Trade Contracts UK — What to Include and How to Protect Yourself (2026)

Most disputes between tradespeople and customers come down to one thing: what was actually agreed. Without a written contract, it's your word against theirs. And in a County Court, a judge who has to choose between two conflicting accounts will often find against the person who didn't bother to write anything down.

This guide covers what every trade contract in the UK should contain, how domestic and commercial jobs differ, how to handle variations, and what your options are when a customer refuses to pay.

Why a written contract matters

Verbal agreements are legally binding in the UK. If you shake hands on a price and the customer says "go ahead," a contract exists. The problem is enforcing it. Without written evidence, you have no reliable record of what scope was agreed, what the price was, what the payment terms were, or what was excluded. The customer can claim you agreed to do more, charge less, or finish sooner — and you'll struggle to prove otherwise.

A written contract protects both parties. It tells the customer exactly what they're getting and for how much. It tells you what you're obligated to deliver and when you get paid. It removes ambiguity before work starts rather than creating arguments after it finishes.

How a contract is formed

A contract requires three things: an offer, an acceptance, and consideration (something of value exchanged — usually money for services). Your written quote is the offer. The customer's email saying "sounds good, when can you start?" is the acceptance. That exchange alone constitutes a contract.

A formal signed agreement gives you stronger protection, particularly if you need to pursue payment through the courts. But even if you never get a signature, a paper trail of emails and messages recording what was agreed is far better than nothing. The key is to have something written down before work starts.

What to include in every trade contract

Whether you're using a formal template or a detailed quote, every agreement should cover the following.

Full names and addresses

Include the full legal name and address of both your business and the customer. For a limited company, use the registered company name. For a sole trader, your own name. This matters if you ever need to issue a formal letter before action or pursue a court claim.

Description of work

This is where most contracts fall short. Vague scope creates disputes. "Boiler installation" means nothing. "Supply and install Worcester Bosch 30i combi boiler at [full address], including removal and disposal of existing boiler and flue, all new gas pipework, system flush, and commissioning" is a contract. Be specific about brand, model, location, materials, and exactly what the job covers.

If something is outside scope, say so explicitly. Making good any decorations disturbed, skip hire, disposing of old materials — these are common sources of dispute because customers assume they're included unless you say otherwise.

Start date and estimated completion

Include a start date and a realistic estimated completion date. Use "estimated" language for completion — most trade jobs are subject to factors outside your control, including hidden structural issues, delayed deliveries, and changes in scope. You don't want to be held in breach of contract because a delivery was late. That said, if you commit to a fixed completion date in writing, you're bound by it.

Price and payment terms

State the total fixed price, or your hourly rate plus estimated hours, and be explicit about what the price includes. If materials are included, list the key items. If you're charging materials at cost plus a margin, say so.

Payment terms should specify: the deposit amount (20–30% is typical for domestic work), any milestone payments for longer jobs, when the final payment is due (typically on practical completion, not whenever the customer gets round to it), and the accepted payment method. "Payment due on completion" is not enough — specify "payment due on the day of practical completion by bank transfer to [account details]" or similar.

What's not included

Explicitly list exclusions. Common ones: making good plaster, paintwork or tiles disturbed during work; disposal of waste unless skip hire is priced; additional materials not listed in the quote; costs arising from unforeseen conditions such as concealed pipework, asbestos, or structural defects discovered during the job. If a customer assumes it's included and you haven't excluded it, you may be obligated to do it at no extra charge.

Variation procedure

Any change to the agreed scope — additional work, upgraded materials, changes requested by the customer — must be agreed in writing before the additional work begins, with a confirmed price. A variation clause in your contract makes this clear up front. It gives you the right to charge for extras and protects you from the customer who later claims they never asked for it.

Cancellation terms

What happens if the customer cancels after you've ordered materials, booked subcontractors, or turned down other work? Your contract should state that cancellation fees apply to cover costs already incurred. For materials already delivered, you're entitled to recover those costs regardless.

Domestic vs commercial contracts

The Consumer Rights Act 2015 applies to domestic customers — anyone who's using your services outside of a business context. Under this Act, your terms must be fair and transparent. Unfair terms can be unenforceable. Practically speaking, this means: don't include penalty clauses designed to punish customers, make sure your payment terms are clearly explained before work starts, and don't try to exclude liability for poor workmanship.

