Importance Of Using Consistent Terms In A Construction Contract

A recent decision of the Supreme Court of the State of New York reminds us of the importance of using consistent terms when drafting a construction contract. In Clinton Assoc. For A Renewed Envt. Inc. v. Monadock Constr. Inc., defendants, pursuant to a contract (the “Contract”), agreed to provide architectural services and contract administration services to plaintiffs.[i] As part of their work, defendants prepared architectural plans, including specifications for the design system and choice of materials for the exterior masonry wall system. The Certificate of Substantial Completion was signed on March 29, 2006 and, at or about that time, the masonry walls began to fail, causing the walls to bulge and take on water. It was determined that the walls could not withstand the weather cycles to which they were exposed. Following Substantial Completion of the project, defendants worked extensively to cure the flaws in the masonry walls by, among other things, creating an alternate design and supervising the corrective work until August 18, 2008, when an Architect’s Certificate approving the repairs was issued.

On April 22, 2011, plaintiffs commenced a malpractice action against defendant architects. Defendants moved to dismiss on the grounds that plaintiffs’ claims were time-barred. The New York State statute of limitations for a malpractice action sounding in tort or contract against an architect is three years.[ii] Plaintiff’s argued that the continuous treatment doctrine operated to toll the statute of limitations from Substantial Completion on March 26, 2006 to the issuing of Architect’s Certification on August 18, 2008, because the parties had continued their professional relationship to rectify the problems with the walls. Defendants contended that the action was time barred under the applicable statute of limitations because the Contract language barred the application of the continuous treatment doctrine. The relevant Contract provision provides:

Causes of action between the parties to this Agreement pertaining to acts or failures to act shall be deemed to have accrued and the applicable statute of limitations shall commence not later than either the date of Substantial Completion for the acts or failures to act occurring prior to Substantial Completion or the date of issuance of the final Certificate of Payment for acts or failures to act occurring after Substantial Completion. In no event shall such statutes of limitations commence to run any later than the date when the Architect’s services are substantially completed.

Defendants’ motion to dismiss on the grounds that the Contract unambiguously bars tolling of the statute of limitations was denied. The Court held the Contract language was ambiguous as to whether the three year statute of limitations was tolled by the continuous treatment doctrine. The Court stated:

The Contract is ambiguous as to whether it purports to limit the application of the “continuous treatment” doctrine to toll the three-year limitations period. In the Contract, “Substantial Completion” is a defined, capitalized term. However, the Contract says that the limitations period will begin to run no “later than the date when the Architect’s services are substantially completed.” The Contract is ambiguous as to whether the time when “services are substantially completed” is referring to the defined date of “Substantial Completion.” Id. The time that “services are substantially completed” could reasonably be read as referring to the time when work on the project was mostly complete rather than the date of Substantial Completion. (Citations omitted.)

The Court’s holding brings to the light the importance of carefully reviewing each term in a construction contract. The particular words and terms incorporated must not only be clear and defined, but must also be consistent.


[i] Clinton Assoc. For A Renewed Envt. Inc. v. Monadock Constr. Inc., 2013 NY Slip Op 30224(U), 2013 N.Y. Lexis 421 (Sup. Ct., NY County, January 11, 2013).

[ii] NY CPLR § 214(6).