Contract Interpretation

Plain English

Contract interpretation is how courts figure out what the parties intended when they signed an agreement. Judges look at the plain meaning of the words, the context of the deal, what the parties said before signing, and what they did after signing. If the contract is clear and unambiguous, courts stick with what it says. If it's confusing or has conflicting terms, courts use rules like assuming ambiguous language goes against whoever wrote it, or looking at how the parties have acted under the contract.

Example

A lease says rent is due 'on the first of each month,' but doesn't specify whether that means the first day of the month or the first business day. A court interpreting this contract would look at how the landlord and tenant have handled payment in the past to figure out the real meaning.

Used in a sentence

“Contract interpretation requires courts to determine the parties' intent based on the language used and surrounding circumstances.”

Related terms