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Monday, November 20, 2023

It is a Dangerous Thought to Depend on Ideas of Interpretation in Deciding on Contract Language

Yesterday I encountered this LinkedIn publish about “canons of building.” (I name them “rules of interpretation.”) The publish begins as follows:

Tip for legislation college students and newer attorneys:

Familiarize your self with the foundations of contract interpretation (typically known as “canons”), if, like me, you didn’t be taught them in legislation college.

Courts depend on these default guidelines to interpret contracts and statutes. Efficient attorneys know the foundations and use them to their purchasers’ benefit—each in drafting and litigation.

Beneath, I’ve summarized a number of the commonest guidelines of interpretation, however there are lots of others.

If you happen to litigate contract disputes, then positive—invoke rules of interpretation that favor no matter you need the language at challenge to imply. However for 2 causes, it’s a nasty thought to depend on rules of interpretation when deciding on the textual content of a contract.

First, courts use rules of interpretation to attribute which means to complicated contract language. In case you have a say within the wording of a contract that finally must be interpreted, which means the language at challenge is complicated. In different phrases, you failed at your process. (See my 2017 LinkedIn publish Be Afraid of Contract Interpretation, right here.)

And second, to make issues worse, rules of interpretation are expediency-driven notions invented by courts to make it simpler to resolve disputes over complicated textual content. Therefore the usual remark that you would be able to invoke totally different rules of interpretation to assist giving totally different meanings to a given textual content.

Some rules of interpretation are significantly shaky. Concerning the frailty of the rule of the final antecedent, see Joe Kimble’s article The Doctrine of the Final Antecedent, the Instance in Barnhart, Why Each Are Weak, and How Textualism Postures (PDF right here). And if you wish to see the place the rule of the final antecedent actually goes off the rails, take a look at my article Bamboozled by a Comma: The Second Circuit’s Misdiagnosis of Ambiguity in American Worldwide Group, Inc. v. Financial institution of America Corp. (PDF right here).

So one factor that rules of interpretation aren’t is “guidelines of grammar.” See this 2022 weblog publish about that. That is from that publish:

So right here’s my normal precept: If a courtroom says that rules of interpretation are guidelines of grammar, don’t count on a lot from their textual interpretation, in that opinion and others. Among the many courts which have indulged within the rules-of-grammar factor is the U.S. Supreme Courtroom; see this 2021 weblog publish.

Once more, in litigation, rules of interpretation are dodgy however unavoidable, they usually would possibly work in your favor, however counting on them for contract drafting is asking for bother.

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