Construction Contract — Nigeria
CONSTRUCTION CONTRACT
This Construction Contract (this "Contract") is entered into on [Contract Date] between [Employer Name], of [Employer Address] (the "Employer"), and [Contractor Name] (CAC RC: [Contractor RC]), of [Contractor Address] (the "Contractor").
1. Works
1.1 The Contractor agrees to carry out and complete the following works (the "Works") at [Site Address]: [Scope of Works]. The Works shall be carried out in accordance with the approved building plan reference [Building Plan Reference] and the National Building Code 2006.
2. Contract Sum and Payment
2.1 The Employer shall pay the Contractor the sum of [Contract Sum] (the "Contract Sum") for the execution and completion of the Works, subject to additions and deductions under this Contract. 2.2 The Employer shall pay a mobilisation fee of [Deposit Amount] upon execution of this Contract. 2.3 The Contract Sum shall be paid in accordance with the following milestones: [Payment Milestones]. 2.4 The Employer shall retain [Retention Percentage] from each certified payment as a retention sum, to be released to the Contractor upon satisfactory completion of the defects liability period.
3. Programme and Completion
3.1 The Contractor shall commence the Works on [Commencement Date] and shall achieve practical completion on or before [Completion Date]. 3.2 If the Contractor fails to achieve practical completion by [Completion Date] (or any extended date granted under Clause 3.3), the Contractor shall pay to the Employer liquidated and ascertained damages at the rate of [Liquidated Damages Rate] for each calendar day of delay until practical completion. 3.3 The Contractor shall be entitled to an extension of time for delays caused by: (a) variations instructed by the Employer; (b) exceptionally adverse weather; (c) force majeure; or (d) late supply of information by the Employer, subject to the Contractor giving written notice within 7 days of becoming aware of the delay event. 3.4 The defects liability period shall be [Defects Liability Period] from the date of practical completion. During this period, the Contractor shall rectify at its own cost any defects, shrinkage, or other faults in the Works attributable to the Contractor's workmanship or materials.
4. Contractor's Obligations
4.1 The Contractor shall: (a) carry out and complete the Works in a good and workmanlike manner using materials of the specified quality; (b) comply with all applicable Nigerian laws and regulations, including the National Building Code 2006, Lagos State Building Control Agency (LASBCA) requirements (where applicable), and the Labour Act Cap L1 LFN 2004 in respect of site workers; (c) maintain at its own cost contractors all risks (CAR) insurance, employer's liability insurance, and third-party liability insurance throughout the project; and (d) obtain and maintain all necessary licences, permits, and statutory approvals for the execution of the Works.
5. Dispute Resolution and Governing Law
5.1 This Contract shall be governed by the laws of the Federal Republic of Nigeria. Any dispute arising out of or in connection with this Contract shall be resolved by [Dispute Resolution] under the Arbitration and Conciliation Act Cap A18 LFN 2004.
Signatures
Signed by the Employer: [Employer Name]
Signed by the Contractor: [Contractor Name]
Employer
________________
Signature
Contractor
________________
Signature
What Is a Construction Contract — Nigeria?
A Construction Contract in Nigeria records the obligations the parties accept and the terms governing their arrangement.
Construction contracts in Nigeria are governed by the general law of contract as applicable in Nigeria, specific provisions of the Land Use Act Cap L5 LFN 2004 (where works relate to land), the Labour Act Cap L1 LFN 2004 (regarding workers employed on site), and various state-level building regulations. The National Building Code 2006 issued by the Federal Ministry of Works sets minimum technical standards for building construction. Lagos State, which accounts for a significant proportion of Nigeria's construction activity, additionally imposes requirements under the Lagos State Urban and Regional Planning and Development Law 2010 and the Lagos State Building Control Agency (LASBCA) regulations.
Several standard form contracts are used in Nigeria. The Joint Contract Tribunal (JCT) forms adapted for Nigerian use and the FIDIC suite of contracts (particularly FIDIC Red Book for building works and FIDIC Yellow Book for design-and-build) are widely used for commercial and infrastructure projects. The Nigerian Institute of Building (NIOB) and the Nigerian Institute of Architects (NIA) also publish standard forms used for smaller residential and commercial projects. For government contracts, the terms of the Bureau of Public Procurement Act 2007 and related circulars apply.
