Measured Term Contracts in Construction (UK)

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Measured Term Contracts are a critical part of the construction landscape in the UK, providing a legal framework that safeguards all parties involved in a project and helps ensure it runs smoothly and on time. In the UK, these contracts are the most commonly used form of contract for construction projects; they provide parameters like hours worked, quality of work, and materials used which make it possible for everyone involved to know exactly what is expected.

However, understanding each individual’s legal rights and obligations can be complex and difficult to comprehend. It is therefore vital that all parties understand the legal intricacies of measured term contracts in order to guarantee that everything runs as planned with no unforeseen delays or issues. This also allows contractors to tailor requirements according to their own needs as these contracts offer flexibility while maintaining control over projects.

There are numerous advantages associated with utilizing measured term contracts within construction; they give clear direction when it comes to contractual obligations whilst also safeguarding against any risks involved. Moreover, having such a contract offers stability so everybody understands how long projects will take and how much work needs completing - this creates an environment of certainty that can limit disputes from arising later down the line.

The Genie AI Team want to help cut through this complexity by offering free templates tailored towards measured term contracts available from our community template library - so you don’t require even an account with us! No matter your experience level or qualifications, you can create high-quality legal documents specific to your project without having to pay for expensive lawyer fees - simply follow our step-by-step guidance available at [website] today!

Definitions (feel free to skip)

Construction Act of 1996: A UK law that sets out the legal framework for contracts in the construction industry, including measured term contracts.
Housing Grants, Construction and Regeneration Act of 1996: A UK law that sets out regulations for construction projects, including those that involve measured term contracts.
O’Gorman v Gormley [2002] EWCA Civ 1380: A High Court decision that established legal precedent for measured term contracts in the UK.
Fixed Price: A type of pricing structure where the cost of a project is predetermined and does not change.
Scope of the Project: The tasks or activities that must be completed in order to complete a project.
Timeline: A schedule of tasks or activities that must be completed in order to complete a project.
Unforeseen Circumstances: Unexpected events or conditions that can affect the completion of a project.
References: People that have previously worked with a company and can provide feedback on the company’s services.
Customer Reviews: Feedback from customers that have used a company’s services.
Quotes: A price estimate for a project.
Contract: A legal agreement between two or more parties that outlines the rights and responsibilities of each party.
Negotiate: To discuss the terms of a contract in order to reach an agreement.
Approval: The process of verifying that a contract meets all of the requirements of the parties involved.
Finalize: To complete a contract and make it legally binding.
Implement: To begin working on a project according to the terms of a contract.
Track and Measure: To monitor the progress of a project and ensure that it is meeting the terms of the contract.

Contents

• Definition of Measured Term Contracts
• Advantages of Measured Term Contracts
• Disadvantages of Measured Term Contracts
• Research The Legal Framework of Measured Term Contracts in the UK
• Identify Companies That Offer Measured Term Contracts
• Contact Companies to Obtain Quotes for Measured Term Contracts
• Compare Quotes and Select Preferred Measured Term Contract
• Negotiate Terms of Measured Term Contract
• Draft Measured Term Contract and Submit for Approval
• Sign Measured Term Contract and Finalize Agreement
• Implement Measured Term Contract
• Track and Measure Performance of Measured Term Contract
• Conclusion and Summary of the Process and Legal Implications

Get started

Definition of Measured Term Contracts

• Understand what a Measured Term Contract is - it is a type of construction contract for services where the contractor is paid for the actual amount of work carried out
• Learn about the different types of Measured Term Contracts in the UK, such as NEC3 and JCT Measured Term Contracts
• Become familiar with the terminology used in Measured Term Contracts, including the contractor’s base rate and the payment terms
• Understand the information required to be provided by the contractor, such as a detailed breakdown of the work to be performed and the estimated completion date
• Know the different stages of a Measured Term Contract, such as the initial price, the final bill and the payment terms
• Familiarize yourself with the different types of payment terms in Measured Term Contracts, such as lump sum, interim payment, and staged payment

You can check off this step when you have a good understanding of the definition of Measured Term Contracts, the different types and their payment terms, and the stages of a Measured Term Contract.

Advantages of Measured Term Contracts

• Measured Term Contracts provide an incentive to contractors to complete the project on time and within the budget.
• Measured Term Contracts are more cost-effective than traditional fixed-price contracts, as they provide greater accuracy in pricing and cost-control.
• Measured Term Contracts are flexible and allow for variations in the project scope.
• Measured Term Contracts provide flexibility for the parties to change the payment structure during the course of the project.

When you can check this off your list and move on to the next step:

• When you understand the advantages of Measured Term Contracts and have identified the key benefits for the parties involved.

