Contracts should help you do business, while being realistic.
Most contracts do not anticipate ‘failure’ in stark terms.
However, not every project will be a success, especially those which are on the edges of what is currently possible. Is that anyone’s fault?
Failure can be consistent with using reasonable skill and care. In IBA v EMI (1980), the House of Lords quoted from a 1853 case:
“…if you employer (an architect) about a novel thing, about which he has had little experience, if it has not had the test of experience, failure may be consistent with skill. The history of great improvements shows failure of those who embark upon them.”
Being More Successful
Here are some ideas for improving your chances of success:
- take specific precautions: especially for daring and difficult adventures
- assess and appreciate the risks of each individual project
- be prepared to walk away when the risks are too high: “the law requires even pioneers to be prudent“
- decide which is the most important objective
- make suitable inquiries and obtain relevant data
- check every assumption is a reasonable one
- specify the quality standards you want (not rely on implied terms)
- record all these aspects in your contract.
Go to slideshare for my Checklist for use on D&B Projects.
Case: Independent Broadcasting Authority v EMI Electronics and BICC Construction (1980) 14 BLR 1