A construction contract is distinct from a consulting agreement or professional services agreement: the contractor undertakes physical construction obligations and assumes responsibility for workmanship, materials, and compliance with the approved building plan, while a consultant (architect, structural engineer, or M&E engineer) provides design or supervision services under a separate professional engagement.
The legal framework governing the Construction Contract — Nigeria in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Construction Contract — Nigeria in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies and Allied Matters Act (CAMA) 2020 sets the foundational requirements.
When Do You Need a Construction Contract — Nigeria?
A Nigeria Construction Contract is needed before any contractor begins any building, renovation, or civil works on a site in Nigeria.
The contract is required when a property owner engages a building contractor to construct a new residential property. Under Section 34 of the Land Use Act Cap L5 LFN 2004, land in Nigeria is held under a right of occupancy granted by the Governor of a State or the Minister of the FCT; any development must comply with the conditions attached to the Certificate of Occupancy, and a written contract with the contractor documents the agreed scope and standard of works.
The contract is needed when a developer engages a main contractor for a commercial real estate project in Lagos, Abuja, or Port Harcourt. Given that commercial projects frequently involve multi-storey structures, specialized mechanical and electrical works, and subcontractor chains, a thorough written contract is essential to allocate risk and responsibility among the parties.
The contract is required when a government ministry, department, or agency (MDA) or a state government contracts with a civil engineering firm for infrastructure works under the Public Procurement Act 2007. The Bureau of Public Procurement (BPP) mandates written contracts for all public construction procurements above the threshold prescribed in BPP circulars.
The contract is needed when a foreign construction company enters Nigeria to execute an engineering, procurement, and construction (EPC) project in the oil and gas or power sector. In this context, compliance with Nigerian Content Development and Monitoring Board (NCDMB) requirements under the Nigerian Oil and Gas Industry Content Development Act 2010 must be reflected in the contract.
The contract is also required when homeowners engage artisans or small contractors for renovation works. Even for smaller jobs, a written agreement prevents disputes over scope creep, materials quality, and payment timelines.
Parties in Nigeria should prepare a Construction Contract — Nigeria proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Construction Contract — Nigeria
A Nigeria Construction Contract must contain the following key elements.
Party identification: Full legal names, CAC registration numbers for corporate entities, and addresses of the employer and the contractor. Specify the names and authority of the employer's representative (typically an architect or project manager) and the contractor's project manager.
Scope of works: A detailed description of the works to be carried out, by reference to the approved building drawings, specifications, and bills of quantities (BOQ). The scope should clearly state what is included and what is excluded, and reference the approved building plan obtained from the relevant State Urban Planning Authority or LASBCA.
Contract sum and payment milestones: The agreed contract sum in Nigerian Naira (NGN), the payment schedule tied to project milestones (e.g., completion of substructure, completion of superstructure, roofing, finishes), the period within which the employer must certify and pay each milestone, and the interest rate applicable to late payments.
Variation orders: The procedure for instructing and valuing variations to the scope of works. Variations must be in writing, signed by the employer's representative, before the contractor is obliged to carry out additional or omitted works.
Programme of works: The agreed commencement date, the completion date or project duration, and a clause addressing extensions of time for delays caused by weather, force majeure, employer's variations, or late information.
Defects liability period: The period (typically 12 months from practical completion) during which the contractor is obliged to rectify defects at no additional cost to the employer. The retention sum (typically 5% of the contract sum) is held by the employer and released upon satisfactory completion of the defects liability period.
Insurance: The contractor's obligation to maintain contractors all risks (CAR) insurance, employer's liability/workers compensation insurance, and third-party liability insurance throughout the project, in minimum amounts specified in the contract.
Dispute resolution: Adjudication, mediation, or arbitration under the Arbitration and Conciliation Act Cap A18 LFN 2004, with the seat of arbitration specified.
Additional compliance elements for a Construction Contract — Nigeria used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Construction Contract — Nigeria (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/business/construction/construction-contract-nigeria
"Construction Contract — Nigeria (Nigeria)." Forms Legal, 2026, https://forms-legal.com/nigeria/business/construction/construction-contract-nigeria.
