When contracts are signed on a deal, it is always hoped that they go in a drawer to gather dust, never to be referred to again. However, a recent case has shown the importance of getting a contract right in the drafting stage, to avoid arguments in the future.
In McGee Group Ltd v Galliford Try Building Ltd (2017), McGee was delayed in providing certain services. The parties had contracted on the JCT Design and Build Sub-Contract Agreement (2011), but had made various amendments to the standard form; in particular, they had added two provisions relating to the financial consequences of a delay. The parties ended up in court to clarify the intention of those provisions and whether or not they worked together.
The court made a number of points, including highlighting the risk of amending a standard form contract without appropriately matching up the new and existing provisions. In this case, the new clauses used different terminology, and it was also unusual in that a limitation of liability provision had been included as a sub-clause in another provision, rather than as a stand-alone clause (which is best practice).
This case highlights the importance of focusing contracts, even templates, on the practical reality of the proposed contractual arrangement. Drafting a contract, or adding clauses to a template, without understanding the big picture of how the contract will operate if relied on, is fine until there is an argument and the contract is actually read. It is then that the parties will look back and wish they had done it properly from the start.
It is much better to get the drafting clear and right in the first place, rather than arguing about it later. If you need any help with drafting contracts, please contact our Commercial Team.