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Why does being contractual mean you're being confrontational?
In nearly every walk of life, when we engage with a business, we enter into a contract. Whether we are buying a new car, renting a house or booking a holiday, we expect to sign on the dotted line in some way or another to complete the transaction, otherwise we don't get what we want.
So why do so many SMEs in construction not thoroughly consider the contract with the customer when offering their services? In our experience it is due to one of two reasons (or a combination of both) – the stigma associated with being 'contractual' or because time just isn't available to take a cautious step. Either way, the danger is getting railroaded into undesirable terms.
Contracts are critically important in construction because virtually every building project is bespoke. Even with the most meticulous planning, jobs rarely, if ever, go to plan because of so many variables that are outside the control of the doers. A good contract gives you protection against external factors, so you are not the one who loses out financially when there's a delay, the need for unexpected additional work, or a quality issue that is not your fault.
No wonder then, that those who can protect themselves do, and at the same time they encourage the 'little guy' to work in an unprotected way, often with false assurances that they have 'got their back' should anything go wrong.
Change your mindset and beat the stigma
Nobody cares about you and your business as much as you and the people around you, regardless of what they tell you. So, you have to look after number one and protect your interests whatever it takes. If that means having to 'do things by the book' then that's what you should do. It's not combative; it's following the rules.
If you have a fair contract drawn up before you do the work, you will have a fair set of rules with a degree of protection that you wouldn't otherwise. If you fulfil your obligations and keep your side of the deal, a payer will not be able to hold back payment without risking legal challenge.
In our experience, many subcontractors are reluctant to point to the contract terms initially, but once they start using them, they quickly get into the habit and 'being contractual' soon becomes both comfortable and normal. Sometimes it's just a question of style. Always remember that when you demand that a contract is properly reviewed before you start work on a project, you are not being awkward, fussy or over the top. You are protecting yourself against the potential for financial stress and emotional turmoil – why wouldn't you want to do that?
The best way to get a contract written in a way that is fair to you, is to have it written or checked by a professional. This is a service the guys in our Quantum CPM team are specialists at - they work with specialist sub-contractors and contractors in all sectors of construction to develop and review contracts with the aim of helping them avoid issues further down the line.
Resist 'bully-boy' tactics
As specialists in dispute resolution, we've seen it all over the past 25 years. But one thing that does rear its ugly head time and time again is the doers getting bullied. Often it is not just about a big business trying to gain a commercial advantage over an SME, sometimes it is a blatant attempt to make someone else foot the bill for their own inadequacies. They are all pals when the hands are shaken and may start on very friendly terms, but when the contract starts to fall behind or go over budget, things can quickly turn sour. Remember, "Good fences make good neighbours!"
If you are in such a situation, feeling like you haven't got a leg to stand on, there may be another tactic deployed – 'the false sense of security'. They will try to stay on good terms with you (make out to be on your side) and promise payment for things without dotting the 'i's' and crossing the 't's', offering you lots of profitable work in future if you 'do the right thing' and sort out their problem. Don't fall for it! It is manipulative behaviour that may make you feel you don't have any other choice. But you do – you can talk to a specialist in construction dispute resolution like Quantum Consult.
We can take an objective look at your dispute and recommend a course of action to resolve disagreements and differences. Everything we do is highly professional, but the priority should always be to find commercial solutions or outcomes, which is by far the least risky and often the least costly path. But where there is an impasse, we are highly experienced in arbitration and adjudication, as well as mediation and conciliation. Quantum Consult's team represents its client interests in either pursuing or defending dispute matters and, should litigation be the route, we can act as expert witnesses too. Even so, in business we like to suggest keeping objective, holding commercial mindsets, and deploying strong negotiation skills in parallel to any formal dispute resolution. We reckon legally trained QS's are best at that.
If all that makes sense to you, why not ask for a no obligation consultation?
