Interpretation
of Contracts
Plain Meaning Rule: Courts give
terms their obvious meaning.
Ambiguous Terms. If terms are ambiguous, court will attempt to
interpret ambiguous contract terms in a reasonable, lawful, effective
manner.
Ø Contracts are
interpreted as a whole.
Ø Terms negotiated
separately given greater weight.
Ø Ordinary, common
meaning given.
Ambiguous Terms (cont’d)
Ø Specific wording
given greater weight than general language.
Ø Written or typewritten
given greater weight than preprinted.
Ø Ambiguous terms
interpreted against the drafter.
Ø Trade usage,
prior dealing, course of performance to allowed to clarify.
Case 9.3: Dispatch Automation v. Richards (2002).
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