Definitions

In an NEC contract under Option A or C, the list of activities, each with a price, that makes up your price. Under Option A you are paid for each activity once it is complete: see NEC main options.

A fast way to have a construction dispute decided by an independent adjudicator, usually within 28 days of the referral. The decision binds both sides unless the dispute is later settled by agreement, arbitration or court: see how adjudication works.

A statutory insolvency procedure in which an administrator takes control of a company to pursue the relevant statutory objectives. See termination and insolvency.

Any way of settling a dispute without going to court, such as negotiation, mediation, adjudication or arbitration. See Construction disputes: your options.

A process in which an agreed tribunal decides a dispute through an award, generally binding subject to limited challenge or appeal rights. See arbitration.

The preparation of a clear claim or response from the chronology, entitlement analysis, evidence and calculation. It connects each assertion to the documents and figures that support it.

The date on which the amount due is assessed under the relevant NEC payment mechanism. Check your contract timetable in payment and notices.

A subcontract whose terms mirror the main contract, passing its obligations down to you. It can bind you to terms you have never seen: see reading your contract documents

A contractual reference date used for specified adjustments or risk allocation. Its effect depends on the particular clause and contract.

A document that lists the work item by item, with quantities, for pricing. Your rates in it are often the starting point for valuing changes.

The part of a JCT building contract that the contractor designs. If your package includes design, some of that design risk passes to you: see which JCT form applies.

A separate contract in which you promise a third party, such as a funder or a tenant, that you have met your contract duties. It lets that party claim against you directly: see reading your contract documents

An NEC event assessed under the contract for effects on price, time or both; entitlement depends on its rules and facts. Check the exact contract notification period and exceptions in changes and compensation events.

A clause that makes a final certificate or final account conclusive once a set time passes without a challenge. Check the particular document, deadline and contractual exceptions.

Overlapping delays from different causes that each affect completion during the relevant period. The applicable test and consequences depend on the contract and law.

Part II of the Housing Grants, Construction and Regeneration Act 1996 sets payment and adjudication rules for qualifying construction contracts. See the Construction Act explained.

A construction claims consultant advises a party on preparing, assessing or responding to a claim about construction work. Their appointment defines the commercial, contractual, evidence and specialist analysis they provide.

A deduction the other party makes from your account for costs it says you caused, such as cleaning or putting right defects. See assessing and responding to a claim

What the other party says it cost to finish your work after terminating your contract, which it usually tries to recover from you. See termination and insolvency

The sequence of activities that determines the earliest completion of the work or milestone being analysed, using the programme’s logic, durations and constraints.

A regular comparison of what a job has cost with what it has earned, usually monthly. It shows early where a job is losing money.

A method of valuing work using recorded labour, plant and materials under agreed rates and rules. See changes to contract work.

A notice from the other party saying you are in breach and must put it right, often the first step towards termination. See termination and insolvency.

A payee notice used within the applicable payment mechanism after a missing payer notice, subject to the contract and statutory requirements. See payment documents and deductions.

A contractual period after completion for addressing defects, also called a rectification period in relevant JCT forms. See completion and retention.

Cost calculated under the relevant NEC cost-component rules, which may involve incurred or forecast resources depending on the assessment. See NEC pricing options.

Cost excluded by the applicable NEC contract’s Disallowed Cost provisions; the definition, payment option, evidence and amendments determine the assessment.

A loss of productivity caused by interference with the planned way of working; disruption can occur even when the completion date does not move.

A subcontractor the main contractor chooses and employs itself, as most subcontractors are. The client does not choose you, though the contract may give a list of names to choose from.

In an NEC contract, a notice either side gives as soon as it sees something that could raise the cost or delay the job. See changes and compensation events

Bringing a contractor in at the design stage, before the price is fixed. It is often done under a pre-construction services agreement.

The contractual or other legal basis for the remedy being claimed, such as additional payment or time. It is a separate question from what happened, what the records prove and how much is claimed.

An occurrence or change that prompts a potential claim or response, such as a revised instruction, late access or an alleged defect. Record what happened and compare it with the agreed scope before deciding whether it gives rise to an entitlement.

The records and other material used to support or test the facts, responsibility and amount in a claim. Relevant evidence may include instructions, correspondence, photographs, programmes, measurements and cost records.

More time to finish your work, for a delay your contract says is not your risk. It protects you from delay damages for that period: see time entitlement and delay costs.

A voluntary UK code under which businesses commit to paying their suppliers fairly and on time. It replaced the Prompt Payment Code.

In an NEC contract, the amount calculated by applying the contractual fee percentage to Defined Cost, distinct from the percentage itself. See how the NEC Fee works.

The closing valuation of the contract work and relevant adjustments, which may be proposed, disputed or agreed. See preparing your final account.

The deadline for paying the relevant sum under the applicable payment mechanism, distinct from the due date. See your payment cycle and notices.

A price that does not change when labour or material costs rise, unless your contract says it does. Check any express adjustment terms before assuming an increase is recoverable.

The time an activity can move within a programme before affecting a defined successor or completion milestone, depending on the type of float being measured.

Terms that adjust your price for rises and falls in costs after your base date. They apply only if your contract includes them.

An agreement settling the claims within its stated scope, often in return for an agreed payment. See preparing your final account.

A contractual pricing arrangement setting a maximum for defined work, subject to its agreed adjustment rules and exceptions.

The cost of running your business, such as offices and staff, that a delay can leave unrecovered. See time, delay and financial loss.

A payment on account during the job, usually monthly, for the work done so far. It is not the final value of the work: see payment documents and deductions.