Disadvantages of Measured Term Contracts

• Understand the limitations of measured term contracts for construction projects in the UK
• Consider the risk of unexpected or additional works that may arise from the project
• Think about the risk of poor workmanship due to lack of contractor supervision
• Be aware of the potential for disputes between the parties which could lead to delays in the project
• Consider the potential for cost and time overruns
• Understand that the contractor may not be able to take full responsibility for the works due to lack of control

Once you have evaluated the potential risks of measured term contracts for your construction project in the UK, you can move on to the next step: Research The Legal Framework of Measured Term Contracts in the UK.

Research The Legal Framework of Measured Term Contracts in the UK

• Research the UK Construction Act of 1996 and the Measured Term Contract Regulations of 1986.
• Examine case law to understand how courts have interpreted the legal framework in the past.
• Read up on relevant guidance documents that provide additional context to the legal framework.
• Make a list of any regulations or rules that you need to be aware of when entering into a measured term contract.
• Once you have a thorough understanding of the legal framework, you can check this off your list and move on to the next step.

Identify Companies That Offer Measured Term Contracts

• Research online using directories and search engines to locate companies that offer measured term contracts
• Use professional networks and contacts to identify companies that provide measured term contracts in the UK
• Check trade magazines for relevant industry-specific companies offering measured term contracts in the UK
• When you have identified a few companies, create a list of their contact details
• Verify that the companies are registered with the appropriate regulatory bodies
• When you have a list of potential companies to contact, you can move on to the next step of contacting them to obtain quotes for measured term contracts.

Contact Companies to Obtain Quotes for Measured Term Contracts

• Compile a list of companies that offer measured term contracts, identified in the previous step
• Develop a brief outline of your requirements, including the scope and timeline of the project
• Contact each of the companies on the list, either via email or phone, to request a quote for the project
• Ask for a detailed breakdown of the quote, including any additional costs or fees
• Request the quote in writing and ensure that all relevant terms and conditions are included
• Compare the quotes between the different companies and determine which one is the most suitable for the project

Once you have received quotes from all of the companies identified in the previous step, this step is complete and you can move on to the next step of comparing the quotes and selecting your preferred measured term contract.

Compare Quotes and Select Preferred Measured Term Contract

• Compare the quotes you received from the companies you contacted for their Measured Term Contract services
• Evaluate the quotes based on cost, quality, and the timeline for completion of the project
• Contact the companies if you need more information or clarification on any of the quotes
• Once you have all the information you need, select the quote that best fits your needs
• You can check off this step when you have selected the preferred Measured Term Contract and are ready to move on to the next step of negotiating the terms of the contract.

Negotiate Terms of Measured Term Contract

• Gather any relevant documentation such as drawings, specifications, and other documents provided by the contractor
• Negotiate terms with the contractor such as pricing, payment terms, the scope of the project, and the timeline of the project
• Make sure all parties are in agreement on the negotiated terms and that they are laid out in a clear and concise manner
• Obtain written confirmation of the agreed terms from the contractor
• You’ll know that you have completed this step when you have written confirmation of the agreed terms from the contractor.

Draft Measured Term Contract and Submit for Approval

• Consult the contract documents to ensure all required terms are included in the draft
• Prepare the contract documents for submission to the client for approval
• Submit the contract documents to the client for review
• Coordinate with the client to address any questions or concerns with the contract
• Make any necessary revisions to the contract documents
• Upon the client’s approval, receive signed copies of the contract documents
• You will know you have completed this step when you have received signed copies of the contract documents from the client and all necessary revisions have been made.

Sign Measured Term Contract and Finalize Agreement

• Obtain final authorization and sign the Measured Term Contract.
• Make sure the contractor’s signature is on the contract and the signatories are accurate.
• Check the contract thoroughly and make sure there are no discrepancies.
• Request a signed and dated copy of the contract from the contractor.
• Ensure that any additional documents or specifications are attached to the contract.
• Make sure both parties understand their obligations and responsibilities under the contract.
• Once the contract is signed, it is a legally binding document.

Once you have completed these steps, you can move on to the next step of implementing the Measured Term Contract.

Implement Measured Term Contract

• Establish clear communication channels between the contractor and client
• Develop a detailed schedule of works, terms and conditions, and payment plan
• Agree and sign off on the project scope, schedule and payment plan
• Provide the contractor with all necessary documents and information to begin work
• Track and monitor the contractor’s performance against the agreed schedule of works
• Make sure the contractor complies with the terms and conditions of the contract
• Make timely payments to the contractor in accordance with the payment plan
• Agree and sign off on the completion of works and the final payment

When you can check this off your list:

• When the contractor has begun work
• When all necessary documents and information have been provided to the contractor
• When the contractor has completed the works and has been paid in full

Track and Measure Performance of Measured Term Contract

• Establish a system to track performance of the measured term contract
• This should include progress reports and other data that can be used to measure performance against the expected results of the contract
• Ensure all parties are aware of the system and that it is adhered to
• Monitor performance and ensure that any issues are addressed promptly
• Set up regular meetings to review progress and performance
• Keep accurate records of all performance data
• Once performance has been assessed and any issues have been resolved, the contract can be considered complete and the process can move on to the next step.

