Contract Clauses Research Articles

Intelligent detection on construction project contract missing clauses based on deep learning and NLP

PurposeThe number of construction dispute cases has maintained a high growth trend in recent years. The effective exploration and management of construction contract risk can directly promote the overall performance of the project life cycle. The miss of clauses may result in a failure to match with standard contracts. If the contract, modified by the owner, omits key clauses, potential disputes may lead to contractors paying substantial compensation. Therefore, the identification of construction project contract missing clauses has heavily relied on the manual review technique, which is inefficient and highly restricted by personnel experience. The existing intelligent means only work for the contract query and storage. It is urgent to raise the level of intelligence for contract clause management. Therefore, this paper aims to propose an intelligent method to detect construction project contract missing clauses based on Natural Language Processing (NLP) and deep learning technology.Design/methodology/approachA complete classification scheme of contract clauses is designed based on NLP. First, construction contract texts are pre-processed and converted from unstructured natural language into structured digital vector form. Following the initial categorization, a multi-label classification of long text construction contract clauses is designed to preliminary identify whether the clause labels are missing. After the multi-label clause missing detection, the authors implement a clause similarity algorithm by creatively integrating the image detection thought, MatchPyramid model, with BERT to identify missing substantial content in the contract clauses.Findings1,322 construction project contracts were tested. Results showed that the accuracy of multi-label classification could reach 93%, the accuracy of similarity matching can reach 83%, and the recall rate and F1 mean of both can reach more than 0.7. The experimental results verify the feasibility of intelligently detecting contract risk through the NLP-based method to some extent.Originality/valueNLP is adept at recognizing textual content and has shown promising results in some contract processing applications. However, the mostly used approaches of its utilization for risk detection in construction contract clauses predominantly are rule-based, which encounter challenges when handling intricate and lengthy engineering contracts. This paper introduces an NLP technique based on deep learning which reduces manual intervention and can autonomously identify and tag types of contractual deficiencies, aligning with the evolving complexities anticipated in future construction contracts. Moreover, this method achieves the recognition of extended contract clause texts. Ultimately, this approach boasts versatility; users simply need to adjust parameters such as segmentation based on language categories to detect omissions in contract clauses of diverse languages.

Analyzing Recurring EPC Contract Clauses Leading to Court Cases in NHAI: Insights from High Court Judgments

Abstract: This study provides a thorough examination of frequently occurring Engineering, Procurement, and Construction (EPC) contract provisions that have resulted in legal disputes under the purview of the National Highways Authority of India (NHAI). This study intends to identify and examine the specific contractual clauses that have been the focus of legal issues in NHAI projects by drawing conclusions from a thorough assessment of High Court judgements. The study clarifies the underlying factors and ramifications of these conflicts, providing insightful viewpoints for those involved in the infrastructure and construction industries. This paper provides a platform for improving and strengthening EPC contracts to reduce potential conflicts and improve project execution efficiency by looking at the legal precedents.30 judgment from 2012 to 2021 were collected from Highcourt and identified recurring EPC contract clauses leading to court cases.

Quality-Induced Impacts on Time Overrun, Cost Overrun, Dispute, and Litigation in EPC Contracts

Abstract: This research paper delves into the intricate relationship between quality assurance measures and their consequential effects on time overrun, cost overrun, disputes, and litigation within Engineering, Procurement, and Construction (EPC) contracts of National Highway. Through an extensive qualitative study and in-depth analysis in SPSS, this paper aims to shed light on the critical high risk contract clauses which make project delays, budget overruns, and legal conflicts impacted by quality. The findings presented herein offer valuable insights for stakeholders in the construction industry seeking to enhance project performance and minimize legal liabilities through effective quality control mechanisms. Contractors, consultants, and employees of the authority were handed a questionnaire survey as part of this investigation. Google Forms was used to gather 161 replies. Principal component analysis was used in SPSS to analyse the aforementioned data. The result shows that there are a number of crucial (high risk) contract elements in EPC contracts that could lead to litigation.

