Using a set of your organisations terms and conditions, explain how the terms and conditions help the organisation
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Task
Using a set of your organisations (or one with which you are familiar) terms and conditions, explain how the terms and conditions help the organisation ensure that:
- The risks of poor quality, extension of time, increased costs and unethical practice are managed effectively
- The relevant performance measures are monitored and managed.
You should use a full set of terms which includes appropriate schedule content and relevant appendices.
Outline the concept of the ābattle of the formsā and explain how you could ensure that any agreement is carried out under the organisationās own terms and conditions.
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Using a set of your organisations (or one with which you are familiar) terms and conditions IF USING YOUR ORGANISATIONāS T&C ā Introduce your organisation and the contract (provide context). Are these standard / blanket terms and conditions that are used by your organisation regardless of spend / risk, or are these only used for a particular requirement (e.g. high risk / high value contracts?) IF USING MODEL T&C (e.g. NEC / JCT / FIDIC, etc) ā Introduce the Model terms. What are the model terms? Who is the organisation that has developed the model terms? What are the benefits of using model terms? IF USING A DIFFERENT SET OF T&C (e.g. a call off contract from a framework agreement such as NPS or CCS) ā Introduce the organisation and the T&C; Consider the models that you could use? How important is the contract in the context of your organisation? What kind of relationship do you / should you have with the supplier? How is a contract used to manage risk? How does your contract ensure that the risk is allocated to the party that is best suited to manage that risk (e.g. that the contract does not simply ārisk dumpā the risks to your supplier, and then through the supply chain)? |
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The risks of poor quality Include your chosen clause in the main body (either put it in a table or as an image as this does not count towards your word count) Is it a condition or a warranty? And what is the implication if this is breached? Is it an express or implied clause? What are some of the implied clauses from legislation? What do you mean by quality in the context of this contract, and how is it defined / measured? How is the risk monitored/analysed (e.g. risk register, probability / impact)? How does the contract protect against poor quality? What remedies (if any) are available if quality is not of the required standard? Are there any āgapsā in the contract? Is there a link to any statutory implied terms? |
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The risks of extension of time WHAT IS THE RELEVANT CLAUSE?? Include the clause in the main body (either put it in a table or as an image as this does not count towards your word count) Is the clause a condition or a warranty? And what is the implication if this is breached? Is this an express or implied clause? What are some of the implied clauses from legislation? What do you mean by extension of time? Is time of the essence? What impact would not delivering the contract on time have? How does the contract protect against not being delivered on time? Is there a link to any other clauses (eg liquidated damage / force majeure / change control)? What remedies (if any) are available if the contract is not delivered on time? Are there any āgapsā in the contract? Is there a link to any statutory implied terms? |
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The risks of increased costs WHAT IS THE RELEVANT CLAUSE? Include the clause in the main body (either put it in a table or as an image as this does not count towards your word count) Is it a condition or a warranty? And what is the implication if this is breached? Is it an express or implied clause? What are some of the implied clauses from legislation? How does the risk of increased costs impact on the organisation? What impact would not delivering the contract on budget have? Is the supplierās price framework / commercial submission included in the contract? What happens if there is a risk of costs escalating? How (if at all) does the contract incentivise the supplier to deliver the contract on or under budget (i.e. gain share)? |
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The risks of unethical practice WHAT IS THE RELEVANT CLAUSE? Include the clause in the main body (either put it in a table or as an image as this does not count towards your word count) Is it a condition or a warranty? And what is the implication if this is breached? Is it an express or implied clause? What are some of the implied clauses from legislation? How does the contract protect your organisation against the risk of unethical practice being undertaken by your supplier (and their supply chain)? How does the contract protect the supplierās staff from unethical working practices? How does the contract protect your supply chain? Are there any latent risks that you canāt transfer? Why? What is the impact of this? How can this be managed? |
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Relevant performance measures are monitored and managed What performance measures are used in the contract (provide examples, including frequency, target, etc)? How were these developed? How are they managed? Who is involved in managing performance (from both the buyer and supplier side)? What happens if there is poor performance? How do you incentivise improved performance? Do you benchmark against any other contracts / sources? Do you provide the opportunity for the supplier to monitor and feedback to your performance as a buyer? |
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Outline the concept of the ābattle of the formsā and explain how you could ensure that any agreement is carried out under the organisationās own terms and conditions What is the battle of the forms? How does it affect the contract? What are the risks if you contract on the supplierās T&C? How (if at all) does your contract protect against the battle of the forms? WHAT IS THE RELEVANT CLAUSE? Include the clause in the assignment What CASE LAW could you include to support your argument? |
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Conclusions / recommendations Are there any weaknesses/areas for improvement you can identify in the contract? Are the clauses robust enough? Do they provide adequate protection? Are the risks allocated to the party that is best suited to manage it? Are you measuring performance in the right areas? Does your approach to performance management encourage innovation and continuous improvement? Does your contract provide adequate protection against the battle of the forms? |
Sample Answer
Introduction: NEC4 as Model Terms
For this assignment, I am using the NEC4 Engineering and Construction Contract (ECC) as the set of terms and conditions. NEC contracts were developed by the Institution of Civil Engineers (ICE) in the UK and are widely adopted for construction and infrastructure projects. They are written in plain language, encourage collaboration, and are structured around the principles of clarity, flexibility, and good project management.
NEC4 contracts are model terms designed for high-value and high-risk projects, but their modular form allows adaptation for lower-value or lower-risk procurements. The benefit of using model terms such as NEC4 is that they are standardised, well-tested, legally robust, and align risk allocation with the party best able to manage it.
Managing Risks through Terms and Conditions
1. Risks of Poor Quality
Relevant Clause (NEC4, Core Clause 40 ā Quality Management):
āThe Contractor Provides the Works in accordance with the Works Information. If the Contractorās work is not in accordance with the Works Information, the Project Manager notifies the Contractor of a Defect. The Contractor corrects a Defect whether or not the Project Manager notifies the Contractor of it.ā
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Condition or warranty? This is a condition, as failure to provide quality may lead to termination.
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Express or implied? This is an express clause, supported by implied terms in the Sale of Goods Act 1979 (satisfactory quality and fitness for purpose) and Supply of Goods and Services Act 1982 (reasonable care and skill).
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Definition of quality: In NEC, quality is defined by the Works Information (a schedule/appendix that sets standards, specifications, and inspection regimes).
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Monitoring: Risks of poor quality are managed through a Defects Register, regular site inspections, and risk registers scoring probability and impact.
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Remedies: Defects must be corrected at no extra cost; failure allows withholding of payment or termination.
