If you work in the legal field, you know the importance of interpreting a contract correctly. Every word, phrase, and punctuation mark can have a significant impact on the meaning of a document. However, there are many purported rules about contract interpretation out there, and not all of them are accurate. In this article, we’ll explore which of the following purported rules about contract interpretation is not correct.
Rule 1: Words should be given their plain, ordinary meaning.
This rule is generally correct. When interpreting a contract, you should begin by giving the words their plain, ordinary meaning. This means that you should look to the dictionary definitions of the words used in the document and interpret them in their usual context. However, there may be circumstances where the plain, ordinary meaning doesn’t accurately reflect the parties’ intentions. In those cases, you may need to consider other factors, such as the context of the contract or the parties’ course of conduct.
Rule 2: Ambiguities in a contract should be resolved against the drafter.
This rule is also generally correct. If there are ambiguities in a contract, courts will typically interpret the language against the party that drafted the document. This is because the party that drafted the contract is presumed to have had more control over the wording and should have been more clear in their language. However, this rule is not absolute, and courts may look to other factors, such as the parties’ relative bargaining power or the purpose of the contract, in interpreting ambiguous language.
Rule 3: Extrinsic evidence is always admissible in interpreting a contract.
This rule is not correct. Extrinsic evidence, such as emails, draft documents, or testimony about the parties’ negotiations, is not always admissible in interpreting a contract. Courts generally prefer to interpret a contract based solely on its written language. However, if the contract is ambiguous or there is an error in the writing, extrinsic evidence may be considered to clarify the parties’ intentions. Additionally, some contracts may specifically allow for the consideration of extrinsic evidence in interpreting their terms.
Rule 4: Technical terms or trade jargon should be given their specialized meaning.
This rule is generally correct. If a contract uses technical terms or trade jargon, those words should be given their specialized meaning. This means that you should interpret the words based on their meaning in the relevant industry or field. However, if the technical term or trade jargon is not commonly used or is unclear in its meaning, you may need to consider other factors in interpreting the contract.
Rule 5: The parties’ subjective intentions control the interpretation of a contract.
This rule is not correct. While the parties’ subjective intentions may be relevant in interpreting a contract, they do not necessarily control the meaning of the document. Courts will generally interpret a contract based on its objective meaning, meaning that they will look to the words used in the contract and the context in which they were used to determine the parties’ intentions. The subjective beliefs or understandings of the parties may be relevant in cases where the language is ambiguous or where there is a mistake or misrepresentation, but they will not always control the interpretation of the contract.
In conclusion, all of the purported rules about contract interpretation discussed in this article have some validity, but the one that is not correct is Rule 3: Extraneous evidence is always admissible in interpreting a contract. While extrinsic evidence may be considered in some cases, it is not always admissible, and courts generally prefer to interpret a contract based solely on its written language. As a copy editor, it’s important to understand the rules of contract interpretation to ensure that contracts are clear and unambiguous and reflect the parties’ intentions.