Contract Interpretation Principles Specific General

Contract Interpretation Principles: Specific vs. General

Contract interpretation is the process of determining the meaning of a written agreement between two or more parties. It is a crucial aspect of any contractual relationship as it ensures clarity and understanding between the parties involved. However, when it comes to contract interpretation, there are two types of principles that play a significant role in determining the meaning of the contract – specific and general. In this article, we will explore these principles and how they impact contract interpretation.

Specific Contract Interpretation Principles

Specific contract interpretation principles focus on the language used in a particular agreement. It looks at the specific words and phrases used in the contract and tries to determine what they mean. One of the most important principles under this category is the Plain Meaning Rule.

The Plain Meaning Rule states that if a term is clear and unambiguous, it must be given its plain and ordinary meaning. This principle is often used by judges, arbitrators, and other dispute resolution professionals to determine the meaning of terms in a contract. The Plain Meaning Rule is particularly useful when there is no evidence of any intent to give a term a special meaning.

Another specific contract interpretation principle is the Parol Evidence Rule. This rule states that evidence of prior or contemporaneous oral or written agreements cannot be used to contradict or modify the terms of a fully integrated written contract. The Parol Evidence Rule is designed to ensure that the parties` written agreement is the final expression of their intentions.

General Contract Interpretation Principles

General contract interpretation principles focus on the context surrounding the contract. It looks at the broader circumstances of the parties and the agreement to determine what the parties meant when they signed the agreement. One of the most important principles under this category is the Objective Theory of Contract.

The Objective Theory of Contract states that a contract is formed when two or more parties manifest their assent to the same terms. Under this theory, it does not matter what the parties subjectively meant or intended. What matters is whether a reasonable person in the position of the parties would have understood their conduct to manifest assent to the terms of the agreement.

Another general contract interpretation principle is the Doctrine of Contra Proferentem. This rule states that when a contract contains ambiguous language, any ambiguities should be interpreted against the party who drafted the agreement. The Doctrine of Contra Proferentem is designed to ensure that the party with more bargaining power does not take advantage of the other party.

Conclusion

In conclusion, contract interpretation is a crucial aspect of any contractual relationship. The specific and general principles of contract interpretation play a significant role in determining the meaning of a contract. As a professional, it is essential to understand these principles to ensure that any contracts reviewed contain clear and unambiguous language that can be easily understood by all parties involved.