Don't be nice, be fair

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Partnership and trust are great, but that's not what contracts are are there to promote. They are there to make sure that people do what they say they will

Here are some thoughts to mull over: W The idea that a spirit of trust and co-operation can be contractually embodied in a building contract is a non-starter. The very heart of the Latham report in 1994 was that employers and main contractors undertake the project in a spirit of mutual trust, but using the NEC standard form for this was not practical.

Neither is it practical to have what is called a "win–win solution" in construction contracts. For a start, we don't know what that means.

The threat of litigation is effective for improving the output of the construction process.

The purpose of a contract is to enable parties to simultaneously achieve their private ends. This is only the case if the law enforces their promises. A contract that aims to avoid the courts is a contradiction.

A contract that has the objective of flexibility and clarity is doubtful. When drafting contracts, flexibility is not compatible with legal clarity, and legal precision is not compatible with fairness.

Contracts need to be, to some extent, adversarial and the interpretation of them should not rely too much on good relations continuing through the life of a project.

A breach of contract that meets with a robust contractual remedy gives businesses confidence that that their interests will be protected by a court.

Who the blazes told contractors to stuff the contract in the drawer and forget it? That document contains all you need to know about managing the job

The notion and exhortation that contract documents should be left in the drawer during the project is inconsistent with running building projects successfully. The promises, expectations and machinery are all in the contract.

A standard form of contract is a good way to provide a manual of project management. The NEC document is founded on this notion and has emphasis on communications, co-operation and programming.

No, that wasn't me talking. It was a paraphrase of points in the RICS Foundation's Construction Contract Policy: Do We Mean What We Say? The authors, Will Hughes and Yasuyoshi Maeda, set out to ascertain how people in the construction industry felt about the way contracts should be drafted. What they found was that there was support for innovative working practices, but that people disagreed with the kind of contracts that would be required to implement them.

Take this partnering business. The idea is to be open and honest and team spirited rather than resorting to the letter of the law. Oh, do come on, please. Partnering means letting the client get away with murder. I have seen first hand how contractors have luvvied their way through three-quarters of the project, avoided sending contractual letters, hurling hand grenades or pointing out the client's cock-ups – but then got trampled all over when it came time to pay up or to dish out extensions of time. And all this talk of the non-adversarial working is a trap, or not understood, or inconsistent with the contract. If it is a trap, it means I can have a go at you but you can't have a go at me. It if is not understood, you fail to send me letters keeping me informed of the ups and downs of the project because they would contain remarks about my being a bloody nuisance; they would be adversarial. The plain fact is that a stiff, straight-talking letter to an employer helps it to kick butt on its own project team.

And who the blazes is it that told a whole generation of contractors to stuff the contract in the drawer and forget it? That document contains all you need to know about promises and it contains the tools for managing the job. The contract can therefore be construed as an agenda for litigation, so use it to avoid disappointments, differences and disputes, or push it firmly up the other fellow's nose and get him to improve. And by the way, if it is a bespoke/amended/fiddled standard form, there are one or two folk who will cheer. The reason is that the price goes up. Pencils get blunt with bespoke contracts.

Hughes and Maeda's research conveys the message to me that wishy-washy, luvvie documents and sentiments are not working in practice. Contractors prefer precise contractual obligations. Give me a set of rules, a set of boundaries; I then know how far I can go. Give me my status, tell me who to look up to and tell me who pays my bills and tell me how to beat him up if he doesn't.

Postscript

Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on info@tonybingham.co.uk.