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Avoiding Ambiguity in Construction Contracting

Contracts can easily become needlessly complex - especially after lawyers get ahold of them. The legal jargon and boilerplate provisions can cause the parties’ eyes to glaze over. However, it is important to differentiate that type of language to necessary details. The reality is that it is often necessary to have very detailed contracts, even if this causes multi-page, dense agreements.

Adding details to clarify ambiguity in a contract can save both parties from disputes in the future; disputes that would likely require extensive fees and expenses to litigate. For example, suppose you have a contract provision stating that the customer will pay $10,000 at the completion of Phase One of the project. If the customer terminates the contractor at a time when the parties dispute whether Phase One has been completed, then the contract should be able to resolve the issue. But if you do not have a contract that properly defines (a) what Phase One entails and (b) what “completion” means, then you are probably heading down a road towards litigation.

With construction companies, particularly small businesses, the focus can be more on getting the contract rather than the language in it. But it is important to make your best efforts to ensure you have a clear contract. Especially with regards to the provisions relating to payments. Avoiding ambiguity on the front end will help you avoid costly litigation on the back.

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