Many a times a bid document has unconscionable contract terms,especially in construction contract bid document ,which are showstoppers.Is there a way out to deal with such contract terms effectively to safe guard bidder/Contractor interest to effectively deal/deliver the project with such unconscionable terms? Saving Changes...
Interesting question. I have been involved in a project that had so much documents and specially norms to be respected that some would contradict other.
We ended up trying to get the client to clarify is priority.
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1 reply by Chandrashekhar Thatte
Jan 21, 2017 12:29 AM
Chandrashekhar Thatte
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Thank you Vincent for the response.By and large,many of the contract submittals are either repetitive , irrelevant and contradictory which if not complied with in time by the Contractor invite unpleasantness and contractual implications.Lack of clarity and insufficient project execution exposure comes in the way of fixing priorities.I wish you could have focused more precisely on "How to deal with unconscionable contract terms effectively......"
Saving Changes...
Michael ZiyadehContracts Negotiator Sr. | Sikorsky, a Lockheed Martin CompanyBranford, Ct, United States
In your request for bid to the subcontractor did you require terms of sale? It is customary the buyer of the service/product provide the terms of purchase to the subcontractor. Handling your subs in this way may make your negotiations run more smoothly, especially if you are using more that one subcontractor. You may not be required to use the bidders contractual terms. Remember, it is all negotiable. Both parties should be satisfied with the terms to which they have obligated themselves.
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1 reply by Chandrashekhar Thatte
Jan 21, 2017 12:40 AM
Chandrashekhar Thatte
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Thanks Michael for the response.I have referred,in particular, to the construction bid document issued by the Employer to the main Contractor and the prevalent practice on drafting of Contracts in India and probably in other countries too where such unconscionable terms do exist in the bid documents. The contract terms are ,generally, not negotiable in India and poses difficulty in dealing with such contract terms.
Interesting question. I have been involved in a project that had so much documents and specially norms to be respected that some would contradict other.
We ended up trying to get the client to clarify is priority.
Thank you Vincent for the response.By and large,many of the contract submittals are either repetitive , irrelevant and contradictory which if not complied with in time by the Contractor invite unpleasantness and contractual implications.Lack of clarity and insufficient project execution exposure comes in the way of fixing priorities.I wish you could have focused more precisely on "How to deal with unconscionable contract terms effectively......" Saving Changes...
In your request for bid to the subcontractor did you require terms of sale? It is customary the buyer of the service/product provide the terms of purchase to the subcontractor. Handling your subs in this way may make your negotiations run more smoothly, especially if you are using more that one subcontractor. You may not be required to use the bidders contractual terms. Remember, it is all negotiable. Both parties should be satisfied with the terms to which they have obligated themselves.
Thanks Michael for the response.I have referred,in particular, to the construction bid document issued by the Employer to the main Contractor and the prevalent practice on drafting of Contracts in India and probably in other countries too where such unconscionable terms do exist in the bid documents. The contract terms are ,generally, not negotiable in India and poses difficulty in dealing with such contract terms. Saving Changes...
Michael ZiyadehContracts Negotiator Sr. | Sikorsky, a Lockheed Martin CompanyBranford, Ct, United States
Can you offset the risk in the terms with price? Also, limitation of liability terms (cap on liability) and transferring liability to third parties (insurance companies) may help.
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1 reply by Chandrashekhar Thatte
Jan 24, 2017 2:06 AM
Chandrashekhar Thatte
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The quote,in a competitive market especially in India,unfortunately does not have enough margin to offset the risk in terms of price to safeguard against unconscionable contract terms.Limitation of liability terms are generally very stiff /harsh on the Contractor and ,therefore,the contracting fraternity should raise their concern , with regard to the necessity to put a cap on liability as well as on transferring the liability to third parties(Insurance companies) , with FIDIC or respective contract drafting professionals/agencies in private and public sector to make it acceptable to the bidders .
Can you offset the risk in the terms with price? Also, limitation of liability terms (cap on liability) and transferring liability to third parties (insurance companies) may help.
The quote,in a competitive market especially in India,unfortunately does not have enough margin to offset the risk in terms of price to safeguard against unconscionable contract terms.Limitation of liability terms are generally very stiff /harsh on the Contractor and ,therefore,the contracting fraternity should raise their concern , with regard to the necessity to put a cap on liability as well as on transferring the liability to third parties(Insurance companies) , with FIDIC or respective contract drafting professionals/agencies in private and public sector to make it acceptable to the bidders .
From what I understand of the business and regulatory culture in India, and your comments above, your only options are to accept the terms and then negotiate any issues as the job progress using completion as a leverage point, or turn the job away.
I have friends and business colleagues who have horror stories about doing construction projects in India. I wish you much luck!
Kindest regards,
- Cris
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1 reply by Chandrashekhar Thatte
Jan 25, 2017 2:14 AM
Chandrashekhar Thatte
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Dear Cris,
I am in total agreement with your views/comments and compulsively/regretfully accept the state of affairs in India as well as in other countries .I feel sorry for the entire Contracting fraternity ( at the receiving end ) and wish them good luck who has an uphill task at hand to address /raise the issue at an appropriate forum to take it to the logical conclusion.
From what I understand of the business and regulatory culture in India, and your comments above, your only options are to accept the terms and then negotiate any issues as the job progress using completion as a leverage point, or turn the job away.
I have friends and business colleagues who have horror stories about doing construction projects in India. I wish you much luck!
Kindest regards,
- Cris
Dear Cris,
I am in total agreement with your views/comments and compulsively/regretfully accept the state of affairs in India as well as in other countries .I feel sorry for the entire Contracting fraternity ( at the receiving end ) and wish them good luck who has an uphill task at hand to address /raise the issue at an appropriate forum to take it to the logical conclusion.
