Construction

A collateral warranty is a legal agreement that extends contractual protections beyond the main contract, typically giving project owners or funders direct rights against contractors, consultants, or suppliers even if they're not party to the original contract. You need them because they ensure you have recourse if work is defective or professional advice is negligent. Collateral warranties are standard on most projects involving lenders or multiple parties, and getting them properly structured protects your legal position. Our construction law team has extensive experience drafting and negotiating collateral warranties to ensure they provide the protection you need while remaining commercially acceptable to all parties involved. 

Heads of terms are a summary document that sets out the key commercial and legal points agreed between parties before a formal contract is drafted - essentially a roadmap for contract negotiation. They typically cover price, timeline, scope, payment terms, and other principal matters, but they're intentionally high-level and not legally binding on their own. However, if heads of terms are detailed enough or if parties behave as though they're binding, they can create legal obligations, which is why getting them right from the start is critical. We advise construction clients on drafting heads of terms that accurately reflect commercial intentions, flag potential issues early, and set a clear foundation for the formal contract that follows. 

A JCT contract is a standard form building contract published by the Joint Contracts Tribunal. It is widely used across the UK construction industry because it provides a balanced, clearly defined framework for contractor and client responsibilities. JCT offers different versions depending on project type: design and build, intermediate, minor works, and others, each with different risk allocations and complexity levels. Using a standard form like JCT provides clarity and reduces disputes, but it’s vital you select the right form and understand its terms. The wrong choice can expose you to unexpected risk. Our construction lawyers specialise in JCT contracts and can advise you on which form suits your project, negotiate amendments if needed, and ensure you understand your obligations and protections. 

A payment notice is a formal statement from the person obligated to pay (usually the contractor or client) confirming the amount they intend to pay following a payment claim. A pay less notice, by contrast, is a notice served by the payer stating they intend to pay less than claimed and setting out reasons why - it's a legal mechanism to reduce a payment obligation. The key difference is timing and strategy: a payment notice confirms you'll pay, whereas a pay less notice is a formal objection that must meet strict requirements under construction contracts and the law to be valid. Getting these procedures right is crucial because improper payment notices or ineffective pay less notices can result in being obligated to pay the full claim. We advise on payment procedures under your specific contract, help you serve proper payment notices, and advise whether and how to issue effective pay less notices when needed. 

Escrow is a legal arrangement where a neutral third party (an escrow agent, often a solicitor) holds money or documents on behalf of project parties until specified conditions are met. For example, holding retention sums until final account agreement or practical completion is confirmed. Escrow protects both sides, as the payer knows money is held securely and only released when conditions are satisfied, while the payee knows funds are available once obligations are met. Escrow is commonly used in construction to manage retention amounts, holdback arrangements, and payment security. We advise on when escrow is appropriate, draft escrow agreements that clearly define release conditions, and coordinate with escrow agents to ensure smooth administration and timely fund release. 

A design and build contract is a contract structure where a single contractor takes responsibility for both designing and constructing the project. This is rather than the client hiring separate designers and a builder, they contract with one entity accountable for the complete package. Design and build transfers design risk to the contractor, which can streamline decision-making and reduce project delays, but it also shifts design liability away from the client. JCT design and build is the standard form for this contract type in the UK. Understanding design and build allocation of risks, warranties, and change procedures is essential because the contract structure differs significantly from traditional contracts. Our construction law team advises on design and build contract selection, negotiates terms that balance risk fairly, and ensures your design and construction obligations are clearly defined.