Simplified UK government contract terms: hit or miss?

It seems that the Crown Commercial Service – a part of the UK government that has responsibility for procurement of goods and services – made a press announcement this week about their new, simplified form of contract. Government officials, including a commercial lawyer from the Government Legal Department (GLD), have spent a year reducing 50,000 words to about 8,000 words and made the terms less legalistic.

This initiative is, apparently, intended to make it easier for small and medium sized enterprises (SMEs) to contract with the UK government. Small companies ‘without a dedicated legal team will be able to better understand and adapt the Public Sector Contract to its needs by selecting the elements it needs to apply’, the government said. The story was picked up by the Law Society Gazette here.

With some detective work, IP Draughts was able to find the new terms here. (Click on the link to “terms and conditions” near the bottom of the page found at the last link.)

If you click through to those terms and conditions, you will be faced with about 43 documents of varying sizes. The largest of these documents, Schedule 1, is approximately 76,000 words and takes up 234 pages. Some are considerably shorter. But this and most of the other documents are schedules to a set of “Core Terms”.

So far as IP Draughts can tell, it is the Core Terms that have been the subject of the redrafting exercise. The other documents vary in their drafting style. Some are very heavyweight. For example, clause 1.1.1 of Call-Off Schedule 4 includes the following lead-in wording:

Without prejudice to any other right or remedy of the Buyer howsoever arising (including under Framework Schedule 6 (Order Form and Call-Off Schedules Template) and subject to the exclusive financial remedy provisions in Paragraph 2.4 of Call-Off Schedule 14 (Key Performance Indicators) and Paragraph 9.1.2 [concerning Delay Payments] of Part A of Call-Off Schedule 13 (Mobilisation Plan and Testing), if the Supplier commits any Default of this Call-Off Contract then the Buyer may (whether or not any part of the Deliverables have been Delivered) do any of the following:

Any initiative to reduce this style of drafting is to be welcomed. IP Draughts sympathises with the plight of an SME “without a dedicated legal team” struggling to understand the above monstrosity.  It is difficult for an experienced commercial lawyer to understand it.

If this was the style of the Core Terms before they were revised, then the redrafters deserve credit for greatly improving them. This is not, however, unqualified praise. In IP Draughts’ view, the new document could be much better still.

As Ken Adams is fond of saying, contract drafting consists of both “what you say” and “how you say it”. Reducing 50,000 words to 8,000 almost certainly involved taking decisions on omitting matters of substance and reducing the text down to terms that were thought essential to protect the government’s interests. (The cynical side of IP Draughts wonders how many unnecessary provisions have really been omitted, or have they just been moved to, or left in, the schedules, many of which continue to be, in IP Draughts’ view, excessively heavyweight. But let’s hope the next phase of this simplification process will be to reduce the overkill in the schedules.)

IP Draughts commends the GLD for reducing the “what you say” elements of the Core Terms. And for attempting to make the “how you say” elements easier for a non-lawyer to understand. Unfortunately, the “how you say” task has not been performed consistently and some of the choices of non-legal language are suspect. Some examples will illustrate the point.

The document adopts the word “must” for expressing contractual obligations. That is an understandable stylistic choice, and an alternative to “shall”. It is seen in some other UK contracts, eg the Law Society’s recently updated template property leases.

Where the drafter falls down, though, is in his consistent use of other words to express rights and obligations. At various times he uses “may”, “can” or “has the right to”. For example, clause 10.8 uses all three of these phrases at different points. In IP Draughts’ view, these terms mean the same thing, and one choice should have been made – preferably “may” – and the drafter should have stuck with that choice.

IP Draughts would not have used the expression “lets the Supplier know” in clause 3.2.4. It is, in his view, too conversational, and “informs” or even “tells” the Supplier would have been better. Similarly, the phrase “The Relevant Authority may talk to the Supplier” in clause 16.3 is not a good choice, in IP Draughts’ view. “Talk to” could simply be replaced with “contact”.

Even worse, in his view is the choice of the phrase “accepts that they can’t get relief for suspension” in clause 5.2 as one of the conditions for the operation of clause 5.1. IP Draughts is not even sure what form the “acceptance” is meant to take. Sometimes, the choice of modern language is just clumsy, eg the indemnity in clause 12.2 uses the phrase “any costs resulting from any Default by the Supplier relating to any applicable Law to do with a Contract.” “To do with” is not a good choice. The whole sentence needs unpicking, but this phrase should be replaced with “relating to” or “concerning” unless a better, plain English choice can be found.

In other cases, the drafter has tried, unwisely in IP Draughts’ view, to avoid technical language, but only in part of a sentence, leaving in other technical language. For example, clause 9.1 includes an IP licence:

The Supplier gives the Buyer a non-exclusive, perpetual, royalty-free, irrevocable, transferable worldwide licence to use, change and sub-license the Supplier’s Existing IPR…

In this example, the drafter seems to have objected to the word “grants” on the grounds that it is a technical term, but left in “non-exclusive, perpetual, royalty-free, irrevocable, transferable” which are all technical terms. This inconsistency seems all the more suspect when you look at the schedules to the Core Terms, which have not been “modernised”. For example, in the ICT schedule, the following words are used in clause 9.2.1:

The Supplier hereby grants to the Buyer a perpetual, royalty-free and non-exclusive licence…

These examples illustrate what IP Draughts interprets as a desire by the drafter to introduce a chatty, breezy tone to some of the contract terms. But he is doing so within a document that still contains a large amount of technical detail, and the result is a series of false notes that will make very little difference to the overall comprehensibility of the terms. IP Draughts suspects that most SMEs will probably not even notice the chatty phrases, as they are minor features of what is still a long, technical document.

This is hopefully the first of a series of improvements to government contract terms. IP Draughts doesn’t want to discourage the initiative or the individuals who are working on it. But he hopes they will approach the task in a spirit of continuous improvement, rather than treat the new Core Terms as a template for the drafting style of future government contracts.







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Filed under Contract drafting, General Commercial

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