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A comparison of the clarity of traditional construction contracts and of the New Engineering Contract

http://www.rdg.ac.uk/AcaDepts/kc/ARCOM/jonbroome.html

 

J.C.Broome, Project and Construction Management Group, School of Civil Engineering, The University of Birmingham, Edgbaston, Birmingham. B15 2TT. Tel : +44 (0)121-414 5154

Biographical Details of the Author

The author gained an upper second in Civil Engineering at the University of Birmingham in 1990 and has spent three years on various construction sites around the country while working for a national contractor. He returned to Birmingham University in 1993 to research how the New Engineering Contract was operating in practice, reporting to the Panel developing the family of NEC documents via Professor John Perry. He contributed to the second edition of the NEC - now the NEC Engineering and Construction Contract, especially in the checking of the logic of the contract through the flow charts. Other papers published are :

J.C. Broome and J. G. Perry. Experiences of the Use of the New Engineering Contract. Engineering, Construction and Architectural Management. Vol 2/4 December 1995. Blackwell Science.

Abstract

Clarity is a question of the design and layout of a whole contract document, as well as the use and order of words within a sentence. Additionally, the author extends the definition by saying that the clauses within a contract should fit together to form a logical whole, be procedurally correct and relevant to modern construction practice. Part 1 of the paper briefly examines the origins of the standard forms of construction contract conditions, and then comments on whether the traditional style of legal drafting is necessary. Finally, the author addresses the question of whether the existing construction contracts need to be redrafted to achieve clarity. Part 2 reviews the authors' of the New Engineering Contracts (NEC) original aims in writing it, before looking at legal criticisms of it. The author of this paper then presents the findings of research to date on whether the contract fulfils both the needs of the construction industry and the self-stated aims of the authors of the NEC in producing a set of conditions that have greater clarity than other existing forms particularly at project level where it has been and is being used.

Introduction.

This paper discusses clarity of construction contracts. By clarity, the author means the design and layout of the whole contract document, as well as the use and order of words within a sentence. Additionally, the author extends the definition by saying that the clauses within a contract should fit together to form a logical whole, be procedurally correct and relevant to modern construction practice. Part 1 is a general review of the traditional contract forms concerning their clarity, while part 2 deals specifically with the clarity of the New Engineering Contract (NEC).

Part 1 - A Review of the Traditional Construction Forms and Comments on the Clarity.

1. Origins and Development of Construction Contracts.

According to Ian Duncan Wallace, much of the language and many of the phrases used in existing forms of contract can be found in the contracts of late 19th century England which evolved from and closely followed those drafted by lawyers for their own private clients. He goes onto to state that, from the wording of these contracts, "the conclusion is inescapable ..... that the lawyers commissioned to draft the early contracts were probably Chancery pleaders, with great experience of leases, but without any knowledge of the practical or commercial problems and situations on a building site." (Duncan Wallace, I N. 1986, p.462) These forms of contract were then recommended by the professional institutions of architects and civil engineers and consequently drafted primarily to represent the employer's interest, because that was whom these professionals represented (Ibid, p.460). Indeed, the JCT forms are direct descendants of the original RIBA form first published in 1870 and much of the original style, if not content, can be detected in the latest JCT forms. (Murdoch, J. and Hughes, W., 1992) According to Nisbet, the original RIBA forms were published after some consultation with the London Builders' Society, one of two organisations which represented contractors nationally. In 1903, the fifth edition was an agreed form and issued with the inscription "sanctioned by the Royal Institute of British Architects in agreement with the Institute of Builders and the National Federation of Building Trade Employees of Great Britain and Ireland." However, the consultation and agreement of these updates was a constant source of friction - so much so that between 1922 and 1928 the National Federation published its own form. The agreement to bring them back into the fold led to the formation of the Joint Contracts Tribunal "with the objects of keeping the Form up to date with modern practice and removing any difficulties that may arise in connection with its use. (Nisbet, J., 1993) By the 1930's the bodies controlling the content of the contract had equal representation by both the professionals and the contractors each with a power of veto. (Duncan Wallace, I N., 1986, p.460)

