Elements of Contract Interpretation
Business-focused legal analysis and insight in the most significant jurisdictions worldwide
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The civil law interpretation of declarations of intent by contracting parties
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A: original speakers communicate minimally be in God. Some parties may be able to prove that a successful meeting of the minds never actually occurred because the parties involved had two completely different interpretations causing a clear misunderstanding which can invalidate a contract.
Typically, if the court is involved it will base the interpretation of contract clauses on the reasonable understanding of a person with standard knowledge of the industry. If the court finds that interpretations of a contract clause are unclear or seem to be intentionally vague, the Contra Proferentem Rule may be enforced. The Contra Proferentem Rule helps to mitigate intentionally vague contract language for the benefit of either party. The Contra Proferentem Rule requires that the court rule in favor of the plaintiff who feels that contract language is ambiguously detrimental or harmful.
Overall, it can be left up to the courts to decide the interpretations and intentions of contract language. There is a whole field of study dedicated to contract law known as contract theory. Contracts are used in a multitude of situations and scenarios. This can create an opportunity for a vast amount of misunderstandings, mistakes, and misinterpretations. A breakdown in communication can potentially disrupt the successful achievement of a meeting of the minds and call to question its very existence.
Below are some examples of challenging contract issues. The businessman indicates that he is looking to buy the supplier's stock, which he understands to mean the supply of toys that the supplier has. While both parties agree contractually with an acknowledged meeting of the minds, they clearly did not agree to the same material exchange and a court could rule that no meeting of the minds actually occurred to make the contract valid for either party.
A contract might state that a defendant must pay a plaintiff for use of a product or service for a specified amount. The defendant might argue that their understanding of the contract allowed for payments to be made at a time interval that was different from the plaintiff.
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They might claim the payments would be broken up over a longer period of time if the contract does not include detailed language establishing due dates. In this case, such a defense argument might fail in court if it can be established that a reasonable person reviewing the contract would indeed interpret its intent and purpose with the same regard that the plaintiff presented in their argument.
This would imply that the meeting of the minds alluded to the understanding of certain payment terms. Business Essentials.
Meeting of the Minds
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By using Investopedia, you accept our. Your Money. Contracts are promises that the law will enforce. Contract law is generally governed by the state Common Law, and while general overall contract law is common throughout the country, some specific court interpretations of a particular element of the Contract may vary between the states.
If a promise is breached, the law provides remedies to the harmed party, often in form of monetary damages, or in limited circumstances, in the form of specific performance of the promise made. Contracts arise when a duty comes into existence, because of a promise made by one of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. There are two different theories or definitions of consideration: Bargain Theory of Consideration and Benefit-Detriment theory of consideration.
For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of generosity is normally not considered sufficient detriment to constitute adequate consideration. Here, the essential condition is that the promisor was given something specifically to induce the promise being made. Contracts are mainly governed by state statutory and common judge-made law and private law i.
Private law principally includes the terms of the agreement between the parties who are exchanging promises. This private law may override many of the rules otherwise established by state law.