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How To Guide to Creating New Master Contract Templates and Updating Templates for Amendments

Lily Page
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This article is a guide on configuring new contract templates from scratch on FastDraft and how to update existing Master Contract Templates or Contract Templates on individual contracts. 

This guide contains the following:

This article provides a step-by-step process and recommended points to look for; however understanding of contract terms is complicated and it is generally recommended that contract configuration is done or checked by an experienced professional, or that you seek professional advice if you are unsure. This article is not intended to be a definitive guide to configuring contract as there are too many variables to describe every eventuality in a single article.

Note - If the contract template is not configured correctly this could lead to contract notices sent on our platform being ineffective or invalid. This can lead to a court not allowing these notices to be taken into account in a legal dispute or being inadmissible in court.

The following steps have been illustrated with examples from NEC4 ECC.

Step 1 - Understanding provisions on effective contract notices

Most contracts contain provisions on how contract notices must be served to be effective contractually. These provisions provide a framework for the notice and may classify notices into different tiers. For example a contract might specify that a specific system, like FastDraft, is used for all contract notices, or that a more traditional method is used, like recorded delivery.

Under the NEC4 ECC contract these provisions are set out in the following places:-

  • Clause 13, which specifies various requirements on how communications are done, e.g.
    • 13.1 in writing
    • 13.1 in the language of the contract
    • 13.2 using a specified communication system if specified in the Scope, and if not then using the notified address set out in the contract data or communications,
    • 13.2 obligation to reply within the period for reply
    • 13.2 obligations on PM to set out reasons for not accepting submissions
    • 13.2 extension of timetables and the need to set out notice separately from each other; and,
  • The Scope may further describe additional communications, requirements and timetables; and,
  • Z clauses may also amend these provisions and add to them; and,
  • Whilst not part of the NEC contract terms, it maybe that Form of Agreement that binds the contract together specifies additional requirements.

It would always be prudent to review the entire contract, in case there are provisions on communications that are buried in a section of contract you might not have considered.

When configuring a new templates, therefore, these rules must be taken into account. For example, all reply forms to Submissions must have a description or comments field to allow the PM to state the reason they wish to 'not accept' a submission, as per clause 13.4. 

Step 2 - Search for Relevant Communications

Searching for common verbs that trigger communications is a quick way of finding the majority of the notices and communications that would need to be captured in the platfrom. However, it will be necessary to review every clause to ensure that nothing is missed.

Below is a checklist of some of the most common verbs used in contract drafting:

  • Accept
  • Agree
  • Approve
  • Assess
  • Certify
  • Give
  • Instruct
  • Issue
  • Notify
  • Obtain
  • Provide
  • Quote
  • Reply
  • Request
  • Submit

Searching and highlighting all the terms will help you review the contract terms quicker, so you can start compiling a list of dropdown options.

Step 3 - Grouping notices by Types

Once you have a list of dropdown options they will need grouping together, as notices are grouped within the platfrom around common verbs or workflows group.

Note - Grouping of notice types must be done consistently if you later wish to aggregate data consistently across different forms of contract. Otherwise, you may distort reporting across programmes of works, muddling instructions with submissions, etc. 

Therefore if the verb is an order, for example, instruct, order, do, carry out - then put the new clause in the Instructions workflow. If the verb is 'giving' - e.g. submit, provide, give, handover, etc - then put it in the Submissions workflow. Some verbs are likely to be in plural form, such as 'notifies', in which case it is sometimes better to search for 'notif', etc. 

Search for 'certif' to identify anything that requires certification. This is typically added to PM Certificates or Supervisor Certificates . 

Search for 'propos', 'agree' and 'accept'. This is typically added to Submissions (for Acceptance), subject to what you settle on. 

Irrespective of the verbiage, anything that requires a reply (i.e. acceptance or not), will typically go into the Submissions workflow, and anything that doesn't require acceptance will go in the Notifications or Instructions workflow. 

