Similar to many industries, legal battles within the construction industry primarily consist of disputes over contract terms. Careful drafting and negotiation of your contracts is the best tool to avoid disputes because it sets expectations early and provides the tools to address them if they arise. Keep these three tips in mind when entering into a contract to help avoid a future dispute.
When ambiguity exists, disputes are sure to arise. Precise words are essential to ensure clarity of intent. Review your contract language to determine if the words could be interpreted in multiple ways. If so, the contract language may need to be reworked.
This tip ties into avoiding ambiguity. Try to avoid jargon words or terms that may be unclear or subject to interpretation. Avoiding jargon will help ensure that the intent of the contract parties is clear, thereby lessening the chance of a dispute. In the event of a dispute, an independent third party, such as a court or arbitrator, must also be able to understand the intentions of the parties. If left to interpretation, the court or arbitrator may reach a conclusion not intended by either party.
No Conflicts With Other Documents
Ensure that the contract terms don’t conflict with other contracts, agreements, and documents that you have already in place. Subcontracts often flow down terms of prime contracts and you need to know the commitments you’ve made in prior contracts to confidently move forward with a new contract.
Equinox can help ensure your contracts incorporate these tips. For additional information, we invite you to attend our Construction Seminar, “Building Foundations: Best Practices in Today’s Construction Environment,” on October 31, 2018. You can sign up for the seminar at our Events Page by clicking here. You can also contact us at 425-250-0205 and can learn more about our Construction Industry General Counsel Services by clicking here.