As part of my on-going research into contract writing, I reading Peter Hibberd’s (former Chairman of The Joint Contracts Tribunal) Arbrix paper How Difficult is it to Write a Standard Form Contract?
“How difficult is it to write a standard form contract – it depends on what one means. At the simplest level all that is required is a description of the works to be carried out and a price or price mechanism; the rest is left to common law and statute (the detail, of course, which everyone is fully aware of!!).
The advocate of the one sheet of A4 standard contract is easily satisfied – indeed a whole page is too much. That might have worked two hundred years ago – it still might even today – because trust was more obvious and because labour was very cheap compared to today’s labour costs.”
Perhaps the 500-Word Contract has struck a nerve! After all, as chairman of the JCT, his most commonly used contract is tens of thousands of words long, and JCT does not produce a one-page standard contract.
His arguments against a short form contract are built on:
- users not knowing what best practice or legislation says – possibly an assumption too far as any business which does not meet these minimum standards will not stay solvent for long!
- a lack of trust – but contracts are meant to encourage trust not create mistrust*, and surely the longer the contract, the less trust it conveys or allows?
- the cost of labour – with no reference to the cost of lawyers which are often required nowadays to write, read & interpret, advise on and resolve disputes under standard forms.
The overwhelming request in my 2014 Survey of construction contract users was that you want simple contracts written by users for users. Not quite a one-page contract, admittedly, but less than 25,000 words (roughly NEC and half the length of JCT SBC or FIDIC).
What do you think? Could a one-page standard contract work today? Is trust so lacking that your contracts need to cover every angle?
* Note: the 1995 Latham Report highlighted three common themes from surveyed users of standard forms: they were unclear (45%), they created mistrust (38%) and they encouraged conflict (52%). 40% of users said the solution was simpler contracts.