Avoiding Legal Issues with Incomplete or Poorly Drafted Contracting Agreements in Bahrain
In Bahrain’s contracting industry, a well-drafted agreement is the foundation for a successful project. When contracts are incomplete, vague, or poorly written, they create uncertainty often leading to disputes over scope, payment, quality, and timelines.
This blog explains the risks of inadequate contracting agreements, the key elements required under Bahraini law, and best practices to ensure contracts protect all parties and withstand legal scrutiny.
How Incomplete or Poor Contracts Cause Problems
- Undefined Scope of Work
- Ambiguity over what is included or excluded leads to scope creep and variation disputes.
- Unclear Payment Terms
- Missing details on payment milestones, retention, or variation pricing.
- No Dispute Resolution Mechanism
- Without a clear method for resolving conflicts, disputes can escalate to lengthy court cases.
- Missing Compliance Clauses
- Lack of provisions for regulatory, safety, and quality standards under Bahraini law.
- No Termination Provisions
- Unclear rights and procedures for ending the contract without breaching it.
Key Legal Requirements in Bahrain
A complete contracting agreement should:
- Identify the Parties — full legal names, CR numbers, and contact details.
- Define the Scope — detailed specifications, drawings, and deliverables.
- Set Payment Terms — amounts, schedules, retention, and penalties for late payment.
- Include Variation Procedures — how changes will be approved, priced, and scheduled.
- Address Defects Liability — responsibilities during the DLP and warranty period.
- Specify Governing Law — confirm Bahraini law applies, and state the dispute resolution method.
Risks of Incomplete Contracts
- Frequent disputes over obligations and performance.
- Loss of payment for extra work due to lack of formal variation clauses.
- Legal exposure from missing compliance requirements.
- Difficulty enforcing rights in court or arbitration due to unclear terms.
Example:
A contractor in Bahrain signed a brief agreement to build a warehouse, containing only basic details about the price and completion date. The contract did not define the scope of work or address material specifications.
When the employer demanded higher-grade steel halfway through the project, the contractor argued it was not included in the price. The dispute delayed the project and led to arbitration. A lawyer reviewing the matter noted that a clear scope clause with defined inclusions and exclusions could have prevented the conflict entirely.
Best Practices
For Contractors:
- Always ensure contracts are reviewed by a legal professional before signing.
- Use comprehensive templates that cover all technical, financial, and legal aspects.
- Avoid starting work based on incomplete or unsigned agreements.
For Employers:
- Provide detailed project requirements in tender documents.
- Ensure the contract includes compliance obligations and penalties for non-performance.
- Avoid vague clauses that leave room for conflicting interpretations.