Lump sum contract meaning

This Checklist sets out actions that can be taken—some at procurement stage and others during the life of a project—to help minimise the chance of disputes emerging on construction projects... During the procurement process Select the right procurement route Ensure the procurement method fits the specific context. For instance, where the employer wants to maintain control of the design or specified materials, a traditional contract may suit better than design and build. Conversely, if an earlier start on site is essential, design and build might be the preferred choice. See Practice Note: Choosing the right procurement method—construction projects. Adopt the correct pricing structure Choose a pricing approach that aligns with the employer’s objectives. If price certainty is a priority, a lump sum contract is generally more suitable than a prime cost arrangement. Where a lump sum is used, avoid inserting an excessive number of provisional sums, as these can undermine the desired cost certainty. See Practice Notes:...

Uniform Building Contractors Ltd v The Water and Sewerage Authority of Trinidad and Tobago [2026] UKPC 2 What was the background? The Privy Council appeal arose from a 2007 design-and-build, lump sum contract governed by the 1999 FIDIC Yellow Book, concluded between the Water and Sewerage Authority of Trinidad and Tobago (WASA) and Uniform Building Contractors Ltd (UBC) for the design, supply and installation of pipelines. The works were structured as two discrete packages, each on a lump-sum basis. Executed on 23 May 2007, the agreement incorporated the Yellow Book, bespoke Conditions of Particular Application, the Employer’s Requirements, together with a Bill of Quantities (BoQ). Mr Barry Paul was appointed as the Engineer under the contract. During execution, disputes between the parties arose over performance. WASA served termination notices dated 28 May and 4 June 2009. UBC commenced proceedings in May 2013, shortly before the limitation period expired, and WASA advanced a counterclaim. At first instance, the court dismissed both UBC’s claim and WASA’s counterclaim in full. WASA...

Original news: Mascareignes Sterling Co Ltd v Chang Cheng Esquares Co Ltd (Mauritius) [2016] UKPC 21 What was this case about? Mascareignes retained Chang Cheng under an amended JCT Standard Form of Contract (1980 Edition) with the Contractor’s Designed Portion Supplement to design and construct an office building in Port Louis, Mauritius. During delivery, the character of the works evolved, resulting in substantial additional and substituted items (variations). At completion, the quantity surveyor—who effectively administered the contract—issued the final account, valuing the majority of the works on a measurement-and-valuation basis because of the extent of the variations. Mascareignes refused payment, so Chang Cheng commenced arbitration and succeeded in obtaining an award for the sum certified in the final account. Mascareignes appealed, contending the arbitrator was wrong to: sanction the widespread use of measurement and valuation in the final account, holding either that the contract was on a measure-and-value footing, or that, if it began as a lump sum arrangement, the parties had varied it into...

What is the Pensions Advice Allowance? Following consultation in 2016/17, the government brought in, from 6 April 2017, the Pensions Advice Allowance. It enables eligible pension scheme members to withdraw a fixed sum from their pension pot tax-free to cover holistic retirement advice. At the member’s instruction, the scheme may therefore reduce the value of the member’s pot by the advice fee and pay the funds straight to the member’s adviser. This measure stemmed from the Financial Advice Market Review, which highlighted an advice gap affecting people who require retirement planning support but cannot meet the cost from net-of-tax income or savings. It is available in addition to other existing advice allowances and payment routes for advice. These include adviser charging, which does not permit pension monies to be used to fund holistic retirement advice. For further details, see Other types of pensions advice measures below. The government’s aim is to help those preparing for retirement to use the Pensions Advice Allowance to fund holistic...

This Practice Note is archived and no longer updated or maintained. It outlines the differences introduced in the NEC4 standard form construction contracts when set against the NEC3 versions. It also summarises the changes from NEC3 across the standard forms. The spotlight is on the NEC4 Engineering and Construction Contract (ECC), though many ECC revisions mirror those rolled out across the broader NEC suite. Many of the points made in relation to the ECC are indicative of suite-wide adjustments. The NEC characterises NEC4 as an ‘evolution not revolution’, building on NEC3. The bulk of NEC4’s revisions appear aimed at embedding sound practice and/or cutting reliance on Z clauses (ie bespoke amendments). For further details on NEC contracts in general, including their structure, see Practice Note: NEC contracts—introduction. Publication of NEC4 The NEC4 contracts were issued by the Institution of Civil Engineers on 22 June 2017...

This Practice Note reviews the Conditions of Contract for Plant and Design Build 1999 (widely known as the FIDIC Yellow Book 1999) and the Conditions of Contract for EPC/Turnkey Projects 1999 (the FIDIC Silver Book 1999). Both are intended for scenarios where the Contractor, rather than the Employer, undertakes the design of the Works, but there are important differences, which are outlined in this Practice Note and considered at a high level. For deeper analysis of each form, see Practice Notes: FIDIC contracts—introduction to the Yellow Book 1999 and FIDIC contracts—introduction to the Silver Book 1999 for background and context. New editions of the Yellow and Silver Books were issued in December 2017. For more information, refer to Practice Note: FIDIC contracts 2017—what’s changed? [Archived]. These materials provide helpful orientation too. What types of projects are the contracts suitable for? Although both contracts envisage the Contractor being responsible for carrying out all, or the vast majority, of the design, and both are fixed price 'lump sum' contracts, that...

In the Employment Tribunals Case number: [ Insert case number ] Between: [ Insert name of claimant ] (Claimant) and [ Insert name of respondent ] (Respondent) Claimant's schedule of loss 1. Details Net basic pay per week (after deductions): £[ Insert amount ] Respondent’s yearly pension contributions/annual pension entitlement: [ [ Insert amount, e.g. £x ] OR [ Insert details of pension scheme, e.g. 1/80 final salary scheme with related lump sum ] ] Yearly value of bonus/other employment perks: £[ Insert amount ] Notice period under the contract: [ Insert period, e.g. x weeks or x months ] Claimant’s date of birth: [ Insert date ] Date employment ended: [ [ Insert date ] ] Age at termination: [ [ Insert age ] ] 2. ...

Special Conditions: Amendments to the General Conditions of Contract of the Institution of Chemical Engineers (IChemE) Form of Contract—Lump Sum Contracts, the Red Book, fifth edition (2013) Special Conditions The General Conditions in the IChemE Red Book, fifth edition (2013) shall apply as altered below: Agreement Paragraph 8: remove ‘6.3’. Paragraph 14: after ‘fax number’ include: ‘or email address’. Add ‘Email Address’ to the contact details for both the Purchaser and the Contractor. Paragraph 16: delete the paragraph and replace with ‘Not used’. 1. Definitions, interpretation, waiver and Notices Sub-clause 1.1 Within the definition of Cost, insert ‘, reasonably and necessarily’ immediately after ‘properly’. Within the definition of Legislation, add at the end: (including Acts of Parliament and subordinate instruments; orders; rules and/or regulations made thereunder; and/or the rules; regulations and/or bye-laws made by any body of competent jurisdiction in respect of which the Contractor or Purchaser (as appropriate) has a legal obligation to comply,...