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WILLIAM QUATMAN, from page 11
“These obligations are for the purpose of facilitating coordination and construction by the Contractor and are not for the purpose of discovering errors, omissions, or inconsistencies in the Contract Documents; however, the Contractor shall promptly report to the Architect any errors, inconsistencies or omissions discovered by or made known to the Contractor as a request for information in such form as the Architect may require… “If the Contractor fails to perform the obligations of Sections 3.2.2… the Contractor shall pay such costs and damages to the Owner, subject to Section 15.1.7, as would have been avoided if the Contractor had performed such obligations. If the Contractor performs those obligations, the Contractor shall not be liable to the Owner or Architect for damages resulting from errors, inconsistencies or omissions in the Contract Documents, for differences between field measurements or conditions and the Contract Documents, or for nonconformities of the Contract Documents to applicable laws, statutes, ordinances, codes, rules and regulations, and lawful orders of public authorities.” THE RULE OF REASONABLENESS. Even if an ambiguity is found to be hidden and not obvious, i.e. latent, the contractor is not automatically entitled to an extra or a change order from the owner. Courts hold that a contractor’s interpretation of a latent ambiguity will only be adopted if it is found to be reasonable. As one court held, “If the court finds that a patent ambiguity did not exist, then the reasonableness of the contractor’s interpretation becomes crucial in decid- ing whether the normal contra proferentem rule applies.” Interpretation of the contract requires the court to place itself into the shoes of a reasonable and prudent contrac- tor. The contractor does not have to prove that its inter- pretation of the contract is the only reasonable one, but it does bear the burden of showing: a) that its conclusion is at least a reasonable reading; and, b) that it relied on its interpretation of that provision when preparing its bid. WHAT TO DO? If you are an owner or design professional, the takeaway here is to not leave contractors guessing at your intent. Using plain language, make your intent clear to avoid disputes, change orders and claims. If you are a contractor or a subcontractor bidding a job, read the docu- ments carefully and ask for clarification if something is un- clear at the earliest discovery of an ambiguity. Failure to do so may result in the financial risk shifting from the drafter to the reader! WILLIAM QUATMAN, FAIA, Esq., is general counsel and senior vice president at Burns & McDonnell Engineering Co. He can be reached at bquatman@burnsmcd.com. “Under this rule, ambiguities in a contract, a set of specifications, or a drawing can be interpreted against the author and in favor of the other party’s reasonable interpretation.”
ary definition. Second, the court applies the principle that a contract should “be considered as a whole and interpret- ed so as to harmonize and give reasonable meaning to all of its parts.” Third, the mere fact that the parties disagree with regard to the interpretation of a specific provision, does not, standing alone, render that provision ambiguous. A contract provision is ambiguous only if it is susceptible to more than one “reasonable meaning.” In other words, differing interpretations must fall within a “zone of rea- sonableness.” “The person who drafts a document (contract or drawing) has to make his or her intent clear, and not leave the reader guessing at the intent. The legal name for this rule is ‘contra proferentem,’ Latin for ‘against the offeror.’” CONTRACTOR’S DUTY TO INQUIRE. Like every legal rule, there are exceptions. The exception to this rule of contra proferen- tem applies when an ambiguity is obvious on the face of the document, known as a patent ambiguity. This excep- tion applies when the ambiguity is so glaring that it is unreasonable for a contractor not to discover and inquire about it. A patent ambiguity triggers a duty on behalf of a contractor on public projects to ask about the meaning of the ambiguity before it bids on a contract. Absent such an inquiry, a patent ambiguity in the contract will be resolved against the contractor – and not the drafter – for failure to inquire as to the contract’s meaning. Government cases have held that the owner’s so-called Spearin implied war- ranty does not eliminate the “contractor’s duty to inves- tigate or inquire about a patent ambiguity, inconsistency, or mistake when the contractor recognized or should have recognized an error in the specifications or drawings.” Therefore, contractors are given fair warning that, when faced with an obvious ambiguity in the contract, plans, or specifications, they should err on the side of seeking clarification prior to bidding rather than hoping to pursue a change order later. This is tough law, but it makes sense that a contractor should not be able to “sand-bag” on claims, but should come forward at the earliest stage and seek a clarification. This rule has essentially been written into industry contracts. AIA CONTRACT CLAUSES. In the private sector, this concept is found in the standard AIA A201 General Conditions (2017 edition). Failure to promptly report an ambiguity will re- sult in the contractor bearing the financial risk. Section 3.2, Review of Contract Documents and Field Conditions by Contractor, states that: “Because the Contract Documents are complementary, the Contractor shall, before starting each portion of the Work, carefully study and compare the various Contract Documents relative to that portion of the Work…
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THE ZWEIG LETTER April 22, 2019, ISSUE 1293
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