{"id":891646,"date":"2017-02-15T10:07:19","date_gmt":"2017-02-15T17:07:19","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=891646"},"modified":"2017-02-15T10:07:19","modified_gmt":"2017-02-15T17:07:19","slug":"importance-clear-contract-terms","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/importance-clear-contract-terms\/","title":{"rendered":"The Importance of Clear Contract Terms"},"content":{"rendered":"

Michael Wilson | Greensfelder Hemker & Gale PC<\/a> | February 6, 2017<\/p>\n

Many legal battles in the construction industry revolve around contract interpretation disputes. Care in contract drafting is a valuable way to avoid disputes.<\/p>\n

A fundamental principle of contract interpretation is to ascertain and give effect to the parties\u2019 objectively expressed intent. What a party was trying to say, without accurately expressing it, does not count. Contract terms are usually given their ordinary (i.e., dictionary) meaning unless the contract specially defines them or the industry has adopted a special meaning known to both parties.<\/p>\n

Identifying and interpreting ambiguity<\/strong><\/p>\n

Ambiguity exists in a contract when the pertinent terms are subject to two or more reasonable<\/em><\/strong> constructions. When an ambiguity exists, a court (and presumably an arbitrator) will give great weight to how the parties contemporaneously construed the terms by conduct or otherwise. Other interpretive guides when an ambiguity exists include:<\/p>\n

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  1. The specific controls over the general; and<\/li>\n
  2. The more recently drafted of two provisions controls.<\/li>\n<\/ol>\n

    The interpretative rule of last resort is to construe the ambiguity against the party that provided the language.<\/p>\n

    In federal government contracts, a patent or apparent ambiguity is construed against the contractor. To avoid this result, a contractor for a federal project is obligated, before bidding, to seek clarification.<\/p>\n

    Examples from case law of ambiguities include:<\/p>\n