To what extent can smart contracts replace traditional contracts in construction project?

PurposeThe smart contract provides an opportunity to improve existing contract management practices in the construction projects by replacing traditional contracts. However, translating the contracts into computer languages is considered a major challenge which has not been investigated. Thus, it is necessary to: (1) identify the obstructing clauses in real-world contracts; and (2) analyze the replacement's technical and economic feasibility. This paper aims to discuss the aforementioned objectives.Design/methodology/approachThis study identified the flexibility clauses of traditional contracts and their corresponding functions through inductive content analysis with representative standard contracts as materials. Through a speculative analysis in accordance to design science paradigm and new institutional economics, the economic and technical feasibility of existing approaches, including enumeration method, fuzzy algorithm, rough sets theory, machine learning and artificial intelligence, to transform respective clauses (functions) into executable codes are analyzed.FindingsThe clauses of semantic flexibility and structural flexibility are identified from the contracts. The transformation of semantic flexibility is economically and/or technically infeasible with existing methods and materials. But with more data as materials and methods of rough sets or machine learning, the transformation can be feasible. The transformation of structural flexibility is technically possible however economically unacceptable.Practical implicationsGiven smart contracts' inability to provide the required flexibility for construction projects, smart contracts will be more effective in less relational contracts. For construction contracts, the combination of smart contracts and traditional contracts is recommended. In the long run, with the sharing or trading of data in the industry level and the integration of machine learning or artificial intelligence reducing relevant costs, the automation of contract management can be achieved.Originality/valueThis study contributes to the understanding of the smart contract's limitations in industry scenarios and its role in construction project management.

The EU-US Data Privacy Framework: Doomed Like Its Predecessors?

As of 10 July 2023, the EU-US Data Privacy Framework became active 1 and allows for personal data to flow between the EU and US without the need for separate contractual arrangements (such as Standard Contractual Clauses (‘SCC’s’). However, with years of challenges and invalidation of (i) the EU-US Safe Harbor Framework and (ii) the EU-US Privacy Shield, it remains to be seen whether this new mechanism will fall foul of the same data privacy challenges as those mechanisms. Data Protection, International Data Transfers

ВЗАИМОДЕЙСТВИЕ МЕЖДУНАРОДНЫХ СТРОИТЕЛЬНЫХ КОНТРАКТОВ И ДОГОВОРОВ ОБ ИНВЕСТИЦИЯХ: ВОЗМОЖНОСТИ ДЛЯ ГАРМОНИЗАЦИИ КОММЕРЧЕСКИХ И ОБЩЕСТВЕННЫХ ИНТЕРЕСОВ

The article analyzes the interaction of the provisions of international construction contracts and bilateral investment treaties. The aim of the study is to identify opportunities for harmonizing commercial and public interests through model contractual clauses. The results can serve as a reference point for reforming norms and practices in the field of cross-border infrastructure. Opportunities for integrating commercial and government priorities in the areas of stabilization, arbitration, insurance, and information disclosure are being explored. Innovative provisions of standard contracts are proposed, designed to harmonize the interests of investors, the state, and society. The texts of model international construction contracts, bilateral investment treaties, multilateral conventions, scientific publications on private international investment and construction law, etc. were used as materials. The article used such methods as comparative legal analysis of provisions of contracts and agreements, system analysis of interrelationships between commercial and public-law norms, content analysis of scientific publications and expert sources, and analysis of the arbitration practice of resolving disputes from contracts and agreements. The integrated approach allowed for a comprehensive review of the interaction of international commercial contracts and investment agreements and the development of recommendations for their harmonization in the interests of all parties.

