Ambiguous price provisions
In Riddell Kurczaba Architecture Engineering Interior Design Ltd. v.
Governors of the University of Calgary, 2018 ABQB 11, the parties had
negotiated a fairly complex and sophisticated contract which suf-fered
from one major ambiguity around the price. The court ulti-mately
found in favour of the University of Calgary and dismissed
Riddell’s $1.8 million claim.
The ambiguity had to do with the contingency of rising construc-tion
costs in the City of Calgary between 2006 and 2010 and how
that risk should be covered. Riddell argued that it had sought to cov-er
this risk by stipulating that the price of the contract was to be
8.71 per cent of the final construction cost, which turned out to be
$52,622,480. The University of Calgary argued that the 8.71 per cent
was a fixed fee based on the construction cost of $18,750,000, which
was estimated at the time the contract was signed and that all fee
increases were to be covered through the “Change Order” provisions
of the Contract. A final construction cost to the tune of $52,622,480
meant that there was approximately $1.8 million dollars to litigate.
The judge noted from the outset the importance that contract man-agement
had in determining the ultimate outcome of the litigation:
39 … considering the cost and importance of the project, it
seems that, at times, little attention was paid by the parties to
the manner in which the Service Agreement was prepared, re-viewed
and administered. The University prepared and pre-sented
an agreement containing confusing and ambiguous
language in respect to one of its most important provisions:
price. RKA signed that agreement without seeking clarification.
It further subsequently signed off on Change Orders, which
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