Grant agreements are binding contracts. The recipient must use the funds for the stated purpose. Unlike loans, grants do not need to be repaid if conditions are met — but clawback clauses allow recovery if the money is misused or conditions are breached.

• Grant is subject to conditions — breach can trigger clawback
• Unspent funds: define whether they must be returned or can be carried over
• Regular progress reports and financial reports are standard
• HMRC: grants may be subject to tax (especially for commercial organisations)
• Subcontracting: check whether grant can be passed to sub-recipients

Legal reference: Charities Act 2011; HMRC Grant income guidance; Public Contracts Regulations 2015 (public bodies)