According to Norrie, the development of local government in the late nineteenth century led to each major local authority independently drawing up their own conditions of contract for civil engineering projects and periodically modifying them to make good their deficiencies or ambiguities. Officialdom and the legal element played a major part in their structure. In time, these were added to as consulting engineers drew up and modified their own individual documents. Therefore, each time a contractor had to bid for a potential job, he had to study the documents closely, so that he did not take on risk without realising it. (Norrie, C M., 1956, p.100) By the early part of this century both the courts and contractors were coming to the conclusion that a standard form was needed. In 1919, the Federation of Civil Engineering Contractors (FCEC)was founded with one of its founding aims being to secure a model form of contract, if possible in conjunction with the Institution of Civil Engineers. (Ibid., p.104) However, it was not until 1930 that it managed to publish a form with the Association of Consulting Engineers (ACE). However, a paper published in 1938 makes it obvious that this was not widely taken up, stating that "To-day work is carried out under such a variety of general conditions that it is impossible for the parties and administrators to know precisely where they stand if any dispute arises or appears likely" and that "it says much for those concerned that they can proceed so successfully, yet so unscientifically, to execute works for huge sums without either party fully appreciating the rights and obligations which are theirs" (Rimmer, E J. 1938). He then called for a standard form which was enthusiastically endorsed by letters received about his paper.

In 1945, the Institution of Civil Engineers (ICE) together with the FCEC put its name to a set of conditions. These conditions closely resemble the 1930 contract in wording and structure and were obviously derived from it. It was not until the second edition was published in 1950 that all parties, including the ACE, agreed to put their name to the contract and now all three organisations are represented on a permanent committee which last published the sixth edition in 1991. It should be noted that it is not just the construction contracts which have their origins in the early part of the century - for instance, all the current MF model forms of contract for electrical and mechanical work are derived from contracts originally published in the early 1920's. (Eggleston, B., 1995)

From the end of the Second World War onwards, the development of standard forms of contracts has pre-dominantly been by committees with representation from various professions of the industry, all of whom have, to a greater or lesser extent tried to promote the status and role of their profession. This has led a belief that politics have been played with the contracts. As Professor John Uff wrote "the growth and proliferation of construction contract forms is notable and suggests an intention to achieve some objective. That object is, however, rarely defined other than in generality, usually consisting of a desire to 'improve' the operation of the form" and goes on to say that most improvements have been for one side to gain an advantage over the other with there being "little evidence of policy having played a significant part in the drafting of standard forms of construction contract, other than in the most general terms." (Uff, J. 1989)

1.2. Is 'Legal Language' Needed ?

Having decided on, or more realistically, compromised upon policy, the situation is then exaggerated, as Max Abrahamson explains : "when a standard form or special term for a contract has to be drafted, much time and money is spent employing lawyers to translate it into legal language, and then employing other lawyers to translate it back again when the users want to know what it means. The serious risk, often realised is that much is lost, distorted or overlooked in the process of translation and re-translation." (Abrahamson, M W. 1983)

Why is there this need for legal language ? According to the Plain English Campaign, there is no need. In their book, the Plain English Story they state that "for centuries lawyers have sold at a great price the myth that legal language has special, quasi-magical powers; the ritual element in some legal documents is strong." and "lawyers are reluctant to see the traditional style of legal writing, full of hereinafters and aforesaids, disappear. They have told the public so often that legal jargon is essential to the legality of the documents that they would be seen to be spitting on their own opinions if they changed their style." (Cutts, M and Maher, C. 1986) This is not unsubstantiated opinion - although their involvement has primarily been to help the individual consumer, they have grown from a small protest movement set up in 1979 to an organisation now employing twenty five people. They regularly write a wide variety of legally binding documents and contracts for 'blue chip' clients, none of which have ever been subject to litigation.

This call for plain English is not new. In 1596 an English chancellor decided to make an example, by ordering a hole to be cut through the centre of a 120 page document and then to have the writer's head stuffed through it before being led around and exhibited to all those attending court at Westminster Hall. (Monro, C. 1847) Richard Wydick, Professor of Law at the University of California, in a paper titled "Plain English for Lawyers" starts by stating that "We lawyers cannot write plain English. We use eight words to say what could be said in two. We use old, arcane phrases to express commonplace ideas. Seeking to be precise, we become redundant. Seeking to be cautious, we become verbose. Our sentences twist on, phrase within clause, glazing the eyes and numbing the minds of our reader." (Wydick, R C. 1978). This opinion can be backed up by looking at the ICE form which, while escaping the worst maulings of the courts and commentators, has one 252 word sentence (Clause 65 (6)(c))with no punctuation in it at all. Professor Wydick, in the same paper, then goes on to give many useful tips and advice on how to write in plain English, many of which can be also be found in Plain English Campaign literature.

