Blog 030 - Contracts, a Sweet Treat or Chance to Get Burnt?

There is a type of contract I have come to compare to brownies, yes, those delicious bakes. The contract looks firm and rigid, crisp even, on the outside, but get beneath that top layer and you get the gooey delicious bit, but unfortunately, for the Specialist Contractor, this bit is only nice and delicious for the Main Contractor! Let me explain…

From the outside, the contract looks good, the scope is prepared well and so far, the relationship with the contractor has been progressing well. They have issued the contract to you in good time and it looks to be based around a standard JCT, and you think, this project looks, sounds, feels good. This is the firm exterior.

It’s time to bite down into that brownie and investigate the caloric content of the bits that will stay with you for the lifetime of the project. When you look into it, have you checked the contract for:

1. Payment Terms

2. Rights to variations

3. Conditions Precedent to Payment

4. Defect periods

5. Damages

6. Termination

7. Amendments to standard clauses

You get the picture.

I am encouraging all Specialist Contractors to read deep into their contracts and determine whether they think the proposed document is operable for the course of the project and a fair distribution of risk and responsibilities.

Beware! You will experience the immediate sugar rush of a brownie contract, the emphatic win and the signing of secured turnover, however, a moment on the lips, an entire project on the hips. Don’t leave yourself with a contract that puts undue pressure on your business when this could be avoided with some simple reading and negotiating.

A contract is meant to work for both parties, there shouldn’t be any shame in negotiating terms and conditions until they are commercially viable for your business. Remember, it works for both sides, so proposing one sided terms in your favour isn’t going to work either. In my opinion, the fairest way to achieve this is to use the standard wording provided by JCT, NEC, CECA etc. but then, nobody wants to put the lawyers out of business! Construction projects require commercial contracts and should be agreed in the same way, by commercially minded people looking to make a fair contract representative of the agreements reached.

If you want to know more about the risks in your contracts or want help reviewing any contracts, please get in touch, drop me an email and start the conversation.

For the avoidance of doubt, real brownies are my favourite, particularly Peanut Butter Brownies! So, for your chance to win a tray of artisan brownies, baked especially for you and delivered to your door, share this post on LinkedIn or join the subscription mailing list on the Website. I will draw a winner from each on the 29th January 2020.