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A turnkey contract agreement is a legally binding contract where a contractor or company agrees to deliver a fully completed, operational project to a client. This type of contract is commonly used in construction, engineering, manufacturing, and IT sectors to ensure that the client receives a ready-to-use project with minimal involvement in the execution process.
Our expert lawyers have prepared this detailed guide to help businesses and contractors understand how to structure a legally compliant turnkey contract agreement, covering key clauses, benefits, risks, and common use cases.
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A turnkey contract agreement is a contractual arrangement where the contractor designs, builds, and delivers a complete, functional project, so the client only needs to “turn the key” to start operations. It is commonly used in:
💡 Did You Know?
Turnkey contracts differ from traditional contracts because the contractor bears full responsibility for the design, execution, and successful completion of the project.
A well-structured turnkey contract agreement protects both the contractor and the client by:
✔ Defining clear project deliverables and timelines.
✔ Transferring project responsibility to the contractor until completion.
✔ Reducing client risk by ensuring a fully functional outcome.
✔ Minimising cost overruns with a fixed-price structure.
🔗 Download a Lawyer-Drafted Turnkey Contract Template
Clearly defines what the contractor is responsible for, including design, procurement, construction, and testing.
📌 Example Clause:
"The contractor shall provide a fully operational manufacturing facility, including all necessary equipment, software, and training, ensuring compliance with UK industry standards."
Specifies the start and completion dates and any intermediate milestones for tracking progress.
📌 Example Clause:
"The project shall commence on 1st July 2024 and be completed by 30th June 2025. Progress milestones will be assessed at three-month intervals."
💡 Tip:
Including penalty clauses for delays can protect the client’s interests.
Outlines how and when the contractor will be paid, typically in milestones.
📌 Example Clause:
"Payments will be released in four stages: 25% upon contract signing, 25% after design approval, 25% upon 75% project completion, and the final 25% upon successful project handover."
Ensures the final product meets industry standards and client expectations.
📌 Example Clause:
"The contractor guarantees that the project shall meet all regulatory and operational requirements. Any defects identified within 12 months post-handover shall be rectified at no additional cost."
💡 Did You Know?
Many turnkey contracts include a defect liability period, during which the contractor must fix any issues at their own expense.
Defines the process for handling contract disputes, such as mediation, arbitration, or court proceedings.
📌 Example Clause:
"Any disputes arising under this contract shall first be resolved through mediation. If unresolved, the matter shall be referred to arbitration under UK law."
🔗 Access a Customisable Turnkey Contract Template
A developer hires a contractor to design and construct a fully operational shopping mall. The client receives a ready-to-use building, complete with infrastructure, utilities, and interior fittings.
📌 Key Terms:
✔ Fixed contract price.
✔ Milestone-based payments.
✔ Defect liability period for structural issues.
A company commissions an end-to-end software development project, where the contractor delivers a fully functional system with training for the client’s employees.
📌 Key Terms:
✔ Full software development lifecycle responsibility.
✔ Performance testing and bug-fixing guarantees.
✔ Ongoing support post-handover.
A manufacturer contracts a firm to build an automated production line for a new product. The contractor delivers the entire facility, including machines, software, and operational manuals.
📌 Key Terms:
✔ Delivery of a working production line.
✔ Compliance with industry standards.
✔ Employee training provided by the contractor.
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✔ Clearly define scope of work and project deliverables.
✔ Include a timeline with milestones.
✔ Outline payment schedules and penalties for delays.
✔ Specify quality and performance guarantees.
✔ Include a defect liability period for post-handover issues.
✔ Add a dispute resolution mechanism.
🔗 Download a Lawyer-Drafted Turnkey Contract Agreement
📄 Construction Contract Agreement – Covers traditional construction agreements where the client is involved in each stage.
📄 Supply & Installation Agreement – Used when a contractor provides and installs equipment or infrastructure.
📄 Maintenance & Service Contract – For post-project support and ongoing maintenance.
✔ AI-Powered Contract Drafting – Create custom turnkey agreements in minutes.
✔ 5,000+ Lawyer-Drafted Templates – Covering construction, IT, and manufacturing contracts.
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✔ Collaborative Digital Platform – Edit, store, and sign documents online.
