Interpretation- contracts

Interpretation

In which the courts determine the meaning of the terms, by considering the terms, the parties’ inent and purpose to enter the contract

Standard of preference applied during court (1)

Court will prefer to give reasonable, lawful, and effective meaning to all terms

Standard of preference applied during court (2)

Courts will give greater weight to specific or exact erms over general language

Standard of preference applied during court (3)

Courts will give greater weight to negotiated or added terms rather than standard terms

Standard of prefrence applied during court (4)

courts will interpret the contract against the drafter when choosing among reasonable terms

indefinte terms

terms that are left open or uncertain

Essential indefinite terms

the court will determine that the parties never intended to enter in a contract

Minor indefinite terms

the court may imply a definite term based on hat is reasonable

ambiguous terms

multiple meanings or involve a misunderstanding between the parties

contract voided

if there is a misunderstanding of terms by both parties

If one party knew of the misunderstanding

the court will interpret the term based on the party that was unaware of the misunderstanding

omitted terms

parties have not provided for what should happen

how do courts deal with omitted terms?

courts will fill in the gaps by supplying a reasonable terms

duty of good faith

both parties must act with decency, fairness, reasonability, and honesty in their conduct and transaction