- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 09 Aug 2019
Levelling the playing field
Its perspective is informed by enquiries from nearly 3,000 specialist contractors. ECA is therefore able to highlight ostensibly onerous practices within an industry where contracts can be unforgiving.
- Modified standard form of contracts i.e. JCT or NEC.
- In-house bespoke terms and conditions which are procured as an investment in commercial risk protection by the client in question.
- To recognise specific project risks, e.g. if the project is on a high security risk site, there may be additional contractual requirements surrounding security;
- Commercial risk transfer: in order to de-risk the commercial model of their own business, clients will often seek – either through standard form modifications or bespoke terms – to push as much commercial risk downwards within the contractual chain as possible.
ECA has published a guidance document that identifies common areas of standard form contracts (which broadly represent the industry norm for what is acceptable risk allocation) and/or bespoke terms and identifies where those issues are modified to an ECA Member’s detriment.
The document also outlines the risk of those types of clauses; it suggests a risk-proportionate approach and rationale for finding and negotiating a compromise which aligns the risks involved with the parties who are realistically and proportionately in a position to manage those risks.
ECA wishes to identify and inform the engineering services sector and ECA Members’ decisions on what ‘fair, reasonable and good contractual practice’ looks like. ECA remains committed to fair and open competition and this document is not designed in any way to dictate what may be an appropriate risk allocation for a specific project, or act as a substitute for ECA Members obtaining project and context-specific legal advice.
About this article
This article was written by Rob Driscoll, ECA Director of Legal and Business. It was previously published on the ECA website in August 2019 and can be accessed here.
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