Powered by Lexis+®
Jurisdiction(s):
United Kingdom
United Kingdom
View all Glossary Terms Related Content
CASE STUDY
“Although cost was an important factor, our relationship with LexisNexis, their responsiveness, flexibility, and the integration available with other products were key factors.”
Irwin MitchellAccess all documents on Contingency sum
Contingency sum meaning
Published by a LexisNexis Construction expert
What does Contingency sum mean?
In construction practice, a contingency sum is an allowance in the employer’s budget or, if expressly stated, within the contract sum, to cover costs arising from uncertain events or risks that may or may not occur during the works. It is a descriptive industry term rather than one defined by legislation or case law; its effect depends on the contract wording and the standard form used.
Key features and use:
- It is a general allowance, not tied to a particular item of work. This distinguishes it from a provisional sum, which relates to an identified but not fully defined element.
- It is typically controlled by the employer/client and only becomes payable when properly instructed and valued under the contract’s change mechanism (for example, a Variation under JCT, a compensation event under NEC, or an Architect/Contract Administrator instruction or Change Order under RIAI/Public Works Contracts in Ireland).
- Contractors may price their own risk within rates; that internal contingency is separate and not recoverable as a contingency sum unless the contract provides otherwise.
Usage is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland, though some standard forms avoid the term in favour of “provisional sums” or “risk allowance.”
Speed up all aspects of your legal work with tools that help you to work faster and smarter. Win cases, close deals and grow your business–all whilst saving time and reducing risk.
View the related Practice Notes about Contingency sum
PRACTICE NOTES
UK stamp duty on securities transfers: chargeable consideration, contingency/unascertainable rules, valuation and market value (listed/unlisted), liabilities and debt, low-value exemption, and forthcoming STC reform
FORTHCOMING CHANGE relating to the modernisation of stamp taxes on shares framework: From 2027, stamp duty and SDRT will be brought together into a single, self-assessed charge on securities—the securities transfer charge (STC)—which will be paid and reported via a new online portal. The STC’s key features are expected to broadly align with the proposals consulted on in 2023. Finance Bill 2026 contains an enabling power commencing on Royal Assent to make secondary legislation that will allow taxpayers to pilot the digital service. This will permit self-assessment of stamp taxes on securities liabilities and electronic reporting of transactions through the digital platform. For more on the modernisation of stamp taxes on securities, see: News Analyses: Budget 2025—Tax analysis—Stamp and transfer taxes Tax update spring 2025—Stamp taxes on shares modernisation Tax update spring 2025—Tax analysis—Stamp and transfer taxes TAMD 2023—Stamp taxes on shares modernisation TAMD 2023—consultation—stamp taxes on shares Tax Administration and Maintenance Day—27 April 2023—Stamp and transfer taxes... ...
27 May
Read More 
PRACTICE NOTES
UK construction law glossary—C: contracts, procurement, CDM, insurance and dispute resolution
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Call-off The method, within a framework agreement, of directing particular works to be undertaken when needed, as appropriate. According to the arrangement's format and conditions, a call-off might demand that a separate contract is concluded, or it may simply need the instructing party to issue a call off notice. Refer to Practice Note: Framework agreements in construction—call-off procedures. CAR insurance Consult Contractor's all risk (CAR) insurance below. Category A fit out Interior fit out provided to a fundamental standard for landlords/developers, typically. Pinning down the scope is challenging, as it can differ quite widely in practice. Nevertheless, guidance does exist, such as authoritative publications issued by the British Council for Offices. Category B fit out Interior fit out delivered to an exact specified design for occupiers/owners...
22 May
Read More 
