Specialists sound alarm on onerous contract clauses

Tim Outteridge, BCSA President & Sales Director, Cleveland Bridge, writes about onerous contract clauses:

Main contractors often push the limits when drafting construction contracts for subcontract work, even though we have perfectly good standard form contracts in the form of NEC and JCT. I have seen pages and pages of ‘z clauses’ inserted into NEC contracts, and so many changes to JCT contracts that they should really rename them. Standard clauses designed to protect subcontractors, though, simply vanish into thin air.

On the other side of the table, for some subcontractors, navigating the contractual landscape can be time-consuming and difficult. Especially when ‘standard’ no longer really means ‘standard’ and those all-important standard clauses to provide protection and a level playing field are deleted time and time again.

So what are subcontractors to do?

Firstly, subcontractors should ensure that they educate their commercial teams properly about construction law. The place to start is knowing and remembering the basics, and sticking with good practice. I am unashamedly going to put in a plug for the BCSA’s recently updated Construction Contractual Handbook. This comprehensive Handbook aimed at subcontractors, kicks off with a useful reminder about the formation of contracts and carries on to cover all the important aspects of construction law in a compact and accessible way.

Second, BCSA recommends that subcontractors should be aware of what onerous terms might unexpectedly appear in their contracts and what to do about them. The Construction Contractual Handbook has a chapter explaining some of the most common onerous clauses or changes. These might include lengthening the payment period and inserting certain obligations regarding time. The checklists at the back of the Handbook are really useful for making sure you cover everything.

Third, subcontractors need to maintain their vigilance throughout the duration of the contract, ensuring they issue certificates at the right time, manage variations and any disputes properly and follow claims procedures. Again, these are all covered in the updated Construction Contractual Handbook.

The Handbook also includes chapters on construction contracts in Scotland and Ireland. Of course, sometimes a handbook, manual or textbook isn’t enough.

How can businesses access the handbook?

As part of their membership, BCSA members also get exclusive access to contractual seminars and individual commercial and contractual advice.

Negotiating contracts and juggling all the relevant commercial matters through a job will always be a necessary task for subcontractors. But having the right tools and advice to hand can help to redress the balance. Plus, it makes life easier and fairer for subcontractors.

BCSA’s Construction Contractual Handbook can be purchased from https://www.cip-books.com/product/construction-contractual-handbook-5th-edition