Top Tips: Contract Documents

More often than not, the contract documents will form the basis of any claim. If something has changed, the extent of the change may only be measured and evaluated by reference to the drawings and specification upon which the Contract is based. The claimant’s entitlement will usually be spelled out in the conditions of contract as will the procedure to be followed in the case of a claim. If there is a disagreement between the parties as to design, quality, responsibility, scope of works or procedures, the contract is the place to look for guidance and resolution.

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Contract Unfamiliarity Breeds Contempt

The potential for increased risks arises when the contractor is unfamiliar with the contract type, or when a standard form of contract has certain conditions that have been changed to reduce the employer’s risk. To minimise any potential risk, the contractor must be aware of the conditions agreed to in the contract and most importantly the contractor acquainted with the conditions stated and actively administer the contract in accordance to these conditions. There is much discussion about the advantages and disadvantages of the various standard forms of contract. In essence, this is a discussion on risk and who takes the larger portion of it in any project. The identified risk associated with both the project and contract conditions is then quantified and a value included in the tender price. This is standard practice, and employers and contractors are familiar with the contract type - it is only the project that has to be evaluated for any risks. This is the main reason for the…

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Contractors: Project Documentation Can Make or Break Your Claim

In my experience as a trial lawyer specialising in construction claims, I see a consistent pattern with project documentation: weak project documentation impairs the claimant’s ability to resolve the claim, whether by settlement, arbitration, or trial. The weaknesses generally fall into three categories: (1) failure to follow contractual requirements for notice; (2) failure to completely document daily events, impacts and costs on the project; and (3) failure to raise critical issues as soon as practicable after they are known. Each of these weaknesses can and should be addressed on the project to improve the likelihood of a favorable and timely resolution of claims. Read and Follow the Contract Requirements for Notice I cannot say how often a client has told me it did not read the contract, or that “it’s just boilerplate,” or that it trusted the other party to do the right thing, regardless of what the contract says. None of those statements provides any relief whatsoever in a…

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Construction Project Documentation: Explaining Business Records Exception to the Rule Against Hearsay

Given the critical role of written documentation in resolving construction claims – whether inside or outside of the courtroom – it is essential that companies adequately train the individuals who create written documentation. Depending on experience and training, the average worker on the project management or quality control team may not be aware of the best practices for creating written documents that may later be used to prove, or disprove, entitlement to additional time or money. These employees are also unlikely to be aware of the business records exception to the rule against hearsay and the requirements that must be satisfied before a written document may be used as evidence in trial. Wendy Wendrowski, Counsel, Seyfarth Shaw LLP, Washington D.C. has authored a paper outlining the best practices for generating and preserving construction records to avoid evidentiary challenges to company records if a construction claim is litigated. To request a copy, please email your…

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Poorly Drafted Contract Documents

Poorly drafted contract documents are often the source of claims. If they contain contradictions or ambiguities, it is natural for each party to interpret the inconsistencies to their advantage, thus giving grounds for contention and dispute. I was recently asked for my opinion on the following case and I thought it would be worth sharing. The description was as follows: ‘Although it was understood by the parties that the contract was to be a lump sum price, clause 14.1 of FIDIC Red Book in the conditions of contract was not amended to reflect this (Note: the un-amended FIDIC Red Book includes for the Works to be remeasured). In various other places such as the contract agreement, the letter of intent and the cover page, it clearly says that the type of contract is a lump sum. Our client's auditors have issued a report to the client that the contractor may dispute the type of contract in the future. The client now wants the contract amended and is seeking our own and legal advice.…

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