1What are the eight types of Evidence based Interpretation Tools?
(a) Text
(b) Dictionaries
(c) Preliminary Negotiations
(d) Commercial Context
(e) Course of Performance ("COP")
(f) Course of Dealing ("COD")
(g) Usage of Trade ("UOT")
(h) Unexpressed Intent
2The eight types of Evidence based Interpretation Tools:
(TDPCPDTU)
Trek ; Test (a)
Down ; Dictionary (b)
Pirates ; Preliminary Negotiations (c)
to Close ; Commercial context (d)
Planets ; course of Performance (e)
Deep ; course of Dealing (f)
Throughout ; Trade usage (g)
the Universe ; Unexpressed intent (h)
3What are the two basic forms of Tools of interpretation?
Evidence
Rules
4Acts in performance of the contract at issue.
Course of Performance ("COP")
5Course of Performance ("COP") plus other acts and statements made after the contract was formed.
Practical Construction
6Acts in performance of previous contracts between the parties.
Course of Dealing ("COD")
7Industry Practice: Prefers generally prevailing (ordinary) meaning, unless there is an industry meaning and parties are in the industry, and then prefer industry meaning.
Usage of Trade
8Majority/ClassRule: Testimony regarding unexpressed intent is prohibited.
Unexpressed Intent
9Rules related to Text and Big 3:
• Interpret a, e, f, & g as consistent if reasonable. \
• If a, e, f, & g can’t be reconciled, then order of priority = a, e, f, g.
(a) Text
(e) Course of Performance ("COP")
(f) Course of Dealing ("COD")
(g) Usage of Trade ("UOT")
10What types of interpretation tools are considered “Extrinsic Evidence?"
Categories c through h
(c) Preliminary Negotiations
(d) Commercial Context
(e) Course of Performance ("COP")
(f) Course of Dealing ("COD")
(g) Usage of Trade ("UOT")
(h) Unexpressed Intent
11What types of interpretation tools are related to “the Big 3.”
Categories e through g
(e) Course of Performance ("COP")
(f) Course of Dealing ("COD")
(g) Usage of Trade ("UOT")
12What is the rule for the use of Evidence in Court Under Textualism:
Only a & b may be used at Stage 1;
all evidence (but h) may be used at Stage 2.
13Use of Evidence in Court Under Contextualism:
All evidence (but h) may be used at both Stage 1 and Stage
2.
14What are the ten rules for Interpretation Tools?
(WCSPRENESC)
(1) Interpret the Contract as a Whole.
(2) Avoid Interpretations that Result in Terms Conflicting
(3) Avoid Interpretations that Make Terms Superfluous
(4) The Purpose of the Contract is Given Considerable Weight in Interpretation
(5) Reasonable Meanings are Preferred Over Unreasonable Meanings
(6) Ejusdem Generis
(7) Noscitur a Sociis
(8) Expressio Unius Exclusio Alterius
(9) Specific Provisions are Exceptions to and Control Contradictory General Provisions
(10) Contra Proferentem — Construe Against the Drafter
15What are the ten rules for Interpretation Tools?
(WCSPRENESC)
(W) Wraiths; Interpret the Contract as a Whole.
(C) Chased; Avoid Interpretations that Result in Terms Conflicting
(S) Sam & Frodo; Avoid Interpretations that Make Terms Superfluous
(P) to Prancing Pony; The Purpose of the Contract is Given Considerable Weight in Interpretation
(R) and Rivendell; Reasonable Meanings are Preferred Over Unreasonable Meanings
(E) Elrond; Ejusdem Generis
(N) the Nine; Noscitur a Sociis
(E) but they Escaped; Expressio
(S) to Sauron's Specific Provisions are Exceptions to and Control Contradictory General Provisions
(C) Castle; Contra Proferentem — Construe Against the Drafter
16What is the first rule for Interpretation Tools?
(1) Interpret the Contract as a Whole.
