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Interpretation of Contracts

Interpretation of  Contracts
Interpretation of  Contracts

Interpretation of Contracts

Ideally, a contract between two parties is the product of painstakingly thorough and deliberate effort. Yet even though the parties may try to be as precise as possible in developing an agreement, questions may arise as they begin to perform the terms of the contract, questions about the meaning of terms in the contract, what the parties’ original intentions were, and whether certain conditions included in the contract have been met. If the parties themselves can’t resolve their differences, the court is called in to settle them. The court’s first task is to determine if it can resolve the dispute. Once it decides that it can, the court must then determine what criteria it will use to do so.

Intention of the Parties

A contract is to be enforced according to its terms. A court cannot remake or rewrite the contract of the parties under the pretense of interpreting it. If there is a dispute as to the meaning of a contract, the court examines the contract to determine what the parties intended. The court will first apply the objective theory approach. That is, the court will first ask what a reasonable third person would believe the parties intended when they entered into the contract. A party cannot claim that secretly something else was intended. Such secret or subjective intent cannot be proven.

The use of the objective intent standard means that an unambiguous contract must be interpreted as having been written. It cannot be given any other meaning that one party thinks it has.

A Totally and a Partially Integrated Contract

A totally integrated contract is one that exists on the face of the paper. Everything that you need to know about that contract and its performance is written on that piece of paper. The parties don’t ha ve any additional decisions to make, there’s no need for clarification.

As a result, the courts do not allow any other evidence to be presented that would show a difference from what the writing itself says.

A partially integrated contract is intended to be the final agreement, but is incomplete.

When the court is looking at a partially integrated contract, they’re looking at an agreement that is not the complete agreement of the parties, either by choice, or by omission of some sort. The court will then allow evidence to be presented by either party or by both parties. This evidence can either fill in the gaps that were left in the original writing, or you can even use oral evidence or other evidence to show additions to the contract – other things that w eren’t necessarily included, so long as those additions do not change what the writing says.

Rules of Interpretation

The parties to a contract may define the words and terms used in their contract. If the language in a contract is ambiguous, the courts will attempt to interpret the contract in accordance with the intent of the parties. If the subjective intent of the parties fails to provide a clear interpretation, the courts will use an objective theory approach to interpret a contract. Rules of interpretation include:

1.Ordinary words are given their usual meaning according to the dictionary.

2.Technical words are given their technical meaning, unless a different meaning is clearly intended.

Testimony from expert witnesses is often necessary to determine the precise meaning of technical words.

3.Specific terms are presumed to qualify general terms. That is, specific terms are given greater

weight than general language.

4.Where a preprinted form contract is used, typed words in a contract prevail over preprinted words.

Handwritten words prevail over both preprinted and typed words.

5.Where a term or promise has several possible meanings, it will be interpreted against the party who

drafted the contract.

?Course of Dealing and Usage of Trade

When parties have different interpretations of the terms and phrases in a contract, the courts usually look at industries, or conduct between the parties. The court will assume that the course of prior dealing between the parties and the usage of trade were taken into account when the agreement was phrased.

A course of dealing is a sequence of previous conduct and communications between the parties that

may fairly be regarded as establishing a common basis of understanding for interpreting their expressions and agreement. Usage of trade is defined as any practice or method of dealing regularity observed and followed in a place, vocation, or trade.

Conditions

When the execution of an agreement is made conditional on something else, the court usually rules that the contract is not binding.

Conditions may be precedent, concurrent, or subsequent to the obligation to perform.

?Condition precedent means the condition that must occur before a party has an obligation to perform. For example, a contract that promises to replace or repair a defective computer establishes a condition precedent. Only if the computer is defective is there an obligation to repair or replace it.

?Condition concurrent is one that requires both parties to carry out some performance at the same time. The most common condition concurrent is one that implies in all sales transactions: the buyer must pay and the seller must deliver the promised property or services at the same time.

Of course, the parties may agree otherwise, but in the absence of such an agreement, payment is due at the time that delivery is due.

