Construction contracts are often loaded with industry and legal jargon, making them tough for nonlawyers to understand. Even though there’s a push for simpler legal language, lawyers are hesitant to let go of traditional terms. This reluctance means complex legal language will likely persist in construction contracts.
Commonly Misunderstood Legal Terms in Construction Contracts:
Pro tanto – A Latin term meaning “to that extent,” often used in lien waivers. Plain English alternative: “to the extent.”
Force majeure – A French term meaning “superior force,” referring to uncontrollable events impacting a contract. Always check how it’s defined in each contract.
Mutatis mutandis – A Latin phrase meaning “making necessary changes.” Instead of using it, update contracts directly.
Indemnify – Means “to reimburse for a loss.” Think of it as “pay,” though it has legal nuances.
Mediation vs. Arbitration – Mediation involves negotiation with a neutral third party, while arbitration results in a binding decision.
Warranty – A promise that work will meet certain standards. Often confused with a contractor’s one-year corrective obligation.
Time is of the essence – In contracts, this phrase means missing a deadline can be a material breach, not just that timeliness is important.
While plain English in contracts is an evolving goal, legal jargon isn’t disappearing anytime soon. Construction professionals should take the time to understand the terms in their contracts to better manage project risks. Please click here to read the full article.