The Importance of Standard Form of Contract

standard form of contracts


A successful standard form of contract, according to Datuk Sundra Rajoo (2014), would lend itself to controlling the day-to-day relationship on a building site and offer a clear and definite knowledge of the parties’ roles and responsibilities. Users and practitioners must be familiar with the contract’s standard form of terms and conditions. As a result, it would be useful in clarifying the parties’ obligations and defining the project’s scope with reasonable clarity. In arbitration, Standard Form Contracts are commonly used to ensure that both parties are aware of the norms and regulations. In this essay, I’ll go over why the Standard Form of Contract (SFC) is so crucial.

standard form of contracts
  1. Familiarity with the material

Since a standard form of contract is used frequently, everyone will be familiar with the content. The contractual complexities that any type of contract entails are frequently relatively simple to comprehend. The use of standard contractual papers helps consumers become more familiar with the various contractual terms and obligations (Murdoch & Hughes, 2007). Because the content and provisions of the contract are familiar, there are fewer disagreements and misunderstandings. Furthermore, according to Broome & Hayes (1997), the possibility of redundancy is removed. Furthermore, the usage of these forms regularly creates an experience bank, which leads to increased efficiency.

  1. Increase the speed of the bidding procedure

The elimination of the bargaining portion for the arbitration is supposed to speed up the bidding procedure. It also tries to determine the possibility of having a contract of works that is flexible enough to allow for any necessary situational alterations after the agreement is signed, without risking any outcomes that the parties may have argued for throughout their respective discussions. As a result, every outcome is final and should not be revisited unless required.

  1. Less room for deviation

There is less room for deviation from the contract’s provisions if the contract is consistent. It makes it illegal for employers to change contracts without informing their clients. In a nutshell, Standard Form Contracts will be fair since they are more clear about what is going on at the time. There are no margins for error because any changes to the paper should be done with both parties’ consent.

  1. Reduces cost

Every party can customise their contract for specific tenders if the Standard Form of Contracts is not used. When customising the contract, this will cost you extra. Because many people utilise standardised contracts, utilising SFC lowers contracting costs. It also takes less time than creating your contract from scratch. Furthermore, contract standardisation improves the transparency and fairness of the tendering process. They serve as a basis for comparison and evaluation, and familiarity with the material makes pricing simpler and faster.


Standard form construction contracts, despite their advantages, are not ideal for all projects. Even though they are a fantastic starting point for your organisation, the terms of the standard form of contract may need to be adjusted to match your specific requirements.

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