UK: Interpreting Ambiguities In Contract Documents

Last Updated: 26 September 2013
Article by Andrew Weston

The Facts

In the case of RWE Npower Renewables Ltd v JN Bentley Ltd, [2013] EWHC 978 (TCC), JN Bentley Limited ('Bentley') was engaged by RWE Npower Renewables Limited ('RWE') to carry out civil engineering works at a hydro electric project in northern Scotland. Bentley's works included the construction of the powerhouse, a 3.5 km penstock pipeline for channelling water to the powerhouse and a tailrace to return the water. The hydro plant equipment was to be provided and installed by others.

Clause 2 of the Contract listed the contract documents, which included the NEC 3 Engineering and Construction Contract Conditions 2005 (revised 2006), Contract Data sheets Parts 1 and 2, Post Tender Clarifications, Works Information and Site Information. It provided that the documents were deemed to form and be read and construed as part of the agreement. They were listed by order of precedence.

Bentley's works were to be completed in three sections. The Contract Data Part 1 described Section 2 as comprising "...completion, including testing, of the intake, penstock pipeline and tailrace and the powerhouse (including building services), to allow Hydro Plant to be installed...". These works were to be completed by 27 May 2011 but one of the key dates prescribed was completion of pipeline testing by 24 November 2010. The Contract Data Part 1 also provided for liquidated damages for late completion of each Section. The daily rate for Section 2 was £2,544.

The Works Information also included descriptions of Sections 1 – 3 of Bentley's works but they differed from those in the Contract Data Part 1. Paragraph 6.2 of the Works Information stated completion of Section 2 required "... all of the penstock pipeline and associated facilities..." and "... all of the tailrace...".

The Contract Data Part 2 comprised documents to be provided by Bentley which included a Contract Programme Revision C. This programme showed the penstock pipeline was to be completed some six months before the commencement of the Hydro Plant installation.

The Issues

The penstock pipeline was not actually completed until 25 October 2012,although the balance of Section 2 was completed on 21 February 2012. A dispute regarding liability for liquidated damages followed and was referred to adjudication.

In January 2013 the Adjudicator decided that the requirements for completion of Section 2 described in the Contract Data Part 1 should take precedence over the requirements appearing in the Works Information. RWE was dissatisfied and so issued Part 8 proceedings in court, seeking a declaration that the completion of the Section 2 works was defined by paragraph 6.2 of the Works Information.

RWE argued that, in the absence of material ambiguity between the various documents, there was no need to apply the order of precedence as, even though there were some discrepancies in the definitions of two Sections, when the Contract was looked at as a whole, it was clear that Section 2 included completion of the penstock pipeline.

Bentley argued the definition within Contract Data Part 1 took precedence and it only required completion of a sufficient part of the penstock pipeline as was necessary to allow the hydro plant to be installed. Bentley submitted the differences between the Contract Data Part 1 and the Works Information definitions were clear and largely irreconcilable.

The Decision

Mr Justice Akenhead decided that RWE was entitled to the declaration that Section 2 did require the completion and testing of the intake and the penstock pipework. On a proper analysis, there was no material ambiguity between the descriptions of the Section 2 works that appeared in the Contract Data Part 1 and the Works Information. The descriptions of Sections 1 - 3 in the Contract Data Part 1 were only "shorthand" descriptions of the works required and the parties could be taken to have assumed that the necessary work was spelled out in more detail elsewhere in the Contract documents. It followed that the description of the Section 2 works appearing in the Contract Data Part 1 was not exclusive or exhaustive and could be construed in light of the other Contract documents, including the more detailed description of the works in paragraph 6.2 of the Works Information, the key date provisions and the Contract Programme Revision C, all of which pointed to the need for the inlet and penstock pipeline to be complete.


The Judgment highlights that the interpretation of contract documents requires one to determine objectively what a reasonable person, with the background knowledge reasonably available, would have understood the parties to have meant, with the more commercial construction being adopted if more than one interpretation is possible.

The Judge remarked that with commercial contracts, it is first necessary to analyse apparent ambiguities in order to establish whether or not there are any unresolvable conflicts that necessitate reference to the precedence provisions. The Judge specifically warned against parties seeking to identify ambiguities by reviewing discrete elements of the contract documents in isolation and then comparing the results. The Judge said that if, following a review of all of the contract documents, it is possible to identify a clear and sensible commercial interpretation that does not produce an ambiguity, then that interpretation is likely to be correct.

For the purposes of avoiding disputes it is clearly important to avoid any ambiguity in the wording of contracts. However, as in this case, construction contracts will frequently be made up of a number of separate documents that have been prepared by different parties. For practical purposes the sheer volume of paperwork will often preclude a line by line analysis of all contract documents to ensure absolute consistency.

This Judgment may be read as a strong discouragement to place reliance on order of precedence provisions for every apparent discrepancy in the language of the contract without first properly analysing the contract and applying a commercial interpretation.

This article is one of a series contributed by Fenwick Elliott to the Building website. To see further articles in this series please go to

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.