Conclusion and Summary of the Process and Legal Implications

• Summarize the process of measuring a term contract and the legal implications of doing so
• Make sure all the documents and relevant information have been collected and reviewed
• Ensure that the performance and measurements of the terms have been completed and reported
• Prepare and sign the final documents for the completion of the contract
• Analyze the results to ensure that the contract was completed according to the applicable laws
• Once all of the above steps have been completed, the process of measuring a term contract is complete
• Record the details and results of the process for future reference
• Check this off your list and move on to the next step.

FAQ:

Q: What is the legal definition of a measured term contract in the UK?

Asked by Michelle on April 10, 2022.
A: A measured term contract (MTC) is a type of contract used in the construction industry in the UK that sets a predetermined price for works over a set period of time. This type of contract is commonly used in public works and civil engineering projects, as well as private construction projects. Under an MTC, the contractor agrees to carry out the works as specified in the contract agreement and to provide all necessary materials and services required to complete the project. The contractor is then paid a predetermined price which is agreed at the start of the contract and can be adjusted at regular intervals throughout the duration of the project.

Q: When should I use a measured term contract?

Asked by David on August 1, 2022.
A: Measured term contracts are most commonly used when there is an ongoing project or when there is a need to complete a large and complex project over an extended period of time. They provide stability for both parties involved, as the contractor is able to plan for labour, materials and services over an extended period of time, while the client is able to budget for regular payments over that same period of time. MTCs are also useful when there are a number of different stages to a project that need to be completed sequentially or when it is difficult to accurately estimate the cost of completing each stage.

Q: How does pricing work with measured term contracts?

Asked by Ethan on November 22, 2022.
A: The price for each stage of work under a measured term contract will be established in advance and will not change during the duration of the project. The price may be calculated based on an hourly rate, or it may be based on specific materials or services required for each stage of work. The price will usually be reviewed at regular intervals throughout the duration of the project and any necessary adjustments can be made at this time.

Q: Are there any restrictions on measured term contracts?

Asked by Emma on February 12, 2022.
A: Yes, there are certain restrictions associated with measured term contracts in the UK. All parties involved must adhere to industry regulations and health and safety standards throughout the duration of the project. Additionally, contractors must ensure that all works are carried out as per the specifications set out in the contract agreement. Any changes to specifications must be agreed upon by both parties before any works begin.

Q: What are some common pitfalls associated with measured term contracts?

Asked by Jack on June 6, 2022.
A: One common pitfall associated with measured term contracts is that they can become too restrictive if not properly managed throughout their duration. If specifications are not regularly reviewed and adjusted as needed, it can become difficult for contractors to complete their work as planned. Additionally, if changes are made without prior agreement from both parties then disputes may arise which could lead to costly delays or even termination of the contract agreement.

Q: How long do measured term contracts usually last?

Asked by Olivia on September 20, 2022.
A: The length of a measured term contract will depend on its specific requirements and scope of work; however, they typically range from six months up to three years in length. It is important to keep in mind that if changes are made during this period then it could affect the overall length and cost of the project.

Q: Are there any differences between UK vs USA vs EU jurisdictions when it comes to measured term contracts?

Asked by Logan on December 18, 2022.
A: Yes, there can be some differences between UK vs USA vs EU jurisdictions when it comes to measured term contracts; however, many aspects such as pricing structure, health and safety regulations and contractual obligations remain relatively similar across all three jurisdictions. In general, each jurisdiction has its own set of regulations which must be adhered to when entering into a measured term contract agreement; it is therefore important that all parties involved are aware of these regulations before entering into any contractual arrangements.

Example dispute

Suing a Company for Breach of a Measured Term Contract

• Review the terms of the contract to identify any potential breaches.
• Gather evidence of the breach of contract, such as emails, invoices, and records of meetings.
• File a lawsuit in civil court referencing the terms of the contract that were violated.
• Establish that the contract was breached, and any damages occurred as a direct result of the breach.
• Seek remedies such as monetary damages or injunctive relief, depending on the severity of the breach.
• Seek to resolve the dispute through mediation or arbitration if possible.

Templates available (free to use)

Jct Measured Term Contract
Jct Measured Term Contract Guide 2016

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