When it comes to contract management, preparation is your best ally – here’s why.
Question: what do you get when you take one voice actor, a popular brand of e-reader and enough time to watch civil war-era epic Gone With The Wind approximately 2.27 times?
The answer: an experiment that proved what many of us already knew.
I’ll explain. In 2017, consumer advocacy group Choice ran a simple test. They took the Terms and Conditions document for Amazon’s Kindle, and asked a voice actor to read it word for word.
It took nine hours. (Yes, you read that correctly.)
This result says it all. Terms and Conditions documents are getting longer. And when as a society we’ve possibly never been more time-poor, this is a problem.
I don’t know anybody who reads the full Terms and Conditions when signing up for a service online. I would argue that it’s almost assumed that we will just click ‘agree’ in order to get the streaming service, email account or takeaway food we’re after.
But imagine if that happened with construction contracts?
Well, here’s another problem: it almost does.
The Burden of the Dotted Line
Let’s face it: contracts are not everybody’s cup of tea.
I ought to know: having worked on both sides of the fence, I’ve seen a few in my time.
Contracts are often very long – because they have to be. They can use unfamiliar, dangerously specific jargon and, unless you’re a lawyer, they can be really hard to read. Their circular nature can cause real problems: one clause relates back to another, which in turn relates to another.
…And so on, and so forth.
The problem is that in the Commercial/Infrastructure and Resource Construction Industry, many businesses don’t have a designated contract person.
I’ve seen it many times: it’s often the super, the PM or equivalent who’s been lumped with the task of reading and complying with the document. And that’s on top of the hard work he or she puts in on site or at the office.
When people are over-burdened, that’s when mistakes happen. And – as we know – this is not a particularly forgiving industry.
Dollars are at stake. Reputations are at stake. Maybe even careers.
So how do you protect yourself?
Here are my top three solutions for safe contract management:
1. Recruit a construction lawyer/claims expert and look after contracts internally
Depending on your budget, this can be a really good option. This person will be available to you whenever you need. They’ll learn the quirks of dealing with your business. They will prove their value very quickly – but at a cost.
With full-time salaries for contracts experts sitting upwards of $200k per year, this becomes a very expensive insurance policy.
2. Engage ad-hoc legal services when you need them
The good news here is that there are plenty of firms out there who are willing to engage with you for short-term assistance. But if you’re not familiar with the firm, a degree of caution wouldn’t go astray.
When an organisation charges by the day, there’s less of an incentive to finish the job any time soon. With a good firm, this won’t be an issue. But you’ll want to make sure you know who you’re working with so you can be sure your dollars are fighting litigation and not just funding lunch.
3. Outsource – but on retainer
The best weapon in your arsenal against construction claims? Solid preparation.
Finding experts you can trust and getting them in your corner before any fights break out is invaluable. And the best thing about a retainer model is how easy it is to budget for.
Yes, there’s an initial outlay, but it’s vastly more appealing than an expensive, time-consuming and reputation-draining dispute process. Trust me – across my career in construction claims, I’ve seen both in action.
It’s a bit like paying for car insurance – that is, if your insurance also comes with a pair of eyes in the back of your head! Not only are you protected should disaster strike, but it’s much less likely to strike in the first place.
Whichever solution suits you – and there are benefits to all three – just make sure somebody reads that contract.
After all, blindly ticking the box probably won’t get you into trouble with your Kindle.
But your next construction project, on the other hand? That’s another story.