In construction contracts, as with many legal documents, there are terms or phrases that can be ambiguous and open to interpretation.
Ambiguous terms in construction contracts can lead to a multitude of challenges and should be avoided. Unfortunately, the presence of vague terms can dramatically increase the risk of disputes, potentially culminating in lengthy and expensive legal battles.
What Are The Risks Of Ambiguous Contract Language?
These misunderstandings, born from a lack of clarity, can also result in construction errors. Correcting such errors often means additional costs due to rework, material waste, and labor overruns. Moreover, project timelines can be disrupted by work stoppages arising from disagreements over ambiguous terms.
Relationships between owners, contractors, subcontractors, and other stakeholders can suffer significantly, leading to a lack of trust and cohesion among the parties involved.
What Are Commonly Used Ambiguous Terms In Construction Contracts?
Here are some of the more commonly encountered ambiguous terms:
- “Reasonable” or “Reasonably”: This is a common term that can mean different things in different contexts. For instance, “reasonable efforts” or “reasonable time” can be subjective without clear benchmarks.
- “Substantial Completion”: This often refers to the point at which a project can be used for its intended purpose, but what exactly qualifies as substantial completion can be up for debate.
- “As Is”: When materials or an existing building are accepted “as is,” it might be ambiguous as to which defects are acceptable and which defects are not acceptable.
- “Force Majeure”: This term, meaning unforeseeable circumstances that prevent someone from fulfilling a contract, can be vague if not clearly defined. Events like “acts of God,” wars, or strikes might be included, but the specifics can vary.
- “Fit for Purpose”: Without clear specifications, what qualifies as “fit” can be debated.
- “Or Equal”: In specifications, “or equal” can be used to indicate that products other than the named brand can be substituted if they are of equal quality and function. However, what is “equal” can be a source of contention.
- “Workmanlike Manner”: This term refers to quality of work, but without a clear definition, it can be interpreted in various ways.
- “Customary” or “Usual”: These terms, when used to describe practices or standards, can vary from region to region or among different contractors.
- “Including But Not Limited To”: This phrase often precedes a list, suggesting the list is not exhaustive but this phrase can create uncertainty about what else might be covered.
- “Best Efforts”: Similar to “reasonable efforts,” it can be hard to determine exactly how much effort is required to meet this standard.
- “Day”: Does this mean calendar days, business days, or another definition? It’s essential to specify.
- “Fair Market Value”: This refers to the price a willing buyer would pay a willing seller, but there can be disputes over how this value is determined.
- “Material Change” or “Material Adverse Change”: What exactly constitutes a “material” change can be a source of disagreement.
- “Delay Damages” or “Liquidated Damages”: While these are intended to set a predetermined amount for damages when there are delays or other issues, they can be ambiguous unless very well-defined.
- “Indemnity”: The scope and terms of indemnification, especially if not detailed, can be contentious.
Given these concerns, it’s vital to ensure construction contracts are drafted with clarity. Engaging professionals in construction law, ensuring mutual understanding among all parties, and promoting transparent communication are crucial steps in achieving a clear agreement.
Facing Construction Disputes in North Carolina? Protect Your Interests Now!
Navigating the complexities of construction litigation in North Carolina can be daunting, but you don’t have to do it alone. Whether you’re contending with contract ambiguities, workmanship disputes, or project delays, the seasoned North Carolina construction litigation attorneys at Anderson Jones, PLLC are here to defend your rights and secure the best possible outcome.
Don’t let misunderstandings or disputes jeopardize your project’s success. Act now to ensure you have the best representation on your side. Reach out today and let’s build a strong foundation for your case.