Aside from breach of contract claims, contract and business disputes may arise in different situations such as contract interpretation. In this context, the disagreements and disputes revolve around the interpretation of the language used in the agreement the parties signed. We assist clients with disputes arising out of contract interpretation.
Interpretation of a promise, a contract or a term is the determination of its meaning. Questions of interpretation arise in determining whether a contract exists as well as in determining rights and obligations under a contract. The intention of a party to a contract that is relevant to the formation of a contract is the intention manifested by him or her rather than any different undisclosed intention. It follows that the meaning of the words or other conduct of a party is not necessarily the meaning he or she expects or understands. He or she is not bound by a meaning unless he has reason to know of it, but the expectation and understanding of the other party must also be taken into account.
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Contract interpretation first focuses on the normal, accepted meaning of the words used by the parties. However, words are never spoken in a vacuum so there is always some context in which the words were used. To the extent that this context provides information of what the words might mean, the process of interpretation goes beyond the language used by the parties to take context into account.
However, context does not always provide information that may be relevant to the meaning of a term in dispute, so neither party may be able to offer contextual evidence that bears on what the party must have meant. Where the court has no evidence of meaning outside the language of the contract, it must interpret the language of the agreement to determine its meaning. But when a party seeks to prove contextual evidence relevant to the meaning of the contractual language, that evidence should be considered and given appropriate weight.
Where context evidence is available and is pertinent for contract interpretation, the interpretation of a contract involves five areas of investigation: the express words used by the parties, discussions and conduct of the parties during negotiations, conduct of the parties in the course of performing under the agreement, prior dealings between the parties in similar contractual relationships, and trade usage, common usage, or custom that is reasonably applicable to the parties’ dealings.
It is important to keep in mind that interpretation is not a determination of the legal effect or other conduct. Properly interpreted agreement may not be enforceable as a contract, or a term such as a promise to pay a penalty or the debts of another may be denied legal effect, or it may have a legal effect different from that agreed upon, as in a case of employment at less than a statutory minimum wage.
Contract interpretation issues arise in a variety of business circumstances, including share purchase agreements, asset purchase agreements, partnership agreements, non-compete agreements, post-closing of a business sale or merger, and many more.
Contact us, your business attorney in Florida, to assist you in contract interpretation disputes whether for sale/purchase agreements, share purchase agreements, partnership agreements, general contractor agreements, broker agreements, non-compete agreements, merger agreements and any other contracts.