Our legal templates are written in simple, plain English—no complicated jargon. Legal documents that anyone can understand.
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Our expert lawyers answer your frequently asked questions about turnkey contract agreements, covering legal requirements, risks, benefits, and industry applications.
Whether you’re a business owner, contractor, or investor, this resource will help you understand how turnkey contracts work and how to protect your interests.
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A turnkey contract agreement is a legally binding contract in which the contractor is responsible for designing, building, and delivering a fully functional project to the client. The client receives a ready-to-use product without having to manage the details of construction or development.
💡 Did You Know?
Turnkey contracts shift project risks to the contractor, making them responsible for delays, defects, and cost overruns.
Feature | Turnkey Contract | Traditional Contract |
---|---|---|
Client Involvement | Minimal | High |
Responsibility | Contractor handles everything | Client oversees progress |
Payment Structure | Fixed price | Costs may change |
Risk Level | Contractor assumes most risk | Shared between client and contractor |
📌 Tip:
If you want full control over a project, a traditional contract may be more suitable. If you prefer a hands-off approach, a turnkey contract reduces your management burden.
🔗 Download a Lawyer-Drafted Turnkey Contract Template
A strong turnkey contract should include:
💡 Did You Know?
Turnkey contracts often include defect liability periods where the contractor must fix any issues for free after completion.
The contractor assumes most of the risk because they are responsible for:
✔ Completing the project within budget.
✔ Meeting all quality and safety standards.
✔ Delivering the final product fully operational.
📌 Tip:
If you’re a contractor, factor in unexpected costs when setting your price to avoid profit losses.
Yes, but modifications require mutual agreement between the contractor and client. Any changes should be:
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If the project is delayed, the contract should specify:
✔ Liquidated damages – A penalty fee for every day of delay.
✔ Force majeure clauses – Protects against delays caused by unforeseen events (e.g., natural disasters).
✔ Contract termination rights – If delays exceed a certain period, the client can terminate the agreement.
💡 Did You Know?
Some contracts allow the client to withhold final payments until all contractual conditions are met.
Payments in turnkey contracts are typically fixed price and can be structured as:
📌 Example Clause:
"The client agrees to pay 40% at project initiation, 30% after 50% completion, and the final 30% upon successful project delivery."
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The contractor is responsible for rectifying defects if the final product:
💡 Tip:
Always include a performance guarantee clause that requires the contractor to correct defects within a specific period.
Yes! Turnkey contracts are widely used in global projects for:
✔ Infrastructure development (e.g., airports, energy plants).
✔ IT & software solutions (e.g., fully developed platforms).
✔ Industrial manufacturing plants.
📌 Tip:
International turnkey contracts must comply with the laws of the country where the project is being completed.
Yes, but the contract must specify:
✔ Termination clauses – Outlines valid reasons for cancellation.
✔ Compensation terms – Covers contractor expenses for work completed.
✔ Notice periods – Defines how much advance warning must be given.
💡 Did You Know?
Clients who wrongfully terminate a turnkey contract may be liable for damages.
Turnkey contracts last until the project is fully delivered and accepted. The typical timeframe is:
✔ 6-12 months for IT/software projects.
✔ 12-36 months for construction and infrastructure.
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🚫 Failing to specify quality requirements – Can lead to disputes.
🚫 Ignoring payment structure details – Avoid vague terms.
🚫 Not including a penalty clause for delays – Protects client interests.
🚫 Overlooking post-completion support – Ensure a maintenance plan is in place.
Our expert lawyers provide this DIY guide to help businesses, contractors, and investors draft a legally sound turnkey contract agreement.
This step-by-step guide explains how to structure a turnkey contract, legal requirements, key clauses, and risk management strategies, ensuring a successful and compliant project.
🔗 Get Your Turnkey Contract Agreement Template Now
A turnkey contract agreement is a legally binding contract where a contractor is responsible for delivering a fully functional, ready-to-use project. The client does not need to manage the construction or implementation process—they receive the completed product upon project completion.
💡 Did You Know?
Turnkey contracts are commonly used in large-scale infrastructure projects where the client wants minimal involvement in execution.
The scope of work outlines exactly what the contractor will deliver. It must be detailed and specific to prevent disputes.
