Pace Construction Corp. v. Houdaille-Duval-Wright Division, Houdaille Industries, Inc.

276 S.E.2d 568, 247 Ga. 367, 1981 Ga. LEXIS 644

• Court: Supreme Court of Georgia
• Decided: February 11, 1981
• Docket: 36913
• Status: Published

Opinions

Marshall, Justice.

This case involves an arbitration clause in a subcontract between a general contractor and a subcontractor, which clause provides that the rights and obligations and all procedures in the matter of arbitration shall be analogous to those set forth in the “Contract Documents.” The Court of Appeals held that this arbitration clause is unenforceable, because “nowhere in the subcontract between the parties to this case are those documents described, nor is there any reference in the subcontract by which they may be identified.” Pace Const. Corp. v. Houdaille-Duval-Wright Div. &c. Inc., 155 Ga. App. 923, 924 (274 SE2d 44) (1980). We do not agree that the arbitration clause is unenforceable for this reason. We therefore reverse.

The general contractor, who is the party seeking enforcement of the arbitration clause here, argues that the term “Contract Documents” means those documents forming the contract between the general contractor and the owner of the construction project, and that this is a common and well understood meaning of this terrtí throughout the construction industry. If, as argued by the general contractor, the term “Contract Documents” is understood in the construction industry as meaning those documents forming the contract between the general contractor and the owner of the construction project, this may be proved by parol evidence. “Words generally bear their usual and common signification; but technical words, or words of art, or used in a particular trade or business, will be construed, generally, to be used in reference to this peculiar meaning . . .” Code Ann. § 20-704 (2) (Ga. L. 1964, pp. 414, 415); Dwyer v. Providence Washington Ins. Co., 95 Ga. App. 672, 675 (98 SE2d 592) (1957). “Ambiguities in terms used in written contracts, and their meanings as understood in the trade and by the contracting parties, may be explained by parol proof of this trade usage and custom.” Harris & Co. v. Vallee & Co., 29 Ga. App. 769 (4) (116 SE 642) (1923). Parol evidence is admissible to explain the meaning of technical terms employed in written contracts. Cannon v. Hunt, 116 Ga. 452 (1) (42 SE 734) (1902).

Decided February 11, 1981 Rehearings denied March 3 and March 24, 1981. Robert O. Fleming, Jr., for appellants. John P. MacNaughton, for appellee.

Judgment reversed.

All the Justices concur, except Smith, J., disqualified.