Prior to entering into any construction contracts, all parties want to ensure the contract has been drafted in their favour.
However, before drafting and negotiating a “dream” contract, it is important to select the correct form of contract.
So what are the key considerations when selecting a contract?
- Type of Project – What project is being developed e.g. shopping centre, power plant, hospital, school, railways etc?
- Size of Project – Small, Medium or Large? You can measure this by the type and number of parties involved, the value of the project and work required, or the duration of the project.
- Location of Project – Is it a national or international project? City project or small town? If it’s national you’re more likely to use JCT or NEC, whereas for international FIDIC or IChemE are preferable.
- Value of Project – If it is of low value, it is better to use simpler forms of contract.
- Type of Work – What is it specifically you want the parties to carry out e.g. design and build, refurbishment, extraction etc.?
- Design Works – Will the parties be responsible for design? If so, select a contract with design obligations and requirements for professional indemnity insurance e.g. JCT Design and Build Contract 2016?
- Year of Contract – It is important to ensure you select the most recent version of the contract, as it is more likely to include provisions which cover the issues experienced in the construction industry at the time.
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