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Preparing the ground for contracts

Pre-contract negotiations give you the opportunity to avoid future pitfalls. By Suzanne Reeves

The submission of a bid or offer to a contractor or client will usually be followed by a series of discussions and negotiations before the work is awarded and a contract entered into.

Gradually the parties will agree outstanding points until (ideally) all matters are finalised and an order can be placed or contract entered into.

It is important to keep a record of such negotiations, to check that everything is included in the final contract that should be included and as it was agreed.

As a general legal principle, a court interpreting a contract will only be interested in its terms not the discussions and negotiations that led up to it.

The negotiations are often concluded at a pre-contract meeting to finalise the terms of the contract and the practicalities of the work starting.

The pre-contract meeting is usually a formal one and many contractors have proforma agendas and minutes for such meetings.

The latter, when completed, may be included in the contract documents. It therefore pays to be well prepared for such meetings.

Request a copy of the agenda and any proforma minutes in advance. Ask who will be attending and their roles so that you can consider who should attend from your side. Brief your team and consider and make a list of points you want to raise, including difficult ones which will be easier to deal with at this stage than when the works are underway.

At the meeting query anything you do not understand, whether on the agenda or raised during the meeting itself.

Take notes of the entirety of the meeting, not just the main points, in case there is any subsequent disagreement about precisely what was discussed and agreed.

If you are asked a question to which you do not immediately know the answer, make that clear and offer to get back with the answer. Do not be intimidated into giving an off-the-cuff answer.

As a tenderer do not agree a change to your tender unless you have time to give it proper consideration. Do not sign the minutes unless and until you have had proper time to consider them. It may be better to do this after the meeting rather than sign up to something that is incorrect.

Clarify everything

If, following the meeting anything is unclear, clarify it with the contractor or employer. If he does not circulate minutes, prepare and circulate them yourself from the notes you took at the meeting.

At the end of the pre-contract negotiations and meeting (if there is one) both parties should be clear on the precise terms of the contract and how the works will proceed.

If anything is unclear, or has not been covered, now is the time to deal with it.

Subject to that, both parties should then be in a position to proceed to finalise the contract, so make sure that anything important is covered and ultimately makes its way into the order or formal contract.

Suzanne Reeves is partner at solicitors Wedlake Bell