My experience as a Construction Lawyer and ICT Contract Lawyer
I have been a specialist front-end Construction Lawyer for the last 20+ years.
My focus is more on Contracting as a whole and on Blaze Professional Learning now, rather than Construction Law specifically. But I still have a very soft spot for my speciality, and I still practice in Construction Law in Australia through my law firm, Blaze Business & Legal.
What you may not know is that I have also advised on, drafted and revised a number of ICT Contracts, from SAAS Contracts for startup SAAS firms through to major ICT Contracts between government and Tier 1 private sector providers (acting for both government and private sector contractors on different projects).
In addition, I have also advised my employers or clients at different times from In-House on both Construction and ICT projects.
Key Differences
Here are some of the key differences to keep in mind between Construction Contracts and ICT Contracts:
1. Contract contents are quite different
The sizes of the Contracts can be roughly similar, but the contents are not. You should never just switch the contracts across industries - this will not work. The concepts used are too different, and Construction Contracts have their own language that ICT Contracts do not reflect.
2. Intellectual Property treatment
Construction Contracts are usually set up so that the Principal owns the Intellectual Property Rights after Practical Completion (or delivery/payment of a particular deliverable).
Most ICT Contracts - as a generalisation - involve the ICT Services Provider retaining ownership of the IP they develop and licensing the rights to use (and exploit - depending on negotiations) that IP to the Client.
IP would have to be one of the most hotly contested issues in ICT Contracts, but while it does play a significant role in Construction Contracts, other issues also take equal or greater priority.
3. Practical Completion vs Acceptance
Construction Contracts have "Completion" or "Practical Completion" while ICT Contracts have "Acceptance". While you can draw parallels between them, there are substantial differences between these concepts.
Each requires the deliverable to conform to the criteria in the Contract before it is satisfactory for the Principal/Client.
But Construction Contracts normally have a list of actions that need to be taken before the Works achieve Practical Completion:
- the Works must be commissioned (for some Projects, noting that for some Projects the commissioning takes place after Practical Completion)
- the site must be cleaned
- the Works must be complete in accordance with the Contract with only minor defects or omissions that do not affect the proper usage of the Works and that can be rectified during the Defects Liability Period.
Acceptance also involves the Client "accepting" the Services or Deliverables, often after Acceptance Testing. So, there are some similarities but also a number of differences (with Construction Contracts generally having the more complex process).
4. Additional concepts in Construction Contracts
Construction Contracts have a large number of concepts that are usually not present in ICT Contracts.
For example:
- Latent Conditions;
- Extensions of Time;
- Prevention/Prolongation;
- Delay Damages, Liquidated Damages;
- Practical Completion, Certificate of Practical Completon;
- Defects Liability Period;
- Final Completion; and
- Superintendent (and the dual roles of the Superintendent),
and so on.
5. Standard Form Contracts
ICT Contracts do not seem to have as many standard form contracts as Construction Contracts do.
It's more likely that a government agency will have its own template ICT Contract, and there are also some model ICT Contracts around (particularly within government).
However, the number of construction standard form contracts, both national standard forms (such as Australian Standards), government standards (such as the Commonwealth Contracting Suite), industry body standards (eg Master Builders Contract, ABIC etc) and international standard forms (such as FIDIC, NEC3 etc) is much greater. And most countries around the world have their own standard form construction contracts that are commonly used within that country.
Bonus Similarity
The skills you learn for either Construction Contracts or ICT Contracts are very transferable around the world.
With only a few minor country-specific nuances (eg the application of legislation and case law), I can (and do) discuss the intricacies of Construction Contracts with specialists in other countries.
And I do the same for ICT Contracts.
Which is a fantastic thing to be able to do! I don't know about you, but I find it all fascinating.
How about you: What would you add to my list of similarities and differences?
