February 21, 2022
When determining how to integrate collaborative obligations and requirements into contract, there are various approaches which may be taken. Increasingly, the inclusion of specific provisions in contract has underscored how traditional contracts can be adapted and amended to suite specific cooperative requirements.
Collaborative contracting is primarily facilitated through the inclusion of three separate, but intertwined, contractual provisions, being:
1. cooperative values;
2. cooperative obligations; and
3. cooperative interfaces.
Cooperative Values
Cooperative value clauses reflect a mutual agreement by the parties to work collaboratively. While such clauses fall short of imposing explicit obligations or requirements on parties, they serve to underscore the intended collaborative approach taken with respect to the project.
Common wording which can be included in such clause’s references an:
1. intention to act in a cooperative way;
2. intention to act in a collaborative manner;
3. agreement to work collaboratively in a spirit of mutual trust; or
4. agreement to cooperate in the performance of each parties’ obligations.
Primarily, these clauses are intended to record the behaviour expected from each party during the project. An expectation will often include references to cooperation and/or collaboration, as outlined above, though does not impose any specific obligations on either party.
Cooperation Obligations
Cooperation obligations impose a specific obligation or requirement on a party to be cooperative or collaborative. Normally, the obligations or requirement will be imposed on the contractor or subcontractor, though it may be imposed on any party and subject to negotiations during contract formation.
Cooperative obligations may be drafted in such a way to refer to specific activities or works which must be done in a certain manner. Where such drafting is present in a contract, it is important for the parties to wholly understand such obligations, and ensure project teams are across what is required of them, especially where it departs from traditional contracting processes and procedures.
The cooperative obligation will normally be an “add-on” to other obligations under the contract. In effect, if adds an additional obligation which aligns with another clause or obligation under the contract, to achieve a particular outcome using collaborative means.
An example might be with respect to obligations surrounding WHS Legislation. A contract might provide two obligations clauses to the following effects:
1. Traditional Obligation: The Contractor is required to ensure that all subcontracts comply with their respective obligations under WHS Legislation, and the Contractor must comply with its WHS Legislation obligations to consult and coordinate activities with any other persons who have WHS relations.
2. Collaborative Obligation: The Contractor must cooperate with the Principal to ensure all parties are able to comply with their obligations under the WHS Legislation.
The above example indicates how contractual drafting of cooperative obligations can serve to extend an otherwise traditional contractual obligation by imposing a requirement to work collaboratively to achieve it. Hence, a project team would need to be acutely aware of such a requirement, as in the example the obligation shifts not just from achieving compliance with WHS Legislation, but working collaboratively to achieve compliance.
Cooperative Interfaces
Cooperative interfaces provide for a level of cooperation and facilitation by the parties when interacting with third parties. Constructions works will normally involve extensive and ongoing works with third parties, such as authorities or between contractors appointed by the principal. Hence, the inclusion of cooperative interfaces function to prescribe certain actions contracting parties must take.
Relevantly, it is acknowledged that while third parties cannot be regulated or controlled by the contracting parties, the contracting parties can prescribe obligations regarding their own actions. Therefore, while third parties conduct may be unpredictable and uncertain, cooperative interfaces introduce obligations on the contracting parties in an effort to increase flexibility and collaborative in addressing third party issues as they arise.
Such cooperative interfaces can include obligations to work collaboratively with contracting parties to:
1. assist in dealing and communicating with authorities, such as where an approval may be required;
2. address how other contractors can conduct and undertake works; and
3. prepare and collate information or documents which may be necessary or required by a contracting party for any engagement they have with a third party.
While cooperative interfaces normally imposed obligations on the delivery partner, much like collaborative obligations, they can be imposed on any party and may be subject to negotiation during contract formation.
LPC Lawyers
The above collaborative drafting approaches highlight the importance of considering how to be go about facilitating a collaborative and cooperative atmosphere on a project. With an understanding of what is necessary to ensure project success on collaborative projects, LPC Lawyers can offer tailored advice to best assist on your next project.
LPC Lawyers has extensive experience working on collaborative contracting models and can assist clients across a project’s lifecycle. If you require assistance with your current or future projects, please contact us.
The content of this article is for information purposes only; it does not discuss every important topic or matter of law, and it is not to be relied upon as legal advice. Specialist advice should be sought regarding y our specific circumstances.
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