Modifications to standard forms of contract: the impact on readability
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Published:
Jun 18, 2014
Keywords:
Construction contract, FIDIC, Readability, Standard Form, Infrastructure
Main Article Content
Abstract
Lack of clarity in contract documents can lead to disputes between contracting parties. Standard form contracts have evolved due to construction business becoming increasingly complex and the difficulty in drafting bespoke conditions of contract for each project. Numerous advantages have been identified in using standard forms of contract. However, clients often modify some clauses in order to include specific requirements for a project. While the consequences of ill-modifications to standard forms have been researched, no study has been done on the impact of these modifications on the clarity and readability of the document. Using 281 modified clauses from large infrastructure projects implemented in Sri Lanka, this study found that on balance modifications generally make the document more difficult to read; 60% of the sample clauses were more difficult to read compared to 40% becoming easier. More than 50% of the original and modified clauses were still at the ‘very difficult’ level of readability, which requires the equivalent of post-graduate level to understand. The study contends that modifications have not resulted in improved readability. The study highlights the necessity of clear and plain language when modifying contract documents.
Article Details
How to Cite
Rameezdeen, R., & Rodrigo, A. (2014). Modifications to standard forms of contract: the impact on readability. Construction Economics and Building, 14(2), 31-40. https://doi.org/10.5130/AJCEB.v14i2.3778
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Articles (Peer reviewed)
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References
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Bell, M. (2009) ‘Standard form construction contracts in Australia: Are our reinvented wheels carrying us forward, Building and Construction Law Journal, 25(2), 79-93.
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Bunni, N. G. (2005) The FIDIC form of contract, Third ed., Blackwell, Oxford.
Bunni, N. G. (2003) Risk and insurance in construction, Spon Press, London.
Chen C., Jiang C., and Li, H. (2013) ‘Modifications to the FIDIC Silver book in a buyer’s context: A case study of the Haiphong Power Plant II project’, Applied Mechanics and Materials, 357, 2498-2504.
Cheung, S.O. and Yiu, T.W. (2007) ‘Are construction disputes inevitable?’, Building and Environment, 42, 752-761.
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Courtis, J.K. (1998) ‘Annual report readability variability: tests of the obfuscation hypothesis’, Accounting Auditing and Accountability Journal, 11, 459–471.
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Rameezdeen R., and Rodrigo, A. (2013) ‘Textual complexity of standard conditions used in the construction industry’, Australasian Journal of Construction Economics and Building, 13(1), 1-12.
Rameezdeen, R. and Rajapakse, C. (2007) ‘Contract interpretation: the impact of readability’, Journal of Construction Management and Economics, 25, 729–737.
Rutherford, B.A. (2003) ‘Obfuscation, textual complexity and the role of regulated narrative accounting disclosure in corporate governance’, Journal of Management and Governance, 7, 187–210.
Seifert, B.M. (2005) ‘International construction dispute adjudication under international federation of consulting engineers conditions of contract and the dispute adjudication board’, Journal of Professional Issues in Engineering Education and Practice, 131, 149–157.
Shnookal, T., and Charrett, D. (2010) ‘Standard form contracting; the role for FIDIC contracts domestically and internationally’, Proceedings of the society of construction law conference Australia, Perth.
Sweet, J. (1989) ‘Standard construction contracts: Some advice to construction lawyers’, South Carolina Law Review, 40(4), 823-845.
Swiney, G. (2007) ‘The dubious upgrade of international development contracts, International Law & Management Review, 3, 145-169.
Sydserff, R. and Weetman, P. (2002) ‘Developments in content analysis: a transitivity index and DICTION scores’, Accounting Auditing and Accountability Journal, 15, 523–545.
Thomas, H.R., Smith, G.R. and Mellot, R.E. (1994) ‘Interpretation of construction contracts’, Construction Engineering and Management, 120, 321–336.
Velez, P. and Ashworth, S.D. (2007) ‘The impact of item readability on the endorsement of the midpoint response in surveys’, Survey Research Methods, 1(2), 69–74.
Wright, J.N. and Fergusson, W. (2009) ‘Benefits of the NEC ECC form of contract: A New Zealand case study’, International Journal of Project Management, 27, 243–249.
Cheung, S.O. and Yiu, T.W. (2007) ‘Are construction disputes inevitable?’, Building and Environment, 42, 752-761.
Barnes, W.R. (2007) ‘Toward a fairer model of consumer assent to standard form contracts: In defence of restatement subsection 211(3)’, Washington Law Review, 82, 227-274.
Bell, M. (2009) ‘Standard form construction contracts in Australia: Are our reinvented wheels carrying us forward, Building and Construction Law Journal, 25(2), 79-93.
Bubshait A.A. and Almohawis, S.A. (1994) ‘Evaluating the general conditions of a construction contract’, International Journal of Project Management, 12,133–136.
Bunni, N. G. (2005) The FIDIC form of contract, Third ed., Blackwell, Oxford.
Bunni, N. G. (2003) Risk and insurance in construction, Spon Press, London.
Chen C., Jiang C., and Li, H. (2013) ‘Modifications to the FIDIC Silver book in a buyer’s context: A case study of the Haiphong Power Plant II project’, Applied Mechanics and Materials, 357, 2498-2504.
