Effective Project Management

Section F Contracts

The law is just about the meaning of words and a few simple rules.

David Wright

A man who is his own lawyer has a fool for a client.

Anon.

What the Contract Means

• The most important rule is that the contract, when in writing, as almost all commercial contracts are, is presumed to be a complete and precise statement of exactly what each side has agreed to do so that any failure to do so is a breach of contract.
• It is a breach of contract to prevent or impede the other side in carrying out the contract.
• Everything must be done when stated in the contract or within a reasonable time.
• The contract will always require work or equipment to be of a reasonable level of quality.

How the Contract Is Made

The mechanism used by law to decide whether a contract has been made is that of offer and acceptance. This means, simply, that for a contract to exist, one party has to offer terms which the other party accepts.

This leads to a number of rules:

1. Each party can make and accept offers.
2. The offer can be made in any way: by telephone, letter, e‐mail, or across the negotiating table. They are all equally valid.
3. The offer must be complete. It must include:
   1. A description of the equipment or work to be supplied and a timescale
   2. Price or prices and terms of payment
   3. Contract terms/conditions
4. The offer must be firm. If it is incomplete or subject to further discussion or ‘confirmation’, it is not an offer.
5. Until an offer has been made there cannot be ...