Infrastructure projects can be stressful experiences at the
best of times. When there are multiple contractors involved, trying
to balance your risk against a principal's expectations can
make things even more difficult. To help keep things under control,
here are 5 top tips to bear in mind in negotiating your next
infrastructure contract which are in addition to your usual suspect
Warranties: Building contracts often
include warranties relating to the buildability of your designs.
Unless you are producing a design that is intended to be built (or
partially built) by a third party, you should think twice about
agreeing to these types of warranties.
Step in rights: If you fail to
deliver part of an agreed scope of work under a contract, a
principal will usually request a right to step in and take over
your operations. This could take the form of an explicit right to
take over your personnel and equipment, or the ability to step into
your subcontracts and use your subcontractors to finish the work.
Before negotiating this right, it's worth considering not only
how much access you want to give a party to your physical assets,
but also to your supply chain.
Intellectual property: All projects
involve a certain amount of IP (whether it be preexisting or
projectspecific) so your contract should clearly set out the
IP rights of each party, particularly in relation to ownership,
licensing and assignment. Think about who will be the ultimate end
user and how far assignment rights should extend.
Interface works: Consider the extent
to which your goods or services will interact with any work
performed by others. If your goods or services run independently of
work performed by others, then agreeing to interface warranties
will be relatively low risk where they can't be negotiated
Linked disputes: When a principal is
dealing with multiple contractors on site, it is often in its best
interests to link any dispute arising under its contracts. This
however often works to limit your rights on how and how much you
can claim. Serious thought should be given to the impact of
agreeing to this regime and what control you should retain if you
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Do not depart from the contract terms, or encourage the other party to do so, unless you plan to alter the contract.
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