Why is Construction Contract Law a Good Thing for Construction
The reality is that the terms and conditions, what is required, what has to be done, who is paying for what kind of thing, can get a bit complicated in a decent-sized construction project. Not open to simple word-of-mouth, my word is my bond kind of like “I’ll fit out a new kitchen for you and it will cost you £22k. Deal?”
Along with loads of drawings we have reams of paper listing things like Specifications, Bills of Quantity, start and end dates and the rest of it! It gets so complicated that there really has to be a formalised contract and that has to be backed up by Construction Contract Law to make it all stick!
Without that Construction Contract Law To Enforce Compliance People Would Be Going Round in Circles!
For example, whichever Standard Form of Contract is used, it will specify who has to do what in the event of any changes – and who will pay for any additional costs involved! Without the ultimate of redress for resolution before the Courts given by the Construction Contract Law, arguments could go on forever and a day.
Then all this complexity is made worse by changes to the original specifications which may be made during the project itself. These can be down to the Clients’ changed requirements; at the Contractor’s request; by availability of materials, or even by Acts of God. Without the use of a Standard Form of Contract and, once again, the ultimate threat of resolution by the Courts, these could produce more arguments that could run on forever! Come to think of it, without that Contract nobody might actually take any action on any changes, whatsoever the cause!
By now, hopefully, everyone can see that Construction Contract Law is, in principle, a good thing for construction!
But it also has a down side!
Something changes and the Quantity Surveyors have to put a price on those changes along with trying to ascertain who is liable for additional payments to be made to which party. This can be very, very complicated and there can be serious differences of opinion between the QS’s acting for the various parties to the contract. What they all have in common is that they are acting, to the best of their ability, in the best financial interest of their employers. Left to their own devices, and without senior management oversight and restraint, these differences of opinion can only end up being resolved by resorting to Construction Contract Law and Arbitration, or even by taking them to the Courts.
Now this is a personal observation, not necessarily a statistical fact, but when these cases do go to Arbitration or the Courts, for the losing party the legal costs incurred, (never mind paying the claimed extras), seem to end in construction companies becoming insolvent and going bankrupt!
Now I proudly boast that of many projects I’ve been involved in, none have ever had to go to Dispute! When things have started getting to much of an argumentative issue during meetings what I have done is this! I have got heavy handed with everyone and told them to be sensible and come to an equitable agreement! They have always complied because the QS’s don’t fancy starting a legal battle on site with the Project Manager who is himself a lawyer!
See? Even in these circumstances the threat of Construction Contract Law turns out to be a good thing for construction!