?Condition subsequent is one that excuses performance if an event takes place. For instance, many international contracts provide that an obligation to perform will come to an end if war is declared between the countries where the parties are located.

Parole Evidence Rule

The parole evidence rule states that when a contract has been put in writing as the final expression of agreement between the parties, parol evidence – evidence of an oral agreement made prior to or at the time of signing the written agreement—cannot be presented in court to change or add to the terms of the written contract, which represents the parties’ final and complete statement of their agreement. In other words, neither party can say that he or she agreed to do something other than what was included in the written contract. The purpose of this rule is to preserve the credibility and value of written contracts, especially in cases in which the parties appear to have intended something in writing as a final expression of their agreement.

However, there are some exceptions that parol evidence may be admitted in court.

1) If a contract isn’t totally integrated, outside evidence is allowed to fill the gaps.

2) The spoken words explain the ambiguity in the written contract.

3) If the oral testimony corrects an obvious clerical or typographical error, the court can reform the contract

to reflect the correction.

4) If a condition necessary to the existence of the contract never occurred, there should be some extraneous

evidence allowed as an explanation.

5) If fraud, forgery, illegality, mistake, or misrepresentation occurred,

6) Oral proof can be presented in the court to show that the parties subsequently modified the contract or

made a new agreement.

In a perfect world, there would be no need for judicial interpretation. Contracts would be black and white, and there would be no doubt about what they meant. Unfortunately, ours is not a perfect world. Even the most carefully assembled contracts are often plagued by problems of ambiguity and mistake, and so it falls to the courts to provide interpretation. As w e’ve seen, this is not done in a random, haphazard way. First, the court determines how the contract is to be interpreted or explained, based on whether it is totally or partially integrated. Once it makes this determination, the court has a variety of interpretative tools which it applies in a methodical, systematic manner, tools it uses to determine what the parties to an agreement actually had in mind when they entered into their contract. The most fundamental, overriding standard applied its usually referred to in legal terms as the objective theory approach. As the word objective implies, the emphasis here is on finding an interpretation that would be reasonable to an objective person. The objective approach itself fall into two basic areas. The first of these, and the most common is the standard of general usage. It seeks to establish what a reasonable person who knew all the facts and circumstances would conclude.

In the case of contracts whose execution depends on the language used in a particular locale or industry, the court applies an approach called the standard of limited usage. Beyond the question of interpretative approaches, the court looks at some very specific issues. One of these concerns the matter of conditions. Were there conditions that had to be satisfied for the contract to be valid? Another area the court may look into is what’s called the course of conduct and usages of trade. In other works, how have the parties dealt with each other in previous transactions and what are the customary practices in their industry?

The point of all this is that the court looks at contract interpretation disputes in as dispassionate and rational a manner as possible. It uses whatever tools and approaches are necessary to make a determination that reflects what the parties intended at the time the contract was created. Of course, there’s still no replacement for thorough contract prepar ation by the parties themselves. The court’s wisdom and rationality notwithstanding, a good working relationship and a clear, carefully drawn contract remain the best way to avoid unforeseen legal entanglements.

Case Problems for Discussion:

1.Buying a car had always been somewhat traumatic for Arthur Sanderson. The problem wasn’t just that

he knew next to nothing about automotive mechanics. What really bothered Sanderson was that he always felt intimidated by the sales people, which is why he was so pleasantly surprised in his dealings with Meg Crandall, who never pressured him to move up to the most expensive models, or to add options he did n’t want. She really knew how to make you feel comfortable, and Arthur Sanderson felt like he could trust her.

Because of that trust, Sanderson bought a car from Meg Crandall, and he relied on her statement that the tires would be upgraded to all-weather steel-belted radials. Unfortunately, though, when the car was delivered, it was still equipped with the standard tires. Initially, Sanderson was more annoyed than worried. He wasn’t happy about the misunderstanding, but he figured it would be easily resolved.

