Ambiguities in standard form of contract

Abstract

The Standard Form of Contract serves to control contractual obligations and expectations especially during contract administer. It lays up the general conditions or rules that the contracting parties must follow. Additionally, convenient documentation donates a clear agreement for the contracting parties. Thus, the clarity of the documents in interpreting the needs and requirements contained in the agreement will be critical to effective interpretation and comprehension of contractual duties. Looking at this, a contract should be clearly drafted and understandable, therefore can mitigate a dispute by having a sense of party liability. A clear and understandable contract is vital during project execution because there will be a lot of matter arise in regards of each of party obligation. Following of this event, the court will take place in order to crystallise the event. The dispute is commonly caused by the legal understanding and explaination of the clause. This is because the failure of understanding for such clauses will cause confusion for contractual matter. In regards, the contract must be in clear and readable for any party so that it will not be any ambiguous issue later. This shows how crucial it is for the contract to be clear and understood by the parties. Thus, it is important to identify the ambiguity that exist in standard form of contract at once can mitigate a dispute. This study is focus for a case law that occurred in Malaysia particularly in JKR and PAM Contract. This study was carried out by reviewing a case law using online database for example LexisNexis, Research Gate and other online web page. There were four situations or type of ambiguities that exist in standard form of contract. The ambiguities include in the situations when a contract participant does not understand the clause in the contract, when there is ambiguity in word/clause in contract, when arbitrator/ adjudicator erroneously in his decision and when there is a dispute in construction of contract. Hence, a clarity should be considered in future contract design in order to facilitate understanding of standard forms and, as a result, to help avoid disputes. This study can also give a guide for a party to prevent to use any vague phrase that could lead for a dispute arise. Furthermore, it can give a better understanding on what situation can classified as uncertainties.