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 the most widely used standard form for residential renovation and extension work. The current edition is used on projects typically up to £250,000, though it can be adapted for larger projects.
It costs around £30–£50 from the JCT online shop or from RIBA Books, and can be completed by the homeowner or with guidance from their architect or QS. 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 price, or a mechanism for calculating it (e.g. prime cost with schedules of rates)
- 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
- Defects liability period — typically six months after practical completion, during which the contractor must rectify notified defects at no extra cost
- Termination — the grounds on which either party can end the contract, and what happens to money owed
For very small jobs (a bathroom renovation under £10,000, say), the JCT HomeOwner contract is a simpler and cheaper alternative, produced specifically for domestic clients who aren’t using an architect.
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:
| Stage | Payment |
|---|---|
| Mobilisation / site set-up | 5–10% |
| Foundations complete | 15–20% |
| Structure up to wall plate | 20–25% |
| Roof structure and weathertight | 15–20% |
| First fix complete (electrics, plumbing) | 10–15% |
| Plastered and second fix | 10–15% |
| Practical completion | Balance less retention |
| Defects liability period ends | Retention release (2.5–5%) |
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.
Never pay more than 10–15% upfront before work begins. A contractor who demands 40–50% upfront and then disappears is a recognised fraud pattern in the construction sector.
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 (£200–£500 per week for most domestic projects) to reflect actual inconvenience costs.
The contractor has the right to extensions of time for genuinely exceptional circumstances (extreme weather, employer-caused delays, etc.) — the JCT defines these. 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 includes adjudication as the first-stage dispute resolution mechanism. Adjudication is faster and cheaper than litigation — a decision within 28 days, with costs that are a fraction of court proceedings. The decision is temporarily binding while any final resolution proceeds.
For disputes under approximately £10,000, small claims court is a simpler alternative.
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. Keep all written communications.
If a dispute arises, a solicitor or adjudicator 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 £40 JCT form is the cheapest insurance you’ll buy on any renovation project.