1.3. Is Redrafting of the Contract Forms Needed ?

Ian Duncan Wallace, writing about the standard forms of construction contract, states that "their obscurities and poor draftsmanship create many anomalies, if not downright absurdities and injustices" and that "the draftsmanship tends to be clothed in a legalistic, poor quality jargon, ideally suited to conceal and obscure practical intentions and consequences". (Duncan Wallace, I N. 1986, p.265) He summarises the whole situation, in perhaps extreme language, by stating that "the draftsmanship of the available standard forms in all countries is of the poorest kind, and in the UK and Commonwealth largely derived from very old precedents, often in archaic language drafted by lawyers with little or no experience of the background and needs of a construction project, and in turn taking their instructions from clients often unable to analyse or explain those needs to the draftsman." (Ibid., p.2)

The courts appear to agree with this judgements, and like Ian Duncan Wallace, save the worst of their vitriol for the JCT form describing it as "an extremely complicated form of contract" (Per Lord Reed, 1972) ; "lamentable that such a form be used to govern so many ....... activities throughout the country should be so deviously drafted with what in parts can only be a calculated lack of forthright clarity." and "The time has now come for the whole to be redrafted so that ...... contractors and building owners alike can understand what are their own duties and what are those of the architect." (Per Sachs L J. 1967)

On the other hand, some legal commentators when writing about the ICE forms praise the stability of it stating that it has "the great advantage that their contents become known and understood with constant use, so that they have reduced the number of disputes and misunderstandings" (Abrahamson, M W, 1979); and that "it has been possible to use the contract, safe in the knowledge that what is learnt today will not be redundant tomorrow." (Eggleston, B. 1993) However, this same author says of the latest edition that there will be surprise that it "found its way to print with some clauses in fairly obvious need of amendment." (Ibid.)

A postal survey of construction and construction lawyer organisations in 1992, which had 23 returned questionnaires concluded that both groups rated clarity as the most important factor in selecting the form of contract and that in the drafting of contracts "simple, plain English is more effective" than "traditional legal drafting". (Rhys Jones, S., 1992)

Summarising, distinguished commentators, the courts, lawyers in general and the actual users of the contracts themselves would like to see a shift towards plainer, more up-to-date English. Whilst it could be argued that there is no precedent for this use of English, there is no precedent against it - but then if a contract is written so that the parties to it understand the words of it and do not dispute them, there is no need to go back to lawyers to interpret them, let alone go to court ! It is often said that "on the best projects, the contract is left in the drawer" and numerous Resident Engineers, project managers and contractors' employees, have told the author of this paper that to run a project by the terms of the standard conditions would mean that progress on site would be at best slow and often impossible. This is perhaps not surprising in an industry whose structure and technology has changed dramatically over the last twenty years (let alone the last century), yet the structure and style of English language in the conditions of contracts originate from the last century if not before. Based on the evidence presented - and it is worth noting that apart from the 'better the devil you know' arguement, the author of this paper did not come across any material praising the clarity of existing construction forms - it could be strongly argued that the time has come for a radical appraisal of the type of contracts used in construction and engineering. The author will attempt to answer the question of whether the NEC is an improvement on the traditional forms in the second part of this paper.

Part 2 - Is the NEC the Answer ?

2.1 Aims of the Authors of the NEC.

The second part of the this paper looks at the issue of clarity in the New Engineering Contract. One of the principal aims of the NEC was to achieve a higher degree of clarity compared to other existing contracts. According to the specification prepared for the ICE in 1987 (Martin Barnes Project Management, September 1987), clarity was to be achieved by :

bulletusing simple and commonly occurring language and avoiding legal jargon;
bulletusing identical phrases where possible;
bulletexcluding contract specific data so that there is no need to change, delete or add to the core conditions of contract;
bulletsetting out duties and responsibilities clearly and precisely, using engineering terminology common to all disciplines wherever possible;
bulletnot attempting to paraphrase existing law;
bulletsettling for clarity above fairness in minor matters which would involve complicated text and
bulletomitting matters which are more effectively covered in the technical specification.

