Sources of Ambiguity in Construction Contract Documents, Reflected by Litigation in Supreme Court Cases

Abstract

A construction contract is a mutually agreed upon and signed document by the contracting parties and plays a significant role in controlling and preventing disputes in a project. This paper’s main objective is to develop a framework to assess sources of ambiguity in construction contracts for comprehensive referencing and early detection of potential root causes of claims and disputes. This is addressed by (1) developing a hierarchical concept map, representing well-rounded sources of contract ambiguities through a comprehensive analysis of the literature; and (2) validating the proposed model by the analysis of relevant court cases at the Supreme Court of Canada (SCC) as the court of last resort in the Canadian judicial system. Starting with 285 relevant cases in construction (from a total of 30,500 cases listed on the SCC website), we defined topical, temporal, and geographic criteria, and narrowed the cases accordingly down to 50, which underwent a first-level analysis, and 13 cases, which went through a detailed analysis. The study found that incomplete and/or redundant information in the contract documents are the core reasons for conflict between contracted parties in the Canadian construction industry. Therefore, proactive identification of sources of ambiguity in contract documents by the general contractor and owner and attentive preparation of contract documents to avoid contradictory information/terms, missing information, or vague clauses can minimize the potential lengthy and costly litigation process at the court level.