August 25, 2017

How An Indiana Court Will Likely Interpret a Construction Contract

Written By

J. Herbert Davis
Member, Stoll Keenon Ogden PLLC


Your company is the general contractor that has been engaged to construct a new office building in Evansville, Indiana. A dispute arises between your company and the owner regarding certain scope of work and warranty provisions contained in the construction contract. 

Are there general rules of contract interpretation that are utilized by Indiana courts to resolve these types of construction disputes?

The answer is yes. 

This article will give you a brief overview of some of the more significant rules of contract interpretation that are used by Indiana courts. One rule used by Indiana courts is to give effect to the intent of the parties when interpreting the construction contract. The intent of the parties is defined by the contract language included in the construction contract. If that contract language is clear and unambiguous as written, you can expect that an Indiana court will apply that clear and unambiguous language to assist in the resolution of your dispute. You should not expect that a court will look to evidence outside the construction contract when the construction contract is written in a clear and unambiguous manner.

Another rule used in construing construction contracts is that Indiana courts will try to give effect to all of the provisions of the construction contract, and will not read out provisions from the contract.

Indiana courts also generally follow the rule of specific provisions control over general provisions. This rule normally applies when there are conflicting provisions that arguably apply to the same issue, but one of the provisions is more specific than the other. Indiana courts will generally give effect to the more specific provision.

Indiana courts also generally follow the rule that unambiguous terms in a construction contract will not be interpreted by the court. In other words, an Indiana court is likely to enforce unambiguous terms as written, and apply the plain meaning of the language in the construction contract to govern the resolution of the dispute.

These and other judicial rules of contract interpretation will be utilized by Indiana courts to resolve your construction disputes. The most important lesson to be learned from these general rules of contract interpretation is that Indiana courts will likely enforce the language that the parties agreed to in their construction contract, which makes it all the more important that you fully review and understand your construction contracts before agreeing to the terms.


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