When it comes to business contracts, language matters. Ambiguous contract language can lead to contract disputes, and those disputes can lead to breach of contract, costly litigation, and ruined business relationships. Here’s a look at why contract interpretation matters, the challenges of interpreting contract language, and how a contract dispute lawyer can help.
Strong contracts lead to strong business relationships. Whether you’re navigating a contract dispute right now or you want to prevent one in the future, a Houston business attorney can help.
Why Contract Interpretation Matters
Clear, Thorough, Up-to-Date Contracts Are Essential
Many different factors may lead to problems interpreting a contract. Even if your dispute doesn’t go all the way to court, it can still cause considerable disruption. These are some common contract issues and how they may lead to business disputes.
Ambiguity
If the language included in your contract is unclear and leaves room for interpretation, there’s a chance the two parties will each have their own interpretation. While the parties may be able to come to a mutual agreement in some cases, they may need court intervention to solve the issue in others.
Unforeseen Circumstances
Usually, when you draft a contract, you make an effort to include every possible situation. However, there’s still a possibility that unforeseen circumstances can happen. If you and the other party find yourselves in a situation not covered by the contract, you may disagree on what to do.
Conflicting Clauses
Contracts are complex enough that it’s possible to draft one (or sign one) with conflicting clauses without realizing it. Conflicting clauses can lead to major disputes. The parties may agree with different clauses, and because both clauses are in the contract, they may need a court to step in and make a ruling on which clause should be adhered to.
Changes in Law or Business Environment
There’s always a risk that you will draft a thorough contract and then face a change in laws or regulations that renders it obsolete. While it’s ideal to consult a contract lawyer any time a relevant regulation changes, not all businesses do this. A dispute may arise when both parties disagree on how a given clause should be interpreted in light of the new law.
Are you facing an issue with contract interpretation in Houston? Call Weisblatt Law Firm at (713) 666-1981 to book your free phone consultation today.
Principles of Contract Interpretation in Texas
While handling disputes in contract interpretation between the parties is generally preferable, there may come a time when you need a court to intervene. These are some of the relevant doctrines and principles that may apply to your case.
Plain Meaning Rule
While it’s possible to read various meanings into the language of a contract, courts will generally avoid doing this. The plain meaning rule dictates that, whenever possible, courts should take language at face value and interpret it according to its ordinary meaning.
Contextual Interpretation
If there’s a disagreement over a specific contract term, courts will usually look at the contract as a whole (in some cases, they will even look at surrounding circumstances) to determine how the provision should be interpreted.
“Four Corners” Rule
While there may be some exceptional circumstances, courts will usually focus on what’s in the “four corners” of a contract — essentially, they focus on what’s contained in the contract and not on any external evidence.
Contra Proferentem
This is a phrase that comes from the Latin words for “against the offerer.” It holds that if there is any ambiguity in a contract clause, it should be interpreted in a way that goes against the drafter’s interests.
Course of Dealing and Trade Usage
When a contract has an ambiguous clause, a court might look at the way the parties typically handle similar issues to determine how that ambiguity should be interpreted.
Common Contract Interpretation Disputes
Theoretically, a dispute can arise over any part of a contract. However, these are some of the most common disputes you may run into:
- Disagreements over what payment methods, schedules, and terms are allowable under the contract
- Disagreements over the scope of work covered by the contract
- Disagreements over when termination is warranted
- Disputes over which party is responsible for losses and other liabilities.
These disputes may be common, but that doesn’t mean they’re easy to solve. A business attorney may be able to help you resolve disputes in a way that preserves your business relationships.
How a Houston Business Attorney Can Help
Whether you’re hoping to prevent future contract disputes or you’re stuck in a contract dispute that seems hopeless, a business law attorney may be able to help in a number of different ways:
Drafting Clear Contracts
While there’s no way to absolutely guarantee you won’t run into a contract dispute in the future, clear contracts go a long way toward preventing disagreements. Attorneys understand common disputes and the exact contract language needed to prevent them.
Reviewing Existing Contracts
Even if you already have one or more business contracts written, a business lawyer can review and revise them in a way that protects you from future disputes.
Negotiating Contract Terms
Most business contracts aren’t just written and signed — they involve negotiation between the parties. In many cases, it’s helpful to have a lawyer representing you during these negotiations.
Representing You in Disputes
If contract disputes do arise, you might resolve them via mediation or arbitration. You could even choose litigation. In any case, a business lawyer can advocate for you and ensure your interests are protected.
Dealing With a Contract Dispute?
Let Weisblatt Law Help You
Even experienced businesspeople may find themselves unable to resolve contract disputes without outside assistance. Whether you and the other party simply want legal guidance or your dispute goes all the way to court, Weisblatt Law Firm has the experience needed to help you reach a mutually beneficial resolution.
Need help solving a contract dispute or drafting contract language to prevent future disputes? Call Weisblatt Law Firm at (713) 666-1981 for a free phone consultation.
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio
