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How Do New York Courts Interpret Contracts?

How Do New York Courts Interpret Contracts?

Contract disputes are one of the most common issues that corporate litigators handle. These issues arise so often, in fact, that virtually every organization can expect to find themselves facing one at some point.

Thankfully, there are measures you can take when drafting and reviewing contractual agreements to protect your company should some kind of dispute occur. For example, as long as you understand how New York courts interpret contracts, you can ensure the terms will remain in your favor if you end up before a judge.

Let’s take a look at the two most prevalent ways the terms of a contract might be interpreted in a court of law:

1. The Plain & Ordinary Meaning of the Words

If the terms of the contract are ambiguous, the court will attempt to apply the “plain and ordinary” meaning to the words and/or phrases that are up for interpretation. A word’s plain and ordinary meaning is generally its simplest and most common definition.

2. Ejusdem Generis

Ejusdem generis is a principle that states the meaning of an ambiguous word or phrase must be determined “by the company it keeps.” To apply ejusdem generis, the court will evaluate the words and phrases surrounding the questionable content to determine its intent.

How Can I Draft Contracts with Terms That Won’t Be Challenged—or Misinterpreted—in Court?

Unless you happen to be an expert in contract law, it’s wise to have a corporate lawyer review every document you’re asked to sign line by line before doing so. A seasoned attorney will make a note of any vague language that could interpreted in more than one way.

Your lawyer will also confirm that the terms are, in fact, favorable. If they’re not, he or she can help you negotiate for a better agreement.

In that same vein, you should have a knowledgeable legal professional draft all the documents you plan on asking others to sign, as well. A strategic attorney will ensure these contracts contain clear and unambiguous language that will uphold its intended meaning under severe scrutiny in a court of law.

What If a Client or Vendor Has Misinterpreted the Terms of Our Agreement?

If you entered into an agreement that you believed meant one thing but the opposing party assumed it meant another, you’re facing a contract dispute. If the misunderstanding is minor, you may be able to resolve it by proposing a simple correction. If, however, the other party refuses to concede, you should seek legal counsel.

A corporate lawyer will evaluate the situation and help you determine how best to secure a satisfactory outcome. If necessary, your legal team will even prepare your case for court.

Call 716-855-3761 to Discuss Your Case with a New York Corporate Attorney

If your corporation is facing a contract dispute, turn to Heather Baumeister at LoTempio P.C. Law Group. A tireless advocate for each and every one of her corporate clients, Heather is well-versed in commercial litigation and business law.  Call 716-855-3761 or fill out our Contact Form to schedule a free consultation with a corporate lawyer in New York.

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