Author: Jeffrey G. Rankin, President
October 6, 2014
Another blog about contract negations? YES!!! Leave it to the President to emphasize the importance of mutually agreed upon Terms and Conditions. While this may be one of our least glamorous job duties, you could argue it is one of the most important things we do.
Terms and Conditions are the first thing that needs to be in place when starting a project, and the last thing to which you should resort on that project. They are the first thing that needs to be put in place so that contractual obligations and expectations are defined at the beginning of the project. Of course, getting them negotiated could possibly create schedule delays in getting the project started. Ts and Cs are important because they protect both parties, both the customer and the supplier. Payment terms, insurance requirements, dispute resolution, limitation of liability, and standard of care are some of the primary, but not the only items to be negotiated. Once defined, however, they can be referenced on all future projects and allow the customer-supplier relationship to prosper.
If by chance things don’t go so well on a project, they are the last thing to which you should resort in order to resolve any issue. Timely, professional, direct communication between both parties, about the issue is paramount. This communication should be at the project level before it is elevated to the executive level. Understanding the position of both parties can hopefully lead to a resolution of the issue without resorting to the Ts and Cs of the contract. If that is not possible, dispute resolution such as either mediation or arbitration, as defined by the contract, are both time consuming and expensive. Going to court adds another level of both time and money.
Getting terms and conditions in place first, at the beginning of the project, defines the contractual obligations that protect both parties. The good news is that with most projects, it should be the last time you have to look at them!