupier who has not appointed a consultant to oversee the work (HO/B) costs £40 plus VAT.⁴ A separate Building Contract and Consultancy Agreement (HO/C) covers homeowners who have appointed an architect or other consultant.⁵ For smaller jobs without a consultant, the JCT Home Owner contract is the simpler and cheaper choice.

What Your Contract Must Include

Whether you use a standard JCT form or a bespoke agreement, these elements are non-negotiable:

1. Defined Scope of Works

The scope must be as specific as possible. “Rear extension” is not a scope, it’s a category. The contract documents should include approved drawings, a written specification covering materials and finishes, and if possible a schedule of works.

Vague scope is the primary cause of disputes over variations and additional costs. “We assumed that meant X” is what you hear when something isn’t written down.

2. Fixed or Clearly Defined Price

A lump-sum contract gives you a fixed price for a defined scope. Any change to the scope triggers a formal variation order with an agreed price before the work is done.

A schedule-of-rates contract prices work by measured unit (e.g. £X per m² of brickwork, £Y per metre of copper pipe). The final price varies with the actual quantities, useful where scope is genuinely uncertain (such as investigative work or phased renovations), but requires more active monitoring.

Whichever approach you use, the mechanism for changing the agreed price must be clearly defined.

3. Payment Schedule and Retention

Stage payments tied to physical progress are the safest approach for the homeowner. A typical structure for an extension might be:

Retention, typically 2.5–5% of the contract sum, is held back after practical completion and released only once the defects liability period ends and any defects have been rectified. Never agree to pay retention in full at practical completion.

As a rule of thumb, avoid paying more than 10–15% before work begins. A large upfront demand followed by the contractor disappearing is a familiar pattern in complaints about rogue builders.

4. Programme and Completion Date

Agree a start date and a target completion date. If the project runs over without cause, the JCT form allows the employer to deduct liquidated and ascertained damages (LADs), a pre-agreed daily or weekly sum, specified in the contract at signing. Set this at a realistic figure that reflects your likely losses from a late finish, such as extra rent or storage; on domestic projects it is often a few hundred pounds a week.

The contractor can claim extensions of time for delays outside its control, such as delays caused by the employer; the contract sets out which events qualify. LADs only bite where the delay is the contractor’s responsibility.

5. Variation Procedure

Any change to the agreed scope must go through a formal variation process: the homeowner instructs the change in writing; the contractor prices it before doing the work; the homeowner approves the cost before the instruction takes effect. This sounds bureaucratic, but it’s essential.

Verbal instructions, “while you’re at it, could you also…”, are the fastest route to a disputed final account. The contractor claims they were instructed; you dispute the cost or even that the instruction was given.

6. Dispute Resolution

The JCT Minor Works form gives either party the right to refer a dispute to adjudication. Adjudication is faster and cheaper than litigation, with costs that are a fraction of court proceedings. The adjudication rules in the Housing Grants, Construction and Regeneration Act 1996 require the adjudicator to reach a decision within 28 days of referral unless the parties agree a longer period.⁶ The decision is binding until the dispute is finally determined by legal proceedings, arbitration or agreement.⁶ The Act’s adjudication right does not apply to a construction contract with a residential occupier, so for a homeowner it exists only because the contract provides for it.⁷

For claims of less than £10,000 in England and Wales, the county court’s small claims process, with a less formal hearing, is a simpler alternative.⁸

Common Contract Mistakes to Avoid

Signing a contractor’s own terms without reading them. A builder’s standard terms may be heavily weighted in their favour, particularly around payment timing, liability, and what constitutes a variation. If you’re using a contractor’s form rather than JCT, at minimum read every clause.

Leaving the specification vague. “Best quality materials” means nothing enforceable. Specify brand/grade where it matters, or agree a sample that can be inspected.

No defects liability clause. Without a formal defects liability period, you have limited leverage once the contractor has been paid in full. Retention and the defects period work together, don’t give one up without the other.

Paying the full retention early. Releasing retention before the defects period ends removes your main financial incentive for the contractor to return and fix snagging items.

Relying on insurance-backed guarantees without checking them. Some builders offer “insurance-backed guarantees” as an alternative to financial protection. These vary enormously in quality, check who the insurer is, what’s actually covered, and whether the insurer is still trading.

What If There’s No Contract?

If you’ve already started a project without a written contract, which is far more common than it should be, you’re not entirely without rights. Contract law still applies; the terms of any verbal agreement, exchange of emails, or accepted quote can be used to establish what was agreed. The Consumer Rights Act 2015 also treats every contract to supply a service as including a term that the trader must perform it with reasonable care and skill.⁹ Keep all written communications.

If a dispute arises, a court can reconstruct the agreement from the available evidence, but it’s a harder and more expensive process than resolving a clear written contract dispute.

The lesson is simple: no matter how well you know a builder, no matter how small the job, put it in writing before work starts. A JCT form costing £40–£50 plus VAT is the cheapest insurance you’ll buy on any renovation project.