What are the consequences if the contracts that are entered into are onerous or do not reflect the commercial agreement?


If the contracts are too onerous on the contractor then you may have a contractor who will end up hating your project and where bad relations between the parties fester into all sorts of disputes. If you are tendering with a set of onerous conditions, you may find you lose access to the entire marketplace because people will either decline to quote or those that do, will quote at very high costs to cover the huge risks in play.

If the contract does not reflect the commercial agreement then there may be case of mutual mistake. Mutual mistake is where one or other party to a contract raises an argument that the written agreement does not reflect the intention of the parties and should be amended.

The courts may alter the contract by correction through construction or by rectification. First, the court may deem the words to mean what they should mean (i.e. correction by construction). Second, it may rewrite the words to mean what they should mean (i.e. rectification). There is a fine line between these remedies. Broadly speaking, the former is a way of repairing minor mistakes in drafting, whereas the latter is used where a more fundamental error has occurred in committing the agreement to paper.

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We specialise in construction law, construction contracts and real estate matters and have an excellent reputation across the country. We can assist wherever you are in the based and have offices in central London.