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Interpretation or Mis-interpretation

5 replies [Last post]
Sajid Balma
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Dears
We got our NTP sometime back that had a total duration of the contract as 5 Months plus 15 days for Mobilization. Later on the SOW was revised and in the kickoff meeting it was prinicipally agreed by us that the contsruction time would be 4 months, plus 15 days for mobilization.

Now when we received our LOA, it says
Quote
........ Construction time is Four Months instead of Five Months and 15 days..............
Unquote
Now we are in dispute. We interpret this as 4 months instead of 5 months (Consruction Time), and 15 days for mobilization.
Please note that the above quote is exactly as it was typed in LOA.

Any thoughts?????

Replies

Stuart Ness
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Dear Saljid,

Mike is correct that a meeting note does not change the contents of an agreed Contract, and I have never alluded to this. I simply make reference to the fact that the Minutes of Meeting would throw some well-needed light on what was (or was not!) discussed at the KO Meeting. Such an reference point would then support one side or the other.

Mike is correct that contra proforentum rule is applicable to the Contract terms and again, I have never suggested otherwise.

The point is, if (big if, in this case!) the parties did agree that the construction period alone was four months, then the four month period - having been agreed to jointly between the parties - is then folded into the Contract requirements, albeit that it requires to be formalised and executed as such.

Indeed, it is apparent that the parties did mutually agree to a four month period; the debate seems to be whether or not that four month period does - or does not - include for a distinct 15 day mobilisation period.

This example is one of what goes wrong when the parties fail to properly record what is discussed and agreed!!

As to submitting this to a lawyer, I respectfully suggest that this would be a waste of your money. This is not a question of the law; it is question of agreeing (or disagreeing!) to what was understood (or not!) at a specific meeting. A lawyer - good or otherwise - would not be able to throw anymore light on this subject that any other contributor to this forum.

Nor am I aware that I have suggested that lawyers are ’rip-off sharks’; some of my best mates are lawyers and I have worked with some of the best in Europe and elsewhere. My point is that the point under discussion here is not a legal matter.

I rest my case, M’lud!!
Mike Testro
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Hi Saljid

I am cutting across Stuart’s advice because this is an important topic.

1. A note in a meeting minute cannot change an express contract term.
2. The rule of contra proforentum only applies to terms within the contract - a meeting minute would not qualify.
3. If you are unsure as to what your actual contract terms are - either express or implied - then a good lawyer will tell you. They are not all rip off sharks.

Best regards

Mike Testro
Stuart Ness
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Dear Saljid,

By definition, it is unlikely that your NTP is a Contract document, but merely a contractual instrument which is administered under the Contract terms.

My further advice would be to keep the lawyers out of it!! The will only add to the confusion - probably coming up with yet another (mis) interpretation, and on a good day, they will only tell you what you want to hear.

As to what was ’expressly agreed’, based on your initial post, it appears that the parties agreed to a construction period of 4 months; again, it would be useful if the respective Minutes reflected this!

I presume that if the clear intention was to have the mobilisation period included within the reduced four month construction period, then this would have created a furore from the Contractor at the KO meeting. Apparently this did not happen, so it appears that the four month period under discussion was related only to the construction period and not to the mobilisation period.

The Contractor needs to draft a firm response to the Employer, citing the contra proferentum rule, under which any ambiguous contract term is construed against the party that composed it; it doesn’t need a lawyer to write that!!

Hope this helps.

Stuart
Mike Testro
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Hi Saljid

If your notice to proceed (NTP) is your contract document then the 5 months + 15 days cannot be varied unless by express agreement of the authorised company officials.

It could be that the 4 months + 15 days agreed at the Kick off meeting was nothing more than a "target programme" and your contract period remains unchanged.

Seek a local lawyers opinion as to the exact status of your current contract.

Best regards

Mike T.
Stuart Ness
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What do the Minutes of the KO Meeting state?

In addition, does the original time schedule clearly indicate a "construction period" of 5 months from start of the Works through to completion as well as a separate "mobilisation period" of 15 days?


If so, then the "construction period" is 5 months and this has now been replaced with a "construction period " of 4 months. In my view the separate "mobilisation period " remains unaffected.

This example only underlines the problems of sloppy drafting.

Stuart