Your contract needs to reflect a variety of aims or objectives for the parties and for the project or task:
It is trite to say projects need to balance time, cost and quality. That means any contract has to strike a balance between getting the goods, works or services by a specific time, for a price that fairly reflects the scope, and to the correct level of performance or quality.
As well as the core aims, each project has its own unique challenges. Often, these are defined by the owner/occupier for a construction project and also by regulatory bodies. Your contract should not ignore the problem that you/your client seeks a solution to.
Although each party has its own why for getting involved – its own aim – everyone involved in a construction project instinctively knows that the whole project team has to work together. No contract should treat the other party as an adversary, as being of lesser importance, or attempt to ensure the paying party has the legal and moral ‘high ground’.
Trust is essential to construction, as it is an inherently collaborative process, with everyone working on a more-or-less unique project. You will need to share information and documents with others, obtain or provide accurate data on time/cost changes and progress, and neither hinder nor prevent others from getting on with their tasks.
There are multiple purposes for contracts which vary from project, to client, to contract type. For example, whilst there are a number of possible purposes for letters of intent, they are specifically designed to keep the project to time by starting the works before all the details required for the full contract have been finalised. The core purpose of a collateral warranty is to create an additional contractual link, providing a smooth avenue for a stakeholder to bring claims. The purpose of a subcontract is to enable the contractor to get specialist goods, works or services to help it complete a project.
What should you do?
Before you create any contract you need to know the aims that the contract is designed to achieve – for both parties and the project. One simple way to build trust is to create a fair and balanced contract which has simple processes and content that everyone can read, understand and use.
You can go further and explain exactly how you want to work together to ensure you have described what trust and collaboration mean for you.
This post is based on a chapter in four of the books in the series on Construction Contracts in Just 500 Words (Chapter 11 for consultant appointments, Chapter 13 for small works contracts and subcontract agreements and Chapter 19 for letters of intent). Each of these chapters also illustrates the perils of getting it wrong, based on a real-life case study, as well as how you can write it simply.