Contract Definitions

As I was updating my CIPS Knowledge, I came across this article “Why definitions are the backbone of all good contracts” posted by Supply Chain Management on 23rd February 2018.

The article spoke about “Misused definitions in contracts and how the legal results can be disastrous. Using an undefined term may lead to expensive litigations. Definitions are the backbone of every good contract,” says Susan Singleton.

Bringing this topic down to our local set up, it may seem easy for Private Procurement Professionals to rely on standard terms and conditions specified by the vendor, especially were the said good/services are monopolistic in nature. On the contrary, for Public Procurement Professionals, the said is unheard of!

Under Public Procurement practice, contract definitions are stipulated in the standard set of terms and conditions (T & Cs) provided by the relevant authority. In fact, the definitions and the T & Cs are prescribed at the bidding stage and these culminate into a contract.

Bottom line – Whether Public or Private practice; the standard set of T & Cs of purchase set out to achieve what standard forms usually have as their goal: To ensure practical and effective contract terms, which firmly protect the procuring entity’s interests without being unfair or unreasonable to the supplier (CIPS Guidance Notes).

For my colleagues in Public Practice, we look forward to the new standard set, to be released by the authority, with the expectation that the definitions shall tackle a new understanding of Force Majeure to cover ripple effects of global pandemics or the outbreak of war.

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