Additionally, it was aimed to have a more logical structure avoiding cross referencing between clauses, but treating procedures as processes and checking that they are logically complete by the use of flow charts (which are also published) and having a modular system of 'bolt on' optional clauses through which the contract can be tailored to meet the requirements of the project. Lastly, it was intended to reflect modern and up to date construction practice - for instance, regarding subcontracting as the normal practice.

2.2 Criticisms on the Drafting of the NEC.

Some of the criticisms from the legal community can be answered by reference to the original specification - the panel writing the contract, rightly or wrongly, decided on the issue as a matter of policy. For instance, :

bulletthe panel decided not to assign any priority to the different documents making up the contract, to encourage good information in the project specification. If information is ambiguous it is interpreted by the contra preferentum rule;
bulletthat there is no cross referencing of clauses within the NEC contract. Instead, the authors have used flow charts to ensure logical clarity.

Another criticism is often heard by the author of this paper as a reason for not using the NECis that there is no case law on the contract or the wording within it. Martin Barnes has answered this criticism by saying that the reason people need to go to court in the first place is because the wording is unclear. (Barnes M., December 1994) The author of this paper would argue that personnel at site level are paid to get on with construction and not to have an in depth knowledge of case law. Consequently, to prevent disputes starting in the first place (as is the intention of the NEC) clear English is required, not a long history of case law on that particular clause or phraseology.

Other criticisms are undoubtedly justified and have been addressed in the second edition which was published in July 1995. For instance :

bulletthe criticism that the delay damages clause will fail if there is partial hand over (Cornes, D L., 1995);
bulletthat there are no Articles of Agreement (Ibid.). While this was not in the original brief of authors and many clients have their own form, a specimen form will be published with the Guidance Notes of the second edition;
bulletthe possible risk that retention of half the Price for Work Done to Date may be construed as a penalty in law and therefore unenforceable (Ibid.). The reduction to a quarter reduces this possibility;
bulletthe Project Manager's right to assess compensation events' under certain circumstances is mandatory in the second edition and not optional as before (Ibid.);
bulletthe adjudication clauses are poorly drafted (Cottam G. 1993). They have been completely re-written in the second edition.

Another general criticism is that the authors of the NEC had to publish it with guidance notes for people to understand it. However, the guidance notes are not an interpretation of the contract. The NEC was conceived as a broad proposal with its objectives defined in a broad way (Martin Barnes Project Management., August 1987) and then progressively split into function statements defining what effect and impact each individual clause was meant to have. Finally the clauses were written. The Guidance Notes can be viewed as a reversal of this process, explaining the implications of the clauses to users and the philosophies underpinning the contract. The authors of the NEC justify their publication because of the innovative and 'radical' nature of the contract. It could be argued that this is more pro-active than having the regular legal columns in construction journals and magazines explaining the implications of court judgements on the standard forms, which the construction industry then has to take on board - besides other contracts have guidance notes !

The previously mentioned postal survey in 1992 found that the NEC contract was ranked as having the highest clarity of drafting of fourteen standard construction contracts by those in the construction sector, while construction lawyers ranked it sixth (Rhys Jones, S., 1992). It should be remembered that this was the consultative version, which was substantially revised and improved due to comments and practice before evolving into the first and now the second edition. However, why was there such a difference in the views between the two groups ? The author can only suggest the following as reasons :

bulletlawyers are more likely to be familiar with case law and existing standard conditions, therefore they know with more certainty what the existing clauses and phrases mean;
bulletdifferent perspectives on a contract's operation : for the construction sector the contract form is more a means to an end to help (or hinder) the main activity of construction, where as for lawyers it is their speciality;
bulletdifferent aptitudes : lawyers may well be more linguistically talented than say engineers who will probably tend to be more visually talented. As an example of this, one lawyer, in conversation, said that while it was harder for her to read the NEC, the engineers who she worked alongside found it much easier because they could refer to the Flow Charts and follow the processes through. Any differences in aptitude will probably be further strengthened by :
bulletthe conditioning of lawyers minds by education and experience to read (and write) in a certain legal style and to positively search for different ways of interpreting text.
2.3. The NEC in Practice at Project Level.

