Read the article and learn more about current trends in contract development with our prominent course director John Atkinson from FITOL.
There are 3 key trends currently within Contract Development, which may be summarised as:
- Simple clear unambiguous contract language
- Increasing use of involvement of legal expertise within pre contract negotiations by both parties
- An increase in the use of performance based contract framework
Taking each in turn...
Simple, clear unambiguous contract language: Whilst this trend is maturing, the true strategic value of this approach is to minimise potential judicial interpretation within contract disputes. The key element of this strategy is the use of simple language and even examples being given of specific clauses ( for example price variation) to underpin a strong position within test of reasonableness.
Increasing use of involvement of legal expertise within pre contract negotiations by both parties: This trend evidences a change in negotiating strategy, whereby the main negotiators from both parties, by mutual agreement bring their legal counsel to the negotiation meetings- as each point is negotiated and agreed the lawyers then agree mutually acceptable wording to reflect the agreement of the negotiators. An additional benefit of this approach is shortened exposure of both parties whilst contract is finalised, plus swifter implementation/ realisation of the contract benefits
An increase in the use of performance based contract frameworks:
- This trend is particularly prevalent within the Public sector globally as it offers transparent application of public funds.
- Additionally, this method offers options for performance measures to be agreed and enacted by citizens.
- For example satisfaction in services provided at say an airport.
Equally applicable within the private sector, the key focus here is a “ we only pay for what we get” thus providing a robust gated risk management approach; closely aligned with the key principles of liquidated damages.