In the legal world, particularly contract law, the term ‘standard’ often incites a sense of security, predictability, and familiarity. Yet, an article recently published on JD Supra rightly advises industry professionals to be wary of ‘standard’ contract terms cautioning that ‘nothing is ‘standard’.
The concern lies within the scenario where developers, designers, contractors and other professionals hasten to initiate a project, allocating inadequate time to efficiently identify and allocate risk in their contracts. This lackadaisical attitude towards comprehensive contract scrutiny can lead to unforeseen and often disastrous consequences due to the rights, obligations, and remedies sanctioned by contract terms.
As per the shared practical experience, the most unintended consequences often arise in cases where parties defer to the ‘standard’ terms without sufficient understanding or consideration of their implications. Specifically, the troubles emerge when disputes arise and these ‘standard’ terms are subjected to the harsh light of litigation. The contract clauses once tacitly agreed upon can substantially impact the liabilities, risks and financial outcomes of the dispute.
Unfortunately, in the construction contracts domain, the risks are numerous and varied, ranging from issues related to project timescales, allocated responsibilities, and unforeseen circumstances. Even more concerning is the cascading effect these terms can potentially incite, causing knock-on effects spiraling beyond the immediate contractual parties.
Reminding professionals that ‘standard’ does not mean universally fitting nor without consequence, the article urges that parties engage in detailed considerations and negotiations acknowledging the specifics of the project at hand before settling on contract terms. Just as no two projects are identical, neither should the contracts governing them be considered so.
As such, constructing tailor-made contracts that address the unique characteristics and potential risks of each project should be the ‘standard’ practice. A cautious approach towards contract clauses and comprehensive foresight can potentially save the parties from possible legal entanglements and financial setbacks in the future.