Rules of Contract Interpretation

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Rules of Contract Interpretation

• Presented to Suncoast Chapter NCMA 27 October
  2005
• William C. Pursch, PhD, CPCM, NCMA Fellow

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RULES OF CONTRACT INTERPRETATION
1. The contract will be read as a
whole 2. Negotiations may be examined to explain
but not enlarge the contract 3. The contract
language is presumed to express the intent of
the parties 4. Objective meaning of the words is
preferred over the subjective
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RULES OF CONTRACT INTERPRETATION (cont)
5. Ordinary meaning of words is preferred over
technical 6. Technical meaning controls in
technical context 7. A lawful result is
preferred over unlawful 8. A practical result
is preferred over an absurd literal
interpretation
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RULES OF CONTRACT INTERPRETATION (cont)
9. Specific terms control over general
terms 10. Typewritten controls over printer
matter 11. Handwritten controls over typewritten
matter 12. Specifications control over drawings
if in conflict
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RULES OF CONTRACT INTERPRETATION (cont)
17. Plain contract language overrides trade
usage 18. Ambiguity Is uncertainty of
meaning Is more than mere disagreement 19. Sell
ers interpretation, if reasonable, controls,
BUT 20. If ambiguity is obvious seller must
ask buyer for clarification, AND
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RULES OF CONTRACT INTERPRETATION (cont)
13. Specifications and drawings are read
together 14. Performance specifications
control 15. Design specifications (US) are
warranted as correct 16. Trade practice governs
contract performance, BUT
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RULES OF CONTRACT INTERPRETATION (cont)
21. Buyer must clarify 22. Ambiguous language
will be construed against the drafter
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Summary
Work the process If you deviate-DOCUMENT!!! Negoti
ate Mediate Arbitrate Litigate as a last resort!
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If you always do What you always did, You will
always get What you always got!!