Do You Read Your Contracts?

The first stage for reviewing a contract is to read it. Best practice, as set out in Which Contract? suggests that you ‘study its contents and understand its implications’.

Some of you do not read your contracts: you let them gather dust. If you don’t read your contract, it goes without saying that you probably have no idea whether you can understand its provisions (and what you must/not do), nor can you use it properly. For those of us who spend our lives writing contract, it is depressing to think that our hard work is then ignored!

Should we dispense with contracts, and rely on a gentleman’s agreement?

Using contracts

Assuming you are going to ignore the handshake option and use contracts, then what’s stopping you reading them?

The truth is that many contracts are pretty un-readable. I don’t mean illegible – they are just turgid, verbose, jargon-filled random assortments of clauses, sub-clauses and sub-sub-clauses.

Perhaps we can lay the blame at the foot of the drafting committees – group drafting rarely encourages simplicity and clarity. A big publisher with a long history (50 years), like JCT, is a no guarantee of readability. Many of the standard form contracts positively discourage reading. They are formatted, referenced and drafted to suit the needs of the drafters. You probably can’t read your contracts without getting bored, distracted, depressed or confused and there is little chance that you will study it or understand its contents, or implications.

I admit that standard forms rarely make logical sense, with a clear progression of obligations (MF/1 and PPC2000 are, perhaps, exceptions), even for a contract expert like me.

Is trust an alternative?

Which Contract? recognises construction consultants who ‘minimise the significance of contract wording by referring to the importance of trust. They blandly talk of the best kind of contract as being the one which is put into the drawer and only taken out when things go wrong.’

But trust is not about ignoring your contract.

Trust is about agreeing and recording a contract which you can read, understand and use. It is about a contract with no hidden surprises (transparent), that aims to help you do business (safeguarding your business) which avoids disputes. It is about a living breathing document which assists you with your project.

Or is that just the sound of wishful thinking?

What should you do?

Start reading your contracts – not all of them all the way through. Just start reading clauses (perhaps those boring ones at the back first). This will ease you in gently!

Ref: Which Contract? by Clamp, Cox, Stanley and Udom (2012, 5th edition, RIBA Publishing). Interestingly, the authors also state that an appropriate contract “fairly and firmly administered, is the best means of trying to ensure that things do not go wrong in the first place!” 

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