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title = {Construction Contract — Nigeria (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/business/construction/construction-contract-nigeria}},
note = {Free legal document template. Based on Companies and Allied Matters Act (CAMA) 2020}
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Frequently Asked Questions
A verbal construction agreement may be enforceable under Nigerian contract law if the essential elements of a contract — offer, acceptance, consideration, and intention to create legal relations — can be proven. However, enforcing an oral construction contract in Nigerian courts is extremely difficult because disputes typically involve contested issues of scope, price, and programme that require documentary evidence to resolve. Nigerian courts, including the Court of Appeal, have repeatedly emphasised that parties to commercial transactions should reduce their agreements to writing. A written construction contract signed by both parties is the only reliable way to protect the employer and contractor in Nigeria. Furthermore, for construction projects on land held under a Certificate of Occupancy, building plan approval authorities and lenders will require written contracts before processing approvals or disbursing funds.
Before commencing construction in Nigeria, the employer must obtain a building permit from the relevant State Urban and Regional Planning Authority or the Federal Capital Territory Administration (FCTA) for projects in Abuja. In Lagos State, building plan approval is processed through the Lagos State Physical Planning Permit Authority (LASPPPA), and site supervision is conducted by the Lagos State Building Control Agency (LASBCA). In Abuja, the Abuja Municipal Area Council (AMAC) and the FCTA Development Control Department supervise building approvals. Construction without an approved building plan is a criminal offence under the Lagos State Building Control Law and equivalent state legislation, and structures built without approval may be demolished by the relevant authority. The construction contract should expressly allocate the obligation and cost of obtaining building permits and all statutory approvals to the employer, unless otherwise agreed.
Value Added Tax (VAT) in Nigeria is charged at the rate of 7.5% under the Value Added Tax Act Cap V1 LFN 2004 (as amended by the Finance Act 2019). Construction and related services are subject to VAT, and a contractor registered with the Federal Inland Revenue Service (FIRS) must charge VAT on its invoices to the employer. The employer is responsible for remitting the VAT to FIRS under the reverse charge mechanism applicable to certain transactions. The construction contract should clearly state whether the contract sum is inclusive or exclusive of VAT, to avoid disputes at the payment stage. Contractors supplying construction services to the Federal Government or a State Government are subject to the Withholding Tax (WHT) regime under the Companies Income Tax Act Cap C21 LFN 2004, with WHT on construction services typically deducted at source by the government payor.
The defects liability period (DLP) in a Nigeria construction contract is the period after practical completion during which the contractor is obliged to return to site and rectify any defects, shrinkage, or faults in the works that appear and are attributable to the contractor's workmanship or materials. The standard DLP in Nigerian construction practice is 12 months from the date of practical completion, though longer periods (18–24 months) are negotiated for complex mechanical or electrical installations. During the DLP, the employer typically retains a retention sum of 5% of the contract sum, half of which is released at practical completion and the remainder at the end of the DLP on the issue of a defects rectification certificate by the employer's architect or project manager. If the contractor fails to rectify notified defects within a reasonable time, the employer may engage other contractors and recover the cost from the retention or as a debt from the contractor.
Construction disputes in Nigeria are commonly resolved by arbitration under the Arbitration and Conciliation Act Cap A18 LFN 2004, which is based on the UNCITRAL Model Law and provides for a well-established framework for arbitral proceedings. The Lagos Court of Arbitration (LCA) and the Chartered Institute of Arbitrators Nigeria (CIArb Nigeria) are the primary arbitral institutions for Nigerian construction disputes. Arbitration is preferred over litigation in construction disputes for several reasons: arbitrators with technical construction expertise can be appointed, proceedings are confidential (protecting commercially sensitive project information), and awards are enforceable as court judgments. The construction contract should specify the arbitral institution, the number of arbitrators (one or three), the seat of arbitration, and the language. Courts in Nigeria, including the Court of Appeal in Statoil (Nig) Ltd v NNPC [2013], have affirmed the principle of minimal judicial intervention in arbitral proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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