Contract Interpretation

Adam Keilen Construction Law

Contract Law. The most basic principle in contract law is simple, “a contract is a promise, and promises ought to be kept.” 

Contract Interpretation. Contract interpretation often controls the outcome of a lawsuit. Ambiguous contracts can be unpredictable in court. However, when contracts are clear and fully integrated, interpretation of the contract is a question of law, meaning it will be decided by a judge, not a jury.Auto Club Ins Ass’n v. Lozanis, 215 Mich App 415, 546 NW2d 648 (1996). However, if a contract is ambiguous, and outside evidence is necessary to interpret the contract’s meaning, a jury may be involved. Brown v. Forrester Constr Co, 372 Mich 204, 125 NW2d 315 (1963)Zinchook v. Turkewycz, 128 Mich App 513, 340 NW2d 844 (1983). The primary goal of contract interpretation is to honor the parties’ intentions when the contract was made; if there is clear language, the courts will not depart from the ordinary meaning. Terry Barr Sales Agency v. All-Lock Co, 96 F3d 174 (6th Cir 1996).

The Take Away. Be sure your contracts are clear and unambiguous. Generally, the words used in contracts will be given their ordinary meaning, i.e., contracts are a bad place to infer obligations, so make them specific.