📌 What to Include:
✔ Project specifications (design, materials, and end-product requirements).
✔ Responsibilities of the contractor (design, construction, testing).
✔ Client requirements (performance expectations and compliance).
📌 Example Clause:
"The contractor shall design, build, and deliver a fully operational production facility, complete with all machinery, utilities, and safety certifications, ensuring compliance with UK industry regulations."
Turnkey contracts typically follow a fixed-price model, but payments are released in phases.
📌 Common Payment Structures:
✔ Lump Sum Payment – Full payment upon project completion.
✔ Milestone-Based Payments – Payments released upon completion of key stages (e.g., 20% at project start, 40% at halfway point, 40% at completion).
📌 Example Clause:
"The client shall pay 30% upon contract signing, 40% at 50% project completion, and the remaining 30% upon successful project handover."
🔗 Download a Customisable Turnkey Contract Agreement
A turnkey contract must specify deadlines and include penalty clauses for delays.
📌 What to Include:
✔ Start and completion dates.
✔ Interim milestones to track progress.
✔ Penalties for contractor delays.
📌 Example Clause:
"The contractor shall complete the project by 30th June 2025. A penalty of £5,000 per week will apply for delays beyond this deadline unless caused by force majeure."
💡 Did You Know?
Force majeure clauses protect contractors from delays caused by uncontrollable events like natural disasters or government regulations.
📌 Scenario: A private healthcare provider hires a contractor to design, construct, and fully equip a new hospital, including all medical equipment, IT systems, and staff training.
📌 Key Terms:
✔ 24-month completion timeline.
✔ Fixed-price contract covering construction and equipment supply.
✔ Warranty for medical equipment included.
📌 Scenario: A government awards a contractor a project to design and install a fully operational solar energy farm, including infrastructure, grid connection, and maintenance.
📌 Key Terms:
✔ Performance guarantee for energy output.
✔ Maintenance and operational support for five years.
✔ Penalty clause for delays beyond 18 months.
📌 Scenario: An airline company commissions a contractor to deliver a fully functional aircraft hangar and maintenance facility with the required aviation compliance.
📌 Key Terms:
✔ Full compliance with UK Civil Aviation Authority regulations.
✔ Fixed completion date with liquidated damages for delays.
✔ Safety inspections before handover.
🔗 Get a Lawyer-Drafted Turnkey Contract Template
Go Legal AI makes drafting turnkey contracts effortless with:
✔ AI-Powered Document Creation – Generate a turnkey contract agreement in minutes.
✔ 5,000+ Lawyer-Drafted Templates – Covering construction, IT, renewable energy, and industrial projects.
✔ Award-Winning Legal AI Assistant – Get real-time legal guidance on contract terms.
✔ Secure Digital Platform – Draft, edit, and store legally compliant contracts online.
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I wholeheartedly recommend Karim to anyone in need of legal assistance. Their professionalism, expertise, and genuine care for their clients truly set them apart. If you’re facing a contract breach or any other legal challenge, look no further.
Karim and his team are a god send. We have been dealing with a breach of contract construction dispute for several months which has caused us stress and anxiety. Karim was able to resolve it for us in a few weeks. Honestly the best lawyers I have come across. Diligent and well thought out advice.
Karim Oualnan at handled a contractual case to a successful resolution. Karim was diligent, always providing great, honest advice in which Karim always put my best interests at the forefront of his suggestions during the case. He is very reliable, trustworthy and always on hand to help. I would highly recommend Karim and look forward to working with him again in future.
Karim is a standout lawyer! His approach is very strategic and always has the best intentions of the client in mind throughout. I would highly recommend him if you’re looking for a lawyer. You’re in safe hands!
Karim is an incredibly meticulous and astute lawyer who applies a high level of skill and intelligence to his work. There is no one else that I can think of who I would go to solve a commercial dispute due to his ability of solve problems and see the commercial angle and importance of legal issues. As is evidenced by his career so far he is very comfortable with leading on complex matters and you can trust that he will produce an excellent quality of work. He is also incredibly personable, diligent and hard-working.
Karim was amazing, quick and effective just what you need. Very professional and makes it easy for you to understand everything. Always there when we need help and times of need. Worth every single penny!
