A contract can be defined as “a legally binding agreement between two or more parties.” Contract law, which is the legal basis for contract management, is an interesting and complex subject. But there are three contractual provisions that are particularly important for a contract manager to ensure the execution of contracts and the management of supplier best practices. You are Privity, Estoppel and the priority document. Only at this point – a contract cannot be rewritten just to get a result close to the company. However, if there is more than one interpretation, it is likely that the court will implement the purpose of the tribunal, which is considered to be the commercial purpose of the agreement. To ensure the proper delivery and smooth running of a contract, it is essential to have a clear understanding of the order of priority of the various documents that include the contract itself. During the performance, the delegate directed the placement of 36 inches of filling under the concrete slabs, as shown in the drawings. The Armed Services Board of Contract Appeals rejected the contractor`s request for the resulting additional work and decided that, given the apparent disparity, the contractor was required to seek clarification despite the clear explanation of the classification clause. In this contract for the construction of a beam repair system based on Tinker Air Force, the specifications required at least 18 inches of non-expansionist filling under the concrete floor slabs, while a reference to the designs required 36 inches of filling. The classification clause provided that the specifications in the event of a conflict were governed by the drawings. In relying on this clause to correct the apparent discrepancy, the excavation subcontractor based itself on the 18-inch specification requirement, and the Primus, in turn, included the subcontractor`s price in its own offer to the government.
Because construction projects are complex, contract documents often run over hundreds of pages and it is easy to have inconsistencies. These inconsistencies can often be used unjustifiably against you, so the filing clause serves as a protection to help you understand which documents are most relevant in the event of a dispute. A good starting point, where there is an ambiguous or contradictory provision within a contract, is to check the order of priority that is typically defined in the document. This classification will classify treaty documents so that priority documents are clearly specified. Referring to Franchi Construction Co. v. United States, 609 F.2d 984 (Ct.Cl 1979), in which the Court of Claims ruled that a contractor could invoke the classification clause to resolve a patent gap between specifications and designs, the Federal Circuit struck down the House`s judgment. In its decision, the Tribunal once again pointed out that the classification clause was a mechanism for removing conflicts between different parts of the contract, thereby removing the obligation to declare a manifest (patent) inconsistency prior to the tender.
The Tribunal therefore decided that if the contract contains a classification clause, a contractor should only seek clarification if there is an obvious internal disparity within the drawings or specifications. In Hensel Phelps Construction Co. v. United States, 886 F.2d 1296 (1989), the Tribunal held that a contractor could invoke a classification clause to resolve a discrepancy between specifications and designs, even though the contractor recognizes the disparity prior to the offer.