Commercially Sensible Contracting

Construction Contract

By Simon Forsterling | Nexus Law Group Principal – Sydney

“Sure, I can run your contract negotiations for you, but what I’d really like is for you to feel comfortable knowing exactly where you stand on contract risk, and to reach agreement on the commercial position confident that with a few tweaks from your construction contract specialist, the contract will actually represent the agreed position. No surprises. No disputes. Job finished on time. Everyone makes a buck, and comes back to do it all again, only bigger and better.”

Sometimes lawyers don’t understand what matters to you

As a developer, principal or contractor, have you ever been in the position of having instructed your lawyers to prepare your construction contract, and get it back uncertain of exactly what the risk allocation in it is. There might be a lingering feeling of lack of empowerment to make the changes necessary to ensure the risk allocation in it actually represents your intentions.

The flow on effect from this is that you rely on lawyers to negotiate what should be a commercial discussion. Although there might be commercial agreement between the parties, but for some reason the lawyers are not satisfied. Negotiations drag out, legal fees mount up, and contract execution (and maybe commencement) is delayed.

Perhaps you get fed up with the lawyers, who seem to have lost touch with commercial reality, and finalise the document yourself, still not quite sure of the exact risk allocation in it, but run with it anyway. It’ll end up in the bottom drawer.

A Construction Contract Specialist will empower you

This is where the skills of a construction contract specialist will help you. It’s really important that the right type of contract is chosen at the outset. If you want to get your roadbase transported, don’t make do with the template works agreement you’ve already got. The $20,000 underbore contract might need a more robust agreement than the $2m supply of roadbase. A $1m design and construct contract for stormcells might need a more complex contract than a $30m earthworks job. There is more to preparing AS4000 than just filling in Annexure A.

If you have a contracts specialist with a deep appreciation of the industry and the people who make it move, you’ll get a clear identification and understanding of the risks that matter to you. You will get the right set of terms for the job, and will be empowered to negotiate what matters.

Nexus Lawyers has a dedicated team of construction contract specialists. If you want an agreement or suite of agreements set up, or need help to understand and negotiate contract terms, contact Simon Forsterling directly on [email protected] for a commercially sensible solution.

 

This article first appeared on LinkedIn.

 

This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.