Contracts & Claims DRAFTING
David Roberts has been drafting contracts and subcontracts for most of his working life. Even where a ‘Standard Form’ such as the JCT, ICE, FIDEC, NEC, CRINE (LOGIC), IChemE, IMechE (includes IEE), GC Wks, DEFCON, ICC, etc. suites are utilised it is almost invariably necessary to draft a set of Special Conditions to tailor the terms and Conditions to the specific and often unique nature and circumstances of the work to be contracted.
In order to do this properly or indeed to vary ‘in house standards’ (most major multi-nationals have their own documents) or draft bespoke terms and conditions it is necessary to have an understanding of the scope and technical aspects of the work to be undertaken. This generally means having enough experience and confidence to ask questions to fully understand ones Client’s (this often includes Contractors or Major Sub-contractors) requirements and then playing ‘what if’ games with the terms to ensure that all possible problems are catered for within the terms as drafted for tender purposes.
Whilst it is always worth having a lawyer check the finished draft it is neither realistic nor economic to have them draft the document as it is the ‘entire agreement’ that is important and must hang together, this often means alterations to the sections covering the scope, specifications, programme, procedures, etc. to ensure clarity of intent and liability. Generally this can only be accomplished by someone with experience of administering on site on a day to day basis a similar contract and with some technical knowledge.
It also needs to be done reasonably quickly (some times very quickly) and shortly after the final scope has been agreed and the budget approved. A claims background is certainly of use in drafting a contract document that puts the liabilities where the contracting strategy agreed upon has determined they should be and ensures that there are terms to deal with the outcome of the failure of either party to fulfil its obligations thus minimising the potential for claims.
Many important matters can be controlled and influenced through the contract documentation and the contracting strategy these include safety, operating costs, fitness for purpose, environmental issues, security and the parties relationships (who is deemed the diving contractor for diving contracts, the roles of General Designer and General Contractor in Russia, who is the Principle Contractor, Planning Supervisor, etc. under CDM).
It is essential that the Contracts Specialist, Engineers, Planners and the Lawyers are involved from pre-tender as money spent at this stage saves or reduces claims, delays and cost overruns.
Contracting Strategies that have been worked to; cover the full gamete from Turnkey through to Reimbursable Insured Risk with Commercial Strategies from Lump Sum to fully open book reimbursable.