However, if a court declares a provision of a contract ambiguous, external evidence may be allowed to prove the intention of the parties. Michigan law also provides that an ambiguous provision of a contract must be interpreted against the party who drafted it. Written contracts are only the expression of the agreement of the parties; If you do this for me, I will do it for you. It`s as simple as that. However, history teaches us that nothing is really as simple as it seems at first glance. Courts often use the four-corner rule, which means that the interpretation comes only from what is included in the contract, unless the wording is ambiguous. Language can be defined as ambiguous when it is possible that the simple meaning as well as the meaning in the context may be different constructions. If all other building codes do not reveal the intent of the parties, including the review of extrinsic evidence, the courts may interpret the contract against the party who drafted it. This rule is applied only if all the usual rules and maxims of the construction of the contract do not answer the question at issue.
A contract is ambiguous when the language is reasonably sensitive to more than one meaning. The difficulty of interpreting a treaty is not an ambiguity. Ordinary meaning is the standard used by the court to determine the language of the contract. This is also known as dictionary definition or common usage. Unless it is proved that the contract uses some technical language, it is interpreted with the ordinary meaning. Ben and Jerry enter into a contract for the purchase and sale of goods. The contract is very short and written in simple language. Shortly after the business relationship begins, Ben and Jerry discuss the extent of Ben`s obligation to deliver all the goods Jerry needs. Jerry is suing Ben for breach of contract for failing to comply with the requirements of his offer. Ben argues that the contract did not require him to respond to this level of demand for supply. When interpreting the terms of the contract, what are some of the rules that a court will apply? Feel free to contact Michigan contract attorney Michael J. Hamblin for more information on how he can help you with your legal requirements.
Contract design is a skill that develops over time and often through painful trial and error. Watching experienced lawyers draft a contract is as much a lesson in negotiation as it is a clever paternity exercise. The coherent expression of clear and unambiguous thoughts is by no means an easy task. The choice of words, structure and even punctuation by authors can focus or obscure a meaning. However, before presenting extrinsic evidence, courts generally follow various rules or maxims of contract interpretation. For example, one of the first rules is that courts cannot impose ambiguity if the wording of the contract is otherwise clear. The words chosen by the parties should, as far as possible, take precedence. To this end, the courts will not rewrite the parties` contract under the guise of interpretation or interpretation. What a court should consider when interpreting a contract: Courts should always interpret contractual terms for the purpose of determining the intention of the parties.
The determination of the intention of the parties should be subject to an objective analysis. The court should not consider the subjective intentions of the parties. The court should, on the basis of the evidence presented and the language of the contract, attempt to determine how a reasonable person who possesses all the basic knowledge that the parties had at the time of the conclusion of the contract would have understood the terms of the contract. Absence of words: The absence of certain words in the contract must be taken into account when interpreting the contract. This doctrine of contract interpretation is called Expressio Unius Est Exclusio Alterius. The translation of this Latin reads as follows: “The inclusion of one is the exclusion of the other.” The courts assume that if there is a list of items and an item has NOT been included, it should not be. This rule applies if the services are included in construction contracts. In some contracts, if the parts are handwritten or printed and they are other pre-printed or boilerplate terms that are inconsistent, the handwritten or typed part will prevail. When interpreting a contract, the courts also assume that the parties knew and understood the state of the law at the time the contract was concluded. As such, the courts will adopt the contractual arrangement consistent with existing law. Even if they are compatible with the law, the courts will avoid any arrangement whose outcome would be contrary to public order.
Many people assume that if they have a written contract with someone else, any dispute about their agreement will be resolved simply by reading the contract itself. Sometimes this instinct is right. In fact, Michigan state courts and federal courts that enforce Michigan law have generally held that the most reliable indication of the parties` intent is the wording of the contract itself. Courts take common sense into account when interpreting a contract. In recent years, emphasis has been placed on the importance of common sense in the interpretation of contractual clauses. However, the Supreme Court has now clarified that the starting point is the natural meaning of the language used; Common sense cannot be used to underestimate the importance of the language of fate to be understood. Courts will reject the meaning of a provision only because one of the parties has entered into a bad deal; It is not for the court to improve the positions of the parties by revising the contract.9 However, in the event of ambiguity and more than one possible interpretation, the court will choose the most economically sensible interpretation, assuming that the parties did not intend to achieve a non-commercial result.10 Courts in different jurisdictions may apply different standards when interpreting the meaning of contractual terms. The common approaches are as follows: The starting point for the tribunal is to determine the intention of the contracting parties […].