Turnkey Contract Agreement for the United Kingdom

Turnkey Contract Agreement Template for England and Wales

A Turnkey Contract Agreement under English and Welsh law is a comprehensive legal document that establishes the terms for the complete delivery of a project, from design through to commissioning. The contractor assumes full responsibility for all aspects of the project, including design, procurement, construction, and handover, delivering a fully operational facility to the employer. This agreement type is governed by English and Welsh construction law, including the Housing Grants, Construction and Regeneration Act 1996 and relevant common law principles.

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What is a Turnkey Contract Agreement?

The Turnkey Contract Agreement is utilized when an employer requires a single point of responsibility for delivering a complete, operational project. This contract type is particularly suitable for complex projects where the employer wants to minimize their involvement in the day-to-day execution. The agreement, governed by English and Welsh law, covers all aspects from initial design to final commissioning, including detailed specifications, payment terms, completion criteria, and warranty obligations. It provides certainty of cost and time while transferring significant risk to the contractor.

What sections should be included in a Turnkey Contract Agreement?

1. Parties: Identification and details of the Employer and Contractor

2. Background/Recitals: Context of the agreement and project overview

3. Definitions and Interpretation: Key terms and their meanings used throughout the contract

4. Contractor's Obligations: Core responsibilities including design, construction, and completion

5. Contract Price and Payment Terms: Price, payment schedule, and payment mechanisms

6. Time for Completion: Project timeline, milestones, and completion dates

7. Testing and Commissioning: Requirements for testing and handover procedures

8. Defects Liability: Warranty period and rectification of defects

9. Insurance and Indemnities: Required insurance coverage and indemnification provisions

What sections are optional to include in a Turnkey Contract Agreement?

1. Performance Security: Additional security provisions including bank guarantees or bonds - used for high-value projects or where risk mitigation is crucial

2. Variations: Procedure for changes to scope - included when flexibility in scope might be needed during project execution

3. Force Majeure: Provisions for unforeseen circumstances and their handling - recommended for long-term or high-risk projects

4. Step-in Rights: Rights to take over project completion - typically included for critical infrastructure projects

What schedules should be included in a Turnkey Contract Agreement?

1. Schedule 1 - Employer's Requirements: Detailed technical specifications and requirements

2. Schedule 2 - Project Timeline: Detailed program of works and milestones

3. Schedule 3 - Payment Schedule: Detailed breakdown of payments and timing

4. Schedule 4 - Site Information: Site details, surveys, and existing conditions

5. Schedule 5 - Form of Bonds/Guarantees: Templates for required security documents

6. Schedule 6 - Tests on Completion: Detailed testing and commissioning procedures

7. Schedule 7 - Permits and Licenses: List of required regulatory approvals

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Project Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Housing Grants, Construction and Regeneration Act 1996: Key legislation governing construction contracts in England and Wales, covering payment provisions, adjudication rights, and notice requirements

Contracts (Rights of Third Parties) Act 1999: Legislation governing third-party rights and enforcement in contractual relationships

Late Payment of Commercial Debts (Interest) Act 1998: Legislation governing interest charges on late payments in commercial contracts

Supply of Goods and Services Act 1982: Legislation setting standards for quality of services, fitness for purpose, and reasonable care and skill requirements

Construction (Design and Management) Regulations 2015: Regulations covering health and safety requirements, principal contractor duties, and designer responsibilities in construction projects

Common Law Principles: Fundamental legal principles covering contract formation, breach of contract, damages and remedies

EU Retained Law: Post-Brexit retained European Union laws affecting construction standards, regulations, and technical specifications

Building Regulations 2010: Regulations ensuring compliance with building standards and technical requirements

Environmental Protection Act 1990: Primary legislation governing environmental protection and obligations in construction projects

Climate Change Act 2008: Legislation setting requirements for carbon reduction and environmental sustainability

Town and Country Planning Act 1990: Primary legislation governing planning permissions and development control

Professional Standards: Industry-specific guidelines and standards from professional bodies such as RIBA and RICS

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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