Contracts the Act does not cover
Most people know about the residential occupier exclusion. Fewer know that the operations excluded from the definition can carve a single project into covered and uncovered parts.
QScope Team · 19 March 2026 · 5 min read
The Housing Grants, Construction and Regeneration Act 1996 applies to construction contracts, and construction contract has a statutory definition. Where a contract falls outside it, the payment timetable, the notice regime, the right to suspend and the right to adjudicate all fall away, and the parties are left with whatever they agreed.
Residential occupiers
The best known exclusion. A contract with a residential occupier, meaning someone who occupies or intends to occupy the dwelling as their residence, is outside the Act.
The purpose is consumer protection: a homeowner should not be dragged into a twenty-eight day adjudication over a kitchen extension. The practical effect is that a builder working directly for a homeowner has no statutory payment protection and no right to adjudicate unless the contract gives one. Many standard forms do give one contractually, which is worth checking rather than assuming either way.
Excluded operations
The definition of construction operations excludes several categories, and these are the ones that catch professionals rather than homeowners. They include, broadly, drilling for oil and gas; extraction of minerals and tunnelling for that purpose; and the assembly, installation or demolition of plant or machinery on sites where the primary activity is nuclear processing, power generation, water or effluent treatment, or the production, transmission or bulk storage of chemicals, pharmaceuticals, oil, gas, steel or food and drink.
The wording matters more than any summary, because the exclusions are drawn narrowly and turn on the primary activity of the site.
Mixed contracts
This is where it gets awkward. A single contract can cover both included and excluded operations, and the Act then applies only to the included part.
Installing process plant in a food factory may be excluded. Building the shed around it is not. One contract, one contractor, two regimes, and a payment dispute that has to be split before anyone can work out what applies to which.
Where a project is likely to straddle the line, dealing with it in the drafting is far cheaper than dealing with it in a dispute.
Contracts of employment
Excluded, unsurprisingly. So are certain agreements that are really finance or development agreements rather than contracts for construction operations, though the boundary there has been litigated more than once.
Agreements in writing
Since the 2009 amendments, the Act applies to oral and partly oral construction contracts as well as written ones. The adjudication provisions must still be in writing, but the contract itself no longer has to be. That reversed a substantial body of earlier practice, and older guidance on the point is unreliable.
What to do about it
Establish at the outset whether the Act applies, and record the answer. If it does not, the payment terms in the contract are the whole of the protection, and they deserve a much closer reading than they usually get.
QScope lets you set the contract form and payment terms per project, so a contract outside the Act is not silently given statutory deadlines it does not have.