Interpretation of contract

Question 1

Interpretation of contracts - II PACC

Answer 1

• Intentions of parties
• Incorporation by reference
• Parole Evidence Rule
• Ambiguity
• Controlling Statute
• Conflict of Laws

Question 2

Interpretation of contracts - Intention of Parties Control

Answer 2

Objective intention as expressed in the language uses in the contract

Question 3

Interpretation of contracts - Incorporation by Reference

Answer 3

• If contracts refers to other doc/agreement
• Doc needs to be able to be identified w/reasonable certainty
• If conflict with contract - most recent control

Question 4

Interpretation of contracts - Parole Evidence Rule - Gral

Answer 4

• Rule that excludes from E any written/oral prior/contemporaneous extrinsic discussions or agreements that contradict the terms of the final contradicted agreement
• Gral exception: consistent terms and recitals of facts usually allowed as evidence, everything else as DUCAS Exceptions

Question 5

Interpretation of contracts - PER - DUCAS exceptions

Answer 5

• Defect in Formation
• UCC Trade and Dealings
• Condition Precedent
• Ambiguity Interpretation
• Subsequent Modifications

Question 6

PER -DUCAS Exceptions - Defect in Formation

Answer 6

• As preliminary false representation made by one party contradicting terms of final written agreement signed by buyer
• i.e. fraud in inducement, mutual mistake, failure of consideration, illegality, lack of capacity

Question 7

PER -DUCAS Exceptions - UCC Trade and Dealings

Answer 7

• Application of CPU used to clarify intent / supplement / qualify
• CPU: course of early performance in current contract, past dealings among parties, usage of trade (i.e. baker’s dozen)

Question 8

PER -DUCAS Exceptions - Condition Precedent

Answer 8

Parties agreement effectiveness suspended until event occurs.

• Evidence of existence and non-ocurrence of the condition

Question 9

PER -DUCAS Exceptions - Ambiguity Interpretation

Answer 9

E introduced to define/interpret/clarify ambiguous term in the agreement

• “ambiguous term” = susceptible to more than 1 meaning or interpretation

Question 10

PER -DUCAS Exceptions - Subsequent Modification

Answer 10

• To be introduced will require to comply with modification requirements for CL and UCC
• i.e CL: with consideration

Question 11

Interpretation of contracts - Ambiguity - Gral

Answer 11

• Decision on whether term is ambiguous is on court
• Meaning of term is to defined by jury, considering construction maxims and contradictory terms rules

Question 12

Interpretation of contracts - Ambiguity - Construction Maxims and Contradictory Terms Rules

Answer 12

• Terms have usual/ordinary/popular meaning unless contrary intent demonstrated
• Ambiguous terms construed against drafting party - Handwritten terms over typed
• Typed over standard form agreement terms
• Number words prevail over typed periods

Question 13

Interpretation of contracts - Controlling Statute

Answer 13

If contradiction/ambiguity not addressed by agreement, and statute exists

• apply statutory filling gaps

Question 14

Interpretation of contracts - Conflict of Laws

Answer 14

• When parties under different jdx and conflict of law exists
• Contract designation of applicable law control
• even w/out substantial relationship UNLESS party can show unfairness/unreasonableness
• When no contract designation: court looks for most significant relationship with parties/subject/performance