This post sets out the legal requirements and 4 bare minimum content essentials for a construction contract. Even where all of those exist, the courts sometimes decide there is no contract because all the essential terms were not agreed. The terms on which the parties were [of one mind] must
A US$60m project for a luxury Caribbean resort came to a sorry end for many hundreds of disgruntled customers. Even if your project does not involve cabanas, windswept beaches or multi-million pound deals, you can learn from the lessons of Harlequin and its contractor. Setting the scene The ‘startling features’
Alan Sugar once said: I have always been an honest trader. I come from a school of traders where there was honour in the deal. No contracts, just a handshake and that’s it, done. That’s the way I prefer to do business… Can You Contract with a Handshake? looked at
As David Chappell says: it is difficult to think of any other cause responsible for more difficulties and disputes in construction contracts than the employer being in a hurry Construction Contracts Q&A, 2011 There are 3 approaches to letters of intent: Follow the guidance from eg the RICS, CIOB and
Imagine your business relationship is like a romantic relationship. It starts off well with promises (sometimes slightly exaggerated) on either side, enthusiasm, trust and hope, and slowly you develop some ground rules for working together harmoniously (aka a contract). However rose-tinted your spectacles are, a small part of you knows
A contract, whether it is a multi-million pound construction project, a structural survey on a house you were buying, or the design of your porch, is there to solve a client’s problem. Client’s don’t buy drills, they buy a tool to help them create holes. Client’s don’t buy porches, they
Although you cannot avoid mandatory legislative requirements, such as the right to suspend or claim interest for late payments, some unscrupulous payers include unenforceable conditions, perhaps hoping the other does not know the law?! Another vexatious approach is to make compliance with a legal right almost impossibly tricky, creating hurdles
If you are writing a contract, you should really make sure that its terms are simple and effective. You need to ask: do both parties understand what it does? what is it meant to do? does it actually do? when would it apply? how does it transfer risk? Lessons from
Which should come first: works or contract? Well you might expect me to say the contract but here’s why… The defective car park In 2001, two companies were trying to agree the terms for a long-term agreement on a variety of projects. One of those projects was in a hurry,
Conditions precedent are requirements that must be met before either (1) the contract as a whole comes into existence, or (2) a specific right under that contract will apply. Your contract won’t always use the phrase ‘condition precedent’, which makes them harder to spot… Here’s a brief spotters’ guide: Examples