Example:

Searching for 'instruct' in the NEC4 ECC contract highlights clause 40.3 which reads as follows:

"The Project Manager may instruct the Contractor to correct a failure to comply with the quality plan. This instruction is not a compensation event."

In FastDraft, this clause has been added under the Project Manager Instructions as:

"40.3 | to correct a failure to comply with the quality plan"

You should now have a list of notice and communication types by workflow groups.

Step 4 - Establishing Timetables or Periods for Reply

In this step we will search for timetables associated with replying to specific notice types.

A search for terms such as 'hours', 'day', ' days', 'week', 'weeks', 'month' and 'months' will highlight the majority of the clauses that require a specific timetable or period for reply. It is also recommended that you read the contract in it entirety to capture any other reply timetables that might fall outside of this search.

These should be noted against the relevant clauses.

Step 5 - Establishing stages in a process

Our platform supports grouping a series of related notices into a single workflow i.e.:

  • Defects notice and the reply
  • Submission and its acceptance
  • The Change notice and its replies
  • Quotation and the reply to the quotations

We have approximately 34 workflows ranging from single-step workflows to workflows with 5 steps.

Whilst our workflows are configurable they are not fully customisable. For example you cannot add or remove a stage in a process, so once you have established the rules of how noticea must be communicated to be effective, a list of notices, their timetables and whether they are part of wider series of steps in a process, you will need to map them to the nearest workflow. In the event you have a workflow with a combination of steps/stages that is not supported in a single workflows, it can be supported by breaking down the individual components or notices. The related notices would allow users to relate the notice afterwards.

Step 6 - Making changes for NEC Secondary and Main Options Clauses

Our standard templates cater for the standard forms of contract and typically include all notices types, even if they are optional, or can be removed when compiling the contract. So, for example, all of the secondary options in NEC (X1-X22) are included in our templates but are rarely all included in a single contract. Also, all the relevant notices under the main options are also included and only one main option is ever included in an NEC contract, so the choice of main option (A-F) will also require the removal of some notice types. It is quick and easy to remove the clauses not required. Just remove any X clauses which are not incorporated into the contract and the main option clauses for all but the main option chosen. Refer to the start of Contract Data Part 1 to discover which main option and secondary X option clauses apply. 

Example: In an NEC4 TSC contract, the Contract Data Part 1 indicates that the following X clauses do not apply:

  • Main Option A with secondary X2, 4, 5, 6, 7, 9, 11, 12, 14, 15, 16, 21, and 22. 

Step 7 - Making changes for Z Clauses and other amendments

Z clauses are the generic name for changes made to the standard NEC conditions of contract, but when configuring new templates any changes to standard need to be considered. Look at the remaining clauses in the proforma and check if any have been changed in the Z clauses. The Z clause can be drafted a number of different ways, but if drafted well they will refer to the clause number, e.g. 'At clause 15.1, add the following bullet point...' or 'Delete clause 15.1', etc.

For each of the Z clauses or amendments you will need to check the orginal wording in the contract to see if this affects the configuration.

Look out for anything that fundamentally changes the content or mechanics of any process that has a dedicated workflow;

  • Early Warnings (typically clause 15.1/16.1) - 'replace', 'add', 'insert' a bullet here is quite common, and generally signifies adding/removing a reason i.e. risk type for notifying an Early Warning. 
  • Compensation Events (typically clauses 60-69) - particularly if the Z clause adds/removes steps or introduces automatic acceptance or removes the need for an acceptance. 
  • Programme (typically clauses 30-32) - particularly if the Z clause introduces automatic acceptance or removes the need for an acceptance.
  • Payments (typically clause 51)
  • Notifying Defects (typically clause 42)

Check clauses deleted in case they include notices removed. Search for 'omit', 'delete', 'remove' and 'replace', to find any clauses which need to be removed. 

Look out for additional compensation events; these can be added by a Z clause to clause 61.1, or they can be included in the Contract Data Part 1. 

 

 

 

 

 

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