Contract execution
Contract execution is the process of signing an agreed contract, after which its terms become binding on the parties to the contract.
Contract engrossment is the process of preparing the final agreed form of contract and its schedules and appendices so that it can be executed. Engrossed contracts are then either executed under seal (signed by the parties, witnessed and most importantly made clear that they are executed as a deed) or under hand (a 'simple contract' that is just signed by the parties).
Simple contracts and contracts under seal have different limitation periods. An action founded on simple contract cannot be brought after six years from the date on which the cause of the action accrued. The limitation period for a contract under seal is 12 years. See Contracts under seal v under hand for more information.
Generally, two engrossed contracts will be prepared for execution, one for the client and one for the supplier. Alternatively, one party might retain the executed contract, with certified copies being issued to the other party, this can avoid potential errors in preparing two contracts for execution.
It is very important to ensure all details entered into the contract are correct before signing. It is surprisingly common for example for the wrong company to be named in the contract, and whilst the courts may see this as a clerical error that should be corrected, this should not be relied upon, particularly in the case of insolvency, and court proceedings in themselves are likely to be costly and time consuming.
See:
- Derek Hodd Limited v Climate Change Capital Limited.
- Genesis Housing Association Limited v Liberty Syndicate Management Limited.
- Westshield Civil Engineering Ltd and Westshield Ltd v Buckingham Group Contracting Ltd.
It is also relatively common for contract execution to be delayed until well after the actual works described in the contract have been started. Clearly this is not advisable.
Letters of intent are sometimes used as interim arrangements to mobilise a supplier prior to a formal contract being executed, but they should never be seen as an alternative to a full contract and should place a limit on expenditure and liability prior to the contract being put in place. See letter of intent for more information.
[edit] Related articles on Designing Buildings
- Articles of agreement.
- Conformed contract.
- Construction contract.
- Construing a contract.
- Contract award.
- Contract conditions.
- Contract documents.
- Contract engrossment
- Contracts under seal v under hand.
- Derek Hodd Limited v Climate Change Capital Limited.
- ESignatures.
- Essentials of a contract.
- Form of tender.
- Genesis Housing Association Limited v Liberty Syndicate Management Limited.
- Glossary of property law terms.
- Letter of intent.
- Privity of contract.
- Westshield Civil Engineering Ltd and Westshield Ltd v Buckingham Group Contracting Ltd.
Featured articles and news
Shortage of high-quality data threatening the AI boom
And other fundamental issues highlighted by the Open Data Institute.
Data centres top the list of growth opportunities
In robust, yet heterogenous world BACS market.
Increased funding for BSR announced
Within plans for next generation of new towns.
New Towns Taskforce interim policy statement
With initial reactions to the 6 month policy update.
Heritage, industry and slavery
Interpretation must tell the story accurately.
PM announces Building safety and fire move to MHCLG
Following recommendations of the Grenfell Inquiry report.
Conserving the ruins of a great Elizabethan country house.
BSRIA European air conditioning market update 2024
Highs, lows and discrepancy rates in the annual demand.
50 years celebrating the ECA Apprenticeship Awards
As SMEs say the 10 years of the Apprenticeship Levy has failed them.
Nominations sought for CIOB awards
Celebrating construction excellence in Ireland and Northern Ireland.
EPC consultation in context: NCM, SAP, SBEM and HEM
One week to respond to the consultation on reforms to the Energy Performance of Buildings framework.
CIAT Celebrates 60 years of Architectural Technology
Find out more #CIAT60 social media takeover.
The BPF urges Chancellor for additional BSR resources
To remove barriers and bottlenecks which delay projects.
Flexibility over requirements to boost apprentice numbers
English, maths and minimumun duration requirements reduced for a 10,000 gain.
A long term view on European heating markets
BSRIA HVAC 2032 Study.
Humidity resilience strategies for home design
Frequency of extreme humidity events is increasing.
National Apprenticeship Week 2025
Skills for life : 10-16 February