Effectively Using the Sherman Act to Address the Anticompetitive Use of Non-Compete Clauses in Tennessee Labor Contracts

Effectively Using the Sherman Act to Address the Anticompetitive Use of Non-Compete Clauses in Tennessee Labor Contracts

Royal Companies, Risk Management and Sovereignty in Old Regime France

Abstract Shortly after William of Orange arrived in Devon at the outset of the Glorious Revolution in 1688, Dutch troops stationed in Dartmouth seized the Amitié, a ship laden with marble purchased for the French court at Versailles. This seizure precipitated an extraordinary insurance dispute in Paris between two little-known royal companies: the Royal Insurance Company and the Royal Marble Company. This article analyses the fractious dispute and the companies at its heart. In so doing, it reflects on the dispute as a product of the French state’s broader exploitation of companies as tools of risk management: the state leveraged private capital in order to spread the risks of its virulently anti-Dutch commercial policy. Yet the dispute also exposed the ambiguities of war and peace in seventeenth-century thought and practice. In justifying their refusal to pay out on the insurance policy they had signed on the Amitié, the Royal Insurance Company’s directors suggested that an insurer could decide unilaterally that France was in a state of war, thereby triggering a contractual clause that would shift the onus back onto the policyholder. Although Louis XIV himself stepped in to defuse the dispute at its most contentious moment, the state proved unable to respond to the challenge posed to its sovereignty, with significant consequences for the French insurance industry and maritime commerce up to the end of the Old Regime.

국제장기상거래계약 상 불가항력조항의 설계에 관한 연구: 불가항력의 정의와 관련 사태의 리스트를 중심으로

국제장기상거래계약 상 불가항력조항의 설계에 관한 연구: 불가항력의 정의와 관련 사태의 리스트를 중심으로

Multi‐tiered dispute resolution clauses in engineering contracts: A Jordanian legal perspective

AbstractThis study delves into the intricacies of the multi‐tier dispute resolution clause in engineering contracts, particularly within the Jordanian legal system. The multi‐tier dispute resolution clause has evolved from a traditional arbitration clause into a more comprehensive approach, reflecting the complexities of modern contractual relationships. The study employs a doctrinal or library‐based methodology involving a comprehensive review of relevant legal texts, statutes, regulations, and case law. The multi‐tier dispute resolution clause is defined as a contractual clause that stipulates the existence of different stages, each involving separate procedures, to address disputes and seek to resolve them. The study also examines the mandatory nature of the multi‐tier dispute resolution clause and the procedural defense based on an arbitration clause. The study concludes that following the sequence outlined, the multi‐tier dispute resolution clause should be binding. This necessitates the Jordanian legislator's intervention to establish a legislative framework that empowers decisions made by the Dispute Adjudication Board (DAB) or Dispute Avoidance/Adjudication Board (DAAB) to achieve the goals of multi‐tiered dispute resolution clause. It also calls for an amendment to Article (109) of the Civil Procedure Law, allowing procedural defense based on the Multi‐Tiered Dispute Resolution Clause, not limiting it to the arbitration clause, even if arbitration is not one of its tiers. This power should also extend to amicable settlements to ensure the proper implementation of the steps under the multi‐tiered dispute resolution clause.

Reconstructing lease-to-own contracts: A contemporary approach to Islamic banking standards

The Palestinian Monetary Authority issued decision No. 15 of 2019 demanding Islamic banks to act according to Islamic standards set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). Among the essential financial services, Islamic banks offer Ijārah Muntahiyah bi-t-tamlīk contracts (lease-to-own), which share a similar purpose with financial leasing contracts. This decision places Islamic banks in a challenging predicament, caught between the modern doctrinal orientations of AAOIFI standards and the traditional orientations provided in Al-Majjahllah Code. The formation of Ijārah Muntahiyah bi-t-tamlīk contracts relies on a promise of sale issued by the bank to the tenant, contingent on the complete payment of agreed-upon installments. The first challenge arises because the general rules do not recognize the unilateral promise as a source of legal obligations, thus rendering it without legal value. The second issue stems from several contract clauses that contravene AAOIFI standards by burdening the tenant with most of the bank's obligations. Despite the importance of resolving these contradictions, no comprehensive review has been undertaken to date. This research introduces specific recommendations to ensure the consistency of these transactions with Islamic standards and relevant legislative provisions as provided in national law. By bridging this gap, the study seeks to enhance the effectiveness and compliance of lease-to-own contracts in Palestinian Islamic banks, fostering a more robust and Sharia-compliant financial system.

