Construction and contracts operate in the same way – multiple parts come together to form one cohesive item.
Construction projects require specifications for measurements, elements of building products, and the amount of materials to be used. Contracts are put together as a document that addresses the intentions of the parties involved. Construction contracts are based on the simple premise that someone wants something built or fixed, and someone else agrees to build or fix something. If only the drafting of construction contracts could be that simple.
Construction contracts set out the responsibilities, obligations and duties of the parties involved. The parties generally intend to follow those responsibilities, obligations, and duties. The intentions of the parties, however, are not always set out in clear, unambiguous terms. Ambiguity can arise when a term or phrase in a contract can be reasonably interpreted to have more than one meaning. To minimize the possibility of ambiguity in a construction contract, consider the following tips:
- Use plain language, with straightforward terms and clauses. A contract that becomes bogged down in technical terms or run-on clauses will open the door for claims of ambiguity. Clear, succinct, and easy-to-understand phrasing helps the parties express their intentions without too much “legalese.”
- Take punctuation seriously. A misplaced or omitted comma could mean dire consequences. In early 2017, the United States First Circuit Court of Appeals sided with delivery drivers who argued four years of overtime pay was due because an Oxford comma was missing in their contract language. If you want to know how the case turned out, Google “10 million-dollar Oxford comma.”
- If a technical term, or industry-specific term is used, add the definition of the term to the contract. If the term becomes an issue for litigation or arbitration, the outcome will be determined on how the parties intended the term to be used at the time the contract was executed. A clear definition in the contract will help alleviate any question of ambiguity that could be raised.
Careful contract drafting is a valuable way to avoid disputes. If you find a construction contract too wordy, or too vague, read it out loud. Make sure you understand what you are reading, and that it matches your intentions for agreeing to the contract.
For additional information regarding construction law, contact our Sioux City law firm, Sioux Falls law firm, or Omaha law firm today! For more articles like the one above, visit our Construction Lawyer blog!