Does the Construction Act 1996 apply to my contract?
The Construction Act 1996 governs agreements to carry out construction operations, arrange for them or provide labour for them, including design, surveying and advisory work. The operations must be in England, Wales or Scotland. A contract with a residential occupier is left out, and a pay when paid term is ineffective unless someone up the chain is insolvent.
Construction operations in England, Wales or Scotland
A construction contract is an agreement to carry out construction operations, arrange for others to carry them out, or provide labour for them, and includes architectural, design, surveying and advisory work in relation to them (s 104(1), (2)); not a contract of employment (s 104(3)). It must relate to construction operations in England, Wales or Scotland (s 104(6)).
| Duty | Window and section | If missed |
|---|---|---|
| Determine whether the contract is a construction contract the Construction Act governs | none sets 104, 105, 106, 106A, 117 | no penalty statedDisputes |
| Be paid by instalments, stage or periodic payments for work expected to last 45 days or more | none setThe Act sets no interval of its own, so no window is recorded, and states no consequence for the entitlement itself.s 109(1)-(4) | no penalty statedDisputes |
| Do not rely on a term that makes payment conditional on payment from a third party, or on performance or certification under another contract | none sets 110(1), 110(1A)-(1D), 113(1)-(6) | no penalty statedDisputes |
What the library notes on each duty
Quoted a whole sentence at a time from the library's note on each row.
Determine whether the contract is a construction contract the Construction Act governs
s 104, 105, 106, 106A, 117 · none set · no penalty stated
- A construction contract is an agreement to carry out construction operations, arrange for others to carry them out, or provide labour for them, and includes architectural, design, surveying and advisory work in relation to them (s 104(1), (2)); not a contract of employment (s 104(3)).
- It must relate to construction operations in England, Wales or Scotland (s 104(6)).
- Construction operations include building and civil engineering works, roadworks, pipelines, sewers, site clearance, earth-moving, excavation, scaffolding and landscaping (s 105(1)); they exclude oil, gas and mineral extraction, plant and steelwork on process, power, water treatment and similar sites, delivery of materials or components without installation, and artistic works (s 105(2)).
- The Act does not apply to a contract with a residential occupier, one principally about a dwelling a party lives in or intends to (s 106), or to a description of contract excluded by order (s 106A; in England the Construction Contracts (England) Exclusion Order 2011, S.I. 2011/2332, not read).
- An oral or partly oral contract is covered since s 107 was repealed (1 October 2011 in England and Wales, 1 November 2011 in Scotland).
- It binds the Crown (s 117).
Be paid by instalments, stage or periodic payments for work expected to last 45 days or more
s 109(1)-(4) · none set · no penalty stated
- The entitlement does not arise where the contract specifies, or the parties agree, that the work will last less than 45 days (s 109(1)).
Do not rely on a term that makes payment conditional on payment from a third party, or on performance or certification under another contract
s 110(1), 110(1A)-(1D), 113(1)-(6) · none set · no penalty stated
- Every construction contract must give an adequate mechanism for what payments become due and when, and a final date for payment of each (s 110(1)).
- Three terms fail that test: payment conditional on performance of obligations under another contract, or on someone's decision that they were performed (pay when certified, s 110(1A)), except where the other contract is the subcontract for those same operations (s 110(1C)); and a due date set by the payee giving a notice of what is due (s 110(1D)).
- A pay when paid term is ineffective unless the third party, or anyone up the chain whose payment conditions it, is insolvent as s 113(2) to (5) define (s 113(1)).
- The Scheme fills the gap (ss 110(3), 113(6)).
Where the contract is covered
A covered contract carries the payment and pay less notices and the right to adjudication.
What this page is, and is not
It is the section text this library holds for England, from The Construction (Design and Management) Regulations 2015 (Great Britain), Housing Grants, Construction and Regeneration Act 1996, Part II (Construction Contracts) and The Scheme for Construction Contracts (England and Wales) Regulations 1998, as amended for England, with the window and the consequence. It is not legal advice, and it is not a substitute for reading the Regulations, the Act, the Scheme and the contract you signed.
Demiton does not yet track English projects. These pages set out the duties; the product does not run these checks on an English job today.
No library of law is complete, and Demiton never says this one is. An obligation the library does not hold, and you did not add, is not protected. You can add your own to any job.