The Joint Contracts Tribunal, which publishes a family of standard building contracts and subcontracts widely used in the UK. See What is a JCT contract?.

A letter asking you to start work before the contract is signed, often with a cap on what you will be paid. See understanding your agreement

An agreed contractual measure of damages for a specified breach, commonly delay, subject to the relevant conditions. See time entitlement and delay costs.

The money you lose when the job is delayed or disrupted by events your contract puts at the other side's risk. See time, delay and financial loss.

A method of assessing productivity loss by comparing affected work with a suitably comparable period or area of less affected work.

A meeting where an independent mediator helps both sides reach their own settlement. The mediator decides nothing: see mediation.

A family of contracts published by the Institution of Civil Engineers, first called the New Engineering Contract. The current edition is NEC4: see What is an NEC contract?.

A subcontractor selected through an employer nomination mechanism under the relevant contract. Distinguish nomination from named, listed and directly selected subcontract arrangements.

A communication given under a contractual or statutory procedure to tell another party about an event, claim or required action. Its timing, content, recipient and method of delivery depend on the applicable requirements.

The notice identifying the dispute to be adjudicated and the remedy sought, starting the applicable procedural timetable. See the adjudication process.

The sum established through the applicable payment-notice mechanism, subject to any valid and timely pay less notice. See payment documents and deductions.

The amount added to the cost of work to cover running your business and a profit, usually as a percentage. It is part of pricing a variation or a claim.

Taking work out of your contract by instruction. Taking work away to give to someone else is often not allowed: see changes to your contract work.

When the client takes over part of the works early, with the main contractor's agreement. On a JCT contract, that part is treated as practically complete: see partial possession and sections.

The notice the other party must send if it plans to pay you less than the notified sum. See payment documents and deductions

A clause making your payment depend on the other party being paid. The Construction Act generally prohibits this, subject to its specified insolvency exception: see the payment rules.

Your claim for payment for a cycle, stating the sum you consider due and how you worked it out. See payment documents and deductions

A notice stating the sum considered due and its basis; your contract identifies whether the payer, a specified person or you must give it. See your payment cycle and notices.

An agreement for pre-construction services, such as design or planning, before the construction contract is agreed. Check your scope, payment, responsibilities and what happens if no further work follows.

A contractual milestone for sufficiently complete work, often shortened to PC; its meaning and financial effects depend on your contract. See practical completion and your money.

In England and Wales, the construction pre-action protocol sets steps normally expected before court proceedings. These include a claim letter, response and meeting: see assessing and responding to a claim.

The costs of running the site that do not belong to one item of work, such as supervision, welfare, access and site plant. Often called prelims: see time, delay and financial loss.

In RICS NRM 2, an allowance within a unit rate for the supply of specified materials or goods, with other rate components dealt with separately.

An extended period needed to carry out your work, distinct from the separate question of recoverable delay costs. See time, delay and financial loss.

An allowance for work not sufficiently defined for a firm price when the contract documents are prepared. Its adjustment follows the agreed valuation rules.

A quantity surveyor is a construction professional who advises on and manages the costs and commercial aspects of a project. Quantity surveying is the discipline covering that work.

The money side of a claim: how much is owed, rather than whether it is owed. See supporting a claim calculation.

A reasonable payment for work or services where the applicable legal basis permits that form of recovery. See understanding your agreement.

The referring party’s case and evidence in an adjudication; if you are responding, check the timetable you receive and seek prompt advice. See the adjudication process.

In a JCT contract, an event that can give you more time, such as a variation. It gives time only, and money comes through a Relevant Matter: see time entitlement and delay costs.

An event listed in the applicable JCT terms that may support your loss-and-expense entitlement, subject to conditions and amendments. Separate this from time entitlement in delay and disruption.

The stage at which a claim or dispute is addressed through agreement or an applicable decision-making process. Record what has been resolved, what remains outstanding and what must happen next.

Money withheld under the agreed payment terms as security, with release governed by your contract’s events and conditions. See completion, retention and your final account.

A separate security instrument that may replace cash retention on agreed terms. Its wording governs the amount, expiry and conditions for a demand.

An early, rough estimate of cost, given before the design is developed enough to price properly.

A list of rates for types of work, without firm quantities, used to price and value work as it is measured.

The default rules that fill the gaps where a construction contract does not meet the Construction Act. See What is the Scheme for Construction Contracts?.

A table that sets out disputed items one to a row, with each side's position and figure side by side. See preparing your final account.

A contractual arrangement dividing the works into defined sections with their own completion provisions. See partial possession and sections.

Deducting money one party says it is owed from money it owes the other. See assessing and responding to a claim

An adjudication that asks only whether the notified sum was paid, not what the work is worth. See the two payment adjudication routes.

A temporary stopping of contractual performance under an applicable right, such as statutory suspension for qualifying non-payment after the required notice. See payment and notices.

An offer to carry out work on stated documents, pricing assumptions and qualifications, subject to the subsequent agreement. See tender documents and agreed terms.

Ending a contract before the work is finished, under a clause in it or for a serious breach. See termination and insolvency

A provision that can prevent an entitlement where a specified deadline or notice condition is not met, subject to its wording and applicable law. See reading your contract documents.

An adjudication about what the work was actually worth, rather than what a notice said. See the two payment adjudication routes.

A change to the work in your contract that the other party instructs, such as extra, changed or omitted work. See changes to your contract work

Extra conditions added to an NEC contract under Option Z, often where risk moves to you. See NEC secondary options and Z clauses.