UK: Ensure That Defined Terms Are Used Consistently; Ambiguity Can Be Costly

Defined terms can greatly simplify contract wording but equally, if used inconsistently, such terms can lead to ambiguity and the risk of costly disputes.

In the recent case of GB Building Solutions Limited (GB) v SFS Fire Services Limited (t/a Central Fire Protection) (SFS) [2017], the court considered:

  • the case law as to the meaning of "practical completion"; and
  • in a wider context - how defined terms will be interpreted in the context of multiple contract documents.

Drafting for clarity - practical points

The take-aways from this case are clear and important for those drafting contracts, so we summarise them at the outset. The detail of the background and judgment puts these points into context and is set out below.

  • The case provides an example of the risks of the inconsistent use of defined terms. In this contract, "Practical Completion" appeared as a defined term, but later references to "practical completion" were not consistently capitalised.
  • This may seem pedantic (and indeed, this is only one aspect of the judgment) but if a contract states that a definition will apply where relevant words are capitalised, a court may well conclude that capitals (or not) were used intentionally within the contract wording. Intentional or not, the result in this case was that the phrase "practical completion" did not have the same meaning throughout the subcontract and the consequence is that SFS has been left open to a claim by GB.
  • Be specific when using defined terms - if a term needs to be capitalised, then capitalise it. Do a word search for defined terms during the drafting process to ensure that all instances of the terms are picked up. This is a straightforward and relatively swift task that may prevent your business becoming embroiled in a dispute that could have been avoided.


GB was the design and build main contractor on an office development in Manchester. SFS was its design and build subcontractor responsible for the sprinkler system of the building under an amended JCT Design and Build Subcontract 2005. Following flooding of the project before practical completion of the main contract works, GB brought a claim against SFS alleging that it (SFS) was responsible for the flooding.

Various issues were to be resolved, but the key point was whether the flood occurred before or after the "Terminal Date", which was defined (insofar as relevant to this dispute) in clause 6.1 of the subcontract as "[t]he date of practical completion of the Sub-Contract Works..."

If the flood occurred before the Terminal Date, the parties were in agreement that GB would be precluded from pursuing a claim against SFS for losses arising from the flood on the basis of other terms of the subcontract.

Conversely, if the flood had occurred after the Terminal Date, GB could in principle advance a claim against SFS for losses incurred.

As is common on construction projects, the subcontract documents as a whole comprised the standard form along with various other contract documents. The standard form subcontract was expressed as being modified by a schedule of modifications (the Schedule) which formed one of the contract documents.

Clause 1.3 of the Schedule required the subcontract to be read as a whole but set out an order of precedence in the event of a conflict between provisions of the contract documents, with the Schedule taking priority. Where there is an inconsistency between contract documents, an order of precedence clause can be key in ascertaining which is to prevail.

The definition of Terminal Date in the Schedule (in this context) turned on the "date of practical completion of the Sub-Contract Works".

The Schedule also included a definition of "Practical Completion": "the issue of the Certificate of Practical Completion pursuant to the Main Contract". There were clearly, therefore, potentially different definitions of practical completion depending on the terminology used and capitalisation (or not).

In brief, the parties took the following positions:

  • GB argued that where the term "Practical Completion" was capitalised, it was to be used as a defined term as set out in the Schedule. Where it was not capitalised, it was not assigned the meaning of the defined term (and so simply meant practical completion, as a matter of fact).
  • SFS argued that the definition of "Practical Completion" should extend to every mention of practical completion, whether capitalised or not.

Approach to interpretation

His Honour Judge Stephen Davies, sitting as a Judge of the High Court, reviewed leading case law and confirmed that when considering or interpreting contract provisions:

"[t]he court's task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement."

In his view, the exercise of interpreting a contract is not solely an analysis of the words of the contract but rather, the contract is to be considered as a whole. Referring to an "iterative process", he stated:

"... There may often therefore be provisions in a detailed professionally drawn contract which lack clarity and the lawyer or judge in interpreting such provisions may be particularly helped by considering the factual matrix and the purpose of similar provisions in contracts of the same type."

The Judge ultimately preferred GB's argument. The definition of Terminal Date in the Schedule referred to practical completion without capitalisation and the definition of Practical Completion in Section 1 did not apply. The Terminal Date was to be ascertained using other specified clauses in the subcontract.

In view of this, the Judge held that the flood occurred after the Terminal Date and so GB could in principle pursue a claim for the losses against SFS.

In reaching this conclusion, the Judge was satisfied that there was no inconsistency in the contract wording in this respect - where "Practical Completion" was capitalised, its definition in the Schedule would apply; otherwise, it would not. The Judge noted that the parties could easily have amended the meaning of Terminal Date to refer to "Practical Completion" but they had not. The definitions of Practical Completion and Terminal Date were granted equal precedence and it was held that each clause simply applied in different circumstances.

Practical completion

The case also provided a helpful review on the position as to practical completion.

In assessing whether the certificate of practical completion was in fact a valid certificate of practical completion, the Judge considered the substance of the document and relevant facts, such as the state of the works and payment at the time.

Even though the certificate of practical completion in this case labelled itself an "installation completion certificate", it was held to be a practical completion certificate in respect of all of the subcontract works.

The fact that an application for payment as at the time of issue of the certificate of practical completion recorded some work as outstanding did not prevent the certificate from in fact certifying practical completion.

The existence of some outstanding work has never prevented practical completion and in referring to some older authorities, the Judge reiterated the following guidance:

"(a) Practical completion means completion for all practical purposes, and what that completion entails must depend upon the nature, scope and contractual definitions of the Works, as they may have developed by way of variation or architect's instructions.

(b) De minimis snagging should not be a bar to practical completion unless there is so much of it that the building in question cannot be used for its intended purposes.

(c) Practical completion requirements can be relaxed by agreement between the parties. "

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions