EPC Contract Template for England and Wales

An EPC Contract places design, procurement and construction of a project with a single contractor for an agreed price and completion date. Under England and Wales law it sits within the statutory construction contract regime, which means the payment and adjudication provisions of the Housing Grants, Construction and Regeneration Act 1996 apply whatever the contract itself says.

When do you need this document?

You need an EPC Contract when a project must be delivered to a fixed price and date with one party accountable for the whole outcome. That is typically a generating station, substation or grid connection, a process or manufacturing plant, a waste or water treatment facility, or a major infrastructure asset. It is the usual requirement where a project is funded on the strength of the asset itself, because a lender wants a single contractor carrying delay and performance risk rather than gaps between separate designers and builders.

What does it cover?

The contract fixes the scope through the employer's requirements and the contractor's proposals, and sets out the price and payment mechanism, the programme and completion date, and the testing the plant must pass before it is taken over. It allocates the risks that decide whether a project makes money: ground and site conditions, changes in law, delay caused by either party, and shortfalls in output. It then sets the consequences through liquidated damages for late completion and for underperformance, capped by an overall limit of liability, together with the defects liability period and the security package of bonds, parent company guarantees and insurance.

Common pitfalls

The most common problem is a mismatch between the design obligation and the insurance. A contract that promises the plant will be fit for a stated purpose imposes a stricter standard than reasonable skill and care, and professional indemnity policies frequently exclude it, leaving a promise with nothing behind it. The second is a liquidated damages regime that is not tied to the tests: if the performance tests are not defined precisely enough to produce a pass or fail, the damages become unenforceable in practice. The third is excluding the Contracts (Rights of Third Parties) Act 1999 without putting collateral warranties in place, which leaves funders and purchasers with no route to enforce anything.