Employers’ willingness to invest in the training of temporary versus permanent workers: A discrete choice experiment

Various studies have shown that temporary workers participate less in training than those on permanent contracts. This paper investigates whether there is a difference in employer willingness to provide training to temporary vs. permanent workers and estimates the size of these differences under different cost-benefit related conditions. Building on a theoretical framework for employers’ provision of training that includes the major potential sources of cost-benefit differences associated with training investments in employees with different types of employment contracts, we use a discrete choice experiment to estimate the elasticity of a training offer to three attributes affecting employers’ expected net benefits from training investments: (1) the transferability of the skills being trained, (2) the financial contribution of the employee to the training costs and (3) the repayment of training costs when the employee quits early. We find that the effect of the transferability of the training is small and not robust to alternative model specifications. Instead, employers’ lower likelihood of investing in temporary workers is affected by two attributes: a financial contribution to the training costs and a repayment of training costs in case of early quits. Employers’ willingness to invest in temporary workers will particularly increase when introducing a contract clause that workers will repay their training costs when they quit within a year after the training.

The Conflict of Trade Secret Protection and Workers’ Rights in Non-Competition Clauses

This study aims to scrutinize the Non-Competition Clauses in employment contracts as a manifestation of trade secrets and understand how these clauses impact an individual’s right to choose employment. This study uses normative legal research with the statute and comparative approaches. The collected legal material is then qualitatively analyzed to describe the problem and answer study purposes. The results show that including Non-Competition Clauses in employment contracts by employers is a strategic measure to protect trade secrets from competitors. However, every contract must fulfill the requirements for the agreement’s validity subjectively and objectively. Non-Competition Clauses can potentially conflict with workers’ rights as regulated in Article 28D section (2) of the 1945 Constitution, Article 38 section (2) of Law Number 39 of 1999, and Article 31 of Law Number 13 of 2003, thereby violating the objective requirements of employment contracts based on Article 52 section (1) point d of Law Number 13 of 2003. Therefore, it recommended that relevant parties review and evaluate the implementation of Non-Competition Clauses in employment contracts in Indonesia. Before incorporating this clause into the employment contract, employers must consider the agreement’s validity requirements and workers’ rights. Furthermore, the employment contract should further explain the definition and scope of the Non-Competition Clause to avoid different interpretations. Meanwhile, the Government is recommended to create clear regulations concerning the legitimacy of Non-Competition Clauses in employment contracts. These regulations must consider the balance between protecting trade secrets and workers’ rights to employment and income. Lastly, Courts should prioritize protecting workers’ rights in resolving disputes related to breaches of the Non-Competition Clause, especially if employers cannot prove the workers have violated the company’s trade secrets.

Pathological clauses in international commercial arbitration

This article analyses the arbitration clauses, called in doctrine and in international commercial jurisprudence "pathological" clauses, which are drafted poorly, being likely to impede the proper conduct of international commercial arbitration due to incomplete, imprecise, unclear or contradictory stipulations. The remedies for the affected clauses depend on the nature and severity of the pathology affecting each clause, and, often, the deficiencies of these clauses are removed, as far as possible, by applying the various methods of interpretation of the contractual clauses, which have crystallized in national legislations, uniform law and comparative jurisprudence. The courts and arbitral tribunals give various decisions, depending on the legal regulations and the international commercial customs that they consider applicable in the case, the jurisprudence in this field being different.

