1. Contracts Interpretation of Terms
Interpretation of Ambiguous Terms
Plain Meaning test: if relatively clear or obvious, give a term that meaning (perhaps with e.g., a dictionary).
Four Corners test: determine the meaning from other terms within the same document (Williston).
Rules of Construction*: use general, legal truisms developed by courts, e.g. construction against the drafter.
Holistic test: allow all evidence in, but weigh each for evidentiary value on balance (Corbin, Rest. 2d, U.C.C.).
[Give to the Jury]: not a ‘test,’ but an option, esp. re: credibility of witnesses (and evidence) questioned].
The GOAL, not a ‘test,’ is to determine the intent of the parties, using these rules.
Courts interpret, as a matter of law, and not juries/fact finders…but only if there is an ambiguity; if clear, no need for use of the interpretation rules.
Courts are not bound by the order above, but it benefits from the logic of least extrinsic to most extrinsic evidence/considerations. More conservative courts would use ‘four corners’ if there was ambiguity and no simple ‘plain meaning,’ but modern trend is to use more flexible, holistic approach and balance all evidence.
*this is relatively extrinsic, but not linked to the parties or to the case.
Florida courts sometimes use “patent” vs. “latent” distinction for ambiguity; with the former, they lean toward use of the more intrinsic rules (plain meaning or four corners), but if latent use the more extrinsic (typically, the holistic test).
The issue of Integration is a subset of, or form of, Interpretation. The same rules and ideas apply for the most part. For Integration, the question is “does this thing become part of the contract or not” but for Interpretation, the meanding of something already in the contract needs to be determined. Integration involves Parol Evidence rule.
© 2018 Paul J. Carrier, Paul J Carrier, LLC Blue – Category Recognition; White – Specific Category; Yellow – “Black Letter” Rules (to be memorized); Green – Main Factual Issues – Analysis; Red – Upper-Level, Integrated Comprehension