Six beliefs about construction contracts that leave owners exposed, from what a signature covers to who owns the drawings and what a certificate means.
A construction contract is a machine with procedures: notices, certificates, time limits and forms of instruction. Owners tend to read it as a statement of intentions and then act informally, which is how rights get lost without anybody breaching anything. These are the six assumptions that cause the most damage, and what to check in each case.
How to test a claim like this
Before relying on any belief about your contract, find the clause. Then ask three questions of it: what has to happen for this right to exist, within what time, and in what form. Most contractual disadvantage suffered by owners is not caused by unfair terms, it is caused by a right that existed and was not exercised in the manner the contract required. Your adviser should map these procedures onto a single page before work starts.
Myth 1: The contract is the document I signed.
Reality: The contract is usually a set of documents: the agreement, the conditions, the specification, the drawings, the priced document, the programme and any clarifications. They will disagree with each other at some point, and the order of precedence decides which governs. An owner who has only read the agreement has read the shortest and least operative part.
How to check it yourself: Ask for the list of contract documents and the order of precedence, and confirm each document is the revision you intended.
Myth 2: An instruction is an instruction, however it is given.
Reality: Most contracts require instructions in a particular form, from a particular person, and treat anything else as informal. Verbal directions on site can create entitlement in unexpected ways, or create no entitlement at all when you needed it to. This matters especially when you are abroad and communicating by message.
How to check it yourself: Establish who may instruct on your behalf, in what form, and circulate that to everyone before work starts.
Myth 3: A payment certificate means the work is accepted as complete and correct.
Reality: A valuation or payment certificate is generally a statement about payment due for work executed to date, not an acceptance that the work is free of defects or that it complies. Approval, acceptance and completion are separate contractual concepts with separate consequences, and conflating them weakens your position at handover.
How to check it yourself: Ask your adviser to explain what each certificate in your contract actually certifies, and what it does not.
Myth 4: Retention is a fund I can spend on fixing problems.
Reality: Retention is money withheld under defined conditions, released at defined points, and applying it is governed by the contract. Using it as an informal remedy without following the mechanism can expose you to a claim. It is also a limited amount, which is often far less than the cost of a serious defect.
How to check it yourself: Read the retention percentage, the release points and the procedure for applying it before you need to rely on it.
Myth 5: I own the drawings because I paid for them.
Reality: Payment and ownership of intellectual property are different questions, and the licence to use drawings for construction, for a future extension or for a resale is a matter for the appointment. Contractor-designed elements raise the same question again. Owners discover this when they want to extend a building years later.
How to check it yourself: Confirm in each appointment that you have the right to use the design for construction, operation, alteration and sale.
Myth 6: If the contractor is late, I can simply deduct what it costs me.
Reality: Remedies for delay are contractual and procedural: they depend on the mechanism, on notices, on whether an extension of time is due and on how any deduction is calculated and applied. Deducting money outside the mechanism is a frequent cause of escalation, and it can put you in the wrong on a point where you were originally right.
How to check it yourself: Have your adviser set out the delay and deduction procedure, including the notices and time limits, before the programme slips.
What this changes in your decision
- Get a one-page map of the contract procedures, notices and time limits before work starts.
- Name who may issue instructions on your behalf, and in what form.
- Confirm the order of precedence between contract documents at award.
- Read the retention and delay mechanisms before you need to use either.
- Secure your rights to use the design for construction, alteration and sale in every appointment.
Domira designs, builds and manages projects across Saudi Arabia for owners who are based abroad: land appraisal, feasibility, design, construction, handover and asset management under one accountable contract. Send us the plot or the brief and Domira will put the numbers in front of you before you commit.
Frequently Asked Questions
What protects an owner in a construction contract?
A complete document set with a clear order of precedence, a payment mechanism tied to verified progress, retention and bonds as security, named key personnel, an accepted programme, a defined variation and instruction procedure, and clear rights on defects. None of it works unless the procedures are followed, so appoint someone competent to administer the contract from day one.
Are FIDIC contracts used in Saudi Arabia?
Internationally recognised standard forms are widely used in the region alongside bespoke and public-sector forms, and the choice affects how risk, time and payment are allocated. Which form suits your project, and how it interacts with Saudi law, is a question for a licensed Saudi adviser rather than a matter of preference or familiarity from another market.
Can I change the contract after signing it?
Only by agreement, documented in the form the contract requires. Informal side agreements by email or on site create uncertainty about what governs, particularly if a dispute follows. Where a change is genuinely needed, record it as a formal amendment prepared by your adviser, and make sure it references the documents it modifies.
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