In a 2022 case concerning a £154m energy from waste EPC (engineer, procure, construct) project the court had to review the relevant contemporaneous evidence and key legal documents.
The court noted that the EPC contract and its schedules run to 7,259 pages. The Outotec subcontract is less complex at 564 pages but is just one of forty subcontracts. The contractual documentation also includes a further seventy-nine agreements, financing documents, variations, warranties and leases.
Whilst you might believe that 700+ pages of contract would cover everything, the court had to check whether those pages were consistent. It then had to interpret the express terms of the contract based on established rules (such as those from Arnold v Britton) and then determine if there were any implied terms to deal with matters ‘for which the parties had made no provision.’
Even with the extent of these contracts, the contractor still tried to rely on an implied term to excuse their behaviour during what had become a very difficult project. Implied terms are on top of the written terms, but are only implied where such terms are obvious and necessary.
What should you do?
If you want to avoid all implied terms you could use an ‘exclusive remedies’ clause – which stops you from searching through the legal undergrowth for a hook on which to hang your contractual grievances.
If you want better clarity for your contractual rights, remedies, risks, roles and responsibilities, maybe a contract that’s shorter than 140,000 words would be a good start?
Case: Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd & Ors [2022] EWHC 3275 (TCC)
