The foundation of a successful construction project lies not just in the quality of materials or expertise of the workforce, but significantly, in the blueprint of the legal binding between the parties involved; the construction contract.
A well-drafted contract ensures that both parties know exactly what to expect and how to navigate through the various stages of the construction process. It minimises misunderstandings, legal disputes, and unforeseen financial setbacks, thereby safeguarding the interests of all the stakeholders.
However, contract drafting is a complex task that has many potential pitfalls. One minor oversight can lead to substantial repercussions, affecting the project timeline, budget, or even resulting in legal consequences.
Below, this post explores some common mistakes made when drafting construction contracts and how consulting an experienced solicitor can offer you invaluable guidance – read on to learn more.
Common Mistakes During the Drafting Process
When construction contracts are being drafted, there are a number of common mistakes that individuals make. These include;
- Overlooking Details
Often, parties are eager to get the project started and may overlook finer details while drafting contracts. Every aspect of the project, from the scope of work to payment schedules, needs to be described in explicit detail.
Lack of specificity can lead to disagreements and delays. For instance, rather than stating ‘install electrical systems’, the contract should specify the type, brand, and safety measures associated with the installation.
- Inadequate Risk Allocation
In construction, multiple factors can lead to unexpected challenges – whether it’s natural disasters, supply chain disruptions, or labour strikes. An effective contract should clearly spell out who bears the risks associated with such disruptions. Failure to include this can make the responsibilities vague and can lead to conflicts when unforeseen events occur.
- Ambiguity in Language
Legal language is a world of its own and using vague or unclear terminology can introduce ambiguity. Phrases like ‘as soon as possible’ or ‘industry standard’ are open to interpretation and should be avoided or explicitly defined in the contract. This prevents parties from exploiting loopholes or ambiguous phrases to their advantage.
- Ignoring Dispute Resolution Mechanisms
Disputes are not uncommon in construction projects and could lead to litigation, which is often a costly and time-consuming affair. Therefore, it is advisable to include a dispute resolution mechanism within the contract. This could range from arbitration and mediation clauses to specific guidelines about the jurisdiction and applicable laws in case of a legal dispute.
- Neglecting Termination Clauses
Every contract should have a well-defined exit strategy. A termination clause specifies the conditions under which the parties can exit the contract without facing legal repercussions. Often, parties forget to include these, leading to complexities if one party wishes to terminate the contract for legitimate reasons.
How an Experienced Solicitor Can Assist with Contract Drafting
Considering the various intricacies involved in construction contracts, the expertise of an experienced solicitor can be indispensable. When you work with a solicitor, they can provide the necessary legal framework tailored to your project’s specific needs.
Solicitors are adept at foreseeing potential issues and can advise on risk allocation, clauses for dispute resolution, and even nuances like force majeure that you might overlook. Furthermore, a qualified solicitor ensures that the contract adheres to current laws and regulations, minimising the risk of legal complications down the line.
Overall, the importance of a well-drafted construction contract cannot be overstated. By avoiding common mistakes and seeking professional legal advice, you can create a robust contract that stands the test of time and unforeseen challenges. This not only contributes to the smooth execution of the project but also fosters a more collaborative and less contentious relationship between all parties involved.
Searching for Construction Contract Solicitors?
If you require assistance with construction contract claims, then MJD Solicitors is ideally placed to help. Our principal, Matthew Dillon, has extensive experience in commercial and construction law dating back to 1997. Before establishing MJD Solicitors in 2010, he served as in-house counsel for major companies, where he negotiated high-value contracts including PPP and PFI agreements.
Specialising in construction-related matters, MJD Solicitors offers services from drafting amendments to standard JCT Main Contracts to creating bespoke sub-contracts. We are also adept at interpreting contractual arrangements, helping to avoid costly disputes.
MJD Solicitors also performs audits of contractual procedures and is well-versed in negotiating with leading London law firms. To learn more, contact us today on 01277 280760 or email us at [email protected].
