Bespoke Contracts: Everything You Need to Know
Bespoke contracts are contracts that are tailored to fit the specific requirements of a project. Bespoke contracts are often used when boilerplate or standard form contracts are not suitable. 3 min read
Bespoke contracts are contracts that are tailored to fit the specific requirements of a project. Bespoke contracts are often used when boilerplate or standard form contracts are not suitable. The complexity of the project is one of the main factors that determines which type of contract makes the most sense. For very complex projects, drafting a bespoke contract may be the best way to properly create the desired agreement. Bespoke contracts may also be the best fit for simple supply agreements since standard boilerplate form contracts might include unnecessary terms and may be too inflexible to achieve the desired result.
Non-Standard Bespoke Forms of Contract
While bespoke contracts are useful under certain circumstances, these contracts might not fairly or adequately include sufficient provisions for all possible circumstances. Additionally, there can be many issues with bespoke contracts that are not supported by a history of case law. This is because the specific issues with various terms have not been ruled on by a court of law and may be too ambiguous to accurately accomplish the goals of the contract.
Bespoke contracts can be time consuming to create, and disputes regarding the contract's terms are also difficult to defend and costly to bring into court for resolution. For these reasons, you must carefully consider whether to use a bespoke contract or a standard form contract for your agreement.
The Perils of Bespoke Contracts
For engineering projects, the terms in bespoke contracts may be well-intentioned but may also unintentionally increase the duty of care owed by the engineer or team in question beyond the common law standard duty of care. Using a term such as “expert duty of care” or “best practice” can project a higher duty of care on the engineer and adversely determine whether or not the engineer properly performed his duties.
Additionally, bespoke contracts may inadvertently expose engineers to unlimited liability when the terms are silent or unclear on the question of liability. If an engineer agrees to a provision for third-party indemnity, he agrees to compensate his client for any damages caused by himself or any other party involved. As a result, the engineer ends up taking on much more liability for the project than may have been intended.
Self-Drafted Contracts Versus Bespoke Contracts – What Is the Difference?
For businesses who want to control and manage their liability, self-drafted contracts are generally inadequate. Self-drafted contracts might not properly manage the risks of the business and may include terms that are unenforceable.
Suppliers must make sure that the standard terms used in their boilerplate contracts accurately reflect their contract and sale process. For example, any discrepancies between the processes outlined in the contract and the implementation of said processes may result in a finding that the clause or clauses impacted are unenforceable. For this reason, it is important that both the standard terms and the contract processes are reviewed on a regular basis with the company's legal advisors in order to make sure all necessary terms are enforceable.
Choosing Standard Contracts
There are multiple arguments in favor of the use of standard form contracts. These arguments include:
- Standardizing contract terms throughout the industry
- A balance between contract terms
- Standard form contracts end up including more fair terms that benefit both parties
- Standard form contracts are generally provided with instructions and include guidance notes for proper use.
Bespoke Versus Standard Form of Contracts
When projects are simple, standard form contracts can be useful for both parties. However, when there are several different parties involved or the projects are extremely complex, a bespoke contract may be better than the standard form used to accommodate the uniqueness of the project. It is also important to consider the scope of the project and location, as standard form contracts that are developed for general international use do not necessarily include or take into account the laws and customs of individual countries.
Benefits of standard form contracts include greater cost-effectiveness, familiarity to the parties, and fewer unanticipated anomalies. Additionally, standard form contracts allow the parties flexibility, as they can include a vast range of variations on the terms, schedules, and options. These terms can be specifically tailored to ensure the needs of a particular project are properly met.
If you need help drafting a bespoke contract, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.