How often do you thoroughly review your contracts?
This should be something you do every time.
Getting your price right is one side of the equation ensuring that the terms to deliver the project are fair & achievable is the other.
There’s no point getting your price right & winning the job, only to find out that you won’t get paid for because of a condition precedent or you can’t claim a particular variation because you’ve signed away your rights with the net result being negative cashflow and/or loss of profit.
Yes, there is a cost, but done properly the benefits far outweigh it.
Reviewing your contract during tender ensures:
- That you have priced in all the contract requirements, not just what’s stated in the bill, drawings/spec or schedule of works.
- You mitigate your risk. You know what the contract risks are & more importantly which ones you can accept & which ones you can’t, giving you the opportunity to negotiate them out. Try doing that once you discover them on site.
- You empower your site team. They’ll know what needs to be done to comply with the contract. This mitigates risk but also increases the opportunity for maximising entitlement.
Never sign a contract that you haven’t read & understood.