I received follow up legal advice from Karim that was extremely helpful and really helped me to clarify my situation and decide on my case progression
Absolutely super service.
Very reactive and called within minutes. Offered us lots of great advice which he didn’t need to offer up for free. Would recommend
I have known Karim for several years and have nothing but praise for the way he conducts himself professionally. He is an outstanding Litigation Solicitor dedicated to achieving the best solutions for his clients. He is highly recommended
I recently worked with Karim at GoLegal and couldn’t be more pleased with the service I received. He provided exceptional advice regarding trademarks and offered valuable business insights. His expertise and thoroughness were evident in every interaction. I highly recommend Karim and GoLegal for anyone seeking professional and insightful legal guidance.
Thank you so much Karim for your Legal advice
Professional, friendly and helpful
I cannot be more grateful
Highly recommended
It was astounding how much legal knowledge and experience Karim and the team possessed. They gave good legal advice and handled complicated legal matters with ease. Their handling of delicate situations with professionalism was admirable.
Go-legal Ai has very professional and well mannered people who work hard to make sure your enquiries are dealt with as soon as possible.
Having spoken to multiple solicitors in the past few weeks I was at wit’s end, I was just as low as could be until I found Karim who gave me the confidence to keep going, his knowledge of my predicament was second to none.
Karim gave me valuable advice and was very helpful
when i was unsure weather to pursue a claim for a Construction contractual dispute.
Amazing service and experienced staff. Help and advice was top quality and especially recommend Karim as giving a level of quality service above expectations. Thank you
Amazing service! He’s thorough and ensures no detail is overlooked. With his extensive expertise, he provided me with confidence and reassurance during our legal proceedings. Karim was efficient from beginning to end, and his friendly demeanor made it an unparalleled experience!
Karim was able to offer us some great advice in consultation. Very knowledgeable and considerate. Thank you Karim.
I highly recommend Karim as a commercial solicitor. While he worked on my matter, I was extremely impressed with his expertise, professionalism, and client-focused approach. He is a trusted advisor who will provide you with the expert legal advice you need to make informed decisions.
I recently sought legal representation for a challenging litigation case and go-legal exceeded my expectations in every way. From the initial consultation, it was clear they were experienced and truly invested in getting the best outcome for me.
Karim, was particularly exceptional. His profound knowledge of the law and insightful strategies were invaluable throughout the process. He kept me informed, addressed all my concerns with patience and clarity, and consistently demonstrated genuineness.
Another massive thank you
Karim and his team have been excellent in helping our company navigate the regulatory environment in the online competitions and gaming sector. His legal expertise has been invaluable in recent months, and we’re extremely grateful for his knowledge and support.
I am writing to express my deepest gratitude for the service Ms.Zareen provided in securing the approval of my child’s Dependent visa following the initial refusal.
From the very beginning, her dedication and professionalism were evident. She took the time to thoroughly understand our situation, meticulously reviewed all the documents, and provided clear, concise guidance on the necessary steps to strengthen our case. Her expertise and strategic approach played a vital role in overturning the refusal.
I particularly appreciate how she maintained clear and constant communication, ensuring we were informed and reassured throughout the process ,showed remarkable attention in preparing our documents & displayed genuine compassion and understanding, which made a stressful situation much more manageable.
Thanks for her hard work and expertise.
We are incredibly grateful for the positive outcome.
Her efforts have had a profound impact on our lives, and we cannot thank you enough.
I will wholeheartedly recommend the services to anyone in need of immigration assistance, knowing they will be in the best hands.
I am writing to express my deepest gratitude for the service Ms.Zareen provided in securing the approval of my child’s Dependent visa following the initial refusal.
From the very beginning, her dedication and professionalism were evident. She took the time to thoroughly understand our situation, meticulously reviewed all the documents, and provided clear, concise guidance on the necessary steps to strengthen our case. Her expertise and strategic approach played a vital role in overturning the refusal.
I particularly appreciate how she maintained clear and constant communication, ensuring we were informed and reassured throughout the process ,showed remarkable attention in preparing our documents & displayed genuine compassion and understanding, which made a stressful situation much more manageable.
Thanks for her hard work and expertise.
We are incredibly grateful for the positive outcome.
Her efforts have had a profound impact on our lives, and we cannot thank you enough.
