Interpretation

Question 1

Rule for interpretation (objective theory of contract):

Answer 1

If the meaning the parties attached to a particular contract provision or word was different , but the provision or word is unambiguous, that is the meaning applied.

If the word or provision is ambiguous, you will apply what a reasonable person would apply.

If an ambiguous provision or word has two meanings that appear equally reasonable, apply the meaning of the party who did not draft the contract.

Question 2

Mutual Understanding:

Answer 2

If both parties attach the same meaning to a provision or word in a contract, that is the meaning that applies.

Question 3

Majority rule (common law) of determining interpretation of word or provision:

Answer 3

If the word is unambiguous, use the four corners/plain meaning rule, use that meaning.

Question 4

Minority law (UCC)

Answer 4

To determine if a provision or word in a written agreement is ambiguous, the court considers any relevant evidence, extrinsic evidence (contextual approach).