Review Your Contract: Key Aim

In most contracts, there is a balance to be struck between 3 key aims: time, cost and quality. It is impossible to have the best of all three.

The British Library project is a great example of when the decision-makers chose quality as their priority, sometimes without thinking about the impact on time and cost, and often without checking with the project sponsors (ministers and public servants) if that choice was acceptable.

By the time you’ve finished reading a contract, you should know the main aim(s) of your project. Sadly, most construction contracts fail to clarify this.

There is a presumption that we all know that as the programme, budget and specification are attached, that we can somehow discern which of these has the most flex. Or perhaps we are meant to assume they are all equal [an assumption which does not bear deep analysis as the programme and budget are normally well below the works documents in terms of priority].

Leading by example

I was delighted to come across this gem by a construction solicitor on their home improvement project:

The Client’s priority is that the works are completed to a satisfactory standard and within the budget set out in the quote.  Therefore, whilst the Builder agrees to continue to make reasonably regular progress with the Works, delays to the project will not incur any financial penalty.

There are a number of reasons that I like this clause:

  • It states the client’s priorities really clearly: quality and cost.
  • It confirms that the time objective is least important.
  • It recognises that it would be normal to have remedies for late completion.
  • It agrees that those remedies will not be applied as long as there is progress.

This seems eminently sensible because

  1. it is impossible to have high quality, low cost and quick completion
  2. most delay damages are only the starters for negotiations
  3. it allows the contractor to be really confident that it will not be penalised and can make a fair profit
  4. it reflects the statistics which show 50% projects finish late.

What should you do?

Read your contract. Is it clear about the project objectives? If not, ask!

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