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Dear Engineer to the Contract, The problem is....

Updated: Jul 23, 2021

Dear Engineer to the Contract,

Look before you leap to the least or most onerous resolution rule;

- The well-crafted words of the client too often quickly refer to the least or most onerous rule. Such clauses are being frequently misapplied. Please do not fall under the client's spell.

The rule put simply is;

- If seemingly ambiguous or unclear parts of a contract can be reconciled then this is the correct interpretation. This is a well-known and agreed application of contractual interpretation.

- A discrepancy clause is only to be used as a last resort where no reconciliation is possible.

My Personal Checklist is

- Anyone interpreting the contract must explore all possible interpretations. If there is a way to harmonise the parts, then this is always preferred to discarding any part;

- A difference that can be reconciled is not a discrepancy; and

- A discrepancy is an irreconcilable difference, to be resolved by tie breaking rules.

Stop arguing about grey matters

Too often parties choose to argue to avoid resolving matters, when they see their “black” is actually “white”. So, they grey wash it, so they can argue a share that has not been earned. It’s just plain wrong. Clients and Main contractor’s equally read down the contract to their lesser powerful supply chain and slow payments to bully a better than fair result. I say, "no more!" It is time to stand up to bad behaviour. When the claim is well presented and clearly “white” call it as it is, please?

By Matthew Ensoll Editor, The New Zealand Building Economist (NZBE).


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