Get it right with a contract!!

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Over the last 20 years I have come to realise that there are a number of recurring issues that many clients face.

The first of these is a failure to ensure that work is carried out under a contract.

I have lost count of clients who tell me that they have never had any problems for 20 years and have never bothered to get a contract for their works – their word is their bond etc etc etc.

What they don’t say is that they have a lifetime of compromise behind them in which they have settled for far less than they were entitled to as they didn’t feel they could press for more as they didn’t have a contract.

What they don’t say is that they have, all too often, undertaken additional works for which they have little chance of ever being paid because in the absence of a contract they cannot clearly set out the scope of the work they were to undertake.

What they don’t say is that when disputes have arisen they have had to compromise because the lack of an adjudication clause in a contract meant that the only option open to them was to take expensive and protracted court proceedings which they could not afford, and which exposed them or their businesses to claims for costs.

A contract should always be the starting point of any work. It need not be complicated or terribly long. It should set out the basic terms that the parties have agreed:

The work to be done

The amount to be paid for the work

How long the work is to take

How payment is to be made and when

How disputes between the parties are to be resolved

There are many “off the shelf” contracts available to use. Simple contracts can be drafted for relatively modest sums or the parties can record their intentions in correspondence between them.

Where a contractor is required to use its Employers terms it should ensure that it understand those terms and if there are terms it cannot accept it should seek to have them amended. As a rule of thumb if you are presented with 20 pages of amendments to a standard JCT contract they probably have not been prepared for the contractors benefit!

I recognised some time ago that contractors do not have contracts reviewed because they are concerned at the costs of doing so. That is why I introduced the National Legal Consortium Agreed Fee Scheme. Clients of the NLC get unlimited legal advice for a modest monthly fee. That means that they can pass contracts for review when they receive them and the cost of the review is paid for by their monthly payment.

Whether or not you are a client of the NLC make sure you sort out your contracts. Make sure you have a contract, that it is the right one for the job and that you understand it!

If you want to talk about the NLC or contracts call David Jackson on 0800 107 1980 or email me on dj@celawyers.com.

Felix Clarke

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