17 Interpret the Contract as a Whole.
• A writing of writings that form part of the same transaction should be interpreted together as a whole, that is, every term should be interpreted as a part of the whole and not as if isolated from it.
• Expresses the contextual theory of meaning, which is, perhaps, a truism.
18What is the second rule for Interpretation Tools?
(2) Avoid Interpretations that Result in Terms Conflicting
19What is the third rule for Interpretation Tools?
(3) Avoid Interpretations that Make Terms Superfluous
20What is the fourth rule for Interpretation Tools?
(4) Reasonable Meanings are Preferred Over Unreasonable Meanings
21What is the fifth rule for Interpretation Tools?
(5) The Purpose of the Contract is Given Considerable Weight in Interpretation
22What is the sixth rule for Interpretation Tools?
(6) Noscitur a Sociis ("it is known by its associates"): The meaning of a word is affected by its immediate context in the contract.
23("it is known by its associates")
The meaning of a word is affected by its immediate context in the contract.
Noscitur a Sociis
24What is the seventh rule for Interpretation Tools?
(7) Ejusdem Generis (“of the same kind or class"): General Terms in a List Only Cover Things Like Specific Terms in the Same List.
25(“of the same kind or class")
General Terms in a List Only Cover Things Like Specific Terms in the Same List.
Ejusdem Generis
26What is the eighth rule for Interpretation Tools?
(8) Expressio Unius Exclusio Alterius
27Expressio Unius Exclusio Alterius
If one or more specific items are listed, without any more general or inclusive terms, other items although similar in kind are excluded.
28What is the ninth rule for Interpretation Tools?
(9) Specific Provisions are Exceptions to and Control Contradictory General Provisions
29If two provisions of a contract are inconsistent with each other and if one is "general" enough to include the specific situation to which the other is confined, the specific provision will be deemed to qualify the more general one, that is, to state an exception to it.
Specific Provisions are Exceptions to and Control Contradictory General Provisions
30What is the tenth rule for Interpretation Tools?
(10) Contra Proferentem — Construe Against the Drafter
31What are the Use of Rules in Court?
• 1-4 and 6-9 may be used at Stage 1 and Stage 2 under both Textualism and
Contextualism.
• 10 may only be used only at Stage 2 under both Textualism and Contextualism.
• 5 may be used at Stage 2 under both approaches and at Stage 1 under Contextualism.
• But under Textualism, rule 5 can only be used at Stage 1 when the text of the contract identifies the purpose of the transaction.
32What is the Jumbled Approach to Use of Interpretation Tools?
• Stage 1: Determine whether an ambiguity exists by mixing the permissible tools together (both evidence and
rules).
• Stage 2: Resolve the ambiguity by mixing all the tools together (both evidence and rules) to decide what the
contract means under the relevant standard (objective or subjective).
33Words, phrases, sentences, and paragraphs that specify the parties' obligations under the agreement.
"Operative clauses" or "Operative provisions".
34"Preliminary Negotiations" is a label that is generally used to encompass:
(1) Documents exchanged by the parties as part of the negotiation process prior to the signing of the contract.
(2) Oral statements made by the parties during the negotiations
(3) Oral statements made at the time the contract was signed.
35Commercial Context includes things like:
• Type of business or industry the parties are in
• Geographical location of the parties
• Time of day or year when the contract was negotiated and formed
• Nature and length of the parties' business relationship
• Age, experience, and education of the parties
• Supply, demand, pricing, and other conditions in the market in which the parties are doing business.
36The "Big 3" types of Evidence
(1) Course of Performance ("COP")
(2) Course of Dealing ("COD")
(3) Trade Usage
37Any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage must be proved as facts. . . .
"Usage Of Trade"
38A sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
"Course Of Dealing"
39A sequence of conduct between the parties to a particular transaction that exists if:
(1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and
(2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.
"Course Of Performance"
40A "course of performance" is a sequence of conduct between the parties to a particular transaction that exists if:
(1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and
(2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.