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How do courts interpret a contract?

When Miami residents think of the legal system, many envision an overly complex world full of legal jargon and unfamiliar terminology. While this legal jargon certainly does exist, it does not rule the day in certain legal disputes.

For instance, it is important for Miami businesses to understand the way in which a contract is interpreted when they become involved in a contract dispute. When businesses become involved in a contract dispute, they often have different interpretations of key contract provisions, or even specific words.

In a lawsuit based on a breach of contract claim, the judge or jury will typically interpret the contract based on the plain and ordinary meaning of the term at issue, unless the parties defined the term differently or intended for some technical meaning to apply. Disputed terms will also be given the meaning that is typically applied in the business or field involved, unless the parties contracted for a different meaning.

The focus on the written contract is important, because typically only the parties’ agreement is considered, rather than unspoken thoughts or intentions that may have been held at the time by one side or another. The goal is to find out what the parties actually intended when making the contract, which will then determine whether a breach of contract existed at the present time.

These are just a few of the many rules of contract interpretation, which are legal standards that tell judges and juries how to interpret a contract. The rules are very important for businesses involved in contract disputes to understand, as they may end up having a decisive role in the decision.

Source: Florida Supreme Court, “Florida Standard Jury Instructions — Contract and Business Cases,” accessed on Dec. 5, 2015

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