1. Introduction

When a dispute arises between parties, it is always the agreement (contract) that is the focus.

A contract may consist of a single page with some provisions and the signature of those who are parties, but it is very rare in construction contracts.

A construction contract normally consists of an overall “agreement document” indicating who the parties are, the parties' representative, the contract amount, deadlines and whether any of these are covered by day mulch, etc.

Normally, a number of other documents are also included such as the builder's tender and competitive basis, function and performance descriptions or quantity descriptions based on NS 3420, contractor's offer, minutes of contract and clarification meetings, etc.

The largest construction contracts can consist of several thousand pages.

Consequently, rules of interpretation are required which can be applied when the parties disagree on what has been agreed.

The topic of this article is the standard contracts' regulation of how to proceed when interpreting a construction contract.

We stress that these rules complement the general contract law and the rules of interpretation created by case law. We have written several articles on this topic “Contract Law”.

2. Briefly about the preparation of the agreement document itself

Many major players draw up their own agreement documents.

Such agreement documents are normally drawn up in close cooperation between practitioners and lawyers/lawyers.

There is nothing in the way of such agreement documents being created and used. At the same time, various projects will impose special requirements on the parties, and accordingly, attention should also be paid to this when drafting the final agreement document.

In many projects and for many actors, it may be more appropriate to use the Norwegian Standard's “Building Form”. These are forms adapted to the individual standard contract (NS 8405, NS 8406, NS 8407 and NS 8415, NS 8416 and NS 8417). If you choose to use NS 8407, which is the standard contract for turnkey contracts, “Construction form 8407 A” will be used. These building forms are designed in such a way that you can incorporate provisions that are particularly needed in the project in question. An advantage of using such building forms is that they are known to all parties, and what is known creates a form of security.

The building forms can be purchased and filled in digitally on Norsk Standard's website.

3. Overview of the rules

Since it is NS 8407 that is most often used today, we take this as a starting point.

4. Contract documents

In NS 8407 paragraph 2.1, a number of examples of documents normally included in a construction contract are listed.

It is the aggregate contract documents that define the subject matter of the contract and the mutual obligations of the parties to each other. These documents define, among other things, what the contractor shall deliver to the builder upon the takeover, what deadlines apply and what the builder shall pay in consideration.

At the same time, construction contracts are dynamic. Things happen along the way in a project. Something unexpected arises, new needs arise or it is discovered that something was sealed in the drafting of the contract. No matter what - the originally agreed upon may need to be changed in some way. The standard contracts have provisions governing how the parties should deal in such situations, and we write about that elsewhere.

Regardless of the situation, one must always start from the contract to map out what the parties have agreed.

In the standard contracts' provision on contract documents (NS 8405 paragraph 3.1, NS 8406 paragraph 4 and NS 8407 paragraph 2.1), the agreement document itself is located at the top.

One thing is that it is this document that the parties put their signature on when the agreement is finally concluded, and this is what is (normally) dated. In any case, the agreement document itself will be the last (and newest) of all documents. Therefore, in the event of a conflict between this document and older documents, the provisions of the agreement document will weigh most heavily on questions of interpretation.

However, the parties do not always draw up an independent agreement document. For this reason, point 2.1 (a) of NS 8407 has the addition “if such document is created”.

In the article “Agreements through negotiations” We write more about how agreements can be considered concluded even if you have not created (and signed) a formal agreement document, read more here.

The next type of document is minutes etc. from the parties' negotiations leading up to the final agreement, cf NS 8407 paragraph 2.1 letter b.

When the contract is concluded between two private parties, there will usually be minutes from the clarification meetings and from the contract meetings.

Regardless of what you call these meetings, from experience there can be quite a few meetings, and minutes. Often you will also discuss a lot of issues and you are happy to reach agreement on the individual points at different times. Consequently, it can sometimes be challenging to find out what was actually agreed upon. In any case, when a long time has passed and later a dispute arises. Not infrequently, those who follow the construction project or deal with a dispute after the project is completed will be other than those who attended the meetings prior to the conclusion of the agreement.

For these reasons, it can often be challenging to find out what was actually agreed, and why. When there are so many minutes, each of which is a fragment to be assembled into a larger picture, it can get complicated and you have to spend a lot of time and resources to find the right answer if possible.

Nor is it always the case that whoever wrote the minutes was clear and clear in his formulations.

To limit the possibility of ambiguities, the parties should consider whether it might make sense to collect everything agreed upon in a separate final document. From this final document it should be stated that all previous minutes are deleted, and then the final document is inserted only as an annex to the contract.

