Understanding contract documentation

Abstract

The contractual obligation by any party in any contract will be interpreted by terms and contents of the documents laid down in the contract. Effective interpretation and understanding of the contractual obligations will be much dependent on the clarity of the documents in translating the needs and requirements implied as in the agreement. Without proper understanding of the documents may lead to the different interpretations which may result in unnecessary contractual problems such as disputes, unnecessary claims, reworks, shoddy works, and even litigation. This paper presents the results of the study related to issue of understanding of contract documentation done in Malaysia. The findings presented include the factors that inhibit the understanding of the contract as well as the factors that can help to make the interpretation process much easier. The paper also suggested various factors that can be used to improve the level of understanding of contract document that can be considered in designing the contract document.