Dispute Avoidance: Committing Construction Contracts to Writing

It is all too common an occurrence: a construction company or employer seeks advice in respect of a dispute under a construction contract, only for it to transpire that no contract has been entered into in writing.

Although the relationship of the parties may nevertheless be governed in part by implied terms under, for example, the Consumer Rights Act 2015 or Supply of Goods and Services Act 1982; those terms will rarely be sufficiently sophisticated to adequately resolve issues arising in relation to, for example, delay, specification or variations. The uncertainty that results from reliance on such implied terms disproportionately increases the cost and complexity of any ensuing litigation, whilst increasing the risk for the parties involved.

The increased cost, complexity and risk which is presented by a contract which has been entered into other than in writing can be reduced significantly by ensuring that a properly formed construction contract is entered into between the parties in writing prior to the commencement of work; either bespoke or in standard form. A construction contract will typically include express provisions that define:

  • The cost of the works and a contractual mechanism for the variation of that cost.
  • The duration of the works and a contractual mechanism for extending or reducing time.
  • The specification of the works and a contractual mechanism for resolving any discrepancies in that specification of works.

Providing that you follow the relevant contractual mechanism in the event that any of the above issues arise, you will limit the risk that the other contracting party will gain some tactical advantage over you, and reduce the uncertainty as to how any issue will be resolved in the event that litigation cannot be avoided.

How can Berry Smith help?

The construction team at Berry Smith is experienced in the formation of bespoke and standard form construction contracts and is on hand to advise you on pre-contract matters to ensure that your position is protected to the greatest extent possible before you enter into contract.

Often, we can provide advice on contract formation and drafting for a fixed fee; a sound investment to ensure appropriate contractual terms are in place from the outset to limit the risk of a costly and time-consuming dispute between the parties at a later stage.

Please contact Gavin Hoccom to discuss how Berry Smith may be able to assist with the success of your next construction project.