The next types of documents discussed are the contractor's offer, cf letter c, written clarifications etc from the offer period, cf letter d and the builder's tender or competitive basis, cf letter e.

Note that the applicable standard contracts are at the bottom of the list, cf letter f.

The reason for this is that these are standardized, while contract provisions may be drawn up that are specially adapted to the project in question. In that case, the special ones should precede the general ones.

Incidentally, it is not uncommon for different contract terms to be included as part of the builder's tender or competitive basis.

5. Interpretation rules

In all three standards, there are separate rules of interpretation that should be applied if there is a conflict between the contract documents. These rules of interpretation are complemented by the general rules of interpretation developed in case law.

In this connection, we refer to NS 8407 point 2.2, NS 8405 point 3.2 and NS 8406 point 4.

The general main rule is that younger documents apply in front of older ones.

It is also this order that is evidenced by the enumeration of documents in the provision on “Contract documents”.

Often it is seen that the builder changes the order so that the offer or competition basis switches places with the contractor's offer. Usually the motivation is that the builder wants to insure himself against a situation where it later turns out that the contractor has omitted something in his offer, made reservations that the builder has not discovered or in other ways offered a solution, quality or other that does not match the offer or competitive basis.

If the interpretation rule that younger precedes older does not solve the problem, the next step is to consider the individual types of provisions that have conflicting content.

If one provision is special and says something very specific about the dispute, while the other (and contradictory) provision is general and overarching, the starting point will be that the particular provision precedes (weighs most heavily) and settles the question.

Finally, mention is made of the rule of interpretation that provisions specially drawn up for the contract (special contractual clauses) precede the (general) provisions of standard contracts.

6. Especially for NS 8407

Paragraph 5 applies to all three standard contracts, but NS 8407 also contains a special rule to be aware of.

It follows, in particular, from NS 8407, paragraph 2.2 “Rules of Interpretation”, first paragraph that functional requirements and other requirements “specified in the tender or competitive basis” precedes what may be stated in the contractor's offer.

The only exception to this is if the contractor “have made express reservations”.

Naturally, this rule is closely related to the fact that the general contractor must design detailed projects.

No one wants to build a building that does not meet the functions that one needs and has ordered. There will also be very poor community economics on a more overarching level.

Accordingly, it is in everyone's interest that the functional requirements are met unless otherwise expressly agreed.

7. Especially for NS 8405

NS 8405 paragraph 3.2 also contains a rule of interpretation we do not find in the other two contract standards.

As is known, it is the builder who detailed projects in NS 8405 contracts. Offer and competition bases are usually based on specified quantity descriptions built on the basis of the description system in NS 3420 and on drawings. In construction projects, it will normally be the process codes of the State Road Administration that are used.

It is often found that there is a contradiction between drawings and quantity descriptions.

It may be that the “same” relationship appears in both places, but in different ways. One may also find that something is evident from the drawing, but not from the quantity description. A third option is that the designer has included an explanatory text in the drawings, but without this text being reflected in the quantity description.

The common denominator for these situations is usually that the contractor has not priced in the work operations indicated in the drawing, but not from the quantity description.

When the parties then disagree on the scope of the contractor's contractual obligations, the question arises as to whether it is the drawing or description that is decisive for the interpretation.

This question is addressed in NS 8405, paragraph 3.2, second paragraph, where it is expressly stated that the description weighs most heavily on interpretation doubts. In addition, it follows from the same provision that solutions which appear only in the drawings are not covered by the contract. The assumption is that the solution should have been mentioned in the quantity description. In most cases, this condition will probably be met.

This rule of interpretation is a consequence of the method used when contractors calculate and price an assignment. The advantage of quantity descriptions according to NS 3420 and the process codes is that you use software with already entered prices when calculating. In cases where the builder has entered non-standard work operations, digits are used indicating that there is something special that needs to be handled outside of preset, priced records.

This means that if you only indicate something in a drawing, the software will not detect this, and you will not get the price of the works.

In addition, most often entrepreneurs will be in short supply of time with short tests to submit their offer. One does not have time to examine drawings in order to discover, if possible, any discrepancies between drawing and description.

The consequence is that the lack of description is the risk of the builder.

8. Briefly about NS 8406

Since NS 8406 is a simplified version of NS 8405 it does not have equally elaborate provisions.

It follows, however, from NS 8406, paragraph 4, last paragraph that execution “which are indicated only in the drawing, but which should also have been indicated in the description or the list of quantities” Not covered by the contract.