The remainder of this paper presents the findings, related to clarity, of research carried out at the University of Birmingham on the efficiency of the NEC in achieving its stated objectives of greater clarity, flexibility and stimulus to good project management compared with other existing forms of contract. By the end of July 1995 the author has conducted 56 interviews with personnel from employers', contractors' and subcontractors' organisations all of who are or have had substantial involvement in a contract using the NEC. The predominant style of questions used invites interviewees to 'strongly disagree', 'disagree', be 'neutral', 'agree' or 'strongly agree' with an attitudinal statement which compares the NEC with the other existing form of contract that would normally have been used on that type of contract. As attitudinal statements have their limitations (Oppenheim A N. 1966), after each reply the interviewee is then asked for the richer qualitative details on why they have this view and what causes them to take it. While the research, therefore, does not test the legal interpretation of the contract, it does test the clarity at the level where it is used every day. The results are compiled on a spreadsheet, which allows easy identification and analysis of parameters, both of the NEC itself and of those which lead to best practice. Comparison of the factors between different companies, NEC options, engineering disciplines etc. is facilitated by the use of this spreadsheet. In writing this paper, the author has tried to limit it to the definition of clarity given in the introduction - not just the use and order of words within a sentence, but also the design, layout, structure and procedural logic of the whole contract document. However, in looking to see whether clarity of drafting affects the likelihood of disputes and conflicts arising, one must also remember that the NEC is also aimed to stimulate good project management, which should not only reduce the source of disputes, but also their impact - therefore it is hard to completely separate the effects of clarity and the stimulus to good project management.

Before the interviewee is read the attitudinal statements, they are asked in an open question what (if any) advantages or disadvantages they saw in using the NEC both when they read it through for the first time and have subsequently found when used in practice. The most commonly raised benefit was that they found it easier to understand. This can range from a managing director of a medium sized construction company stating that it was the first contract which he could actually understand and a contractor's project manager, on an international contract valued at £100 million, saying that he did not need to go through the document separating out the powers and rights and the duties and responsibilities of the employer, engineer and contractor which normally he found essential to understand a contract. At site level people have said that they actually understood for the first time exactly what they are meant and allowed to do. Internationally, one project director for a contractor involved in a large and complicated project told how, for the first time in his experience, engineers from non-English speaking countries were referring to the contract document.

Initially, interviewees were asked whether "the NEC encourages an increased level of disputes at site level compared with other existing forms of contract" with the predominant answer being neutral to slightly disagree on the basis that disputes happen between people regardless of the contract. When this question was refined to "the NEC has less sources of conflict or dispute within the contract document compared with other forms of contract" there is unanimous agreement. When asked why, the reply is that because the drafting is more precise, when an event occurs or an error is exposed, it is clear which person or party is responsible for it - this reduces time and acrimony in arguing over it. Furthermore, any disagreement is settled much faster due to the project management principles embedded in the contract.

When asked if there are more contractual games that either the client or the contractor can play whilst using the NEC, the general reply is that while there are some, the scope for playing them is reduced and if you are to play them, then you have to be much cleverer. Further, as the scope for playing games is reduced, the interviewees when asked agree that the rewards for playing them are less. Take the Accepted Programme as an example : the NEC lists what is to be included in the first programme (including method statements and resource levels), what is to be shown on each additional programme; reasons why the project manager can reject a programme (and retain moneys until one is acceptable) and the time scales within which these submissions and notifications have to be made. Later, the NEC states the criteria on which the project manager extends the Completion Date. With only one exception, interviewees have agreed that "it is very clear what is and is not meant to be included in the Accepted Programme." This section has been re-written in the second edition, so clarity should be improved further. While there have been some problems in getting the contractors to show all the required information, this mainly seems to be because use of the NEC is aimed at a wide range of disciplines and project sizes. Therefore, to state exactly 'how' a programme is to show, rather than in more conceptual terms 'what' it is to show would either lead to excessive and inappropriate amounts of information being shown or the opposite depending on the size and type of project. It is therefore suggested that it is more appropriate for the employer to state the level of detail required and the method of presentation in the Works Information.

When asked whether the NEC is harder to make work at site level, most interviewees say that once the initial learning is over and the project is properly resourced to deal with problems as they occur, then it is easier to make work because the procedures are logically laid out and charted. The flow charts are often used to follow through the stages of a new NEC procedure in the initial stages of a project.

