General Rules of Contract Construction

Question 1

As a “Whole”

Answer 1

• K will be construed as a whole
• specific clauses will be subordinated to K’s general intent

Question 2

List of Rules

Answer 2

• as a whole
• ordinary meaning
• written/typed vs. printed
• determination: valid + enforceable
• ambiguities + party preparing K
• course of dealing
• usage of trade
• course of performance
• when rules conflict

Question 3

Ordinary Meaning

Answer 3

• ct construes words according to “ordinary” meaning unless clearly shown they were meant to be used in a technical sense

Question 4

Written/Typed vs. Printed Provisions

Answer 4

• if provisions appear inconsistent, written or typed provisions prevail over printed

Question 5

Valid + Enforceable

Answer 5

• courts generally try to reach determination that contract is valid + enforceable

Question 6

Ambiguities

Answer 6

• construed against party preparing the K, absent ev of intention of the parties

Question 7

Parties’ Course of Dealing

Answer 7

• sequence of conduct concerning previous transactions between the parties to a particular transaction that may be regarded as establishing a common basis of their understanding

Question 8

Usage of Trade

Answer 8

• practice or method of dealing, regularly observed in a particular business setting so as to justify an expectation that it will be followed in the transaction in question

Question 9

Course of Performance

Answer 9

• if K involves repeated occasions for performance by either party + other party has opp to object to such performance, any course of performance accepted or acquiesced to is relevant in determining meaning of K

Question 10

When Rules Conflict

Answer 10

1) express terms are given greater weight than course of performance, course of dealing, + usage of trade
2) course of performance is given greater weight then course of dealing or usage of trade AND
3) course of dealing is given greater weight than usage of trade