The Merry Month : Contracts
Robert Merry is an independent stone consultant and project manager who ran his own company for 17 years. He also acts as an expert witness. Here he presents his view of the stone industry now.
In a departure from the usual ramblings of my experiences and thoughts on the happenings of the month, in the next few articles I want to set out the principals of contracts and the basis of contract law, which effects most of us on a day to day basis.
In fact, all those who issue invoices – or, to be more accurate, those who agree to carry out work for a cost or fee that results in an invoice and payment – have in effect entered into a contract, formal or informal.
It might be useful to consider briefly the history and origins of English Law and contracts.
The signing of the Magna Carta in 1215 had an enormous influence on today’s legal system. King John was opposed by a small band of Barons over his apparent cowardice in retreating from war in France. The Barons also held King John’s excommunication from the church against him, after a dispute over the appointment of a new Archbishop of Canterbury. Particularly as he confiscated church property and then sold it back to the Bishops to raise money to form a small Navy to fight the war.
The Barons occupied London, which forced King John into a compromise, resulting in him having to sign the Magna Carta at sword point at Runnymead. The document was set out in various chapters dealing with the rights of the church, reform of the feudal system, royal finances and finally a series of chapters that confirmed the people’s legal rights. The King became subject to common law for the first time in British history. It was, perhaps, the first direct challenge to the Divine Right of Kings, a commonly held belief that Kings and the occasional Queen were appointed by God and therefore not subject to earthly law.
Magna Carta lasted for three months before being repealed, but the treaty was revived for the purposes of appeasement by John’s son Henry III in 1216, 1217, 1225 and finally by his son, Edward I, in 1297. At that point (much changed but still retaining the chapters on people’s rights) it became part of English Statute.
Statute Law, as opposed to common law, is created by legislators and written down for all to refer to. It is the law of the land.
Henry II, John’s father, developed ‘Common law’. By eradicating dependence for justice on local customs, he elevated local law to national law. Appointed judges travelled the land to hear cases, then returned to discuss and record their decisions. This developed a system of ‘precedent’, where a judge was bound to consider the findings of a previous judge on a case with the same or similar facts. This became Common Law or what we might also call ‘case’ law.
There is Public Law – the State’s relationship with its people, constitutional, administrative and criminal.
And…
Private Law – the relationship between individuals, which is where we arrive at Contract law.
Contract law is a form of private law that involves the removal of common law rights, the allocation of risk, responsibility and obligation, the imposing of management structures, communication systems and the identity of powers and duties.
The enormous document that literally thuds on to your desk after exhausting your desktop printer, is a contractor’s interpretation of a private contract. It is full of your obligations and the rules you must not break. It seems endless, as dense as a block of stone and about as animated.
A private contract in building terms falls into several types and forms:
- Traditional – JCT; the eternal triangle
- Design & Build – extreme A and extreme Z
- Management Contracting
- Construction Management
- NEC – New Engineering Contract.
And you must read them all, understand your obligations, and sign away your life and your business.
But rest easy, dear reader. In the coming months I shall explain the intricacies of each. Of course, if you can’t wait, don’t hesitate to give me a call or drop me an email. I promise not to ramble on about the history of contracts… well, not too much.