What Takes Precedence in a Contract

6. Objective examination goes beyond the words of the contract There are usually two legal documents that deal with the provisions of a construction project. One document sets out the general provisions and the other describes the specific provisions. In the event of a conflict between the document and the special provisions and the contract, the special provisions document generally prevails. The document with the general provisions prevails over the document with the special provisions and the contract if the conditions of the three documents have different conditions or a different language that leads to confusion. The two approaches are very different and are both good examples of how to approach classification clauses in construction contracts. If you choose to include a classification clause or if you need to negotiate the specific wording of a classification clause, I recommend that the wording of the clause be clear, that the decision-maker perform an analysis using traditional contract interpretation techniques to determine the intention of the parties as a precursor to invoking the classification clause. Classification clauses are a useful means of providing certainty in the interpretation of the contract where it might not otherwise exist. However, be careful to rely only on it, as you may not get the fairest result. While this is clearer, it remains a broad context. Anything that might have influenced the intention of one of the parties at the time of the conclusion of the contract may indeed constitute important evidence in the event that a question of interpretation of the contract arises.

A communication that seems irrelevant in the conclusion of a contract may indeed prove crucial when it comes to analyzing the intention of the contracting parties when signing the contract. The document management of projects already in the pre-contractual phase is therefore of crucial importance. In short, Lord Hoffman`s test asked, “What would a reasonable man interpret as the meaning of the treaty?” Ranking. Any inconsistency in the terms of this Agreement will be resolved by precedence in the following order: (1) the applicable modification resulting in the inconsistency of the Terms, (2) the Agreement, (3) the Annexes and (4) any other document expressly incorporated by reference under the Agreement; in such a way that the disposition of the higher-ranking document prevails to the extent of the inconsistency. A subcontractor has been hired by the supplier to install new light switches in your office. It would be unwise for your organization to ask the subcontractor to change a light bulb because there is no contractual relationship between your organization and the subcontractor. If you request that the additional work be done, a new oral contract will be created. This exposes your business to price risk (no cost has been agreed) and legal risks (no insurance requirement has been agreed). The classification in project management governs only the services and precautions listed and not the conditions or specifications omitted.

If all the construction documents for an order do not address a particular issue and lawyers and project managers determine that the official language omits the specifications, the parties must amend the contracts, specifications and plans to deal with the dispute. The new supplementary agreement may include additional costs for the customer or concessions from the contractor. Contract changes can result in significant costs for both the owner and the construction company. A filing clause is a term that identifies the order in which different contract documents are prioritized to resolve a conflict or ambiguity in those contract documents. Not all construction contracts contain such a clause. However, many industry participants prefer to include a filing clause in their contracts in order to provide certainty in resolving a conflict or ambiguity in contract documents. The theory is that they will always know that there is a clause in the contract that “breaks the bond,” so to speak, and therefore never leaves the issue unresolved. Of course, this certainty sometimes comes at the expense of a just solution.

One of the challenges in deciding whether or not to include a filing clause and prioritize contractual documents in the clause is that one is not entirely sure how this priority will affect the outcome of a legal dispute. Privity means that only the parties to a contract can enforce the contract. In the real world, this means that if a subcontractor is hired through the supplier, there is no contractual relationship between your organization and the subcontractor. Individual documents may be summarised in annexes or annexes to the contract or incorporated by reference into the contract by reference by mentioning them in the contract itself. The Court held that “the factual circumstances are applicable. would involve conduct under the treaty, which is generally not an acceptable interpretive guide. “The decisions of the United States Claims Court and the Contract Appeals Chambers have made it clear that if a contract contains a classification clause that governs the interpretation of contractual provisions that conflict with each other, the contractor may take the clause literally and invoke provisions that have superior authority. Hensel Phelps Const. Co.c. United States, 886 F.2d 1296, 1299 (Fed. Cir.

1989) (citing Franchi Const. Co., Inc.c. United States, 609 F.2d 984 (Ct. Cl. 1979)); Ryan Electrical Company, ASBCA No. 32381, 87-3 BCA 20.121. As long as there are discrepancies between the contract signatures and the specifications, the classification clause does not impose an investigation obligation on the contractor, but automatically resolves the obvious conflict between the contract drawings and specifications. In this context, the Court of Claims in Franchi, 609 F.2d to 989-990: The government drafted the classification clause as a mechanism for automatically eliminating conflicts between specifications and drawings by giving priority to the former. As an additional initiative, the clause imposes a positive investigation obligation on the entrepreneur, who faces a certain dilemma, namely divergences within the different categories of designs and specifications, among others. When working on a construction contract, the basic document that sets out work processes, regulations, construction requirements, and preparations is usually the contract between the owner and the general contractor.

This legal document sets out the basic operating rules of the construction contract, but usually has the lowest legal rank or priority over all other construction documents dealing with the specifications and details of the building. Often, when a dispute arises, the parties to the contract may face events that occur after the contract has been agreed. These events are considered irrelevant by the courts to what the contract correctly means. Subsequent events may shed light on the interpretation of the Treaty, but cannot alter its fundamental meaning. When a dispute arises over the meaning of a contract, there are no easy answers. A detailed analysis of the contract as a whole is required. In many cases, it is likely that this will resolve inconsistencies or ambiguities. However, if this is not the case, a more detailed review of the contractual documents and the intention of the parties is required. Since these exercises can be so difficult (and therefore costly), disputes over interpretation points should be avoided where possible. Where unavoidable, obtaining legal advice should be a priority.

The Court recognized that strict application of the classification clause in this way could lead to unfair results in certain circumstances and noted that the principles of fairness would apply to ensure that contractors do not make a profit or otherwise benefit from the application of the clause. Essentially, the court will require a contractor to rely on its application of the ranking clause in the bidding process. Lord Hoffman was clear that the objective criterion meant more than just looking at the words of the treaty in their usual sense. He said: “The meaning of words is a matter of dictionaries and grammars; The meaning of the document is what the parties using these words in the relevant context would reasonably have understood. I am a subcontractor working on a contract that includes both a working document and a attendance plan. The two documents say different things as to whether I am responsible for providing scaffolding on the east elevation. .