3.1 CONTRACT DRAFTING & INTERPRETATING

Question 1

3 principles of interpretation

Answer 1

1. objective intention of the parties
2. Apply the cannons of contract construction
3. Consider additional evidence

Question 2

Intention of parties - contract interpretation key principle

Answer 2

review terms of contract

what reasonable parties intended when agreeing to terms

Question 3

Canons of construction - contract interpretation key principle

Answer 3

Not rules of law but guiding principles

Include:

1. Plain and ordinary meaning
2. Special meaning
3. Reading contract as whole
4. Give effect to all parts of contract (don’t read one part and make it redundant)
5. If you’re going to have contract restrictions include express provisions (special trumps general provisions)
6. Commercial purpose (Presume the parties didn’t intend a commercially unreasonable result)
7. Context (read words in context)
8. Contra perferentem (construe ambiguous provisions against the party that drafted contract)

Question 4

Additional evidence - contract interpretation principle

Answer 4

Contract is primary evidence

Parole evidence rule: where contract is clear evidence of parties intentions is not considered (not include background evidence)

When not clear or ambiguous other parties may be considered

Question 5

purposes for drafting contract

Answer 5

1. Reflect business arrangement between parties
2. Clearly allocate risk between parties to minimize disputes
3. Provide protections and incentives for parties
4. Enforceable (5 elements)
5. Consider what it scenarios