In any commercial contract setting, one of the most important things you must do is to assess the scope of the work that is covered under the terms of the contract. Misapprehending the scope of the work to be performed can cause confusion and delay, and it may potentially cost you a lot of money. On the other hand, a clear and in-depth understanding of your contract’s scope may be highly beneficial to your business. If you have questions about the scope of your commercial contract, make sure you are getting reliable answers from a skilled South Florida commercial litigation attorney with the knowledge and experience you need.
When it comes to doing this kind of assessment, carefully analyzing every aspect and potentially every word of the document is essential, as a recent construction contract case illustrates. The project was a series of repairs and other work on the main post office in Okeechobee. The general contractor, which was headquartered in Chicago, hired a local subcontractor to handle the parking lot demolition and paving work.
Eventually, a dispute arose related to the post office’s eastern driveway. The general contractor took the position that the removal and replacement of the asphalt on that driveway was within the scope of the existing subcontract, while the subcontractor countered that the contract covered only the removal of concrete.
The subcontractor completed the demanded work on the driveway, then billed for $33,386 in compensation. The general contractor, still contending that the work was covered by the existing agreement, didn’t pay, so litigation ensued. The key to this case, then, was determining which side’s interpretation of the scope of the subcontract was correct.
The language in the contract’s body is what matters most
It is important to bear in mind that, when it comes to interpreting a contract, the agreement’s titles and headings hold only limited value to ascertaining the contract’s true meaning. If, for example, you have subject headings that say one thing, but the body of the agreement consistently says something else, then the deciding language is whatever is in the body of the contract.
In this post office case, the subcontract described the project as “Replace Pavement.” The document also included other general titles and headings like “Replace Parking Area.” However, in the body of the agreement itself, the provision defining the job’s scope only mentioned concrete. There was no mention of asphalt and, as the appeals court pointed out, “asphalt” and “concrete” are not synonymous. In fact, the topic of the job’s scope came up in multiple places within the subcontract and none of those paragraphs addressed asphalt… only concrete or cement.
That meant that the subcontractor’s interpretation was correct, and it was entitled to recover payment for the driveway work it completed, which was outside the scope of the subcontract.
An additional practical point that the appeals court highlighted in this ruling related to what documents will (and won’t) help your case. For example, many projects like this one will have numerous documents comprising bid preparation and pre-contract communications. These will not bolster your case if, as was the case here, the agreement contained a provision specifically stating that “representations made previous to the contract were ‘null and void.’”
Whether you are drafting, executing, or seeking to enforce a commercial contract, it is vital to know what the agreement includes, and just as essential to understand what it doesn’t. For the legal advice and advocacy you need when it comes to your commercial contracts, count on the knowledgeable South Florida commercial litigation attorneys at Stok Kon + Braverman. We have helped countless businesses just like yours and are ready to get to work for you.
Contact us online or by calling (954) 237-1777 to schedule your consultation.