Resolving Contractual Ambiguities Before They Lead to Disputes in Bahrain
In Bahrain’s contracting sector, clear and precise contracts are essential for avoiding misunderstandings and legal disputes. Unfortunately, many disagreements arise not because one party refuses to honor the contract, but because the contract language itself is ambiguous — leaving room for conflicting interpretations.
This blog explains how contractual ambiguities cause disputes, the legal principles for interpreting unclear terms in Bahrain, and practical measures to resolve ambiguities before they escalate into costly conflicts.
What Is Contractual Ambiguity?
A contractual ambiguity occurs when:
- A clause can be interpreted in more than one reasonable way.
- Key terms are missing or vaguely defined.
- Technical specifications are inconsistent with the general contract terms.
- The contract uses industry jargon without clarification.
Ambiguities can appear in scope definitions, payment terms, variation clauses, performance obligations, and dispute resolution provisions.
Legal Approach to Ambiguity in Bahrain
Under Bahraini contract law:
- Contracts are interpreted according to the common intention of the parties at the time of signing.
- If the intention is unclear, courts and arbitrators interpret terms against the party who drafted them (the contra proferentem rule).
- Industry customs and previous dealings between the parties may be considered when clarifying unclear terms.
Because legal interpretation can be unpredictable, it’s better to resolve ambiguities during contract negotiation rather than after a dispute arises.
Risks of Leaving Ambiguities Unresolved
- Conflicting expectations between employers, contractors, and subcontractors.
- Delays and extra costs due to disagreements over responsibilities.
- Weakened legal position in arbitration or court due to unclear obligations.
- Increased variation claims and payment disputes.
Strategies to Resolve Ambiguities Before Signing
- Plain Language Drafting
- Avoid unnecessary jargon and legalese.
- Use clear, simple language to define obligations.
- Define Key Terms
- Provide a glossary for technical and legal terms.
- Ensure consistency in definitions across the entire contract.
- Align Technical and Legal Documents
- Verify that drawings, specifications, and schedules match the main contract terms.
- Seek Legal Review
- Engage a lawyer familiar with Bahraini contracting law to identify and correct ambiguous clauses.
- Clarify Before Signing
- Discuss potential problem areas with the other party and document agreed interpretations.
Example:
A contractor in Bahrain signed a lump-sum agreement to build a logistics warehouse. The scope clause stated, “Contractor to provide all necessary works to complete the project to operational readiness.”
During construction, the employer insisted that this included supplying specialized racking systems, which the contractor believed were excluded. The vague wording created a dispute over responsibility and cost.
A lawyer reviewing the case noted that the scope clause should have listed specific inclusions and exclusions to avoid conflicting interpretations.
Best Practices
For Contractors:
- Review all contract documents for conflicting terms.
- Request written clarification on any unclear obligations.
- Keep negotiation notes to prove agreed interpretations.
For Employers:
- Use detailed, precise wording for scope, payment, and performance clauses.
- Ensure tender documents match the final contract terms.
- Avoid relying on “understood” industry practices without documenting them.