Construction: Overview, definition and example
What is construction?
In the context of contracts, construction refers to the process of interpreting and understanding the terms, clauses, and provisions in a contract. It involves determining the meaning and intent behind the language used and how those terms should be applied in practice. Construction is crucial for ensuring that all parties understand their obligations and responsibilities.
Why is construction important?
Construction is important because it ensures clarity and reduces ambiguity in a contract. Proper construction helps prevent disputes by making sure that all parties involved understand the exact meaning of the contract terms and how they are to be executed. Without proper construction, one or more parties might interpret the agreement in a way that doesn’t align with the original intent, leading to potential conflicts.
Understanding construction through an example
Consider a construction company that enters into a contract with a property owner to build an office building. The contract includes clauses related to project timelines, payment schedules, and materials used. If there’s any uncertainty about these terms—such as what exactly counts as “acceptable materials” or the deadline for completing specific stages—construction of the contract will be necessary to clarify those points and avoid future misunderstandings.
For instance, if the contract says, “the project should be completed within a reasonable time,” the construction process would involve interpreting what constitutes "reasonable" in that context, considering factors like weather delays, labor availability, or scope changes.
An example of a construction clause
Here’s how a construction clause might appear in a contract:
"The terms and conditions set forth in this agreement shall be interpreted according to their plain meaning and in the context of the overall agreement. Any ambiguities shall be resolved in accordance with the parties' intent, as evidenced by the written terms of the contract."
Conclusion
Construction plays a vital role in ensuring that the terms of a contract are clearly understood and applied as intended. By interpreting the language and context of an agreement, construction helps ensure that both parties fulfill their responsibilities as expected. This clarity helps prevent future disputes and ensures the contract functions smoothly.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.