How to Choose The Right Standard Form of Construction Contract

contract risk assessment

How to Choose The Right Standard Form of Construction Contract

Here are some keys to help you decide which standard form of construction contract is best for your project which will be helpful for anyone responsible for procuring new projects.

It?s very easy to pay little attention to the choice of contract because you have little time or not enough budget but many post contract problems have their roots in poor pre-contract decision making so its important to get it right.

There are lots of different standard forms of contract. Some of the standard forms of contract available include FIDIC, IchemE, JCT and NEC3 and each publisher provides different options. This can sometimes be a bit confusing, so I will help you decide how to choose the right form of contract before you start.It will help avoid costly mistakes that so often lead to problems at a later stage.

First key: Define Your Project Requirements.

This can be done by preparing a project profile with a detailed description of the project, its characteristics and client priorities which may relate to lowest price, an early start on site or early integrated design as shown in this example radar graph:

contract risk assessment

This is helpful for?identifying relevant criteria and characteristics that are of importance for any project.I tend to use a mix of questionnaires, interviews & client workshops to establish this profile.This approach is also?very helpful also when there are multiple stakeholders.

Second key: Identify Risks & Constraints

For example a risk may include working in areas which are subject to strong tidal movement and a constraint may include working in urban areas, a new leisure complex in the centre of a City with extremely low levels for noise and limited working hours. No matter what contract you use its a good idea to think about risks before you decide on your contract and consider who is best placed to control them. Risks identified early will also help ensure that the preferred form of contract addresses them and if not, you will need to consider drafting an amendment. Contracts are not only intended to be a list of roles and responsibilities but they are also a schedule of contractual risks and liabilities for each party.

Making an informed choice of contract is much better than basing choice on previous use and familiarity which, will increase your risk.

If you would like to know more about this then please watch my 5 minute You Tube clip providing useful contracts training:

If you would like o find out more please use my FREE help desk to start a conversation with me.

Please also have a look at my FREE tools on to help you decide which particular FIDIC, NEC3 or JCT contract to use.