By the time somebody opens the contract in anger, it is usually a long document that nobody present negotiated, carrying an amendment schedule that was accepted under time pressure at tender. Reading it well at that point is a skill, and it is the first part of an initial dispute review.
The instinct is to read from the beginning. That almost never helps. A contract in a dispute is not read as a document, it is interrogated for the handful of provisions that decide the question in front of you.
Start with the amendments, not the standard form
Standard forms are well understood, which is precisely why nobody argues about them. The arguments live in the amendment schedule, because that is where the allocation of risk was actually decided.
On a contract that has been amended heavily, the printed form is closer to background than to law. Somebody drafted the amendments deliberately, to move specific risks in a specific direction, and the provisions they chose to move are usually the ones that matter once something goes wrong.
Amendments do three things that matter in a dispute. They narrow entitlement, by removing or qualifying the events that carry a right to time or money. They tighten notices, by shortening periods or adding requirements. And they move risk, by making one party responsible for something the standard form left with the other.
Reading the standard form first and the amendments second produces a view that is confidently wrong. The amendment is the operative text and the printed clause is what it operates on.
Find the contract particulars before anything else
The particulars carry the dates, periods, percentages and named parties that turn general provisions into specific obligations. A clause that requires notice within a stated period means nothing until you know what period was stated.
This is also where completion dates, sectional completion, retention percentages and liquidated damages rates live. In most disputes at least one of those figures turns out to be different from what everybody assumed.
Check them against what has actually been happening on the project. Where valuations have been issued monthly but the particulars set a different interval, or where retention has been deducted at a rate nobody can point to, that gap is usually the first solid thing you find.
Read the clause that applies, then the ones around it
Contracts cross-refer constantly. The clause that gives an entitlement usually points to another clause for the procedure, and that one points to a third for the timing. Reading only the first produces half an answer.
Work outwards until the chain closes. It is slow and it is the difference between knowing that a provision exists and knowing what it requires of you. A right that exists but was never exercised in the way the clause describes is worth a good deal less than one that was.
Definitions deserve the same attention. Terms that look ordinary in English, such as completion, variation or cost, are frequently defined terms with a narrower meaning, and arguments built on the everyday meaning of a defined word tend not to survive.
Establish which document wins
Most contracts contain a priority provision saying which document prevails where two of them conflict. It is short, it is easy to miss, and in a dispute about scope it frequently decides the outcome.
Where there is no priority provision, or where it is unclear, the position is a legal question rather than a commercial one. That is worth recognising early rather than arguing around it, because a commercial argument about a legal question tends to run for a long time without resolving.
On design and build this matters more than anywhere else, because the employer’s requirements and the contractor’s proposals frequently describe the same thing differently, and which one governs decides who pays to put it right.
What to leave alone
Large parts of any construction contract are irrelevant to any particular dispute. Insurance, assignment, collateral warranties and termination provisions usually have nothing to do with a payment or variation argument, and reading them consumes time without improving the position.
The exception is where the dispute is actually about one of those subjects, in which case the same discipline applies in that part of the document instead.
Discipline about scope is worth maintaining. Reading everything feels thorough and produces a general sense of the contract rather than an answer to the question, and general senses of a contract are what get argued about for months. Each of the claims and dispute services starts by narrowing the reading to the provisions that decide the issue in front of you.
Reading it honestly
The hardest part is reading for what the contract says rather than for what you need it to say. Under pressure, ambiguous words start to look helpful and unhelpful words start to look like drafting errors.
A useful test is to read the provision as though you were on the other side. If it still supports your position when read against you, it probably supports it. If it only works when read sympathetically, that is worth knowing before anybody relies on it.
The same test applies to silence. Where the contract says nothing about the situation, that absence is not a gap waiting to be filled in your favour. It usually means the risk sits wherever the general scheme of the contract puts it, which is frequently with the party hoping the silence helps them.
The version of this that costs nothing is reading the amendments properly at tender, when there is still time to price or reject them. That belongs to tendering and procurement, and it is where most of these disputes could have been prevented.
Not sure whether the claim is worth running?
An initial dispute review reads the contract and the correspondence, tests whether an entitlement exists and tells you what the dispute is likely to absorb before you commit to it.