For commercial customers (B2B), the law gives both parties more flexibility to negotiate terms. You can agree almost anything, as long as both businesses consent. This includes retention clauses, longer payment terms, and more aggressive interest on late payment.

The right to cancel (domestic jobs)

Under the Consumer Contracts Regulations 2013, a domestic customer who signed a contract at their home, on-site, or anywhere other than your business premises has 14 days to cancel without penalty. This is a statutory right you cannot contract out of.

The exception: if the customer asks you to start work within those 14 days and acknowledges in writing that they waive their cancellation right, you can begin immediately. Get this in writing — an email from the customer confirming they want you to start and that they understand they lose the right to cancel is sufficient. Without it, if the customer cancels before the 14 days are up, you're not entitled to charge for work already done.

Variation clauses — the biggest source of disputes

The words "while you're here, could you also…" have cost tradespeople enormous amounts of money. Extra work agreed verbally on site, with no written record and no confirmed price, is nearly impossible to invoice for if the customer later denies it or disputes the amount.

Even for small changes, send a message. A WhatsApp saying "just to confirm, you've asked me to also replace the stopcock — that's an additional £85, do you want to proceed?" followed by the customer replying "yes please" is a variation contract. It takes 30 seconds. Job management software that includes a variation sign-off process is even better, because it creates a timestamped record both parties can refer to.

Your contract should explicitly state that no variation to the agreed scope will be carried out without written confirmation of both the additional scope and the agreed price, before work commences.

Payment protection when things go wrong

If a commercial customer doesn't pay on time, the Late Payment of Commercial Debts (Interest) Act 1998 entitles you to charge statutory interest at 8% above the Bank of England base rate, plus a fixed debt recovery fee of £40, £70, or £100 depending on the debt amount. You don't need to include this in your contract — it applies automatically to B2B invoices unless you've agreed different terms.

For domestic customers, interest on late payment is only enforceable if your contract specifies it. Include a clause stating that overdue invoices accrue interest at a specified rate from the due date.

When a customer hasn't paid: send a formal Letter Before Action giving 14 days to pay. If no response, you can issue a claim through MCOL (Money Claim Online) for debts under £10,000 — this falls under the small claims track, where costs are limited and you don't typically need a solicitor. A County Court Judgment (CCJ) can be registered against the customer and enforced through bailiffs or an attachment of earnings if needed.

Retention clauses in commercial work

Main contractors often impose retention clauses on subcontractors — typically 3–5% of the contract value held back until a defects liability period expires (often 6–12 months after practical completion). Before agreeing to any commercial contract with retention, understand: what percentage is retained, how long the retention period lasts, what triggers release of the retention, and whether it's held in a separate account.

Do not agree to retention clauses on domestic work. They're inappropriate for the scale of domestic jobs and difficult to enforce if the customer later disputes the release.

Handling disputes over completed work

Your contract should set out a clear process for dealing with customer complaints after practical completion. A reasonable clause might state: the customer must raise any defects or issues in writing within 14 days of completion; you have the right to inspect within 5 working days; if a genuine defect within scope is confirmed, you'll remedy it within a reasonable timeframe at no charge; if the issue is outside the agreed scope or caused by the customer or a third party, a new quote will be provided.

This matters because it puts the process in writing before any dispute arises. It shows a court that you had a reasonable defects process if a customer ever tries to withhold payment on the grounds of incomplete or defective work.

Minimum requirements for every job

Even for small jobs where a formal signed contract feels excessive, there's a minimum paper trail you should have:

• A written quote specifying the exact scope, price, and what's excluded
• Written acceptance from the customer (email, text, or signed quote)
• Any variations confirmed in writing before the additional work begins
• A final invoice that matches the agreed price plus any confirmed variations

That's it. Four documents. They don't need to be formal legal agreements — they just need to exist and be consistent with each other. If a dispute reaches the small claims court, a judge presented with a clear paper trail of quote, acceptance, variations and invoice will almost always find in your favour.

The tradespeople who lose disputes are usually the ones who did the work first and tried to sort the paperwork later. Write it down before you start. It takes minutes. The disputes it prevents take months.