Cheung, S.O. and Yiu, T.W. (2007) ‘Are construction disputes inevitable?’, Building and Environment, 42, 752-761.
Chong, H. Y. and Zin, R.M. (2010) ‘A case study into the language structure of construction standard form in Malaysia’, International Journal of Project Management, 28, 255–261.
Courtis, J.K. (1998) ‘Annual report readability variability: tests of the obfuscation hypothesis’, Accounting Auditing and Accountability Journal, 11, 459–471.
DuBay, W.H. (2004) The principles of readability, Impact Information, California.
Fawzy S.A., and El-adaway, I. (2012) ‘Contract administration guidelines for U.S. contractors working under World Bank-funded projects’, Journal of Legal Affairs and Dispute Resolution in Engineering and Construction., ASCE, 4(2), 40-50.
FIDIC, 1987 Conditions of Contract for Works of Civil Engineering Construction, fourth ed. Federation Internationale des ingeneurs-conseils, Geneva.
FlDlC, 1999 Conditions of Contract for Building and Engineering Works Designed by the Employer, first ed. Federation Internationale des ingeneurs-conseils, Geneva.
Hall, J.C. (2006) ‘The readability of original articles in surgical journals’, ANZ Journal of Surgery, 76, 68–70.
Harmon, K.M.J. (2003) ‘Resolution of construction disputes: a review of current methodologies’, Leadership and Management in Engineering, 3, 187–201.
Harrison, S. and Bakker, P. (1998) ‘Two new readability predictions for the professional writer: pilot trials’, Journal of Research in Reading, 21, 121–138.
Hughes, W. and Greenwood, D. (1996) ‘The standardization of contracts for construction’, International Construction Law Review, 13(2), 196-206.
Hughes, W., and Shinoda, H. (1999) ‘Achieving satisfactory contractual terms for the Engineer’s role’, In Hughes, W. (ed) Proceedings of the 15th ARCOM Conference, September 1999, Liverpool, 597-606.
Koksal, T. (2011) ‘FIDIC conditions of contract as a model for an international construction contract’, Business and Management Review, 1(2), 32-55.
Koo, M.M., Krass, I. and Aslani, P. (2003) ‘Factors influencing consumer use of written drug information’, The Annals of Pharmacotherapy, 37, 259–267.
Orlow, M.K.P., Taylor, H.A. and Brancati, F.L. (2003) ‘Readability standards for informed-consent forms as compared with the actual readability’, The New England Journal of Medicine, 348, 721–726.
Paz, S.H., Liu, H., Fongwa, M.N., Morales, L.S. and Hays, R.D. (2009) ‘Readability estimates for commonly used health-related quality of life surveys’, Quality of Life Research, 18, 889–900.
Perry, J.G. (1995) ‘The new engineering contract: principles and design of risk allocation’, Engineering, Construction and Architectural Management, 2, 197–208.
Pettit, D. (2012) ‘The effect of the New Australian Consumer Law on the use of standard-form contracts within the Australian construction industry’, Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 4 (1), 1-9.
Raj, S., Hilling, J. and Hughes, W. (2009) ‘Responsiveness to change by standard-form contract drafters in the construction industry: A case study of the FIDIC White Book’, International Journal of Law in the Built Environment, 1, 205–220.
Rameezdeen R., and Rodrigo, A. (2013) ‘Textual complexity of standard conditions used in the construction industry’, Australasian Journal of Construction Economics and Building, 13(1), 1-12.
Rameezdeen, R. and Rajapakse, C. (2007) ‘Contract interpretation: the impact of readability’, Journal of Construction Management and Economics, 25, 729–737.
Rutherford, B.A. (2003) ‘Obfuscation, textual complexity and the role of regulated narrative accounting disclosure in corporate governance’, Journal of Management and Governance, 7, 187–210.
Seifert, B.M. (2005) ‘International construction dispute adjudication under international federation of consulting engineers conditions of contract and the dispute adjudication board’, Journal of Professional Issues in Engineering Education and Practice, 131, 149–157.
Shnookal, T., and Charrett, D. (2010) ‘Standard form contracting; the role for FIDIC contracts domestically and internationally’, Proceedings of the society of construction law conference Australia, Perth.
Sweet, J. (1989) ‘Standard construction contracts: Some advice to construction lawyers’, South Carolina Law Review, 40(4), 823-845.
Swiney, G. (2007) ‘The dubious upgrade of international development contracts, International Law & Management Review, 3, 145-169.
Sydserff, R. and Weetman, P. (2002) ‘Developments in content analysis: a transitivity index and DICTION scores’, Accounting Auditing and Accountability Journal, 15, 523–545.
Thomas, H.R., Smith, G.R. and Mellot, R.E. (1994) ‘Interpretation of construction contracts’, Construction Engineering and Management, 120, 321–336.
Velez, P. and Ashworth, S.D. (2007) ‘The impact of item readability on the endorsement of the midpoint response in surveys’, Survey Research Methods, 1(2), 69–74.
Wright, J.N. and Fergusson, W. (2009) ‘Benefits of the NEC ECC form of contract: A New Zealand case study’, International Journal of Project Management, 27, 243–249.