Lessons from failure: get your ducks in a row

Am I the only person who went into construction for the paperwork? If so, it would make a massive difference if others like you could take the time to plan and sign your contracts properly.

The NBS Contracts and Law Report 2018 shows 30% of projects start without a contract being in place aka £3bn work annually in the UK.

Getting it wrong

In a recent case relating to a ‘very large refurbishment and building project’ the contract process was:

  1. A letter of intent from project managers to a specialist contractor referring to the intention of the home-owners to enter into an NEC contract with the specialist contractor.
  2. Original NEC contract between home-owners and specialist contractor, typed with name of contractor’s director.
  3. Never signed by home-owners because they ‘did not like signing any form of contractual document‘.
  4. Specialist contractor did not have a copy of the contract.

There was considerable dispute on the facts as the home-owners alleged that the specialist contractor was appointed by the project manager/main contractor (who was, by the time of the dispute, in liquidation). The court said ‘there was very little detail from the [home-owners] on what the contractual relations were‘.

What a glaring oversight!

What should you do?

Agree the contract terms you need for the project, before you start work.

Simplify those contract terms and write them down.

Sign those contract terms.

Simple.

Case: Sitol Limited v Finegold & Anor [2018] EWHC 3969

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