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A project agreement is a contract defining the terms on which one party (the contractor or service provider) will carry out a defined body of work for another. It typically covers the project scope and deliverables, timelines and milestones, fees and payment schedule, how changes to scope are managed, intellectual property ownership, confidentiality, and termination rights.

The Supply of Goods and Services Act 1982 implies three baseline obligations: performance with reasonable care and skill, completion within a reasonable time if no deadline is specified, and a reasonable charge if no price is fixed. These apply regardless of what the contract says, and cannot be excluded in consumer contracts under the Consumer Rights Act 2015.

A change control clause is the standard solution. It should require all variations to scope to be agreed in writing before work proceeds, set out how additional costs are estimated and approved, and state whether agreed variations extend the delivery timeline. Verbal scope changes without a written variation order are a leading cause of project disputes under English law.

Without an express assignment, copyright in deliverables created by an independent contractor vests in the contractor under the Copyright, Designs and Patents Act 1988. For the client to own the IP outright, the agreement must include an express assignment. Alternatively, the contractor can grant the client a broad, irrevocable licence. The chosen approach should be reflected clearly in the agreement.

The agreement should state whether time is of the essence, set out a liquidated damages clause for delay (which must be a genuine pre-estimate of loss to be enforceable under Cavendish Square v El Makdessi [2015]), provide for extensions of time in defined circumstances such as client-caused delay or force majeure, and give the client a right to terminate if delay exceeds a long-stop period.

Most commercial project agreements cap the contractor's liability at the total fees paid or payable under the agreement, or at a fixed multiple of them. The cap typically excludes liability for death or personal injury caused by negligence, fraud, or any other loss that cannot be limited by law. The cap must satisfy a reasonableness test under the Unfair Contract Terms Act 1977 in B2B contracts.

For a simple contract, the Limitation Act 1980 provides a six-year period from the date of breach. For a deed, the period is 12 years. Parties to high-value or long-term projects sometimes execute the agreement as a deed specifically to benefit from the longer limitation period. The agreement should record clearly which form of execution applies.

The agreement should include a confidentiality clause protecting both parties' commercially sensitive information disclosed during the project. It should define what constitutes confidential information, specify permitted disclosures (such as to sub-contractors or professional advisers), state the duration of the obligation, and provide for the return or destruction of confidential materials on termination.