Project-Based Contract Template for the UK
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What is a Project-Based Contract?
A project-based contract sets out the terms for completing a specific piece of work with clear deliverables and end dates. It focuses on achieving a defined outcome, such as building a website, developing software, or managing a construction project, rather than providing ongoing support.
In construction, a project management building contract is the agreement that governs how a build project is delivered. It names the employer (the party paying for the works) and the contractor, sets the scope and design responsibilities, ties payment to milestones, and defines what happens if the programme slips or either party ends the contract early. Many building projects run on standard-form contracts such as the JCT suite, which offer set procurement routes including traditional, design and build, and management contracting (where a management contractor coordinates works packages on the employer's behalf).
Under the law of England and Wales, these contracts must clearly define the project scope, payment terms, and completion criteria. Their terms and conditions usually set out key milestones, quality standards, the contractor's method of delivery, and early-termination provisions. Businesses use them for temporary expertise or one-off projects where they need specialist skills without making permanent hires.
Sample clauses: standard wording in a UK project-based contract
6. Deliverables, Milestones and Acceptance
6.1 The Supplier shall complete each Deliverable and achieve each Milestone by the date set out in the Project Plan, and shall notify the Customer in writing when it considers a Deliverable ready for acceptance testing.
6.2 The Customer shall carry out acceptance testing against the acceptance criteria in Schedule [2] within [10] Business Days of that notice, and shall either issue an acceptance certificate or give written notice of the respects in which the Deliverable fails to meet those criteria.
6.3 Where the Customer gives a notice of rejection, the Supplier shall at its own cost remedy the failure and resubmit the Deliverable within [10] Business Days, and clause 6.2 shall apply again to the resubmitted Deliverable.
6.4 If the Customer neither accepts nor rejects a Deliverable within the period in clause 6.2, and does not request an extension, the Deliverable shall be treated as accepted on the last day of that period, save where the Customer is using the Deliverable only for testing purposes.
7. Charges and Payment
7.1 The Customer shall pay the Charges for each Milestone, as set out in Schedule [3], following acceptance of the associated Deliverables under clause 6, and the Supplier shall not invoice for a Milestone before it has been achieved.
7.2 The Supplier shall invoice the Customer on acceptance, and the Customer shall pay each correctly rendered and undisputed invoice within [30] days of receipt, in cleared funds to the account nominated by the Supplier.
7.3 All sums are exclusive of VAT, which shall be added at the prevailing rate against a valid VAT invoice, and the Customer may withhold payment of a disputed amount provided it pays the balance and notifies the Supplier of the grounds of dispute within [10] Business Days.
7.4 Interest on late payment shall accrue in accordance with the Late Payment of Commercial Debts (Interest) Act 1998.
Illustrative extract showing typical drafting under the law of England and Wales. Documents generated with GenieAI are tailored to your rules, standards and context.
Frequently Asked Questions
When should you use a Project-Based Contract?
A project-based contract works best when you need specialist expertise for a defined task with clear deliverables. It suits one-off projects like website development, consulting assignments, or a construction build where you want to keep control over scope, timeline, and budget.
On building projects, use one when you are engaging a contractor or management contractor to deliver works against a fixed programme and defined design. The procurement route matters. A traditional route separates design from construction, while a design and build route puts both under one contractor, and a construction management contract sees the client appoint a construction manager to run trade packages directly. Choosing the contract early keeps contract management simple once works start, because payment, variations, and acceptance are all set out in advance. Project-based contracts are also useful when bringing in external talent for temporary needs, avoiding permanent hiring costs and employment obligations. The key is having measurable goals and defined end points.
What are the different types of Project-Based Contract?
- Fixed-Price Project Contracts: set a total cost upfront, ideal for well-defined projects with clear deliverables and a settled design
- Time-and-Materials Contracts: charge by hour or day plus expenses, suited to projects with evolving requirements
- Milestone-Based Contracts: break payment into stages tied to specific achievements
- Design and Build Contracts: put design and construction responsibility under a single contractor, giving the employer one point of accountability
- Management Contracts: on larger builds, a management contractor is appointed to plan and coordinate the works packages for the employer, useful where design continues after work starts
- Construction Management Contracts: the client appoints a construction manager to oversee the programme while contracting directly with each trade
- Agile Project Contracts: flexible structures allowing iterative development and changing priorities
- Hybrid Contracts: combine fixed and variable elements to balance risk, common in complex UK consulting and construction contract work
Who should typically use a Project-Based Contract?
- Client Organizations: Companies, charities, or public bodies seeking specific project outcomes without permanent hires
- Contractors/Freelancers: Independent professionals or firms delivering specialized services for defined projects
- Project Managers: Oversee deliverables, timelines, and coordinate between parties throughout the project lifecycle
- Legal Teams: Draft and review contract terms, ensure compliance with UK employment and contract law
- Finance Departments: Handle payment schedules, monitor budgets, and process milestone-based invoices
How do you write a Project-Based Contract?
- Project Scope: Define clear deliverables, timelines, and quality standards expected from the contractor
- Party Details: Gather full legal names, addresses, and company registration details of all involved parties
- Payment Terms: Outline fees, payment schedule, and any milestone-based arrangements
- Timeline Planning: Map key dates, milestones, and review points throughout the project lifecycle
- Risk Management: Consider potential issues, include dispute resolution procedures and termination rights
- Document Generation: Use our platform to create a legally sound contract that includes all essential elements
What should be included in a Project-Based Contract?
- Parties' Details: Full legal names, addresses, and company registration numbers of all involved entities
- Project Scope: Detailed description of deliverables, specifications, and quality standards
- Payment Terms: Fee structure, payment schedule, and conditions for milestone payments
- Timeline: Start date, completion date, and key milestone deadlines
- Intellectual Property: Rights ownership and transfer provisions for project outputs
- Termination Rights: Conditions for early termination and consequences
- Dispute Resolution: Process for handling disagreements under English law
What's the difference between a Project-Based Contract and an Employment Contract?
A Project-Based Contract differs significantly from an Employment Contract in several key ways. While both involve work arrangements, they serve distinct legal purposes under UK law.
- Employment Status: Project-Based Contracts create a client-contractor relationship without employment rights, while Employment Contracts establish an employer-employee relationship with statutory protections
- Duration and Scope: Project contracts focus on specific deliverables with clear end dates, whereas employment contracts typically have ongoing, open-ended commitments
- Legal Obligations: Employment contracts include mandatory benefits, tax arrangements, and employment rights. Project contracts focus purely on project delivery terms
- Control and Management: Project contractors maintain independence in how they complete work, while employees must follow company procedures and management direction
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About the Project-Based Contract
- Project Scope: Define clear deliverables, timelines, and quality standards expected from the contractor
- Party Details: Gather full legal names, addresses, and company registration details of all involved parties
- Payment Terms: Outline fees, payment schedule, and any milestone-based arrangements
- Timeline Planning: Map key dates, milestones, and review points throughout the project lifecycle
- Risk Management: Consider potential issues, include dispute resolution procedures and termination rights
- Document Generation: Use our platform to create a legally sound contract that includes all essential elements
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