A construction contract is a legally binding agreement between two or more parties outlining the terms and conditions for the planning, design, and construction of a building or infrastructure project. These contracts are crucial in the construction industry, providing a framework for the relationships, obligations, and responsibilities of the various parties involved in a construction project.

Sections 104-105 of the Housing Grants, Construction and Regeneration Act 1996 describes what constitutes a construction contract and construction operation respectively. Operations such as material only, offshore works, mining and nuclear works are excluded.

Key elements of a construction contract include:

1. Parties Involved:
   The contract identifies the parties involved, including the client (owner or employer) and the contractor(s). In some cases, there may be additional parties such as subcontractors, consultants, architects, engineers, and suppliers.
2. Scope of Work:
   The contract defines the scope of work, detailing the specific tasks, activities, and deliverables that the contractor is obligated to perform. This section often includes project specifications, drawings, and other relevant documents.
3. Project Timeline:
   The contract specifies the project timeline, including commencement and completion dates. It may outline milestones, deadlines for specific phases, and the overall project duration.
4. Contract Sum:
   The contract sum represents the agreed-upon price for the construction work. This may include a lump sum, unit prices, cost-plus arrangements, or other payment structures.
5. Payment Terms:
   The contract outlines the payment terms, including the schedule of payments, progress payments, and conditions for payment release. It may also include provisions for retention amounts.
6. Contractual Documents:
   The contract incorporates various documents by reference, such as drawings, specifications, and other project documents. These form an integral part of the contract and provide additional details about the project.
7. Contractual Terms and Conditions:
   The contract includes terms and conditions that govern the relationship between the parties. This may cover issues such as variations, warranties, insurance, dispute resolution mechanisms, and the handling of unforeseen events (force majeure).
8. Performance Bonds and Guarantees:
   Construction contracts may require the contractor to provide performance bonds or guarantees to ensure the completion of the project according to the contract terms.
9. Rights and Responsibilities:
   The contract defines the rights and responsibilities of each party involved. This includes the duties of the contractor, the obligations of the employer, and the roles of other project participants.
10. Quality and Standards:
    The contract may specify the quality standards and performance criteria that the construction work must meet. It may also include provisions for testing and inspection.
11. Health and Safety:
    Construction contracts often include provisions related to health and safety, outlining the responsibilities of the parties to ensure a safe working environment.
12. Dispute Resolution Mechanisms:
    The contract may include provisions for dispute resolution, specifying mechanisms such as mediation, adjudication, arbitration, or litigation in the event of disagreements between the parties.

Construction contracts can take various forms, including standard forms developed by industry organisations (e.g., JCT, FIDIC, NEC), bespoke contracts tailored to specific projects, or a combination of both. The selection of a suitable construction contract is influenced by factors such as project complexity, size, and the preferences of the parties involved.