Because Contract Management should also be fun, we are now launching a series of posts based on popular music. This is the first one but keep tuned to https://afitac.com if you want to read the others when they come out. Better to bookmark or to connect to the LinkedIn page by clicking on the icon on the right.
So, here we go and start with “Satisfaction” from the Rolling Stones. If you want to listen – in parallel to reading this post – you can click here:
Satisfaction in contracts
Often, we find the word satisfaction in contracts in those provisions where the “works have to performed to the satisfaction of the Employer / Engineer”. For Employers that makes perfect sense! They are paying the Contractor for the works and hope to be satisfied with the results.
What’s the problem with this?
Contractors are not in the business of selling satisfaction; there are other businesses for that ;-). What Contractors do sell is to execute the works in accordance with the contract.
What are we missing? Wouldn’t the Employer/Engineer automatically be satisfied if the works are performed in accordance with the contract?
Well, if humans were like robots and programmed as follows: [if works are in accordance with contract, then be satisfied], there would probably not be much of a problem. But human nature is different. Mick Jagger is clearly singing it. He can’t get no satisfaction. “Cause I try and I try and I try and I try I can’t get no, I can’t get no”. However white his shirts would be, he wouldn’t be satisfied because of some unrelated issue. He didn’t like the man that was promoting the detergent.
It is very difficult for a Contractor to get the Employer 100% satisfied. That’s like aiming for perfection. Reasonable contracts do good efforts to avoid this pursuit of perfection. A good example are the provisions related to substantial completion. Minor defects can be put on a punch list to be resolved after the taking-over.
How to fix it when you encounter satisfaction in contracts?
Simply replace wherever is stated “the works shall be performed to the satisfaction of the Employer/Engineer” with “the works shall be performed in accordance with the contract”. That’s an easy fix.
I see some Employers/Engineers wonder that this will put a heavy burden on preparing the contract. Yes, a contract should be well made with a clear scope of works and clear rights & obligations. Don’t forget that executing the works is even more complex than writing the contract and the Contractor should concentrate on that. Not on the pursuit of pure satisfaction of the Employer/Engineer that may be unrelated to the works. I hate to imagine the compliance problems to reach satisfaction in contracts.
Put the right people on preparing the contract, keep it simple and avoid ambiguity (often introduced by either party with the intention to benefit from it, later on, in case of conflict).
If it is too much of a burden to correct the contract at the last minute or if there is resistance to change these words (“we have always done like this”), you can still “program” the Employer’s Representative or Engineer like the robots we mentioned above. Put a definition around satisfaction. Something like: “wherever ‘to the satisfaction of the Employer/Engineer’ is stated in this contract, the Employer/Engineer is deemed to be satisfied if the works have been executed in accordance with the contract”.
Thank you, Mick, for helping people-working-on-contracts have fun when thinking about how contracts should be! Music helps us to relax. And that’s good for becoming reasonable and satisfied! More to come in future posts.
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