General remarks on drafting construction contract
(Правовое руководство по составлению строительных контрактов)
Each party may find it desirable to establish for himself a procedure setting out the steps which it is necessary to take in negotiating and drawing up a works contract. When tendering procedures are adopted prior to entering into the contract, it is necessary for a first draft to be prepared by the purchaser to be submitted to prospective tenderers with the invitation to tender. If the contract is entered into on the basis of negotiations, a first draft may be prepared by one of the parties after negotiations have taken place on the main technical and commercial issues. Each party may find it useful to designate one person to be primarily responsible for supervising the preparation of the contract documents (paragraphs 1 to 3).
In drawing up the contract the parties should take into account the law applicable to the contract. They should also take into account the different types of relevant mandatory legal rules of an administrative, fiscal or other public nature in the country of each party (paragraphs 4 and 5). The parties may find it useful to examine standard forms of contract, general conditions, standard clauses or previously concluded contracts as aids to drafting, though their provisions should not be adopted without critical examination (paragraph 6).
The contract may be drawn up in only one language version, or in the two languages of the parties where those languages differ. If the contract is drawn up in two language versions, it is advisable to specify which version is to prevail in the event of a conflict between the versions. If the parties provide that both versions are to have equal status, they should attempt to provide guidelines for the settlement of disputes arising out of a conflict between the versions (paragraphs 7 and 8).
The parties may wish to identify and describe themselves in a document which is designed to come first in logical sequence among the contract documents, and to perform a controlling role over the other documents. That document should set forth the names of the parties, their addresses, the subject-matter of the contract, and also record the date on which and the place at which the contract was signed. Parties to works contracts are usually legal entities, and the parties may wish to investigate prior to entering into the contract such issues as the capacity of the entity to enter into the contract and the authority of an official to bind the entity (paragraphs 9 and 10).
The contract should be reduced to writing. It may, in addition, be desirable for the documents forming the contract to be clearly identified, and rules provided for resolving inconsistencies between contract documents (paragraphs 11 and 12). The parties may wish to clarify the extent to which oral exchanges, correspondence and draft documents which came about during the negotiations may be used to interpret the contract documents (paragraph 13).
The parties may wish to provide that headings and marginal notes used in the contract to facilitate its reading are not to be regarded as affecting their rights and obligations. If considered desirable, recitals may be included in the controlling document to describe the object of the contract, or the context in which it was entered into (paragraphs 14 and 15).
Works contracts frequently require a party to notify the other party of certain events or situations. It is desirable to require that all notifications be given in writing. The parties may determine the time when a notification is effective: either upon dispatch by the party giving the notification, or upon delivery to the party to whom the notification is given (paragraphs 18 to 21). The parties may wish to specify in their contract the legal consequences of a failure to notify (paragraph 22).
The parties may find it useful to define certain key words or concepts which are used in their contract. If a definition is to apply throughout a contract, it may be included in the controlling contract document. In formulating definitions relevant to their contract, the parties may find it useful to consider the definitions given in this chapter, and descriptions of concepts contained in other chapters of this Guide (paragraphs 23 to 26).