Pre-empting disputes with clarity

No-one really likes disputes (except a few claims consultants or lawyers). So why don’t we spend more time engineering them out of construction?

As HHJ Brian Preston said The best way to resolve to a dispute is to pre-empt it and not have the dispute in the first placeA lot of disputes arise because people have a different understanding of what they have agreed to do.

This post provides some solutions to common causes of disputes.

Synchronise your understanding

HHJ Preston drew on his wide experience with construction contracts and highlighted these issues:

1. Not having an agreement

It’s not difficult to create a simple record of what was agreed, but we often believe that (a) we need a complex standard form or (b) contracts must be written by lawyers to be effective. Neither of these is true.

Under English law, whilst an oral agreement is sufficient to be a contract, this approach risks the parties not understanding what has been agreed or not addressing key matters (see 3 below).

2. The agreement not addressing a matter, either at all or adequately

In our view, you should share your preferred terms early so that everything important can be discussed and recorded.

Even if you don’t, your contract needs to address all the key matters: rights and repsonsibilities, the scope of the work, manner in which work is to be carried out, quality of the works and timescales. I think you also need to cover other items to make your agreement workable [my 10 essentials].

3. Agreement terms being unclear, complex or uncertain

Create a clear, concise and certain agreement – if you can’t agree what that agreement means when it was made, it won’t suddenly be resolved when a dispute arises. Unclear, complex or uncertain language can even give rise to disputes about what it means. Aim for plain language.

4. Not carrying out work in compliance with the agreement

Create your contract specifically to make it easy for the parties to find what they need and understand/use what they find. But also ensure that the contract terms are practically achievable – there is no point requiring anyone to perform the impossible!

What should you do?

Engineer your contracts to avoid avoidable disputes, it will save dividends over the life of the project.

Further reading:

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