GENERAL RULES ON INTERPRETATION

MEANING AND INTENT

In legal dictionaries, the word “interpretation” is defined as the act of explaining or telling “the meaning” (of a document – and in our case of a contract), especially in order to determine “intent”. The term “meaning” is a highly ambiguous concept which itself has 16 different meanings when used by philosophers, according to the classification made by Ogden and Richards. We will not examine here the notion of meaning as a linguistic and philosophical concept. Instead we will focus on “the meaning” in contract law, which can be distinguished by an aspect of paramount importance, namely the notion of “understanding of contracting parties”. We will, thus, examine the “meaning attached to contractual clauses by contracting parties”, and try to understand its relevance and to what extent and how it can be taken into account in the interpretation process.

From this point of view, three competing definitions of “meaning”, the roots and evolutions of which are shown by Farnsworth, can be seen. Accordingly, the meaning can be understood as:

While the first definition does not take into account “intent” of the contracting parties in the ascertainment of contractual meaning and takes the position of an ordinary objective user of the language, the second and the third, both construe contracting language from the perspective of a different party, namely the promisee and the promisor. It can be said that, in this sense, these three definitions give three solutions grading from the most “objective” test to the most “subjective” one.

Accordingly, the first definition reflects the textualist approach, suggesting that the plain meaning of contractual terms is preferred to any other specific meaning which may be intended by contracting parties, to the extent that it yields to a solution.