Interpretation of construction contracts

Contract interpretation is a common function of contractors, inspectors, designers, and contract administrators. This paper outlines rules of interpretation that can be used by contract administrators to resolve questions about the interpretation of a contract. The rules, arranged in hierarchical order, are based on a review of 100 appellate court decisions. The rules are: (1) The plain-meaning rule; (2) patent ambiguity; (3) practical construction; and (4) interpret the contract as a whole. If there is still more than one logical interpretation, one must resort to the order-of-precedence clause or rule against the drafter. The rules are arranged in an easy-to-use flowchart format. An example of an actual contract dispute is presented to illustrate how to apply the rules. The outcome is compared to the actual court decision.