It is agreed without exception that the definitions of the employer's risks as compensation events are clearer than in the other contract forms. Consequently, there is much less argument over whether the contractor has an entitlement to extra time or money for an event which occurs. One consequence of this is that people are made more responsible for their actions or as one interviewee put it, "there are no hiding places" within the contract. Another consequence is that there is evidence that people at site level are gaining an appreciation of risk and its allocation. As risk is more visible, it then encourages people to take appropriate action to reduce or eliminate its impact and probability of occurring. Clause 60.1(12) defines one compensation event as "The Contractor encounters physical conditions within the site, other than weather conditions which, at the Contract Date, an experienced contractor would have judged to have had such a small chance of occurring that it would have been unreasonable for him to allow for them" and is different from the ICE conditions. There has been criticism by the legal profession that these words really do not improve on the words in the ICE conditions and are more subjective . At site level, despite being used extensively on some projects, while there has not been any disagreements over the wording, neither has there been enthusiastic praise for them. The clauses for deciding whether exceptionally inclement weather has occurred are a major departure from conventional practice. The principal of having 1 in 10 year weather measurements for each month stated in the Contract Data, which if exceeded during the contract period, trigger an entitlement for compensation has received a very warm welcome and eliminated virtually all argument. While there is total agreement for the principle, a number of observations have been raised mainly by contractors :

bulletthe 1 in 10 year period is too long and places too high a risk on the contractor;
bulletthe procedure is retrospective in that both sides have to wait until the end of the month to see if there is a compensation event and
bulletthe potential unfairness if you have a period of bad weather split across the end and beginning of two months.

Project participants all value having the compensation events listed in one place and there have been no complaints that contractors have had extra payment or time withheld because something has not been covered in the list.

With only one exception, there has been unanimous agreement with the statement "compared to other forms of contract, the way the NEC is written is easier to understand." However, many interviewees have pointed out that the words of the contract do not come 'alive', nor do they appreciate the full implications of the clauses until the project is under way. Therefore, some senior personnel have commented that the words are "too clever", as the plain English can lull people into not giving the words full consideration. Once the initial learning curve has been climbed, no procedures or areas within the contract have been found to be inoperable at site level, indicating that the contract is workable. Indeed, the author has noticed that the most successful projects for all participants have been where the contract document has been kept on the top of the desk, rather than in it, and where its procedures have been used to pro-actively solve problems, rather than opportune blame after the event. One area which has taken time for people to become familiar with is the method of working out the cost of a compensation event by the Schedule of Cost Components. This is partly because money is the source of most disagreements and the guidance notes were initially deficient in explaining it - with the publication of additional guidance notes in the second edition, discussion should be reduced. Put simply, the Accepted Programme provides a base for comparison of what resources the contractor originally planned to use for an operation. If a compensation event occurs which affects that operation, there is a comprehensive list of what the contractor can charge for as extra resources (the Schedule of Cost Components). Any other additional costs to the contractor are included in a percentage fee which is applied to the monetary sum for the extras. Compare this with the somewhat woolly "fair valuation" (ICE 6th) or "fair rates and prices" (JCT 80) in other standard conditions. With experience, the procedure has generally not caused problems and the view expressed by the most experienced user client is that, once understood, it is "absolutely marvellous as a structured way of arriving at a price." An indication of the procedure's success is that it is unusual for the final account not to be settled within a couple of months of Completion.

The roles and duties of the project manager and supervisor are generally felt to be well defined in the NEC compared with the roles of the resident engineer or architect in other forms. Where difficulties have occurred, it is because of the internal structures and delegation levels within the client companies. When these have addressed and communicated to all parties then there have not been problems. The roles and duties of the contractor have not caused any problems. To quote a contracts manager of a national contractor, the NEC "spelt out in words of one syllable what you do, what you don't do and when you shall do it - sometimes that is to our advantage and sometimes not."

Up to end of March 1995, the author of this paper was aware of only five contracts on which referrals to the Adjudicator had been made, with the maximum number of referrals on any one contract being four and none of the contracts were using the first edition. There is therefore insufficient evidence to test the effectiveness of the adjudication procedure itself, although no disputes have so far proceeded beyond adjudication. As stated before, there has been some criticism of the details of the adjudication procedure, mainly from the legal profession, and this has been taken into account in the development of the second edition of the NEC, with the section being completely re-written..

