Construction Contracts in Uganda

Part of our guide to Construction Companies in Uganda

A construction contract is the written agreement between you and the contractor that says what will be built, for how much, by when and what happens if something goes wrong. It is your main protection on a building project. This guide explains what a contract should contain and the mistakes to avoid. It is general information and not legal advice, so for a large project have a lawyer review the contract.

This guide is written by a construction company that signs these contracts with its own clients, so it covers the clauses that cause the most disputes on site.

Why you need one

A verbal agreement is hard to prove. A written contract settles the scope, the price and the payments before work starts, and gives both sides a way to resolve disputes.

What a contract should contain

1. The parties. Full legal names and addresses. Check the contractor’s registration with URSB.
2. The scope of work. A description of the building and the drawings and specification it refers to. Attach the drawings and the BOQ.
3. The price. The total, what it includes and excludes, and whether it is fixed or can change. See the bill of quantities guide.
4. Payment stages. Amounts linked to completed work, not to dates, and any advance.
5. The programme. Start date, completion date and key stages.
6. Variations. How changes are requested, priced and approved in writing.
7. Delays. What happens if the contractor or the owner causes a delay.
8. Materials and workmanship. The standard and grade of materials, and who supplies them.
9. Inspection and approval. Who inspects, and when.
10. Handover and defects. The handover process and how long the contractor must fix defects.
11. Insurance and site safety. Who insures the works and the workers.
12. Termination and disputes. How either side can end the contract, and how disputes are settled.

Retention, practical completion and the defects period

Three terms decide how a contract ends, and they protect you if they are written down.

• Practical completion is the point when the building is finished enough to use, apart from minor items. The contractor hands over and you take possession.
• The defects liability period follows practical completion, often six or twelve months. The contractor must return and fix defects that appear in that time, at its own cost.
• Retention is a small percentage held back from each payment. Half is often released at practical completion and the rest at the end of the defects period, once defects are fixed.

Agree the length of the defects period and the retention percentage before you sign, and list any outstanding items in writing at handover.

Labour only or labour and materials

State which one it is, and list who buys, stores and is responsible for each material. See building contractors in Uganda.

Common mistakes

• Starting before the contract is signed.
• A contract with no drawings or BOQ attached.
• Large payments up front, or payments tied to dates.
• Verbal changes with no written price.
• No programme and no remedy for delay.
• No defects period after handover.

Getting help

For a large or complex project, a lawyer and a quantity surveyor are worth their fee. If you use a construction manager, they can help administer the contract. See construction management and how to choose a construction company.

Frequently asked questions