Contract Interpetation

Question 1

Approaches to contract interpetation

Answer 1

1. 4 Corners (Inside contract only)
2. Plain Meaning of the contract words.
3. Corbin: (Intent) Rejects Plain meaning and says allow extrinsic evidence to support the meaning of the words.
4. Williston’s Approach: ( a.) Integration: “Reasonable Person”, what a reasonable person would assume the contract to be in the context as a whole. ( b.) Not integration and is unambiguous: Objective Test of a reasonable person. (c.) Not integration and ambiguous Terms: Subjective Test of Intent of the parties.

Question 2

Course of Performance, Dealing, Trade

UCC

Answer 2

1. Course of Performance: sequence of conduct regarding particular transaction.
2. Course of Dealing: Previous transactions.
3. Usage of Trade: Practice or method in observance in place, vocation, or trade to justify expectations.
4. Couse of Performance or Course of Dealing: in which the parties are engaged in to give meaning to specific terms.
5. (1-4) Used whenever reasonable.

Question 3

1. Technical words as used in the field.
2. Writings as a whole which inlcude those that relate to it.
3. Same meaning of words throughout the contract.
4. Association of word meaning from the context of the contract.
5. General terms derived from the specific terms that are before.
6. Grammar rules apply.

Question 4

Standard of Preference

Answer 4

• *1.** An interpretation is preferred that gives force to every term and provision of the contract rather than one that creates an irreconcilable conflict between provisions
• *2**. Specific terms and exact terms are given greater weight than general language.
• *3.** S_eparately negotiated or added terms a_re given greater weight than standardized terms or other terms not separately negotiated. As a result handwritten terms on a form are given more weight than standard terms.
• *4.** When some things are specified in detail in a contract, other things of the same character are excluded by implication.
• *5.** If a contractual provision is susceptible to 2 reasonable constructions, one 1 of which comports with law, courts will choose the provision which makes it legal.
• *6.** If a provision has two reasonable meanings, the courts should prefer the meaning less favorable to the party drafting the contract language, unless the parties have equal bargaining power or the contract is otherwise the product of negotiation.

Question 5

Terms

Answer 5

1. Open: Reasonable Person (Prior relationship, Usage, etc.)
2. Ambigious: Judge makes initial determintation whether its ambigous. Then, if found goes to fact finder for weighing of evidence and credibilty.
3. Different terms: Party who didn’t know prevails.

Question 6

Adhesion Contract

Answer 6

A contract drafted by one person that povides no opportunity for negotiation.