Contract Sum
The Contract Sum is the total price agreed between the employer (client) and the contractor for carrying out the construction works as defined in the contract documents. It forms the basis for interim valuations and the final account.
Definition
Under JCT (Joint Contracts Tribunal) contracts, the contract sum is the amount stated in the contract as the sum to be paid to the contractor for carrying out and completing the works, subject to adjustments.
What It Includes
The contract sum typically comprises:
- Priced bill of quantities or schedule of works
- Provisional sums for undefined work
- Prime cost sums for specialist work
- Main contractor preliminaries
- Overheads and profit
Adjustments to the Contract Sum
The contract sum may be adjusted for:
- Variations instructed by the client or architect
- Remeasurement of provisional quantities
- Expenditure of provisional and prime cost sums
- Claims for loss and expense
- Liquidated damages deductions
Contract Sum vs Final Account
The contract sum is the starting point; the final account reflects all adjustments made during the contract period and represents the actual amount payable.
Related Terms
See also: Tender, Liquidated Damages, Bill of Quantities, Change Order
