UK: Construction Of Contracts: Priority Of Documents

Last Updated: 5 August 2010
Article by Christopher Hill, Steve Abraham and Donald Warnock

In the following case, the court had to consider the construction of a contract, and in particular the effect of a clause concerning the priority of documents, in order to determine which of two conflicting provisions relating to the payment mechanism was to prevail.

The case also raised a point of interest as to the proper approach to be adopted by a party who lost an adjudication on a point of law.

Fenice Investments Inc v Jerram Falkus Construction Limited and Others [2009] EWHC 3272 (TCC)

The employer engaged the contractor to design and construct five residential properties and a commercial unit in Camden. The contract incorporated the JCT Design and Build Contract (Revision 1) 2007 (JCT Contract) subject to amendments agreed between the parties.

Disputes arose between the parties in connection with the contractor's payment application No 19, which centred on whether the employer's payment notice and withholding notice both of 25 August 2009 had been issued in time.

The contractor maintained that in respect of payment application No 19:

  • the notice of payment was due by 11 August;
  • the withholding notice had to be served no later than 22 August 2009; and
  • the final date for payment was 27 August 2009.

The adjudicator decided that the employer's payment notice and withholding notice were issued out of time and consequently ordered the employer to pay £177,455.94 to the contractor.

The employer paid only £12,202.45 and issued Part 8 proceedings for declarations that on the proper construction of the contract the payment notice and the withholding notice of 25 August 2009 were served within time. The contractor separately issued an application for summary judgment to enforce the adjudicator's decision.

The payment terms of the contract

The issue before the court was how to resolve two conflicting provisions in the contract.

Clauses 4.9 and 4.10 of the JCT Contract contained the typical JCT provisions concerning payment namely:

  • a monthly application for payment made by the contractor;
  • the issue of a payment notice (or certificate) by the employer 5 days after the contractor's application for payment, and
  • payment of the certified sum (less any sums validly withheld) 21 days after the contractor's original application for payment.

However, clause 15 of the Employer's Requirements also contained provisions dealing with interim payment, and in particular contained a detailed evaluation procedure requiring the contractor to submit its valuation to the quantity surveyor who would then issue an interim valuation recommendation to the employer's agent. The employer's agent would then issue an interim certificate within 5 days of the interim valuation recommendation. Payment would follow 21 days after the issue of the interim certificate.

If the contractor's argument was right and the payment mechanism to be followed was contained in clauses 4.9 and 4.10 of the JCT Contract then (as the adjudicator had decided) the employer's payment notice and withholding notice was issued out of time. However, if the employer was right and the payment mechanism to be followed was that contained in section 15 of the Employer's Requirements then the notices were not out of time.

The conflicting mechanisms of payment

The court considered that the conflict between the JCT Contract and the Employer's Requirements led to an unworkable set of contract provisions. There was a fundamental conflict between the two provisions because the provisions affected the starting point, and therefore the end point, of the payment mechanism.

Under clauses 4.9 and 4.10 of the JCT provision, the starting point was the contractor's interim application for payment (which had to be made in accordance with the monthly timetable as provided in Alternative B). Under section 15 of the Employer's Requirements, however, the starting point was the issue of the interim certificate by the employer (or his agent). Additionally, section 15 stipulated no time period for completion of the evaluation process between the contactor's application for payment and the issue of the valuation recommendation.

The JCT Contract provided for a swift procedure with a clear start date as opposed to the section 15 payment mechanism which provided for a drawn-out procedure where the start date was wholly uncertain and within the gift of the employer (or his agent).

As a result the court held that as it was impossible to read the two provisions together and come up with a rational or workable result.

How does the court choose between these two conflicting sets of provisions?

The answer was found in clause 1.3 of the JCT Contract which set out a clear hierarchy clause, designed to deal with a conflict of this sort. The clause provided that the JCT Contract was to be read as a whole and nothing in the Employer's Requirements was to override or modify the provisions in the JCT Contract.

"1.3 The Agreement [and] these Conditions are to be read as a whole but nothing contained in the Employer's Requirements, the Contractor's Proposals or the Contract Sum Analysis shall override or modify the Agreement or these Conditions."

The employer argued nevertheless that section 15 of the Employer's Requirements should trump the printed terms of the JCT Contract including clause 1.3.

The court therefore had to consider whether there were any authorities or principles of law which would oblige it to reach the same conclusion as the employer.

The principles of precedence of contract documents and contract terms

  • It is a well known rule of contract construction that, all other things being equal, a term specifically drafted for a particular contract will take precedence over a standard term (the General Rule).
  • The General Rule can be negated or displaced by express terms. Clause 1.3 did displace the General Rule.
  • There would be no unfairness in holding the parties to their agreement of clause 1.3. The parties had expressly amended the final date for payment in the payment provisions of the JCT Contract (by changing the period from 14 days to 21 days) and could have amended the payment provision further to incorporate the provisions of section 15 of the Employer's Requirements had they chosen to do so.
  • Notwithstanding the recent emphasis in the higher courts on the importance of looking at all the contract documents to work out the parties' objective intention (Chartbrook Ltd & Anr v Persimmon Homes Ltd [2009] UKHL 38), section 15 could not trump the express priority of documents clause in the printed JCT Contract.

The applicable payment regime was therefore that contained within clauses 4.9 - 4.10 of the JCT Contract. The contractor was therefore prima facie entitled to the amount awarded by the adjudicator less the amount already paid by the employer.

Unsuccessful party to an adjudication

The court also commented that it was not uncommon for a losing party in an adjudication to refuse to pay the sum awarded by the adjudicator and commence Part 8 proceedings to challenge the decision on a point of construction or a point of law. The court noted, however that a Part 8 challenge would not excuse the losing party from paying the sum that the adjudicator had found to be due. If the losing party chose not to comply with the adjudicator's decision, then regardless of the outcome of the Part 8 proceedings, that party should expect to be penalised for its default by way of punitive interest and costs, including the possibility of indemnity costs.

Editors' comments

This case is a good example of the need for employers to ensure that any contract amendments are incorporated correctly and are not simply included within other contract documents, such as the Employer's Requirements or Contract Preliminaries, so that the contractual arrangements are clear.

The case is also a reminder that it is advisable to include a priority of documents clause particularly in building contracts. As the judge in this case commented:

"... the impression can sometimes be given that the draftsman has included in the contract every piece of paper in his office that related, no matter how tangentially, to the project in question. Some form of hierarchy or precedence is vital ..."

This particular point is worth bearing in mind when using the Engineering Construction Contract published by the NEC which (in contrast to the JCT) does not contain a priority of documents clause (although the Project Manager does have the ability to issue an instruction resolving inconsistencies or ambiguities in or between the contract documents).

View: Fenice Investments Inc v Jerram Falkus Construction Limited and Others [2009] EWHC 3272 (TCC)

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 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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.