Interpreting a Contract

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Interpreting a Contract

At times, the court may need to intervene and assist with interpreting a contract. Through this process, the court clarifies any disputes that the parties might have had about a word, phrase, sentence, or term in the contract. This can be necessary if there is a disagreement that leads to a breach of contract or to a major discrepancy in bargaining between the parties.

Sometimes, contract interpretation may be necessary because there is a dispute over a single word. At other times, interpretation may be needed to resolve disputes over entire situations proposed by the contract (such as what should happen if a shipment is late or destroyed).

How Do Courts Interpret a Contract?

Courts may use a number of techniques and principles to help them figure out which contract interpretation is correct. Some of these include:

Lastly, courts will always consider the contract as a whole and in its entirety. For instance, if a term is defined at the beginning of a contract, the term will be interpreted as having the same defined meaning if it appears later on in the document.

What Are Some Remedies for Contracts Cases?

In cases where a misinterpretation of a contract leads to financial losses, it may be possible for the non-breaching party to obtain a damages award. In some cases, the contract interpretation may have much to do with the amount of damages issued. In some cases, the interpretation of a contract may actually serve as a defense for the breaching party. In other instances, the court may rewrite the contract or fill in terms that were missing or blank.

Do I need a Lawyer for Help with Interpreting a Contract?

Understanding how contract interpretation works can sometimes be difficult to do. You may need to hire a lawyer if you need help drafting a contract, or if you need help interpreting an existing document. Also, your attorney can represent you in court if you need to file a lawsuit in order to have a contract re-interpreted by the court.

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Last Modified: 11-21-2013 04:35 PM PST

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