A good construction contract in Tanzania clearly states what will be built, for how much, by when, and what happens if something changes or goes wrong. At minimum it should include the drawings and specification, the price and bill of quantities, a payment schedule tied to completed work, a programme with a completion date, rules for variations, retention money, a defects period, insurance, health and safety duties, and a way to resolve disputes. A written contract protects both sides; a handshake with a fundi protects neither.
Why do you need a written contract?
Most building disputes in Tanzania come from unclear scope, unpaid extras and delays. A written contract sets expectations before money changes hands, gives you a basis to stop paying for poor work, and helps if a dispute goes to mediation or court. It matters even more when you are building from abroad.
The 12-point construction contract checklist
| # | Clause | What it should say |
|---|---|---|
| 1 | Parties | Full names, addresses, registration details of both sides |
| 2 | Scope of work | Exactly what is included and excluded |
| 3 | Drawings and specification | Which drawings and which materials and finishes |
| 4 | Price | Total price, and whether it includes VAT |
| 5 | Bill of quantities | Priced items, used to value work and changes |
| 6 | Payment schedule | Payments tied to completed stages |
| 7 | Programme | Start date, key milestones and completion date |
| 8 | Variations | How changes are requested, priced and approved in writing |
| 9 | Retention | A small percentage held until defects are fixed |
| 10 | Defects liability | How long the contractor must return to fix defects |
| 11 | Insurance and safety | Who insures the works and workers, and site safety duties |
| 12 | Disputes and termination | How disagreements are resolved and when either side can end the contract |
What should the scope and specification cover?
Be specific. "Build a house" is not a scope. List the foundation type, wall material, roof type, windows, doors, floor and wall finishes, plumbing and electrical fittings, external works and who provides what. Attach the approved drawings. A priced bill of quantities turns this into numbers.
How should payments be structured?
A common structure:
- Advance for mobilisation, often 10% to 20%, sometimes against a guarantee.
- Stage payments after inspection: foundation, walls to ring beam, roof, finishes.
- Retention of about 5% to 10% of each payment.
- Final payment at practical completion, with retention released after the defects period.
Never pay far ahead of the work done. Read how to avoid construction cost overruns.
How are delays handled?
The contract should say what counts as a valid delay (for example, extreme weather, late payments or changes you request) and what happens for delays caused by the contractor. Some contracts include liquidated damages: a fixed amount per day of unjustified delay. In an El Niño year, agree how rain days are recorded; see building during the rainy season.
What about labour-only contracts with a fundi?
Even a labour-only agreement should be written: the scope, daily or task rates, who buys materials, working hours, quality standards and how payment is made. Keep receipts and photos of each stage.
Should a lawyer review the contract?
For any significant project, yes. An advocate can check the contract protects you and is enforceable. You can find practising advocates through the Tanganyika Law Society. Also confirm your contractor's registration with the Contractors Registration Board.
Frequently asked questions
What is retention in a construction contract?
Money held back from each payment, usually 5% to 10%, and released after the contractor fixes any defects at the end of the defects period.
Can a contractor charge for extras not in the contract?
Only for agreed variations. The contract should require written approval with a price before extra work is done.
What is a defects liability period?
A period after completion, often six to twelve months, during which the contractor must return to fix defects at their own cost.
What if the contractor abandons the site?
The contract should allow you to terminate, keep the retention and use it towards completing the work. Document everything and take legal advice.
Work with a contractor who puts it in writing
Vika Construction works with clear written contracts, priced bills of quantities and stage payments. Contact us to discuss your project, or read how to choose a construction company.
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