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Claims - Contract Interpretation

In interpreting a contract, one starts with plain language where the words of the agreement has their ordinary meaning unless the parties mutually agree to an alternative meaning. If terms are susceptible to more than one reasonable interpretation then an ambiguity exists that can be patent or latent. A patent ambiguity is one so glaring as to raise a duty to inquire while a latent ambiguity is not glaring or obvious and in such cases, the court will construe the ambiguous term against the drafter of the contract when the nondrafter’s interpretation is reasonable (Tecom, Inc. v US, 66 Fed. Cl. 736). Where the court agreed the project specifications were defective in a claim asserting defective specs., it held the ambiguities were patent and thus the contractor’s failure to inquire about them barred its recovery (Sunshine Construction v. US, 64 Fed. Cl. 346). The contractor alleged the building of a temporary structure to anchor the wall its was contracted to repair was a change while the board disagreed, holding the absence of a line item for the structure was a patent ambiguity the contractor was obligated to clarify (Luedtke Engrg Co., ASBCA No. 54226).

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