ConstructionPro Week, Volume: 2 - Issue: 24 - 06/14/2013

Do ‘Order of Precedence’ Clauses Set Things Straight?

By Bruce Jervis

 

A typical construction contract is comprised of multiple documents. Others may be incorporated by reference. It is not surprising that these documents may contain conflicting provisions; internal inconsistencies within the contract.

 

In order to avoid a patent ambiguity, which may or may not be detected in advance by the parties, an “order of precedence” clause attempts to resolve any conflict through the terms of the contract itself. This is accomplished by stipulating, in descending order, which documents take precedence over others.

 

The order of precedence clause is usually found among the boilerplate terms and conditions of the contract. Perhaps that is why it is so often ignored or invoked only when it provides tactical advantage.

 

In a recent Michigan case, a highway contract had the effect of giving precedence to the terms of environmental permits over depictions in the contract drawings. When the state Department of Transportation (DOT) realized this and the unintended impact it would have on the completed project, the DOT had the permits altered to make them consistent with the drawings. This was a constructive change in the contract.

 

What has your experience been with order of precedence clauses? Do parties rely on them in advance when interpreting and pricing contracts? Or are they invoked only in dispute situations, particularly claims for changed work? When the clauses are invoked, are they an effective tool for resolving inconsistencies within the contract documents? I welcome your comments.

 

COMMENTS

The order of precedence cannot take the place of a good quality assurance check by someone who has not been working with the documents day in and day out. Having said that, though, the care put into large scale details is often greater than that put into specs and so it is logical to give them order of precedence. Giving large scale details precedence over smaller scale drawings is also logical since many times the minute details that cause problems later in construction are not obvious at a smaller scale.

Having said all that, the inconsistencies within the specifications are the real problems. They are usually just a matter of someone re-using an older set of specifications and not checking to be sure they are consistent with the rest of the documents. No order of precedence helps in that case.

My practice consists of investigating problems in existing buildings and have found that, all things having been said, the order of precedence makes no difference in the end result if the work has not been quality assurance checked before the documents are issued. The results are still wrong and it still becomes my project later on. So what am I saying? Precedence clauses are only useful to the lawyers.
Posted by: Karen Warseck - Friday, June 14, 2013 11:17 AM


Order of precedence clauses generally are a good thing to have in your contract. They provide a procedure in which resolution of discrepancies can be obtained. The drawback is that once you establish the precedence you have to abide by it. One issue to reference was a case where the drawing details took precedence over the specification in case of conflicts. The specifications took precedence over the shop drawings. The specification made a shop drawing reference that was inaccurate. Contractor was responsible for making sure that the parts submitted would all fit. Order of precedence says go back to the drawing details. The details were, however, also incorrect. Neither would work so it went to change order.
Posted by: Will Weber - Friday, June 14, 2013 11:30 AM


Order of precedence creates an artificial heirarchy of information which torpedoes the idea that construction documents are complementary and have equal weight. It is certainly useful to lawyers who usually don't get involved unless there is a serious problem. Because it is useful to them, it does not mean that the outcome of a dispute resolution is any fairer, and perhaps less fair if reliant upon Order of Precedence. I don't know many architects or their employees that keep Order of Precedence in mind when producing contract documents. If they do, are they intentionally lax with specs, for example, if they take lower status in the heirarchy? I think this is a pretty dangerous approach.
Posted by: Andre Larroque - Friday, June 14, 2013 12:20 PM


The order of precedence clauses are a good addition to the contract as it can be used to resolve a conflict. However, another clause that is frequently added to the contract makes the order of precedence clause take a back seat. This clause is the "in case of a conflict the most stringent requirement applies". This in effect makes any conflict go to the most expensive resolution and requires the contractor to determine which resolution is the most stringent if he catches the conflict during bidding.

Rarely have I seen order of precedence clauses used when interpreting and pricing contracts. I have seen order of precedence used in dispute resolution as the project is in progress. However, with the new clause, the Owner or Engineer picks the "most stringent" requirement and the order of precedence falls by the way side.
Posted by: Bruce Suprenant - Friday, June 14, 2013 12:20 PM


Order of precedence can be of particular value when an owner's aesthetic concerns match those of the projects designer. Contractors often have a tendency to allow certain conventions, cost savings, or convenience to take precedence over the actual design intent, especially when their substitution will not actually reduce project quality or performance. Of course, if the detail or partial plan reference is in the wrong place on the small scale drawings, or carries the wrong reference, warning bells should ring, but often don't because different details can sometimes look quite similar, perhaps with only differences in flashings or a slightly altered profile. The point is that precedence of small scale drawings gives the contractor too much aesthetic leeway, or the latitude to use his own judgement when small scale drawings do not - or can not - contain sufficient information. If the owner is concerned only with schedules and price, the issue becomes moot because it may accept an aesthetic defect, leaving the designer to lament what might have been. However, an owner who prizes the aesthetic outcome, in particular, is usually best served by the general precedence of large scale drawings and details over small scale documents. In no case does this relieve the design team responsibility for a well coordinated set of construction documents, of course.
Posted by: Gary R. Collins, AIA - Friday, June 14, 2013 2:06 PM


As an architect practicing for over 30 years my experience has been that "Order of Precedence" clauses are good to have in contractor pricing and prior to disputes arising. They help diffuse potential issues when a conflict/ dispute arises. However, they ARE NOT a substitute for well planned, executed documents whether drawings or Specifications in the Project Manual. Over the years I have noticed a decrease in the quality of documents due to time constraints or those preparing them being uneducated in the how and why, as well as experience, of the entire process. The CSI has the following as a core goal for the Project Manual: That they be Clear, Concise, Complete and Correct. To this I add that they be Communicated timely; this applies to ALL aspects of project implementation from conception thru and including Contract Administration There is no excuse for poorly planned executed and completed documents.
Posted by: G. Paul Matherne - Friday, June 14, 2013 6:47 PM


 









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