Simplified contracts are more effective: lawyer


Andrew Tulloch extols the virtues of clarity and follow-up in transport, supply chain and logistics contracts

May 23, 2013

A transport lawyer has extolled the virtues of clarity, simplicity and
follow-up
in transport, supply chain and logistics contracts.

Colin Biggers & Paisley Partner Andrew Tulloch insists use of
abbreviations, jargon, Latin, legalese, unrealistic audit obligations and unfair allocation of risk when drafting transport and logistics contracts will weaken them.

"Most people have heard of the "KISS" principle - "Keep It Simple, Stupid!" The same principle is now being applied more frequently in the supply chain and logistics area," Tulloch states.

"For many years, there has been an increasing emphasis in the law on drafting contracts in plain English. But despite this, many companies and those involved in the transport industry have continued to produce lengthy supply chain and logistics contracts with very detailed specifications and performance requirements.

"These contracts often have little active monitoring or enforcement of those performance requirements because of their complexity and the need for extensive resources to be allocated to monitoring and audit.

"Contracts can be far more effective if they are kept simple, are written in a style which can be easily followed and have simple mechanisms for monitoring and auditing performance."

He is also critical of the lack of attention after the contracts are signed on stipulations they require to be fulfilled.

"We have seen too many contracts where, for example, a party is required to arrange insurance and provide evidence of those arrangements, but nobody has ever followed up to require production of the evidence of insurance," Tulloch says.

"Alternatively, evidence of cover is produced without anyone checking if the cover is for the risks required to be insured or for an appropriate amount.

"We also see contracts that require monthly service of records of performance being enforced.

"If records are provided, then someone should be checking to see if they reveal any contract performance issues."

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