A critical appraisal of traditional methods of construction progress monitoring

PurposeThe purpose of this study is to investigate the current construction progress monitoring (CPM) process in relation to the contractual obligations, how project management teams carry out this activity in the field and why teams continue to adopt the current method. The study aims to provide a comprehensive understanding of the current monitoring process and its effectiveness, identify any shortcomings and propose recommendations for improvements that can lead to better project outcomes.Design/methodology/approachThe study conducted semi-structured interviews with 28 construction management practitioners to explore their views on contractual requirements, traditional progress monitoring practices and advanced monitoring methods. Thematic analysis was used to identify existing processes, practices and incentives for advanced monitoring.FindingsStandard construction contracts mandate current progress monitoring practices, which often rely on manual, document-centric and labor-intensive methods, leading to slow and erroneous progress reporting and project delays. Key barriers to adopting advanced tools include rigid contractual clauses, lack of incentives and the absence of reliable automated tools. A holistic automated approach that covers the entire CPM process, from planning to claim management, is needed as a viable alternative to traditional practices.Research limitations/implicationsThe study's findings can inform researchers, stakeholders and decision-makers about the existing monitoring practices and contribute to enhancing project management practices.Originality/valueThe study identified contractually mandated progress monitoring processes, traditional methods of collecting, transferring, analyzing and dispensing progress-related information and potential incentives and points of departure towards technologically advanced methods.

(Анти)санкционные оговорки в международных коммерческих контрактах

The article provides analysis of sanctions clauses in international commercial contracts. Such clauses are intended to regulate actions of the parties in the event of sanctions and corresponding legal consequences. In comparison to classic force majeure clauses sanctions clauses have a number of advantages and may serve several interrelated purposes, including securing compliance by the parties with mandatory rules that impose restrictions on certain economic activity, adaptation of the contract to new circumstances in the event of economic sanctions, regulation of termination of the contract, as well as the distribution of risks and costs incurred by the parties in connection with this. The authors explore the structure of sanctions clauses and their provisions, which cause difficulties in practice, diverse approaches to determining the scope of sanctions clauses in the context of extraterritorial sanctions and blocking statutes, different threshold for sanctions risks that activate the clause, spectrum of options to secure adaptation of contract provisions depending on the specifics of the sanctions regimes, standards of due care and endeavours that are expected from parties in the context of sanctions, conditions for termination of contracts and possibilities for the distribution of costs incurred, including the payment of indemnity. The article also discusses validity of sanctions clauses, their relationship with overriding mandatory rules and norms preventing circumvention of the law, considers the risks of asymmetric and disparity provisions. Particular emphasis is placed on the relationship of sanctions clauses with other sections of international contracts, in particular applicable law and dispute resolution clauses.

A Decentralized and Automated Contracting System Using a Blockchain-Enabled Network of Stakeholders in Construction Megaprojects

With recent advances in information and communication technologies, trust and collaboration have become imperative in the construction industry. The increasing exchange of digital information and assets without much regard to contractual requirements has resulted in various data corruption, privacy, and security issues escalating to claims and disputes. Hence, there is a need to institute reforms in the existing contracting system to achieve a more efficient, collaborative, and transparent system. However, little research has investigated the digitalization of the contracting process, which continues to be traditional. This study is one of the first to develop a digital and automated contract management system leveraging blockchain technology and smart contracts. Design science research methodology was adopted for the research work. The proposed system aims to achieve the following: (1) a decentralized permissioned network of stakeholders with well-defined roles and approval workflow, (2) automated contract execution based on predefined conditions using smart contracts, and (3) transaction history integrity with time stamps via a blockchain-based secured data structure. To exemplify these points, a use case is presented for implementing blockchain-based contract management in a construction megaproject. A conceptual model was developed illustrating the decentralized network of the key project stakeholders based in a Hyperledger Fabric blockchain environment. The roles and access controls of the stakeholders within the network are defined using the responsibility assignment [responsible, accountable, consulted, and informed (RACI) matrix]. A computable and automated smart contract clause is formulated for the price variation clause used in construction contracts. A prototype of the proposed system was developed and demonstrated to industry experts for evaluation and validation. Positive feedback from the experts concerning the system characteristics and user-friendliness of the prototype showed that it possesses the potential to improve trust and transparency in the existing system. Whereas the decentralized stakeholder network would add trust and accountability to the system, the underlying blockchain data structure would enhance security and traceability by providing an immutable and real-time record of the transactions. The study provides a workable solution that serves as a valuable reference for future research in the field of contract management across multiple sectors. Although the system is shown to be applicable and feasible in this study, it may not be economically viable. It could be optimized in the future through cost–benefit analysis for different projects.

