Ensuring a Smooth Start: Contract Clarity in EPC Projects
Planning a major construction project requires clear communication and well-defined expectations. In the world of EPC contracts (Engineering, Procurement, and Construction), a solid foundation is essential for a successful outcome.
This foundation starts with a clear understanding of when the contract becomes binding and when work can officially begin. In common law systems, like the United States, a signed contract with agreed-upon terms is the norm. However, some civil law systems may rely on other forms of agreement, such as exchanged letters.
The key takeaway? Both parties need to be on the same page regarding the contract’s effectiveness (when it becomes binding) and the commencement of work (when construction starts).
A well-written EPC contract will clearly define these points, often including a specific date for work to begin, triggered by a formal notice from the project owner. This helps avoid confusion and potential delays.
Remember, clear communication is key to a successful project. By carefully reviewing the contract together, both the owner and contractor can ensure a smooth start and a successful project completion.
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