shared intent |
words have different meanings |
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context of negotiation and making the contracts |
plain meaning |
dictionary definition/ commonly understood meaning |
contextual meaning |
circumstances surrounding (purpose of terms, history of negotiations, business context ) |
theories |
subjective- meeting of the minds |
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objective- reasonable person, focus on words and conduct |
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modified objective- intention and other evidence relevant to contract |
principles of interpretations |
construe language consistently where posible |
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resolve ambiguity against drafter resolve ambiguity to make contract valid |
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handwritten/ typed preferred over preprinted |
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orefer interpretation that makes contract reasonable, lawful, and effective |
customary practice terms |
usage of trade- meaning or word in industry |
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cuorse of dealings- what has been used in past contracts |
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course of performance- has one party objected to the meaning in the past |
hierarchy of interpretations |
express terms |
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course of performance |
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course of dealings |
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usage of trade |
Restatement 201- whose meaning prevails |
same meaning |
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i. Party does know of other meaning and other knew meaning attached by the first party |
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Party had no reason to know of other meaning and other knew meaning attached by the first party |
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iii. Except as stated in this section, neither party is bound by the meaning attached by the other, even though the results may be a failure of mutual assent |
Rules in Aid of interpretation |
Circumstances |
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Writing interpreted as a whole |
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unless different intention is manifested |
Section 204 |
if terms are omitted, the court can apply reasonable terms |
Determining word meaning |
P has burden of proof because their interpretation id more favorable because D drafted |
what to look at to determine word meaning |
actual language |
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negotiating history |
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industry standards |
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applicable government regulations |
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conduct of parties after the agreement |
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If contract made in good faith and still can't make clear, dismiss the claim |
Doctrine of reasonable expectations (usually adhesion contracts) |
Any nondickered terms should be interpreted in accordance with the non drafting party's reasonable expectations, even if this contradicts the express language of the contract |
Test for reasonable expectation |
bizarre or oppressive terms |
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Eviscerates dickered terms |
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Eliminates dominant purpose of transaction |