The most commonly used adjective, when interviewees were asked if the guidance notes were helpful in understanding the contract was "essential". Normally, people read through the NEC with the guidance notes before the contract or at tender and become aware of the implications of the clauses and philosophies behind the contract. During the construction phase, people would refer to them when they came across a new situation and consequently their use diminishes as the project progresses. The pattern of use of the flow charts is different -they are either used extensively or not at all. When they were used, interviewees said that they found them very useful as a way of finding their way around the contract and consequently seemed to become familiar with the NEC very quickly. Again, during the construction phase users refer to them to find out what to do next.

One of the common criticisms of the NEC is that it is re-inventing the wheel and that having all new drafting detracts from legal certainty. David Cornes states in a paper on the legal implications of the NEC : "if it is ICE 5th or 6th or JCT80, people generally know where they are. If they use them all the time, they become increasingly familiar with their terms, the risk allocation and dispute resolution methods." (Cornes, D L., 1995) Yet this research has indicated that generally, even those who have substantial experience in the construction industry generally rate the clarity of the NEC higher than the other forms of contract after using it on only one contract. The small level of criticism from those who have actually used it, suggest that when the industry is familiar with and understands the NEC (and the philosophies behind it) the real benefits will be seen.

3. Conclusion.

Considering the origins and development of the standard construction forms, it would be unsurprising if the standard of drafting and clarity, in the broadest sense, was as good as it could be. This appears to be confirmed by comments of the courts, legal commentators and the actual daily users of the contract who all appear to be of the opinion that it could be improved.

As Max Abrahamson wrote : "Contracts, codes, standards and regulations could use the language and forms nowadays best suited to construction. They could make clear in various ways that they are intended as practical guides to achieve the purposes of design and construction, and that intention is to be given paramount importance in their interpretation. With refinement those methods could help progress towards lawyers approaching contracts and codes on the construction industry's terms, not their own, and reduce construction semi-legal jargon on other minds and tongues." (Abrahamson, M., 1989) Research so far indicates that the NEC while not being perfect, is a significant step in the right direction.

Note 1 : As this paper was being finished the second edition of the contract had just been published and the author will continue to monitor feedback from users.

Note 2 : The Author would like to thank the Engineering and Physical Sciences Research Council, National Power plc and London Underground Ltd for their financial contribution to the research.

References.

Contracts Referred to are :

ACE : Form of Agreement and General Conditions of Contract for use in connection with Work of Civil Engineering Construction. Published in 1930.

NEC : The Institution of Civil Engineers. (1993) The New Engineering Contract - First Edition. Thomas Telford Services Ltd. - Black Book.

- Guidance Notes.

- Flow Charts.

JCT : Joint Contracts Tribunal. A family of standard forms of contracts published by the Building Employers Federation.

ICE : Conditions of Contract and Forms of Tender, Agreement and Bond for use in connection with Works of Civil Engineering Construction. Various editions from 1945 onwards. .

Joint IMechE / IEE Committee on Model Forms of General Conditions of Contract. MF/1, MF/2 & MF/3. Institution of Electrical Engineers.

Other References :

Abrahamson, M W. Engineering Law and the ICE Contracts. 4th Edition. Applied Science Publishing Limited. 1979

Abrahamson, M W. Risk Management. Construction Insurance and Law. FIDIC,. 1983.

Abrahamson, M W. Risk Problems relating to Construction. Paper from Construction Contract Policy - Improved Procedures and Practice.- Edited by John Uff and Phillip Capper. Centre of Construction Law and Management, King's College, London. 1989.

Barnes M. Talk at Seminar on NEC. December 1994

Cornes, D L. Legal Effect of the NEC. Paper delivered at a debate of The New Engineering Contract - A critical review incorporating an open debate with all speakers. Organised by the School of Business and Industrial Managers. 1995.

Cottam G. 'The contract to suit all occasions ?' Construction News. 27th May, 1993.

Cutts, M and Maher, C. The Plain English Story. Plain English Campaign. 1986.

Duncan Wallace, I N. Construction Contracts : Principal and Policies in Tort and Contract. Sweet and Maxwell. 1986.

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