Payne Hackenbracht & Sullivan

Standards of Contract Interpretation

The interpretation of contracts follows a general set of rules in order to determine if the interpretation is reasonable and logical. That generally accepted set of rules, in descending order of importance and application is:

Read the contract as a whole, giving meaning to each and every part of the document.

Apply the common meaning to the words in question.

Apply the order of precedence clause in the contract to determine which provisions take priority over other provisions.

Determine what interpretation has been given to the provision or term through a prior course of dealing.

Determine what is the trade, custom, or industry usage of the provision in question.