I will wholeheartedly recommend the services to anyone in need of immigration assistance, knowing they will be in the best hands.
Karim was easy to work with. Slight communication hiccup at the start, but more than made up for it with the work he did on my case. Happy with the outcome.
Karim has been so so great, he helped me throughout the whole process and even after. 100% recommended
Karim has been absolutely amazing, really helpful and responses were always really fast. I would 100% go back!
I am extremely pleased with the legal services provided by Karim and his team. Their expertise, professionalism, and prompt communication made a significant difference in my case. I also appreciated your display of empathy and understanding during a potentially stressful period for me. Your compassionate approach was truly valuable – a massive bonus for me personally. Highly recommended!
Karim provided exceptional service, demonstrating a high level of professionalism and competence. He was thorough, responsive, and always ensured that my needs were met promptly and efficiently. His expertise and attention to detail were evident in every interaction, making the entire process smooth and stress-free. I highly recommend Karim for his outstanding service and dedication to excellence.
Karim is an immaculate professional, going above and beyond to excel in his service. Couldn’t recommend highly enough!
Karim was exceptional at providing me advice to my matters. He was attentive, knowledgeable and approachable. Moreover, GoLegal is a great platform for open-sourced legal information.
The owner of Go Legal helped me with the process of filing a pre-action protocol proforma and it went smoothly. I totally recommend their professionalism and also dedication.
Karim is an amazing asset to have in your corner. Can’t recommend him and his team enough
Karim was extremely helpful and knowledgeable.
Gave me sound advice on what I needed to do.
Very helpful and informative. Takes the time to address the details
Very helpful and friendly impartial advice. Extremely thankful for the patience and time.
Karim had exceptional dedication, a positive attitude and provided very helpful guidance. He constantly went above and beyond in every aspect.
Great advice from the start, completely understanding & happy to discuss anything that your unsure about concerning
Fantastic Service given and alot of help regarding ex business partner/supplier giving harassment and defamation. A cease and desist letter was recommended to resolve the issues. Definitely recommended.
Exceptional service throughout the whole process. The information and advice provided was first class and exceeded my expectations.
I am delighted to share my heartfelt gratitude and utmost appreciation for Zareen, the immigration consultant who expertly guided us through the British naturalisation process for my wife and two kids. From start to finish, Zareen’s exceptional service and unwavering confidence made an enormous difference in our journey.
Zareen’s expertise and professionalism were evident from our very first meeting. She thoroughly understood the complexities of our case and approached each challenge with a calm and positive demeanor. Her extensive knowledge of the naturalisation process and her ability to anticipate and address potential issues reassured us every step of the way.
What truly set Zareen apart was her constant communication and feedback. She kept us informed about the progress of our application, providing timely updates and constructive insights that helped us stay on track. Her positive attitude and encouraging words were a source of comfort, especially during moments of uncertainty.
Zareen’s dedication and meticulous attention to detail ensured that all our documentation was accurate and complete. Her proactive approach in preparing and submitting our application demonstrated her commitment to achieving the best possible outcome for our family.
Thanks to Zareen’s exceptional guidance, we successfully obtained British naturalisation for my wife and two kids. Her professionalism, confidence, and unwavering support made an otherwise daunting process smooth and stress-free. I wholeheartedly recommend Zareen to anyone seeking an immigration consultant who genuinely cares about her clients and delivers outstanding results.
Thank you, Zareen, for your outstanding service and for helping our family achieve this significant milestone. We are forever grateful for your expertise and support.
Karim is knowledgeable and very attentive in all details ensuring the process goes smoothly and transparent, Also very professional and reliable, throughout the process making it easier and more prompt, I definitely recommend it 🌟🌟🌟🌟🌟🌟
Excellent to have warm personable assistance
Would highly recommend for drafting any contractual documents. Stand out firm
Called in for information regarding my dissertation on civil law and was kindly provided with very useful information.
Since I was in need of a lawyer, Karim was my go to. He was really listening to me and I felt heard. Thanks for your help
karim gave me a call back and gave me advice on what I should do. Thank you
Very helpful! Thanks Karim
He listened and provided very good advise
Great platform. Thank you Go Legal Ai
Very caring and professional company…
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