CJEU case law on CHF loans the most important issues still awaiting for the decision (limitation of claims, remuneration for the usage of capital)

The Unfair Contract Terms Directive and provisions of the national law which implement that legal act realize a system of consumer protection against the usage of abusive clauses in contracts concluded by consumers and professionals. The large set of case law provided by the CJEU makes it possible to clarify the principles and scope of the consumers protection. However, it is not comprehensive, as there are still important legal issues that have not been yet resolved by the CJEUs judgements. They concern, in particular, such important issues for borrowers as determining the beginning of the limitation period for claims of the parties to the contract, as well as assessing the legitimacy of the lenders' claims for payment of remuneration for the use of the capital of the loan, which had been paid on the basis of a contract which has been declared void. That issues are addressed by references in preliminary ruling proceedings, currently conducted before the CJEU on the basis of questions submitted by Polish courts, in cases concerning borrowers. Examination of these questions leads to the conclusion, that the Court probably will take a pro-consumer position on these key issues, consistently advocating for the broad protection of the weaker party to the contract.

Some Reflections on “Sharīʿah Clauses” of Islamic Finance Contracts

This study delves into resolving financial disputes on Shar'ah contract clauses involving parties from different jurisdictions. There is a lack of explicit references to Shar'ah law in the choice of law clauses in financial contracts. The study emphasizes the complexity of applying Sharīʿah principles due to different interpretations. The jurisdictions lacking Shar'ah law expertise on Islamic finance disputes may set unfavorable precedents. The recommendations include strengthening local jurisdictions in Shar'ah-based legal systems by training judges and arbitrators. Encouraging Islamic Financial Institutions (IFIs) to adopt Shar'ah compliance procedures, collaboratively developing unified IB&F Law, offering mechanisms of comprehensive training of legal practitioners, promoting confidence in local courts, creating a collaboration platform, and developing a comprehensive handbook for adjudicators, etc. are recommended measures to enhance Shar'ah-based dispute resolution and maintain credibility, stability & growth of Islamic finance sector.

Moral Clauses in Contracts: An Iraqi Law Perspective

Purpose: In this research, I want to address the moral clauses in contracts concluded by employers with talents and celebrities to promote goods and services. I want to define the meaning and use of these clauses in USA, and answer whether they are acceptable in Iraqi law. Theoretical framework: In USA, moral clauses used since the twenties of the last century and adopt widely in its sixties until now, it used in contracts relating provide work or service by a talent or celebrity and contracts of sponsorship. Moral clauses refer to conducts that talent prohibited from doing such as lying, violating laws, or corruption. Breaching of these clauses may result in termination of contract, or oblige talent to pay damages. Method: This research follows a comparative analytical approach between the American and Iraqi laws regarding moral clauses, showing their meaning, importance and effects. Result and conclusion: This research concluded that moral clause valid in Iraqi law, because it not violate public order or morals. Implications of the research: The research provides a ground for talents, celebrities, contractors, and employers to be aware of their rights and duties regarding moral clauses, the way these clauses formulate in contract, and how to deal with breach of it. Originality/value: Moral clauses not previously dealt with in Iraq, so this research paves the way for other researchers to delve into these clauses.