Ambiguities usually arise for a number of reasons in contracts. These stem from lumping in numerous factors and documents – such as general conditions, principal agreements, specifications and change orders – into a single contract. What leads to these situations? Most of the time, it’s the rush to finalize contracts that causes problems, and if you don’t read carefully, it can result in conflicts and unintended consequences.
Avoid these from the start, especially when drafting and negotiating construction contracts. This helps you get what you want, including fulfillment and bargained-for benefits that will steer you clear of expensive legal disputes involving construction law. Follow the steps below to help minimize ambiguity at all costs.
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Keep it Simple
When writing the first draft of a contract, keep it simple and concise. These contracts will be read by a variety of people, including a judge who may not have knowledge of the construction industry. Try using simple, plain English and short sentences while avoiding redundancy. These will make your contracts easier to read and understand.
Include it if it’s Part of the Agreement
When a comprehensive and complete contract comes off as clear to a court, it will more than likely prohibit the use of other documents to help parties give meaning to intentions or claims. Be aware that statements made during negotiations will not be valid when contradicting expressive terms are in a contract. Put it all in the contract, even if you have to include a key document for reference.
Define Every Key Term in the Contract
Everything in court is given concrete meaning, including ordinary terms and technical ones. These meanings will not be able to be separated from the context in which they are interpreted and is the primary reason why parties disagree on what terms mean in a variety of contexts. To help avoid misunderstandings, define terms to attribute specific meanings to and capitalize them as well. When referring to specific meanings throughout the contract, capitalize the term to refer to it.
The Order-of-Precedence Clause
As any professional working in construction will tell you, numerous documents make up a construction contract, hence, conflicts arising from specifications and drawings can occur. A way to help avoid these conflicts is to include a clause stating that in the event of a conflict, the specifications take precedence over the drawings or contract documents take precedence in a certain order of hierarchy. You might also want to include a provision stating that everything in a contract document shall be binding.
Update Standard Contract Forms
Throughout the construction industry, there are many standard-form agreements that are commonly used. However, there are certain risks when using these forms since they are written to apply to a wide range of agreements, so they’re written very broadly. If they’re not read and updated, they may contain terms that aren’t applicable to the agreement or contract you’re drafting. Review them carefully so that both parties agree on the terms within them.
If there is a disagreement regarding what is written and both parties verbally agree to a new term, make sure it’s added the contract. Add and delete terms from some of these standard-form agreements as you see fit to ensure agreements and avoid misunderstandings.
Let Us Help You
Our McAllen attorneys at Fryer & Hansen, PLLC can offer you the legal expertise needed to answer questions pertaining to construction law. We possess and work with a diverse range of experience and clients to address and help with any situation in a legal dispute. Call us today for a free consultation at 956.686.6606.