However, when he took the car back to the dealer, he found out the problem was more serious than he’d anticipated. Not only had Meg Crandall suddenly resigned two days earlier, leaving Sanderson without anyone to substantiate his story, but the sales manager insisted that the dealership could not provide any upgrades that weren’t specifically written into the o riginal sales contract. The contract simply said ―New Tires‖ to be added. It said nothing about the kind of tires, or whether there would be an additional charge. If this dispute led to an impasse, and end up in court, how should the contract be interpreted? Is it partially or totally integrated?

2.Charles Rambauer signed a contract with a fledging theatre group, which entitled him to a lifetime

membership in exchange for a payment of 5,000 dollars. The contract stipulated that there would be a four-month trial period, during which Rambauer would have the option of canceling the agreement and getting his money back less $50/month. During the second month of the four month trial period, Charles Rambauer was killed in an automobile accident. When his family found out about the details of the agreement between Rambauer and the theatre group, they attempted to recover $4,900 from the theatre. The management team was sympathetic to Rambauer’s family, but was in desperate need of cash to keep their new enterpr ise afloat. So they decided to contest the family’s position, and fight to keep the money.

Can the theatre keep the money? Why or why not?

3.The Wellington Mining Company reached an agreement with a West German manufacturer to deliver 300

tons of coal. Since this was the first international business deal of its kind for both companies, neither party paid much attention to the precise definition of the word ―ton‖. When the coal was delivered, an immediate dispute arose. It seemed that the word ton meant one thing to the American exporters, who were using the American ―short‖ ton as their standard, and something quite different to the German company, which was using the European metric standard. The result was that the Germans did not receive the amount of coal they had expected. When the matter couldn’t be settled amicably, the German firm sought legal remedies.

How would the court determine which definition of ton should prevail?

4.Richard Adderly had long been interested in purchasing a sail boat, but was put off by what he

considered to be the exorbitant slip fees at his local marina. He finally concluded that the only way he could afford a boat would be to find a marina that offered discount rates. So, he negotiated an agreement in which he agreed to buy a sailboat belonging to Max Samuelson, at a price of four hundred dollars, provided that within the next two months, he could rent a slip in a marina which charged less than he local marina. Unfortunately, when he tried to rent space in another marina, Adderly learned that there was a one year waiting list, which meant that the only way he could take the boat was to store it at the more costly marina near his home. As a result, Adderly decided not to purchase the boat from Samuelson, and that’s where things began to unravel. Samuelson viewed Adderly’s promise to purchase the boat as an absolute promise to buy. They had reached an agreement and, according to his reasoning, they were both bound by that agreement.Which side would the court favor if this matter would go to the court?

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为一名学生干部,她总是充满激情的迎接并完成各项工作,荣获优秀团干部称号.在社会实践和志愿者活动中起到模范带头作用. 04 xxxx同学在思想方面,积极要求进步,为人诚实,尊敬师长.严格 要求自己.在大一期间就积极参加了党课初、高级班的学习,拥护中国共产党的领导,并积极向党组织靠拢. 在工作上,作为班中的学习委员,对待工作兢兢业业、尽职尽责 的完成班集体的各项工作任务.并在班级和系里能够起骨干带头作用.热心为同学服务,工作责任心强. 在学习上,学习目的明确、态度端正、刻苦努力,连续两学年在 班级的综合测评排名中获得第1.并荣获院级二等奖学金、三好生、优秀班干部、优秀团员等奖项. 在社会实践方面,积极参加学校和班级组织的各项政治活动,并 在志愿者活动中起到模范带头作用.积极锻炼身体.能够处理好学习与工作的关系,乐于助人,团结班中每一位同学,谦虚好学,受到师生的好评. 05 在思想方面,xxxx同学积极向上,热爱祖国、热爱中国共产党,拥护中国共产党的领导.作为一名共产党员时刻起到积极的带头作用,利用课余时间和党课机会认真学习政治理论. 在工作上,作为班中的团支部书记,xxxx同学积极策划组织各类 团活动,具有良好的组织能力. 在学习上,xxxx同学学习努力、成绩优良、并热心帮助在学习上有困难的同学,连续两年获得二等奖学金. 在生活中,善于与人沟通,乐观向上,乐于助人.有健全的人格意 识和良好的心理素质.

