Contracts is a first-semester law school class and for good reason -- contracts are critical. The language of contracts is paramount in that you need to know;
#1 The meanings of the words,
#2 you need to be careful as to how the words are read in context, and,
#3 if the word has more than one meaning, which meaning is used.
It is unrealistic to expect you will have a lawyer read every contract you ever enter into. To try and assist you on a day-to-day frame of mind to keep while reviewing your contracts, I think it will be helpful to understand how the courts review contracts.
To determine whether a contract is ambiguous, the court will read the words and phrases in accordance with the apparent purpose of the entire contract. Halla Nursery, Inc. v. City of Chanhassen, 781 N.W.2d 880, 884 (Minn. 2010). If a contract's language is susceptible to two or more reasonable interpretations, it is ambiguous. Dykes v. Sukup Mfg. Co., 781 N.W.2d 578, 582 (Minn. 2010) (emphasis added). The court reads a contract to "harmonize" all of its provisions, if possible, and to avoid a reading that renders any provision meaningless. Stiglich Constr., Inc. v. Larson, 621 N.W.2d 801, 803 (Minn. Ct. App. 2001), review denied (Minn. Mar. 27, 2001).
This is not a concrete, 2+2=4 type rule, but it is the law. The key concepts to keep in mind are;
- the language has to make sense with the "apparent purpose" of the contract,
- the interpretations must be reasonable, and
- every provision of a contract is expected to have some meaning or utility.
Using these key criteria may help you avoid contract problems. I am always here to help you use the law in interpreting or preparing your contracts.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney. All information contained in links are the property of the linked site.