During 2013 Annual NEC User Group conference, I had a lively twitter debate with Chris Hallam (@ChrisHallamLaw), a Partner at CMS, on the use of NEC3 (the New Engineering Contract, Engineering and Construction Contract, Third edition). He pointed me to his article: NEC as Easy as 1-2-3.
From reading between the lines, I don’t think he’s convinced by NEC’s preference for simplicity over substance.
NEC achieves simplicity through:
- The present tense – it causes lawyers ‘to shuffle uncomfortably in their seats’
- Shorter sentences – I approve
- Eradicating clause cross-references – hard to combine with clarity, even on a 500-Word Contract™
- Using ordinary language –a worthy aim especially when your contract is intended for non-lawyers and people whose first language is not English
- Subdividing clauses by bullet points – if you don’t need cross-references, you don’t need sub-clauses.
Chris argues that the raison d’etre of a written contract is to give legal certainty to the rights and obligations of the parties and to ensure they are legally enforceable. On this basis, simplicity is not an end in itself.
Rather than repeat the article, I want to pick up on two specific issues.
NEC drafts its obligations in the present tense, with an over-arching clause which states that ‘the contractor shall act as stated in this contract’ (clause 10.1). So instead of:
“the contractor shall carry out and complete the works” we get: “the contractor carries out and completes the works.”
I like the use of the active voice (since bolstered in NEC4) provided we have a clear subject/actor. I like the use of simple language. But I am not convinced of the benefits of the present tense – although it makes sense when considering this contract should be used as a project handbook, not merely to enforce remedies.
Judges are also not entirely enamoured of the language, such as Akenhead:
There are some sirens or other voices which criticise these Conditions for some loose language, which is mostly in the present tense, which can give rise to confusion as to whether and to what extent actual obligations and liabilities actually arise.
According to ‘Write Like a Pro’ by Dr Marcia Riley “concise means direct or to-the-point… Brevity is not what matters: necessity is.”
Although NEC3 has far fewer words than JCT SBC, that doesn’t automatically result in better clarity. For example:
- the design responsibility under NEC3 is left to the works information (now under NEC4)
- the pricing mechanism is left to the main option clauses
- the standards of care are left to the secondary options
- the use of capitalised and italic terms is unique and often confusing
- the lack of cross-referencing makes remembering and tracing clauses much harder
Chris’ article concludes “lawyers have long been criticised for producing long winded and impenetrable contracts which can be understood… by other lawyers. Simplicity and brevity are often trampled underfoot in an attempt to achieve watertight drafting and deal with every conceivable scenario… Although lawyers are (sometimes justifiably) criticised for using ten words when one will do, sometimes those ten words may be what keeps the parties away from the courts.”
What should we do?
We need to decide whether we prefer comprehensive or comprehensible contracts.
My 500-word contract is drafted on the basis that it does not cover every eventuality or potential cause of dispute. Like any contract, it cannot guarantee that the parties will avoid disputes and stay away from the courts, but then it is not designed to be a safety net. It is meant to help the parties understand their obligations and work together.
Which would you prefer?