Solving Discrepancies & Divergences of Express & Implied Terms


What we need to hold is the main purpose of a project execution, which is to complete the work according to the said quality and during a reasonable time within a reasonable price. Contract is formed in order to guide the work execution and eventually to define rights, duties and obligations of both parties. If there is a discrepancy or divergence during the project duration, the main way to solve this is through negotiating. Since it is important to solve any discrepancy in and divergence between terms in contract documents as soon as possible, we need certain methods in negotiating. What are they?

A. Solving Discrepancy & Divergence of Express Terms

If there is a discrepancy or divergence of express terms in contract documents, there are 2 ways in solving this; the rule of interpretation and by way of reference.

1. The Rule of Interpretation

a. Literal Rule

Words that are reasonably capable of only one meaning must be given that meaning whatever the result.

b. Golden Rule

Ordinary words must be given their ordinary meanings and technical words their technical meanings, unless absurdity would result.

c. Mischief Rule

When an Act aims at curing a defect in the law any ambiguity is to be resolved in such a way as to favour that aim.

d. Purposive Rule

Purposive approach which seeks to give effect to the true purpose of legislation.

         e. Contra Proferentem Rule

The doubt or ambiguity should be resolved against the party who drafted it or who uses it as a basis for a claim against another.

         f. Ejusdem Generis Rule

“Of the same kind”; when a list of specific items belonging to the same class is followed by general words, the general words are to be treated as confined to other items of the same class.

        g. Expressio Unius Est Exclusio Alterius Rule

“The inclusion of the one is the exclusion of the other”; when a list of specific items is not followed by general words it is to be taken as exhaustive. For example, “weekends and public holidays” excudes ordinary weekdays.

        h. In Pari Materia Rule

“On the like matter”; when a prior Act is found to be “on the like matter” it can be used as an aid in construing the statute in question.

       i. Noscitur a sociis Rule

“Known by its associates”; when a word or phrase is of uncertain meaning, it should be construed in the light of surrounding words.

2.  Reference Method

Whether there are other terms incorporated in other sub-documents.

 

 

B. Solving Discrepancy & Divergence of Implied Terms

There are 2 ways in solving discrepancies and divergences of implied terms; first where the parties have reached agreement but did not consider reducing to writing certain terms which they have already contemplated, and second, where it is necessary to give business efficacy. For the last, the court will imply the terms to make the contract meet the business efficacy, which means when a case arises with absence of express terms, the court will consider the business efficacy point of view to imply the terms and give judgment according to it. Business efficacy looks on how efficient the business before and after the implication.

In standard form of contract, there are 3 (three) ways which can be applied regarding to this matter:

1. Order of Priority

Looks on the contract documents hierarchy. Most standard forms of contract include a clause, which stipulates the order of priority of the various contract documents. In other words, the standard form expressly indicates which clause or document prevails should an ambiguity and/or discrepancy be found between provisions set out in different contract documents.

2. Co-ordination and Design Obligation

Most contracts will impose upon the contractor express duties as to the need for co-ordination drawings, shop drawings, compliance with statutory obligations, design development, choosing materials and workmanship.

3. The Architech/Superintending Officer’s Instruction

Most standard forms of contract will usually give the Architect the power to issue an Architect’s Instruction (AI) to resolve the ambiguity and/or discrepancy.

In PWD 203A, there is a specific clause deals with discrepancy or divergence which is clause 8(b). The main point of this clause is that if the Contractor discovers a discrepancy or divergence, he must give written notice to the Superintending Officer as soon as possible. It is essential for the Contractor to notify the Superintending Officer, otherwise he would lose his entitlement to an extension of time under clause 43(e) and his limited right to loss or expense or both under clause 5(d).

In PAM 2006, there is a similar clause which is clause 1.4 subtitle ‘Discrepancy or Divergence between Documents’. And in CIDB it is stated in clause 7.4 subtitle ‘Responsibility for Identifying the Discrepancy’.

 

Closing

Construing contractual documents to me is an art since it is involved many skills and takes many years of experience. If we cannot forming a contract in such a proper way, there might be many problems appear during and after the construction. There is a need to reduce the causes of discrepancies and divergences so that the project can be completed properly. The best way to deal with discrepancies and divergences is by having more frequent professional meetings during the various project phases so that it would help to reduce discrepancies and divergences by way of identifying, controlling and monitoring these matters.

 

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