Contract Acceptance - Avoiding False Starts

Very often a contract offer is issued far too late by the employing party which causes chaos to all involved. This late procurement is usually because either:

  1. the client has changed his mind on something causing extensive alterations to the project requirements, or
  2. the employing party wants the contractor to miss something in his rush to change and reprice the project requirements, giving the employing party a price that doesn't match the scope requirements, or 
  3. the employing party wants to wait until the very last possible moment before he commits to your procurement as he wants you to absorb all additional costs from any changes on the lead up to your package being required to be let, but he has the concern that as soon as he does let your package any changes will become variations and additional costs that he has to deal with.

It is also common for the employing party to ask the contractor to carry out works either before the contract offer has been issued, or for the works to commence almost immediately on issue of the contract offer.

This combination is very dangerous territory as you have not had chance to check the order (see our guidance here on how to do this and what to look out for) and very often the order details something along the lines of “the commencement of work by the contractor is to be deemed acceptance of this contract offer” therefore resulting in your opportunity to negotiate any terms being potentially lost.

So how can you protect yourself? Prior to starting any works you must correspond with the employing party detailing that any commencement of works shall be “Pre-Contract Works” and any works carried out shall not constitute acceptance of the employing parties offer. However please ensure that your correspondence complies with the “Nortices” section of the contract and if you are unsure send the message by both email and post to in an attempt to ensure compliance, however we strongly recommend that you read your duties under the “Notices” section of the contract otherwise your “Pre-Contract Works” message may not be binding.

It is also good practice to detail the date that you shall issue your comments or acceptance by within this correspondence, this date setting is called a ”condition precedent” and allows you to carry out an action before an agreed time, your correspondence may detail something like:

“Many thanks for your contract offer reference XXX dated XXX, we shall commence with our works as required by the programme whilst performing a review of the documentation and offer. Any works completed during this period shall be classed as Pre-Contract works and will not constitute acceptance of the contract offer issued. We shall provide our response to your offer either detailing our comments or confirming our acceptance no later than Friday 9th October 2020 at 5pm.

Following this process should allow you to perform to the employing parties requirements whilst also not allow yourself to walk into a contractual trap as very often the initial issue of the contract offer is full of holes and details incorrect information and wrong document revisions etc

This process does not get you out of the woods and you are still working at risk, but it buys you time and as you are at the start of the project the probability is that the employing party needs you just as much if not more than you need them and it will cost them a significant amount of money to replace you with a different contractor.

If the employing party will not budge on their contract offer which is sometimes the case, you need to decide if you are going to walk away from the project or if you are going to run the gauntlet. Either way, remember that time is always against you and making the decision of walking away at an early stage, negotiating, or accepting the initial contract offer should be your highest priority.

This process for most contractors is very stressful and time consuming, many of Contract Rite’s clients offset these stresses to our expert team allowing them to do what they do best with the comfort that they have our support and guidance throughout this process.

This article is for general information purposes only and should not be relied upon in any specific situation without appropriate advice. If you require advice or wish to discuss any of the issues raised in this article, please contact us.