Say What? Contract Interpretation

Posted on 8/18/2011 2:24 PM

Most disputes involve contract interpretation.  One side thinks something means one thing and the other thinks it means something else.  What does the contract say?

A judicial tribunal will start by examining the plain language of the contract, reading its terms together to give reasonable meaning to all parts of the contract.  The tribunal will not allow extrinsic evidence (evidence outside the contract such as witness testimony, documents, etc.) to be introduced on the issue unless the language is ambiguous.  Ambiguous is defined as capable of two (or more) reasonable interpretations.  If the contract is not ambiguous, meaning there is only one reasonable interpretation, there will be no testimony and no documents allowed in evidence to help interpret the meaning.

Since most disputes arise over interpretations, I must repeat my admonition that you thoroughly and carefully scour the solicitation and contract documents for possible ambiguities BEFORE you bid. 

If you miss something and become entangled in the thicket of "what does it mean", read the language carefully, in the context of the entire contract.  Try to discern the plain meaning first.  If you are hopelessly entwined in differing possible reasonable interpretations, apply the rules of resolving ambiguities, which start with extrinsic evidence of meaning and end with resolving ambiguities against the drafter of the language.


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