Jurisdiction(s):
United Kingdom

Key definition

EPC contract definition

What does EPC contract mean? An EPC contract (engineering, procurement and construction) is a turnkey design-and-build agreement under which a single contractor agrees to deliver a fully operational facility by a fixed date and price, taking responsibility for design, procurement, construction, commissioning and performance. In practice it is used on energy, renewables, process and infrastructure projects to provide “single point” risk allocation and bankability for project finance. The term is descriptive market usage rather than a concept defined by legislation or case law. Typical features include: lump-sum price; fixed completion date; performance guarantees; liquidated damages for delay and under‑performance; capped liability; limited relief events (force...

EPC contracts: liability exclusions, caps, exclusive remedies and limitation periods under English law

Published by a LexisNexis Construction expert

Practice notes

This Practice Note provides guidance on Exclusions and limits of liability relevant to engineer, procure and construct (EPC) Contracts.

It ought to be read with Practice Note: Limiting liability in construction contracts, which provides more detailed guidance on limits of liability generally. When examining any limitation or Exclusion of liability clause within an EPC agreement, a central issue is the governing law that applies to that contract. That choice often affects both how the clause is construed in practice and whether it can be enforced. Considering the differing consequences arising under other jurisdictions lies beyond this note, and, unless expressly stated otherwise, all references herein are to the position under English law, together with the implications that flow from that position accordingly. When drafting any limitation or exclusion of liability clause, it is vital to use wording that is entirely clear and unambiguous.

The majority of EPC agreements contain liability caps for these reasons:

EPC arrangements are commonly deployed on large infrastructure and sophisticated facilities...

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Web page updated on 21/05/2026

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