自我管理演讲稿英语翻译

尊敬的领导,老师,亲爱的同学们, 大家好!我是5班的梁浩东。今天早上我坐车来学校的路上,我仔细观察了路上形形色色的人,有开着小车衣着精致的叔叔阿姨,有市场带着倦容的卖各种早点的阿姨,还有偶尔穿梭于人群中衣衫褴褛的乞丐。于是我问自己,十几年后我会成为怎样的自己,想成为社会成功人士还是碌碌无为的人呢,答案肯定是前者。那么十几年后我怎样才能如愿以偿呢,成为一个受人尊重,有价值的人呢?正如我今天演讲的题目是:自主管理。 大家都知道爱玩是我们孩子的天性,学习也是我们的责任和义务。要怎样处理好这些矛盾,提高自主管理呢? 首先,我们要有小主人翁思想,自己做自己的主人,要认识到我们学习,生活这一切都是我们自己走自己的人生路,并不是为了报答父母,更不是为了敷衍老师。 我认为自主管理又可以理解为自我管理,在学习和生活中无处不在,比如通过老师,小组长来管理约束行为和同学们对自身行为的管理都属于自我管理。比如我们到一个旅游景点,看到一块大石头,有的同学特别兴奋,会想在上面刻上:某某某到此一游话。这时你就需要自我管理,你需要提醒自己,这样做会破坏景点,而且是一种素质低下的表现。你设想一下,如果别人家小孩去你家墙上乱涂乱画,你是何种感受。同样我们把自主管理放到学习上,在我们想偷懒,想逃避,想放弃的时候,我们可以通过自主管理来避免这些,通过他人或者自己的力量来完成。例如我会制定作息时间计划表,里面包括学习,运动,玩耍等内容的完成时间。那些学校学习尖子,他们学习好是智商高于我们吗,其实不然,在我所了解的哪些优秀的学霸传授经验里,就提到要能够自我管理,规范好学习时间的分分秒秒,只有辛勤的付出,才能取得优异成绩。 在现实生活中,无数成功人士告诉我们自主管理的重要性。十几年后我想成为一位优秀的,为国家多做贡献的人。亲爱的同学们,你们们?让我们从现在开始重视和执行自主管理,十几年后成为那个你想成为的人。 谢谢大家!

关于工作的英语演讲稿

关于工作的英语演讲稿 【篇一:关于工作的英语演讲稿】 关于工作的英语演讲稿 different people have various ambitions. some want to be engineers or doctors in the future. some want to be scientists or businessmen. still some wish to be teachers or lawers when they grow up in the days to come. unlike other people, i prefer to be a farmer. however, it is not easy to be a farmer for iwill be looked upon by others. anyway,what i am trying to do is to make great contributions to agriculture. it is well known that farming is the basic of the country. above all, farming is not only a challenge but also a good opportunity for the young. we can also make a big profit by growing vegetables and food in a scientific way. besides we can apply what we have learned in school to farming. thus our countryside will become more and more properous. i believe that any man with knowledge can do whatever they can so long as this job can meet his or her interest. all the working position can provide him with a good chance to become a talent. 【篇二:关于责任感的英语演讲稿】 im grateful that ive been given this opportunity to stand here as a spokesman. facing all of you on the stage, i have the exciting feeling of participating in this speech competition. the topic today is what we cannot afford to lose. if you ask me this question, i must tell you that i think the answer is a word---- responsibility. in my elementary years, there was a little girl in the class who worked very hard, however she could never do satisfactorily in her lessons. the teacher asked me to help her, and it was obvious that she expected a lot from me. but as a young boy, i was so restless and thoughtless, i always tried to get more time to play and enjoy myself. so she was always slighted over by me. one day before the final exam, she came up to me and said, could you please explain this to me? i can not understand it. i

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