Here’s How Courts Will Handle Contradictions and Ambiguities in Contracts

When there is a contract dispute, there are certain rules that courts look at, to determine who is correct and who is not. These rules most often come into play when there are disputes about the meaning of contractual language—for example, if words contradict each other, or if there are phrases that are vague and ambiguous.

These rules aren’t passed by congress or the state, but rather have developed over many years of contract cases.

Who Drafted the Agreement?

One such rule, which is a very basic and fundamental rule of contractual interpretation, is that if there are two plausible interpretations of ambiguous words or phrases in a contract, courts will assume that the words or phrases operate in favor of the party that did not draft the contract.

That’s because the party that drafted the agreement is in the best position to write what he or she wanted the agreement to say—if there’s an ambiguity, it should be the fault of whomever drafted the language that was ambiguous.

That doesn’t mean that the drafting party always loses these kinds of cases, but it is a help to parties that did not draft a contract, and are stuck with confusing or vague terms in the agreement.

Plain Meanings

Often, when arguing that a contractual provision or phrase or word should be construed a certain way, parties will suggest that the court adopt a meaning that normally would not attach to that word or phrase. Sometimes words have a specific meaning in a particular industry or field, that isn’t the same as the word is used in everyday life.

Courts won’t go along with this—if there’s a common sense, every day meaning to a word or phrase, that’s how the court will interpret it.

Similarly, if there are two terms, or two parts of an agreement and one is broader and one is more specific, but they contradict, the court will assume the more specific phrase or word is the one that the parties intended to use, or the one that takes precedence over the broader term.

Handwritten Changes and Markups

In the event that there are markups to a contract—for example, someone hand writes a provision, or crosses out a provision—courts will go with what is handwritten over what is typed, if there is a conflict. The courts will assume that the parties added the handwritten parts later, and thus, the handwritten terms are a better expression of what the parties intended the contract to do or say.

Keeping The Contract Together

Courts want contracts to be in effect, and to be binding. Courts don’t want to invalidate a contract, or make the terms of the contract useless or meaningless.

That means that wherever possible, courts will interpret terms of an agreement in ways that further the goals of the agreement, instead of in ways that may frustrate, or invalidate, the agreement.

Contract dispute? Call our Fort Lauderdale business and commercial litigation lawyers at Sweeney Law P.A. at 954-440-3993 for help.

Sources:

pressbooks.lib.vt.edu/constructioncontracting/chapter/common-rules-of-contract-interpretation/

justice.gov/archives/jm/civil-resource-manual-72-principles-contract-interpretation