Where there are multiple documents comprising a contract, ensuring complete alignment between them is challenging, especially if documents are being amended by different authors all the way up to contract execution. An order of precedence can be used to clarify how any inconsistency ought to be resolved:
If there is any ambiguity, inconsistency, conflict or discrepancy between any of the documents listed in clause X, then the documents will take precedence in the order set out in clause X with the Reference Schedule being the highest in the order.
The document lists associated with such a clause often include a catch-all category (i.e. ‘any other document’) as the lowest in the order, which will often include technical specifications. However, given those documents often include drawings or requirements that have been tailored for the contract, arguably they should be higher in the order. In many cases the parties will not have aligned interests in this regard. A supplier who submitted a tender, which might contain exclusion or qualifications as well as pricing, would prefer that to take precedence over the scope of work attached to the tender package issued to market. A contract drafted by the purchaser is unlikely to reflect that position. Another approach, applied in legislative drafting but rare in commercial contracts, is to include a clause stating that later documents take precedence over earlier documents, rather than an order of precedence. All else being equal, it is arguable that approach would more properly reflect the intention of the parties in the case of a direct conflict. A third approach, often used in conjunction with an order of precedence, is to include specific rules that resolve conflicts between different parties of a contract. A clause stating that written dimensions take precedence over scaled measurements is of this type.
An alternative approach is to have no clauses dealing with inconsistency at all, the basis that the common law principles resolving contractual inconsistency apply. Before applying any precedence clause or rule of interpretation though, it is first necessary to analyse apparent ambiguities in order to establish whether the conflicts are genuinely unresolvable.
At the contract drafting stage, these points can be best addressed by properly reviewing the documents comprising the contract prior to execution. This is where a lawyer can provide significant certainty to your commercial deals.