Construction contract

How BC law treats it

A construction contract is governed by its own terms and the common law of contract. Many BC projects use Canadian Construction Documents Committee (CCDC) standard forms, such as the CCDC 2 stipulated price contract, with supplementary conditions. The contract allocates scope, price, schedule, change orders, delay, deficiencies, insurance, warranties, payment certification and dispute resolution. The Builders Lien Act, SBC 1997, c 45 overlays mandatory rules the parties cannot contract out of (s. 42(2)). The person primarily liable on each contract and subcontract must retain a holdback of 10% of the greater of the value of work and materials provided and the payments made (s. 4), usually in a holdback account where the owner is required to keep one. Money received on account of the contract price is held in trust for the subcontractors and workers below (s. 10). An unpaid contractor, subcontractor, worker or supplier can file a claim of lien against the land within 45 days of the relevant trigger, such as a certificate of completion or the head contract being completed, abandoned or terminated (s. 20), and must commence an action and register a certificate of pending litigation within one year of filing to enforce it (s. 33). A person who files a lien against land to which it does not attach is liable for the owner's resulting costs and damages (s. 19), and knowingly filing a lien containing a false statement is an offence (s. 45). The Construction Prompt Payment Act, SBC 2025, c 24 received Royal Assent on November 27, 2025 but, as of October 2026, is not yet in force; it will come into force by regulation. Once in force it will set mandatory deadlines for paying proper invoices down the contract chain and an adjudication process for payment disputes. Until then, payment timing is set by the contract, and parties signing new contracts should check whether the Act has been brought into force. Claims for breach of a construction contract are generally subject to the two year limitation period in the Limitation Act, SBC 2012, c 13. Many contracts require notice of claims within short periods and arbitration under the Arbitration Act, SBC 2020, c 2. Employers on site have duties under the Workers Compensation Act, RSBC 2019, c 1, including prime contractor obligations on multiple employer sites.

What it means for your business

Most construction disputes come from scope, change orders, delay and payment. A clear contract with written change order procedures, realistic schedules and defined notice periods prevents many of them. Owners must manage holdbacks and trust funds correctly, because mistakes can make them pay twice. Contractors and suppliers must track lien deadlines from the start, since a missed 45 day window often means the loss of their strongest collection tool. Example: A Langley owner pays its general contractor in full without retaining the 10% holdback. When an unpaid subcontractor files a lien, the owner is exposed up to the holdback amount it should have kept.

Risks and common mistakes

Starting work on an email or quote without a signed contract covering scope and change orders. Failing to retain the 10% holdback required by the Builders Lien Act. Treating money received from the owner as general funds instead of trust funds for subcontractors. Doing extra work on verbal instructions without a written change order. Missing contractual notice periods for delay or extra cost claims.