Parol Evidence Rule

Parol Evidence Rule - Principles of Interpretation and the...

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Principles of Interpretation and the Parol Evidence Rule Interpretation – the process by which a court gives meaning to contractual language when the parties attach materially different meanings to that language. Subjective Approach : if parties attach different meanings, no contract because there was no “meeting of the minds.” Objective Approach : terms are interpreted to mean that which a reasonable person familiar with the circumstances would interpret them to mean. Modified Objective Approach : you should seek to understand the intent of the parties. If parties have attached the same meaning to a term, that meaning will prevail. If A and B attach different meanings to a term and A knows this, A is bound by B’s meaning. If A and B attach different meanings to a term and neither parties knows or has reason to know, then neither party is bound. Principles of Interpretation : 1. Contra proferentem : if a word is capable of two meanings, one favorable to one party and one favorable to another party, the meaning will be preferred which is less favorable to the party who drafted the agreement (appropriate for unequal bargaining power). 2. Interpret contract as a whole 3. Specific provision is exception to a general one 4. Handwritten/typed provisions control printed ones 5. Public Interest preferred 6. Purpose of the parties Tools of Interpretation : 1. Course of performance 2. Course of dealing 3. Usage of trade 4. Reasonableness – chicken prices 5. Regulations Plain meaning rule : a term will be interpreted according to its plain meaning, unless it is ambiguous. Latent ambiguity : although the terms may appear certain, extrinsic facts make more than one interpretation possible. Patent ambiguity : A agrees to sell “my property.”
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Reasonable Expectations Doctrine- a party is not bound to non-dickered boilerplate terms where party making terms had reason to believe that adhering party would not have agreed to terms, had he known of the terms (§211(3) – standard forms). This is a contradiction of duty to read rule. Policy:
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Parol Evidence Rule - Principles of Interpretation and the...

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